Accounting & Investing Info for San Antonio A & M
Wed April 18, 2012 11;43 AM CST
The City of San Antonio will soon have a job announcement looking to fill an Auditor I position. COSA’s job postings can be seen at the web address below:
http://www.sanantonio.gov/hr/jobs/index.asp
This would be an Internal Auditor position. I think this is right up the alley so to speak for our students. Take note.
Wed April 18, 2012 11:03 AM CST
Social mood becomes inclusionary at market highs. Positive mood results in a desire to 'come together.' Jim Rogers observes that most of these deals never work ou, the competing cultures, the lay offs, what ever, and indeed the goodwill paid is often written off a few years later.
But consider the recent rash just from today's WSJ
Facebook offers $1 Billion in cash and stock for Instagram. The rationale is that gee FB ought to be worth $200 B and gosh Mr. Systrom at Instagram offers that it should be worth one percent of that, okay make it $1 billion.
Argentina grabbed IPF its largest oil and gas producer. But IPF is owned by Spain's Repsol, welcome to socialism in Argentina!
Audi is going to pay $1.1 B for Italian motorcycle manufacturer Ducati. Apparently this will allow Audi to parallel BMW's motorcycle business. I don't see the culture mix there but …
Amazon acquired the rights to the 14 classic by Fleming Bond Novels, this one does make sense.
Nestle is buying Pfizer's infant nutrition business for $9 Billion. Their offer beat out Damon and Mead.
Good ideas or bad, it happens during periods of good not bad mood. No one was merging in March, 2009.
Wednesday April 18, 2012
The CEO of CHK has borrowed $1.1 B from his own company. The money is used so that he can invest a 2.5% interest in the company's own wells. He and the company claim there is no conflict of interest. Ge looks like a sort of related party loan to me! What do you think?
Tuesday April 17, 2012
Avon AVP
Coty has anounced it has lined up $5 billion in equity financing and is confident of another $9 B in debt if need be. This regards its unsolicited bid for AVP. Above the stock is in play, note the jump from 19 to the offer at 23.25.
AVP of course wanted the higher number in the blue box at left back when it traded at $30.
Which is the correct offer? How would you use tools we have learned in Accounting to evaluate the difference in the two prices? Rest assured you will be asked about that in class tomorrow!
Thursday April 12, 2012
I am heading to the Socionomics Conference tomorrow. The latest study from that group suggests that big big changes are ahead for Higher Education.
Richard Branson holds forth on that topic.
Wed April 11, 2012
2nd Saturday Film Festival: “Stand and Deliver”
Class, this is a reminder to you that our final 2nd Saturday Film Festival event for Spring 2012 will take place this Saturday, April 14th. Doors open at 6 PM; the show starts shortly thereafter. Come early for best seats. This will be the final opportunity for 'extra' course credit for professors awarding such credit for attending the Festival.
Our Saturday event will feature the film "Stand and Deliver", the true story of Jaime Escalante, a math teacher who refuses to write-off his inner-city students as losers. The film captures his struggle to help marginalized students overcome their insecurities and distractions to become champions at math. This film is rated PG.
Adrian B. Guardia PhD, SPHR
School of Business, Management/HRM
Faculty Advisor, SHRM@TAMU-SA
2601 Louis Bauer Drive
San Antonio, TX 78235
Tuesday April 10, 2012
My modest prediction, among others, is that the Facebook IPO will be near or mark a top in the ascent of the US Stock market. We have more evidence of that today. FB has bought Instagram for $1 Billion. An editorial in the WS on page A 16 marvels at this and an article in Section B attempts to explain it.
It's the dot.coms all over again. Instragram has but a dozen employees. It has no revenue.
Its founder sold his first company Nextstop for $2.5 M to Facebook. He then started Burbn which 'he could not explain to anyone.' HE focused on the photo features. The irony is that Instagram changes a digital photo, one shot on a phone for example, to look like an older polaroid or Kodak Instamatic photo. Polaroid has been through bankruptcy twice sine 2000 and EK is there now, if only they had realized this missed opportunity.
But FB is 'behind in mobile' and gee we can't have that with the IPO around the corner.
Note on page C2, for perspective, the Plaza Hotel in NYC is in play for $600 M. We bet the Plaza will easily outlast Instagram.
Our take is this is the whole March 2000 dot.com mania played out again. Instragram has no revenue and is really just a couple of the sort of filters that come standard in Olympus cameras these days. Zuckerberg seems to be falling prey to the moment. But fear not for Mark, he'l be fine.
An 18 year period of stagnation is caused by emotions running from wildly positive to horribly negative. The dot.com mania had its last 40% move in 4 months, after taking 18 years to get to NASD 3,000. It was propelled by a belief that companies with great IPOs but no revenue would re write marketing as we knew it. Wrong.
The bottom came a few yeaars later at NASD 1250, one fourth of its high. The dot.coms had become dot.gones. 9/11 was even more depressing. But then, the market discovered real estate which of course never goes down, and we were off again bolstered by absurdly low interest rates. And so the market hit new highs in 208. And then, real estate can go down, and did.
Now the mania for social media has moved markets up again. This seems even more illusory to me. At least garden.com and appliance.com intended to sell somethng. Instagram is a photo filter which will be on Facebook, which is a digital scrapbook for grandmothers (sorry just my take) which sells 10% of the ads that Google sells. My Space is already on its way to the Netscape / Word Perfect Hall of Fame, built next to the Tandy 1000 / Commodre 64 Hall of Fame Pavillion.
or as one reporter wondered aloud about Enron, how does this company make money? The valuations here are not justified.
From Us Steel in 1962 to Instagram in 2012, you tell me. This is how stock market tops are made.
Tuesday April 10, 2012
The Chicago Mercantile Exchange is one of rou bourses on a short list of bidders for the Lond don Metal Exchange.
Meanwhile Zero Hedge reports that CHesapeake Energy CHK did not 'hedge' its natural gas production going into 2012. What does that mean? Othe rnat gas companies like encana, Linn Energy, Venoco has gedged at least 75% of thier 2012 production.
Hedging is a for of risk management. The futures market exists to offer strategies to lower risk. A natural gas producer who hedges sells production forward at a fixed price to 'lock in' revenue.
We are studying derivatives in Intermediate Accounting. Please reaad this article as part of your study of futures markets.
Monday April 9, 2012
Avon hired Johnson and Johnson exec Sheri McCoy as its new CEO. Nothing like a take over offer to get things rolling eh? We are following this as part of our studies on Equity.
Sunday April 8 2012
If asked, most business students will claim that they would like to make a lot of money.
So far I have had zero zip nada success getting either the students or our marketing professors to see the rather obvious link between social mood and marketing success.
Here is yet another example. This Sunday the Express News interviewed San Antonio 911
Dispatch Sergeant Joe McKinney. His third novel Flesh Eaters in the four novel series Dead World chronicles a hurricane flooded Houston teeming with zombies hujngry for trapped survivors.
Hey I can't make this stuff up. Joe just won the 2012 Bram Stoker Award for superior achievement for this (Stoker wrote the original Dracula novel).
Joe grew up in Clear Lake south of Houston, I was a kid in Bellaire in Southwest Houston. And anyone who endured the heat, humidity, mosquitoes, and torrential rains would indeed like to see the whole place sunk for good, eliminating human habitation for future generations. So no wonder he had zombies descend on the place. Or as wikipedia points out,
Zombie fiction is now a sizeable sub-genre of horror, usually describing a breakdown of civilization occurring when most of the population become flesh-eating zombies —a zombie apocalypse. But I digress.
My point is that connecting with what is popular in social mood brings success. Here a policeman has the right formula. The guy that started LULU, selling high priced tank tops and sweat pants for yoga class has it as well. There are dozens of Mexican restaurants here but somehow someway the simple walk up and take your pick business model of Chipolte Mexican Grill CMG made that stock a runaway success. Take a look at
the market perspective for an update on Abe Lincoln, Vampire Killer, coming at a budget of $70 M to a theater near you this summer.
Tune in and turn on to socionomics, I am headed to the national convention next weekend.
Professor Elam 