The 33 banks that signed up for the Facebook initial public offering may have thought they were heavily discounting their normal six or seven per cent underwriting fee in return for some good publicity on a sure-fire winner. It doesn’t look like that now.
Facebook’s sputtering IPO is drawing scrutiny both to the role of Nasdaq, which has admitted to “embarrassing” mistakes on Friday, but to the price stabilisation tactics that the banks, led by Morgan Stanley, had to employ. Read more
Good old Warren Buffett and his folksy ways. A bunch of newspapers like the Clinch Valley News, the Hickory Daily Record and the Goochland Gazette will fit right in alongside Dairy Queen and See’s candies in Berkshire Hathaway’s collection of quaint Americana.
It’s nice to see a well-meaning billionaire sparing $142m in small change for the hard-hit community newspaper trade, particularly one who still likes to talk about the lessons he learned on his childhood paper route. As he sang to the Omaha Press Club a few weeks ago, “I’m only a paperboy.”
But look a little closer and it becomes clear that Thursday’s deal for most of Media General’s publications is as rational and opportunistic as any of Mr Buffett’s bigger deals. Read more
The travails of old media businesses are well-known but I’m starting to feel sympathy for advertisers and media buyers.
That sentiment was brought on by looking (in old media fashion) at the front of the print section of the New York Times today. The lead article is about Madison Avenue’s scepticism on whether Facebook is a good advertising medium and underneath that is a piece on Dish Network’s new ad-skipping digital video recorder.
Facebook’s advertisers have been struggling with whether display ads on the social network will produce results, with General Motors pulling its $10m Facebook ad budget ahead of the intial public offering.
Meanwhile, Dish has upset US television networks in the “upfront” season where they show off their next season wares to advertisers but producing a box that automatically skips all the commercials between network shows. Read more
This February, as JPMorgan Chase financial traders in London were building a credit derivatives position that would soon cost the bank $2bn, Jamie Dimon was otherwise occupied. He was on a 550-mile bus ride through Florida.
Facebook investors: you have been warned. The last time I was in Silicon Valley was 12 years ago, in the very week that the Nasdaq crashed, marking the end of the dotcom boom. That I should fly back into San Francisco on the eve of the social network’s initial public offering cannot be a good omen.
I’m not here to write about Facebook – for expert insights, read the analysis of my San Francisco-based colleagues or the FT Lex team – but the IPO overshadows most discussions. What strikes me is how entrepreneurs, technology executives and analysts I’ve met are reluctant to talk publicly about Facebook and its founder Mark Zuckerberg. Ask them what they think about him and they tend to preface their remarks with a polite request that this part of the interview should be off the record. Read more
Last Thursday I was, briefly, head of communications for a large Canadian widget maker, coping with a wave of Twitter-borne rumours about the arrest of its chief executive.
London is acquiring a dangerous reputation for US financial institutions.
The financial crisis in 2008 was set off by the London-based derivatives unit of American International Group, which was insuring potential losses for banks. Now, JP Morgan Chase finds itself in trouble over a $2bn hedging/trading loss in London. Read more
JP Morgan’s sudden conference call to disclose, and to try to explain, the $2bn trading loss that it racked up in only six weeks was one of the most absorbing bits of live financial theatre since the 2008 crash.
The star of the show, naturally, was Jamie Dimon, the bank’s ebullient and outspoken chief executive, who has been out in front leading the industry’s defence of “too big too fail” banks and pushing back against new capital requirements.
Mr Dimon isn’t given to mincing his words and he certainly didn’t this time, as I noted on Twitter while listening:
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