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More Bids arrive to acquire Dell Computer More Bids arrive to acquire Dell Computer

March 25, 2013 - Dell Inc received two takeover bids besides the bid by founder Michael Dell to take the company private. The two competing bids are from Blackstone Group a private equity fund and Carl Icahn the activist investor. A committee within the company said the new bids might be superior to Dell’s that was sent in last month.

Dell offered $13.65 per share for the struggling computer manufacturer that totaled $24.4 billion. He said he would be willing to explore the possibility of working with another party on the other two proposals received. Dell’s offer has the backing of Silver Lake Partners, an investment company.

Icahn’s offer includes an equity commitment of $5 billion and the investor said he already has a large stake in Dell. He is willing to purchase $2 billion of the company’s shares for $15 each and another $2 billion for cash equity financing, over and above the current shares he and his business already own.

Blackstone Management Associates offered to buy the company for $14.25 per share and announced that the existing shareholders could stay with the new company if they chose to.

The interest of both Icahn and Blackstone came prior to a deadline for more offers that expired last Friday. Each of the two notified the computer company they were working on bids.

The plot over a takeover is thickening and that shows that some of the more influential player as far as finance sees a bright future for Dell. However, this comes as worldwide personal computer shipments are way down, while smartphones and tablet’s popularity grows each day.

Close to 50% of all of revenue generated by Dell comes from PC sales. Founder Dell was the one who kicked started the effort in 2012 over taking the business private.

The 48 year old founded Dell in 1984 from his dorm room as the University of Texas. He turned it into a powerhouse amongst personal computer businesses. He stepped down in 2004 as the CEO but returned to take the reins again in 2007.

Profits fall at Darden Restaurants Profits fall at Darden Restaurants

March 24, 2013 - Third quarter profits fell at Darden by 18%, as the company dealt with lower sales in Red Lobster. Nevertheless, the performance still was able to beat expectations on Wall Street.

The company, based in Orlando, Florida, said on Friday that its sales at Olive Garden, LongHorn Steakhouse and Red Lobster restaurants that were open at least one year dropped by 4.6% combined.

That figure is an important gauge of a restaurant’s performance since it excludes those results at restaurant that was recently opened or had just closed.

Darden’s Restaurants Inc. has struggled to regain notoriety as more diners head to chains such as Panera and Chipotle, where they feel restaurant quality food is being served at lower prices. As the chain looks for different ways to keep up with the shifting trends, a pay at the counter concept began being tested at Red Lobster in two locations close to its headquarters.

For the quarter ended February 24, Darden’s profits were $134.4 million a per share value of $1.02. That was down from just over $164 million or a per share rate of $1.25 last year during the same period. Analysts had predicted that the restaurant would earn just $1.01 per share.

Revenue for the restaurant chain was up 5% to just over $2.66 billion from last year’s $2.16 billion during the same reporting period.

Revenue for Red Lobster was off 6% as it tried to contend with more expenses and weak sales at is U.S. restaurants open a year or more. Revenue at Olive Garden was up slightly and LongHorn Steakhouse revenue jumped by nearly 7% as the two chains earned money from newly opened restaurants.

Darden said bad weather this winter hurt its sales at some restaurants. The company held to its fiscal earnings forecast for 2013 of between $3.06 a share and $3.22 a share. Analysts are predicting earnings of $3.17.

Nike Stock Surges on Margins and Rebound in China Nike Stock Surges on Margins and Rebound in China

March 23, 2013 - Nike Inc. the largest sporting goods business in the world, increased the most in over four years following the easing of concerns by investors that the company’s profitability and its China business were becoming weaker.

Shares in the company, based in Beaverton, Oregon increased by 11% to $59.53 at Friday’s close on Wall Street. It was the largest gain for Nike since October 28 of 2008. Nike has rebounded by 15% this year in comparison to only a 9.1% by the S&P 500 Index.

Increases in prices that were put into place last year have finally paid dividends for the company, as the company saw its gross margin get wider for the first time in over two years. At the same time, the company reported that Nike brand orders in China, not including changes for currency exchange, gained after sales in that country dropped 10% during the last quarter for a second consecutive quarterly drop.

The increase in gross margin during the fiscal third quarter from Nike which ended on February 28, comes at a time when its earnings from operating increased 16% to over $662 million from $569 million a year earlier, Nike said in a statement. The increase was equivalent to 73 cent per share and analysts had predicted an increase to 67 cents per share.

The company released an initial forecast for their fiscal 2014 year that stayed in line with estimates for analysts. The company said sales would increase in the mid single digit range percentage wise and earnings per share would be up in the mid teen percentage. Analysts’ gains had been 7% for Nike revenue and 14% for earnings.

Following the release of the most recent results, a number of financial analysts raised Nike’s price estimates.

China will be World’s Largest Economy by 2016 China will be World’s Largest Economy by 2016

March 22, 2013 - A new report released by the Organization for Economic Cooperation and Development says that China will continue its rapid growth for a four straight decade and will overtake the United States as the biggest economy in the world by 2016.
Last year, China’s growth dropped to 7.8%, its lowest in over a decade, but this year it is on track to rebound to over 8.5% and nearly 9% in 2014, said the report. It has been forecasted that China would have an average growth of 8% in terms of per capita during this decade, provided the government is able to implement a number of regulatory, financial and economic reforms.

China’s record for sustaining growth has been good and is positioned well to emulate the stellar performers from Asia of the past. The report by the OECD noted that there would be a gradual ebb of growth in China as it catches up to other advanced economics. However, the report’s forecast is even ahead of the official target set by the Chinese government of 7% yearly growth for a five-year period that ends in 2015.

The economy in China is set to surpass the U.S. during 2016 in the latest report, which is online with previous estimates from the OECD.

Risks to the economic outlook were mentioned such as rising inflation, a weaker global economy, a risky financial system, an ageing population and inequality.

However, the reported noted that the Chinese government had done a great deal to cut reliance on the demand from outside the country and that rebalancing domestically was under way, with consumption becoming a bigger driver of the country’s growth than investment.

Recommended broad range reforms included a push to focus on building cities that were much more productive and larger. Chinese cities are expanding quickly but the rate of urbanization is below that of countries that have similar development levels.

Police Charge Man in $8 Million Facebook Stock Fraud Police Charge Man in $8 Million Facebook Stock Fraud

March 20, 2013- An investment adviser from Florida was charged on Tuesday by federal prosecutors in a securities fraud scheme of $8 million. Prosecutors said the man had capitalized on the enthusiasm over the shares of Facebook.

Authorities arrested Craig Berkman in Odessa, Florida at his home and he will be held until his first hearing on Thursday after making a brief appearance in court on Tuesday in Tampa.

The Florida businessman, who is 71 years of age, was charged by authorities with two counts of wire fraud and securities fraud. He is accused of saying he owned shares of Facebook prior to the company going public last May, when at the time he did not own any shares directly.

Federal authorities said Berkman kept nearly all of the $8 million he was given by over 50 investors. If he is found guilty as charged, he could face as much as 80 year behind bars.

Berkman is said to have seized up the interest in the highly coveted stock to swindle his investors out of millions of dollars.

Berkman was once a gubernatorial candidate for the GOP in Oregon and he falsely claimed in December of 2010 to his investors that he was the owner of shares of stock in Facebook.

Prosecutors said Berkman used a company he controlled to cheat his investors, by arranging for legal counsel as recently as last August to write investors and tell them the fund was legitimate and not a Ponzi scheme.

Those claims caused investors to hand over close to $5.5 million in accounts that Berkman controlled. Instead of using his investors’ money to purchase shares in Facebook, Berkman transferred the funds to his own personal account and used a significant amount for his own use and for the benefit of others.

 

Washington Post will start charging for Frequent Usage of Online Site Washington Post will start charging for Frequent Usage of Online Site

March 19, 2013 - The Washington Post has announced that this summer it will begin charging its frequent users of its website. It will ask those looking at more than 20 articles or other multimedia services each month to pay a flat fee. The company however has not said how much it was going to be charging frequent users.

The paper did say however, it would exempt large portions of its audience from having to pay fees. It subscribers of home delivery will have access free of charge to the site along with teachers, students, school administrators, military personnel and government employees who will all have access of an unlimited nature to the company’s website while at their schools or workplace.

The decision, while its modest compared to other moves by some publications, marks a big change for the newspaper. The Post has shied away from the “paywall” out of fear it would drive readers and online advertisers away. Nevertheless, it joins a group of large publications such as the Financial Times, Wall Street Journal, Boston Globe and New York Times that all charge in some form for online usage.

People who are familiar with the online efforts of the Post said the company would be releasing a new application for iPad that will help attract more subscribers. The CEO and chairman of the Washington Post, Donald Graham, has been among the most concerned in the journalism industry about the chance of adverse effects from charging to see online content. However, he has finally agreed, said insiders, to the latest model.

Unlike the Wall Street Journal and New York Times, The Post has for many years been a local business, receiving large sums of advertising revenue from merchants in the area eager to reach an audience that reads print. However, on in its online site, its audience is 90% outside the Washington metropolitan area.

 

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