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Market Fragmentation in U.S. May Get Regulatory Review as SEC Begins Probe

May 7, 2010

By Nina Mehta and Chris Nagi May 7 (Bloomberg) — Federal regulators reviewing yesterday’s stock plunge will try to determine if the five-fold increase in the number of American equity exchanges has left them unable to manage the biggest surges in volume. Almost 1.3 billion shares traded on U.S. markets in a 10- minute span starting at 2:40 p.m., six times the average, sending prices lower on platforms from New York to Kansas City. Nasdaq OMX Group Inc. said it canceled transactions in 286 stocks where swings grew too wide. Federal agencies began inquiries after more than $700 billion in value was erased in an eight-minute span. While most of the losses were reversed as the pace of trading slowed and exchanges were able to match buyers and sellers, the 998-point plunge in the Dow Jones Industrial Average raised concerns that the U.S. was entering another financial crisis. The Securities and Exchange Commission will try to determine if market participants accidentally or maliciously derailed trading, according to two people familiar with the situation. Lawmakers plan to hold hearings next week. “Markets aren’t supposed to work this way,” said Jamie Selway , managing director of White Cap Trading LLC in New York and a former chief economist at NYSE Arca, a unit of NYSE Euronext. “There was a mad rush for the exits. We just don’t know whether it was accidental or intentional.” Multiplying Markets The Standard & Poor’s 500 Index closed at 1,128.15 in New York, down 3.2 percent, after losing as much as 8.6 percent. The rout showed how the fragmentation of the U.S. equity market may suppress demand when it’s needed most, especially when the New York Stock Exchange attempts to calm trading, said James Angel , a finance professor at Georgetown University in Washington. NYSE Euronext Chief Operating Officer Larry Leibowitz said the Big Board prevented a bigger decline. While the first half of the intraday plunge probably reflected normal trading as concern increased that Greece’s credit crisis will spread, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in a Bloomberg Television interview. Accenture Plc , Exelon Corp. and Philip Morris International Inc. were among U.S. stocks that dropped more than 90 percent as U.S. equities tumbled, before recovering within minutes, according to Bloomberg data. Prices fell to pennies in some companies after the New York Stock Exchange switched from electronic matching to auctions, a program that encourages some sell orders to flow to smaller exchanges that had few if any buyers, according to Leibowitz. Electronic Markets “If you look at the charts you can see fairly clearly where the trades came in,” he said from New York. “It’s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split-instant because there really was no liquidity in electronic markets.” Increasing automation and competition have reduced the NYSE and Nasdaq’s volume in securities they list from as much as 80 percent in the last decade. Now, less than 30 percent of trading in their companies takes place on their networks as orders are dispersed to as many as 50 competing venues, almost all of them fully electronic. Twenty years ago, fewer than 10 exchanges competed for all U.S. equity trades. More than 29.4 billion shares changed hands in U.S. markets yesterday, the most since October 2008. In addition to traditional exchanges such as the NYSE, rivals Bats Global Markets Inc. in Kansas City and Jersey City, New Jersey-based Direct Edge LLC handled millions of trades. About 2.6 billion shares traded on the NYSE, the lowest level relative to overall volume in three years, data compiled by Bloomberg show. ‘A Mistake’ “When a large order or series of orders comes into electronic markets, they don’t really have any way to recognize either that they’re a mistake or to slow them down to attract the proper liquidity,” Leibowitz said. “Electronic markets actually traded all the way through the slower New York Stock Exchange markets where we were trying to slow down trading.” Rapid-fire orders trigger what the NYSE calls liquidity replenishment points, or LRPs, shifting the market into auctions. While the system is designed to restore order on the Big Board, trading is so fast during times of panic that orders routed past the exchange may swamp other venues and exhaust buy orders, said Angel at Georgetown. That’s when prices may plummet as orders execute against so-called stub quotes from market makers. Brokers can set the quotes as low as a penny a share because they’re never expected to be used. ‘Doesn’t Work’ “The LRP model doesn’t work,” Angel said. “The idea that when the market is going crazy you can slow down trading in one market and not others means that sell orders were churning through the books at every other market. NYSE dropped out of the running.” Nasdaq OMX said it will cancel stock trades that were more than 60 percent above or below price levels at 2:40 p.m. New York time, just before U.S. equities plummeted. The New York- based firm said it investigated trades between 2:40 p.m. and 3 p.m. CBOE Stock Exchange canceled 18 trades of 100 shares that took place at 1 cent in Accenture over seven seconds starting at 2:47 p.m. The trades occurred against stub quotes, according to David Harris, the exchange’s president. Trades were canceled on CBSX because the market is newer and its book of orders is “thinner,” which led to transactions occurring away from reasonable prices, he said. Connected Markets “We are all connected to each other,” Harris said. “We receive orders electronically and if an order requires an execution we execute it. If it’s away from the market and violates our clearly erroneous trade policy, we bust the trade.” The market rout triggered scrutiny from lawmakers. U.S. Representative Paul Kanjorski , a Pennsylvania Democrat, set a May 11 hearing. U.S. Senator Ted Kaufman , a Delaware Democrat, questioned whether markets that increasingly rely on computer algorithms to execute thousands of transactions in seconds triggered false trades. “This is unacceptable,” Kanjorski, who leads the House Financial Services subcommittee that oversees the SEC, said in a statement. “We cannot allow a technological error to spook the markets and cause panic.” Procter & Gamble Nasdaq’s decision means that trades in Cincinnati-based Procter & Gamble Co. , which fell as much as 37 percent for the biggest intraday drop in the Dow industrials, would stand. The world’s largest consumer products company said stock trades that pushed its shares down were probably an error. Computer programs that increase sell orders when stocks are falling may have exacerbated yesterday’s plunge, said Nick Colas , chief market strategist at BNY ConvergEx Group LLC in New York. Programs that may have smoothed out trading during periods of low volatility can “make market moves a lot worse” when equities are plunging, he said. “This was like what we saw happen on the worst days of the financial crisis in late 2008 and early 2009,” Colas said. “This is not a healthy dynamic. The markets need to work efficiently and properly, particularly during periods of stress.” To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net .

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Electronic Trading to Blame for Plunge, NYSE Says

May 6, 2010

By Chris Nagi and Matt Miller May 6 (Bloomberg) — Computerized trades sent to electronic networks turned an orderly stock market decline into a rout, according to Larry Leibowitz , the chief operating officer of NYSE Euronext. Nasdaq OMX Group Inc. canceled trades in 286 securities that rose or fell 60 percent or more. While the first half of the Dow Jones Industrial Average’s 998.5-point intraday plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television. “If you look at the charts you can see fairly clearly where the trades came in,” he said from New York. “It’s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split-instant because there really was no liquidity in electronic markets.” The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop. The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission are reviewing “unusual trading” that contributed to the plunge. NYSE Volume More than 29.4 billion shares changed hands in all U.S. markets today, including traditional exchanges such as the NYSE, rivals Bats Global Markets Inc. in Kansas City and Jersey City, New Jersey-based Direct Edge LLC, and other electronic platforms. The level compares with 2.58 billion traded on the NYSE, making it the biggest gap between the two in more than three years, data compiled by Bloomberg show. Increasing automation and competition have reduced the Big Board and Nasdaq’s volume in securities they list from as much as 80 percent in the last decade. Now, two-thirds of trading in their companies takes place off their networks because orders are dispersed across dozens of competing venues. Nasdaq OMX in said it will cancel stock trades that were more than 60 percent above or below price levels at 2:40 p.m. New York time, just before U.S. equities plummeted. The New York-based firm investigated trades between 2:40 p.m. and 3 p.m. ‘Snapped Back’ “The fact that it snapped back so quickly made it clear that it was an aberration,” Leibowitz said. “When a large order or series of orders comes into electronic markets, they don’t really have any way to recognize either that they’re a mistake or to slow them to down to attract the proper liquidity on the other side.” The NYSE doesn’t know where the trades that triggered the selloff originated, according to Leibowitz. Citigroup Inc. said it found “no evidence” that it was involved in erroneous trades, a finding supported by futures market CME Group Inc., after U.S. equity markets plunged today. The market rout triggered scrutiny from lawmakers. U.S. Representative Paul Kanjorski , a Pennsylvania Democrat, set a May 11 hearing. U.S. Senator Ted Kaufman , a Delaware Democrat, questioned whether markets that increasingly rely on computer algorithms to execute thousands of transactions in seconds triggered false trades. “This is unacceptable,” Kanjorski, who leads a House Financial Services subcommittee that oversees the SEC, said in a statement. “We cannot allow a technological error to spook the markets and cause panic.” Accenture, Exelon Accenture Plc , Exelon Corp. and Philip Morris International Inc. were among 27 U.S. stocks with at least $50 million in market value that dropped more than 90 percent as U.S. equities tumbled, before recovering by the close, according to Bloomberg data excluding exchange-traded funds. The Nasdaq’s decision means that trades in Cincinnati-based Procter & Gamble Co. , which fell as much as 37 percent for the biggest intraday drop in the Dow industrials, would stand. The world’s largest consumer products company said stock trades that pushed its shares down were probably an error. “Our greater concern is not the fact that a trade error occurred at all but the magnitude of its impact,” Birinyi Associates Inc., the research and money-management firm founded by Laszlo Birinyi , said in a note today. “We propose that when trading errors have occurred in the past, their impact has not been as significant and impactful because of the existence of human intervention.” To contact the reporters on this story: Chris Nagi in New York at chrisnagi@bloomberg.net ; Matt Miller in New York at mtmiller@bloomberg.net

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Electronic Trading to Blame for Stock Market Plunge, NYSE’s Leibowitz Says

May 6, 2010

By Chris Nagi and Matt Miller May 6 (Bloomberg) — Computerized trades sent to electronic networks turned an orderly stock market decline into a rout today, according to Larry Leibowitz , the chief operating officer of NYSE Euronext. While the first half of the Dow Jones Industrial Average’s 998.5-point plunge probably reflected normal trading, the selloff snowballed because of orders sent to venues with no investors willing to match them, Leibowitz said in an interview on Bloomberg Television. “If you look at the charts you can see fairly clearly where the trades came in,” he said from New York. “It’s that V-shaped drop where it came down and snapped right back up. You had some very high-cap stocks trading down 50 percent or large percentages in a split instant because there really was no liquidity in electronic markets.” The selloff briefly erased more than $1 trillion in market value as the Dow average tumbled 9.2 percent, its biggest intraday percentage loss since 1987, before paring the drop. More than 29.4 billion shares changed hands on all U.S. venues today, including traditional exchanges such as the NYSE, rivals Bats Global Markets Inc. in Kansas City and Jersey City, New Jersey-based Direct Edge, and other electronic platforms. The level compares with 2.58 billion traded on the NYSE, making it the biggest gap in more than three years, data compiled by Bloomberg show. More Venues Increasing automation and competition have reduced the Big Board and Nasdaq’s volume in securities they list from as much as 80 percent in the last decade. Now, two-thirds of trading in their companies takes place off their networks because orders are dispersed across dozens of competing venues. Nasdaq OMX Group Inc. said it will cancel stock trades that were more than 60 percent above or below prices at 2:40 p.m. New York time, just before U.S. equities plummeted. The New York-based firm, which investigated trades between 2:40 p.m. and 3 p.m., said it will provide a list of stocks affected and the prices at which the trades will be canceled. “The fact that it snapped back so quickly made it clear that it was an aberration,” Leibowitz said. “When a large order or series of orders comes into electronic markets, they don’t really have any way to recognize either that they’re a mistake or to slow them to down to attract the proper liquidity on the other side. And so the electronic markets actually traded all the way through the slower New York Stock Exchange markets where we were trying to slow down trading.” To contact the reporters on this story: Chris Nagi in New York at chrisnagi@bloomberg.net ; Matt Miller in New York at mtmiller@bloomberg.net

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Ryder Cup Financier Backs Startups to Unclog Wireless Networks

April 13, 2010

By Hugo Miller April 13 (Bloomberg) — Shortly after Terry Matthews left his native Wales for Canada in 1969, he started a venture importing electric lawnmowers from the U.K. It quickly floundered, he said. The shipping company lost the delivery and the machines didn’t arrive until October. “You can’t give lawnmowers away in October,” said Matthews, 66. “Timing in life is almost everything.” Now Matthews, who became a billionaire from technology companies he started, sees opportunity for companies that can help wireless carriers relieve the strain on their networks from smartphones such as Apple Inc. ’s iPhone. Among the 60 companies he has started or backed are a handful that make technology for wireless operators, including Dragonwave Inc. and Bridgewater Systems Corp. “The drivers of change are mobile devices, mainly mobile phones,” said Matthews, during an interview in his modern concrete office building outside Ottawa. “The bandwidth that’s associated with that is dramatically increasing.” Dragonwave and Bridgewater, both based in Ottawa, have surged along with the data on wireless operators’ networks. Dragonwave rose 10-fold last year, while Bridgewater more than tripled. Dragonwave supplies microwave radio products that link transmission towers to carriers’ land-line networks; Bridgewater makes software to help Verizon Wireless and other customers ease data congestion. Several Matthews-backed startups are still private, including BenBria. This month, Mitel Networks Corp., a maker of telecom software and equipment started by Matthews, said it plans to raise as much as $211 million in an initial public offering. Matthews wouldn’t discuss the IPO, citing restrictions of the current investor roadshow. Ryder Cup Development Matthews’ investments have been successful enough that in 1980 he bought the former Wales maternity hospital where he was born, and has spent 100 million pounds developing the property into the Celtic Manor Resort with three golf courses. The site is scheduled to play host to golf’s Ryder Cup in October.     The courses are “full all the time,” said Matthews, who sold his Newbridge Networks Corp. to Alcatel-Lucent SA in 2000 for $7.2 billion. “I don’t play. It takes four hours.” Matthews sees his startup investments as part of a broader revival in the Canadian technology sector. Many local companies are being founded by former employees of Nortel Networks Corp. , the telecom equipment maker that filed for bankruptcy last year. Dragonwave Chief Executive Officer Peter Allen and Bernard Herscovich , CEO of local startup BelAir Networks Inc., both worked at Nortel. Revival In Ottawa “You take a look at Ottawa, and you’ll say Nortel’s melted down, well true,” said Matthews. “The fact of the matter is it is coming back. The activity level for new companies starting up is wild.” Last year, 222 startups were established in the nation’s capital, according to the Ottawa Centre for Research and Innovation , while 215 firms were bought or went bust. Matthews sits on the boards of 12 companies and chairs 10 of them. “The fact that Bridgewater and Dragonwave have succeeded reminds investors why technology investing can be a profitable enterprise,” said Mark McQueen , president of the Toronto-based venture capital firm Wellington Financial. The skills of the region’s workforce may be well suited to helping major carriers with network congestion, Matthews said. AT&T Inc. , Verizon Wireless., and other mobile-phone operators are looking for cost-effective ways to manage the surge in data traffic on their wireless networks. AT&T has said that traffic on its network has increased 50-fold in the past three years. The new companies haven’t boosted total technology employment in the Ottawa area. The number of tech jobs slipped 1.3 percent last year to 78,067 according to the Ottawa Centre. Investment Approach Matthews’ investment approach is to back companies that solve real problems for customers and have attracted customers willing to pay up for products. “It’s a fallacy to think that you take a pot, put very smart people in it, a ton of money and something’s bound to come out,” he said. “The important thing is to connect with clients.” In his office, he pulled down an old rotary-dial converter made by one of the first companies he started in 1972 with a mere C$4,000. He sold a controlling stake in that company to British Telecom in 1985. “I start about five new companies a year. The typical amount I start a company with is a half a million dollars,” Matthews said. “What I do is remove the speculative nature of the R&D by connecting with clients.” To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

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Juniper Will Acquire Ankeena for Less Than $100 Million, Challenging Cisco

April 8, 2010

By Rochelle Garner April 8 (Bloomberg) — Juniper Networks Inc. , the second- largest maker of networking equipment, will pay less than $100 million for Ankeena Networks Inc., a maker of video-streaming software that may help it compete with Cisco Systems Inc. Senior management from Ankeena, a closely held company in Santa Clara, California, will join Juniper after the acquisition, according to a statement today. Exact terms of the deal weren’t disclosed. Juniper and Cisco are adding video capabilities as they woo service providers, carriers and cable companies, which are scrambling to handle the surge in demand for Internet video. Ankeena’s software helps customers stream massive amounts of video without visual jerkiness or disruptions. Founded in 2008, Ankeena is backed by Clearstone Venture Partners, Mayfield Fund and Trinity Ventures. The company competes with Alcatel-Lucent , in addition to Cisco, the biggest maker of networking gear. The deal will probably close this month, Juniper said. Juniper , based in Sunnyvale, California, fell 59 cents to $30.90 at 12:41 p.m. New York time in Nasdaq Stock Market trading. The shares had advanced 18 percent this year before today. To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

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Carlyle’s SS&C Prices IPO at High End of Range as Meru Adds to Rebound

March 31, 2010

By Craig Trudell and Michael Tsang March 31 (Bloomberg) — SS&C Technologies Holdings Inc. and Meru Networks Inc. sold shares in initial public offerings at the high end of their price ranges, as a recovery in the U.S. IPO market gained momentum. Carlyle Group’s SS&C, which provides trading and investment management software to the financial industry, raised $161 million after pricing 10.7 million shares at $15 each, according to a filing with the Securities and Exchange Commission and Bloomberg data. Sunnyvale, California-based Meru , the maker of Wi-Fi networking equipment, sold $65.8 million of shares at $15 each. Both companies sought $13 to $15 each in their sales. The initial sales came after a rally in U.S. stocks to an 18-month high spurred a revival in IPO demand. All seven American deals in the past two weeks were sold within or above the price ranges set by underwriters as the rebound in the Standard & Poor’s 500 Index from its low on Feb. 8 increased to 11 percent. The first 14 offerings of 2010 were chopped by 24 percent on average, according to data compiled by Bloomberg. “The sentiment for IPOs has really improved,” said Josef Schuster , the Chicago-based founder of IPOX Capital Management LLC and manager of the Direxion Long/Short Global IPO Fund. “It’s worthwhile to consider these stocks if they price at the upper end of the range to buy them.” MaxLinear, Calix MaxLinear Inc. , which designs semiconductors that let people watch television on their mobile devices, raised 28 percent more than the Carlsbad, California-based company originally sought in its initial sale last week. The same day, Calix Inc. , which sells connection equipment to telephone companies, priced its offering at the high end of its forecast range. MaxLinear jumped 34 percent in its first day of trading, while Petaluma, California-based Calix gained 16 percent. SS&C of Windsor, Connecticut, sells software that helps fund managers and brokerages trade stocks, bonds, currencies, futures and options, as well as financial modeling tools for municipal bonds and life insurance, according to its SEC filing. The company sold a 16 percent stake and will receive 77 percent of the proceeds before fees and expenses, according to its filing. Carlyle, the Washington-based buyout firm that oversees $89 billion, didn’t plan to offer shares in the IPO and will retain a 63 percent stake. Most of the net proceeds will be used to redeem as much as $71.75 million in outstanding debt due in 2013, on which SS&C pays 11.75 percent in annual interest. The company will keep the rest and may use the money to finance potential takeovers. Relative Value The offering gives SS&C a market capitalization of $1.04 billion when it starts trading today on the Nasdaq Stock Market under the ticker SSNC. That’s 55 times the company’s 2009 net income of $19 million, data compiled by Bloomberg show. The valuation is more than three times the median 16.99 times that 98 computer-software suppliers command globally, data compiled by Bloomberg show. SS&C was also valued at premiums of at least 14 percent to two of its competitors. Evesham, England-based Misys Plc , which provides a rival service to banks and credit unions, trades at 46 times earnings. Advent Software Inc. in San Francisco, SS&C’s competitor for portfolio-management software, is valued at 48 times income, data compiled by Bloomberg show. JPMorgan Chase & Co. of New York arranged SS&C’s sale. Meru, backed by Clearstone Venture Partners and New York- based hedge fund firm D.E. Shaw & Co., will use the proceeds from the IPO to expand sales and marketing, as well as research and development, its filing showed. The company had $69.5 million in sales last year, a 27 percent increase from a year earlier. Bank of America Corp. of Charlotte, North Carolina, arranged Meru’s initial offering. Canadian IPOs Athabasca Oil Sands Corp. raised C$1.35 billion ($1.32 billion) yesterday, Canada’s biggest IPO since Toronto-based Manulife Financial Corp. sold C$2.48 billion in 1999. The oil exploration company sold 75 million shares at C$18 each, according to a prospectus. Calgary-based Athabasca’s sale exceeded Sensata Technologies Holding NV’s $569 million offering this month, making it the largest deal of 2010 in North America. To contact the reporters on this story: Craig Trudell in New York at ctrudell1@bloomberg.net ; Michael Tsang in New York at mtsang1@bloomberg.net .

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Primerica Sells at a Discount in IPO as Citigroup Dismantles Weill’s Deals

March 30, 2010

By Michael Tsang, Craig Trudell and Michael J. Moore March 30 (Bloomberg) — Primerica Inc., the insurance business that Sanford I. “Sandy” Weill used to build Citigroup Inc., is selling shares in an initial public offering at a discount to its competitors. Primerica plans to raise $252 million tomorrow, a filing with the Securities and Exchange Commission and Bloomberg data showed. At the middle of its price range, the Duluth, Georgia- based distributor of consumer-finance products from term-life insurance to mutual funds would be valued at 6.74 times earnings after accounting for its planned reorganization. That’s 29 percent less than the median for U.S. life and health-insurance providers, data compiled by Bloomberg show. Citigroup Chief Executive Officer Vikram Pandit is dismantling the company Weill built spending about $50 billion on Travelers Corp., Salomon Inc. and Citicorp during the 1990s to offer everything from insurance to stock broking and branch banking. The sale comes after the Standard & Poor’s 500 Index’s rally to an 18-month high spurred a rebound in the IPO market. “The Primerica deal reflects a shift from the financial supermarket model , where instead of being good at a lot of things, a company like Citigroup ended up being mediocre at everything,” said James Dailey , who oversees $140 million as chief investment officer at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. “Primerica could fetch a reasonable price. It’s been around a long time, its brand is established.” Primerica is one of four U.S. companies scheduled to sell shares through initial offerings this week. IPO Rebound All five IPOs since March 15 have priced within or above their forecast range as the S&P 500 extended a rebound from its 2010 low on Feb. 8 to 11 percent . The previous 14 deals since the start of the year had been cut by 24 percent on average, data compiled by Bloomberg show. Carlyle Group’s Windsor, Connecticut-based SS&C Technologies Holdings Inc. , which sells trading and investment management software to the financial industry, and Meru Networks Inc. of Sunnyvale, California, which makes Wi-Fi networking equipment, are scheduled to price their IPOs today. Carlyle, the Washington-based buyout firm that oversees $89 billion, won’t sell SS&C shares in the $161 million offering. Tengion Inc. , the East Norriton, Pennsylvania-based company trying to grow replacement organs and tissues, is also set to hold its IPO this week, according to Bloomberg data. Primerica , which has 100,000 representatives selling financial services to households with $30,000 to $100,000 in annual income, earned $495 million in 2009, an almost threefold increase from a year earlier. Relative Value Net income rebounded after declining 72 percent in 2008, when Primerica wrote down some of its goodwill, or the amount paid above the net asset value in an acquisition. As part of its reorganization, Primerica will transfer 80 percent to 90 percent of the “risk and rewards” from the life insurance policies that it sold and distribute $622 million in assets to Citigroup before the IPO, according to the filing. That includes a $454 million one-time dividend to Citigroup. At the middle of its $12 to $14 price range, the company is valued at 6.74 times its 2009 per-share income of $1.93, after taking into account a decrease in revenue and profit that would have taken place if the reorganization occurred on Jan. 1, 2009, according to its filing and data compiled by Bloomberg. That’s less than the median 9.52 times price-earnings ratio for 23 publicly-traded U.S. life and health-insurance providers, Bloomberg data show. Prudential, Ameriprise Prudential Financial Inc. of Newark, New Jersey, the second-largest life insurer, and Ameriprise Financial Inc. , the Minneapolis-based financial planning and services firm, command higher valuations, data compiled by Bloomberg show. Primerica lists the two companies among its biggest competitors. Buyers of Primerica’s IPO will own 24 percent of the insurance firm after the offering. They will also be investing alongside New York-based Warburg Pincus LLC, which oversees $30 billion. The private- equity firm agreed to buy 17.2 million shares, or a 23 percent stake, in a private sale at the IPO midpoint price, and warrants to purchase 4.3 million shares at a 20 percent premium. Warburg’s stake may increase to 33 percent if the firm exercises its right to buy additional shares from Citigroup. “It’s a ‘fire sale’ by Citi,” Francis Gaskins , president of IPOdesktop.com in Marina del Rey, California, said in an e- mail. Also, “the IPO investor can get in on the same terms as Warburg. There appears little, if any, risk in this IPO at $13.” Credit Markets All proceeds will go to New York-based Citigroup, which is serving as the lead underwriter for the sale. Primerica is part of Citi Holdings, the collection of businesses that Citigroup’s Pandit said he would sell, wind down or restructure. Pandit is dismantling Weill’s empire after loans and investments tied to the U.S. subprime mortgage market led to $47.6 billion in losses since the last quarter of 2007. Citigroup took a taxpayer-funded bailout after the credit markets froze, Lehman Brothers Holdings Inc. collapsed and Bear Stearns Cos. and Merrill Lynch & Co. were forced to sell themselves. All three companies were based in New York. Weill used Primerica to build Citigroup through a series of acquisitions. In 1992, Primerica bought a 27 percent stake in Travelers, then took over the company a year later for $3.3 billion, keeping Travelers’ name and umbrella logo. The company acquired Salomon in 1997 and in 1998 merged with Citicorp in a $37.4 billion deal to create Citigroup. “This provides an important message that Citi is prepared to shed assets which clearly do not fit the current strategy, even if they have well-known brands,” said Richard Staite , a London-based analyst who covers financial institutions at Atlantic Equities LLP. “It’s a high-profile sale.” To contact the reporters on this story: Michael Tsang in New York at mtsang1@bloomberg.net ; Craig Trudell in New York at ctrudell1@bloomberg.net ; Michael J. Moore in New York at mmoore55@bloomberg.net .

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Brett King: Evolutionary marketing – Tribal, viral and mobile

March 26, 2010

There is a lot of discussion about how social media will play out from a mobile perspective, and how marketers in particular can monetize and leverage social media for real revenues and brand influence in the future. There are those, such as Umair Haque from Harvard Business Review Blog , that believe social media in its current form is a bubble with very little in the way of real income – in effect creating relationships that are not as robust as others would have you believe. As we start to see massive adoption of smart or App phone handsets, the promise of potential migration of social media onto these platforms are hailed as the real future of 2.0 with endless possibilities. When we throw Augmented Reality and Geo-Tagging into the mix, those who are pro social media envisage an interconnected semi-virtual community where purchase decisions, social grouping, real-time collaboration, even political lobbying are all enabled by mobile 2.0. Neither Haque’s lukewarm perception of ‘thin-connections’ or more upbeat assessments of the impact of AR-enabled social media are completely accurate because a key ingredient is missing in the assessment of the viability of mobile social networking. The real question businesses ask is how do you make money out of social media? We have seen social media give a voice to customers, empowering them to either individually or collectively influence policy, pricing or strategy. The flawed logic by Haque and others is that you need to define your social ‘network’ through a social media platform like Facebook or Twitter and that the voluntary nature of participation in these networks does not always guarantee quality relationship that can be leveraged commercially. The fact is that there are social tribes that exist that are a great deal more powerful than defined networks established on social networking sites (SNS). Everyday when we use our mobile phone we are participating in social behavior that is a great deal more natural and powerful than those established via SNS. Every time I call a friend or business contact, SMS or MMS my friends, check my email, or use mobile internet based communication tools, I’m forming social connections that look just like those you’d see on Facebook or Twitter, but are made up of extremely strong connections with my most intimate and trusted contacts and colleagues. These are extremely powerful natural, social networks that transcend programming and platforms – they are the networks formed by our day-to-day interactions in real terms. CDRs or Call Detail Records are the day-to-day transaction data recorded by mobile network operators to enable accurate billing on your mobile bill. These CDRs contain all of the information required to map social interactions within tribes with substantially more accuracy than an online social network. By data mining CDRs and seeing the natural connections between mobile users, strong network activity can be observed. Within these networks exist natural influencers of the tribe, key influencers or as Gladwell calls them connectors. By targeting these key influencers with targeted messages that are group sensitive, marketers could reach the entire group via the viral network effect. None of this is really happening effectively today because we are either still broadcast advertising, relying on sketchy CRM databases not informed by analytics or are using demographic, tag or keyword association in weaker social networks online. Key influencers are high value targets for initiating viral network campaigns As an illustration a small start-up in Australia, QMani Analytics , has recently demonstrated a platform they call tribefinder which can identifying the tribes contained within a mobile network operators CDR pool. But the key to success on the revenue side is matching other profile information from an enterprise CRM system, or from customer behavioral analytics (like credit card usage data) and filtering CDRs to create better tribal models . Then we need intelligent marketers who can create compelling viral offers that we can roll out via MMS to a key influencer so he or she can send it on to their valuable network. The best key influencers, of course, should also be great advocates. So once we identify these guys we should service the pants off them so they feel inclined to support our viral efforts (although they won’t recognize them as viral campaigns hopefully.) For network operators converting pre-paid to post-paid and preventing churn will be a handy by-product of tribe marketing. For retailers, banks, and other service organizations, however, we are talking highly targeted mini-segment offers that will have a massive acceptance rate. Cheaper than pretty much every current media platform, and magnitudes more effective at conversion, tribal marketing via natural mobile social networks is nothing short of a revolution in customer connectivity. The real challenge is not the technology. Tribefinder’s analytics engine is not rocket science. The real challenge is for companies to understand the shift in marketing dynamics. For almost a decade now traditional broadcast media has been in decline. Marketing to tribes requires a completely different skill set than is on offer in most organizations today, but it is a key part of our future in reaching and retaining customers. Tribal, viral, mobile – they are your future if you are trying to reach customers.

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Nortel Networks returns to profit in Q4

March 14, 2010

Nortel Networks returns to profit in Q4

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Disney May Pull ABC From Larger Cable-TV Distributors Next, Analysts Say

March 8, 2010

By Kelly Riddell March 8 (Bloomberg) — Walt Disney Co. , which blocked some viewers from the first 13 minutes of the Oscars last night amid a dispute with Cablevision Systems Corp. , may be about to do it again with bigger cable operators, analysts said. Disney didn’t restore the WABC-TV signal until after the Academy Awards show began airing at 8:30 p.m. New York time last night. Disney may repeat the maneuver if it can’t reach a deal with Time Warner Cable Inc. once their agreement ends in August, according to Wunderlich Securities LLC analyst Matthew Harrigan. “Disney may have been using Cablevision as a test case for its negotiations with Time Warner Cable and Comcast, where much larger dollars are concerned,” said Harrigan, who is based in Denver. “The timing will be hard to replicate, though — the Oscars is one of the most watched programs other than the Super Bowl.” Time Warner Cable has already put its 13 million viewers on alert, noting in an e-mail to subscribers yesterday that they haven’t lost access to the signal “yet.” Larger rival Comcast Corp. , whose contract for ABC isn’t up this year, also will face off with CBS Corp. at the end of 2010 as more broadcasters seek payment for channels that used to be free. “As the broadcast networks are less able to get advertising revenue, they’re turning to the cable guys to make up for that shortfall,” said Todd Mitchell , an analyst with Kaufman Brothers LP in New York. “For the cable guys, these programming costs are vastly outstripping their subscription pricing, so we’re getting to the point of showdowns.” Disney’s Terms Disney, based in Burbank, California, returned ABC to more than 3 million Cablevision viewers in Connecticut, New York and New Jersey last night after the two companies forged a preliminary agreement. They haven’t disclosed the terms of the deal. Disney was seeking about $1 a month from Cablevision for each subscriber getting the ABC signal, Barclays Capital analyst Anthony DiClemente said in a report this month. Time Warner Cable would pay more over all because it has more than four times as many subscribers as Cablevision. Disney fell 7 cents to $33.16 at 2:29 p.m. in New York Stock Exchange composite trading . Cablevision, based in Bethpage, New York, dropped 27 cents to $24.01. Time Warner Cable rose 79 cents, or 1.6 percent, to $49.08. The terms of the agreement are fair and in line with what Cablevision pays for other programs, spokesman Charles Schueler said today. Cablevision represents about 3 percent of ABC’s revenue, so that may have given it less leverage than Time Warner Cable or Comcast would have, according to Craig Moffett , an analyst with Sanford C. Bernstein in New York. “Cablevision had to know they were going to have to cave to ABC,” Moffett said. “Who had the greater leverage was never in doubt — it looks like Cablevision was just taking one for the team.” Internet Competition Broadcasters have said stations deserve to be compensated for supplying TV’s most-watched shows, including “NCIS,” “Sunday Night Football” and “Desperate Housewives.” In the past, the networks traded those rights to gain distribution for new cable channels, like Walt Disney’s ESPN2, or higher fees for their existing cable networks. Cable operators have balked at the fees because people can typically watch these programs on TV Web sites such as Hulu.com. New York-based Time Warner Cable already weathered blackout threats from News Corp.’s Fox in December. The two struck a deal the day after their contract expired, preventing viewers from losing access to sporting events such as the Sugar Bowl on New Year’s Day. The threats could become reality with Disney, said Chris Marangi , an analyst with Gabelli & Co. in Rye, New York. “This battle is not going to go away,” Marangi said. “Pay-TV providers are looking at this and saying to themselves: ‘Why should I buy the cow, when I can get the milk for free?’” To contact the reporter on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net

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Disney Pulls WABC From Cablevision in New York Fee Fracas on Eve of Oscars

March 7, 2010

By Andy Fixmer March 7 (Bloomberg) — Walt Disney Co. ’s WABC-TV cut its signal to Cablevision Systems Corp. subscribers on the eve of the Academy Awards broadcast, after the two companies failed to agree on fees to carry the New York station. “Cablevision has once again betrayed its subscribers by losing ABC7, the most popular station in the tri-state area,” WABC said today in a statement. “This follows two years of negotiations, during which we worked diligently, up to the final moments, to reach an agreement.” The action threatens Cablevision customers’ access to Disney’s ABC network telecast of the Oscars ceremony tonight in New York and parts of New Jersey and Connecticut. Television networks are trying to extract fees from pay-TV operators for carrying signals broadcast for free, adding a new revenue source as advertising has declined. “The broadcast networks want to monetize free signals going into everybody’s home already,” Rick Franklin , an analyst at Edward Jones in St. Louis, said in a March 5 interview. “Cablevision can’t afford to have ABC dark for long. Otherwise their customers may go someplace else.” Cablevision said WABC wanted $40 million a year in addition to the $200 million paid for cable channels including ESPN. The company urged Disney Chief Executive Officer Robert Iger to reverse the move. “We call on Bob Iger to immediately return ABC to Cablevision customers while we continue to work to reach a fair agreement,” Cablevision said in a statement. Switch Urged WABC said it has been seeking an agreement for two years. Cablevision wasn’t sharing any of the $18 a month customers are charged for a cable package with WABC, the station said. It urged viewers to watch “free, over-the-air, or by switching to one of Cablevision’s competitors.” Verizon Communications Corp. ’s FiOS television service has started offering a $75 discount in New York aimed at converting Cablevision subscribers. A WABC blackout affects customers in Long Island, Westchester, Brooklyn and the Bronx, as well as parts of Connecticut and New Jersey. Disney , the world’s largest media company, gained 65 cents to $33.22 on March 5 in New York Stock Exchange composite trading. Shares of the Burbank, California-based company have increased 3 percent in 2010. Cablevision , based in Bethpage, New York, climbed 21 cents to $24.28 and the stock has risen 14 percent this year. Disney is seeking $1 a month from Cablevision for each subscriber receiving WABC’s signal, Anthony DiClemente , an analyst with Barclays Capital in New York, wrote in a March 5 report. New Fees Gaining higher fees from pay-television operators for the right to retransmit signals from its stations is a priority, Iger said on a Feb. 9 conference call. He said the company also wants to share in retransmission fees collected by affiliate stations. “We think that it’s time to recognize the value that they provide to distributors and their importance to local communities,” Iger said on the conference call. “It would be appropriate for us to seek cash for retransmission consent.” James Cameron ’s 3-D adventure “Avatar,” released by News Corp., and Summit Entertainment’s “The Hurt Locker,” from the filmmaker’s ex-wife, Kathryn Bigelow , lead Oscar nominations with nine each, including best picture and best director. The Academy of Motion Picture Arts & Sciences expanded the best-picture category to 10 nominees this year in part to draw viewers to the telecast. Time Warner Cable Inc. averted losing News Corp. ’s Fox just before Jan. 1 college-football bowl games. Scripps Networks Interactive Inc. took down cable channels including Food Network for 20 days starting Jan. 1 from Cablevision until the companies reached an agreement on subscriber fees. The disagreement sparked debate among politicians in Washington. U.S. Senator John Kerry , a Democrat, urged the Federal Communications Commission to intervene, while Representative Joe Barton , the top Republican on the House Energy and Commerce Committee , asked the FCC to leave the sides alone. “One wonders if consumer patience with the cable TV industry is beginning to wear thin,” DiClemente said in the report. To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net .

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Berlusconi Passes Ad Rules That News Corp. Says Will Damage Pay-TV Market

March 1, 2010

By Steve Scherer and Chiara Remondini March 1 (Bloomberg) — Prime Minister Silvio Berlusconi ’s government approved lower advertising ceilings for pay TV that News Corp.’s Italian unit says will curtail its growth and that of other networks on Rupert Murdoch ’s satellite platform. New regulations will gradually limit the maximum amount of advertising per hour of pay television programming, to 12 percent in 2012 from 18 percent last year. Free-to-air broadcast channels, including those on Berlusconi’s Mediaset SpA network, will be able to increase advertising to a maximum of 20 percent per hour from 18 percent. “The measure isn’t good for Sky Italia,” said Alessandro Frigerio , a fund manager at RMJ SGR in Milan. Since Mediaset started its own pay TV business, the two companies “began stepping on each other’s toes,” he said. Berlusconi, 73, is the country’s biggest media owner. He controls Mediaset, Italy’s largest private TV broadcaster, which competes with Sky Italia. Berlusconi “dutifully” abandoned the Cabinet meeting in Rome today while the rules were approved because of his conflict of interest, according to an e-mailed statement from the premier’s office. The regulations never faced a binding parliamentary vote. Mediaset introduced pay-TV channels in January 2008 to challenge Sky Italia. In the first nine months of 2009, revenue at its Premium service rose 41 percent to 379.9 million euros ($513.2 billion). ‘Limiting Growth’ A draft of the new rules was criticized by Andrea Scrosati , vice president for corporate and market communications at Sky Italia SpA, in parliamentary testimony in January. The rules passed today included new ad ceilings and banned adult content from being broadcast on pay TV during daylight hours, according to a copy of the text and a confirmation by a spokeswoman for Communications Undersecretary Paolo Romani . “Advertising revenue is the engine of this sector. If you add limits, you’re limiting growth,” Scrosati said on Jan. 26. Sky, Italy’s largest pay-TV operator, has five pay-per-view channels running adult content during the day. While advertising is forecast to account for only about 6 percent of Sky Italia’s overall revenue in 2010, it will make up three-quarters of the earnings before interest and taxes, according to Claudio Aspesi , a senior research analyst at Sanford C. Bernstein Ltd. In London. At least 20 other companies operate on the Sky platform, including ESPN Inc., Sony Pictures Entertainment Inc., and The Walt Disney Company. Google Inc. on Jan. 15 said it was “concerned” that the plan to regulate Web TV was aimed at limiting access to its YouTube site and that it would create pressure on Internet service providers to police content. The final version of the directive narrows the kinds of Web sites regulated by the local authority to those with regular TV programming, without saying how copyright infringements perpetrated outside the country will be dealt with. Google and Sky Italia spokesmen had no immediate comment. To contact the reporters on this story: Steve Scherer in Rome at sscherer@bloomberg.net Chiara Remondini in Milan at cremondini@bloomberg.net

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Expand Networks, Inmarsat help optimize global satellite services

February 24, 2010

Expand Networks, Inmarsat help optimize global satellite services

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Google to Build High-Speed Internet Network in Challenge to AT&T, Verizon

February 10, 2010

By Ari Levy and Kelly Riddell Feb. 10 (Bloomberg) — Google Inc. is planning to build high-speed fiber-optic broadband networks in the U.S. to offer Internet speeds that are more than 100 times faster than what Verizon Communications Inc. and AT&T Inc. sell today. The company, owner of the world’s most popular Web-search engine, said today it will offer the service at a “competitive price” to at least 50,000 people and potentially as many as 500,000. Google wants to use the networks for applications that consume lots of bandwidth. Google’s jump into the market may pressure AT&T , Verizon and Comcast Corp. to bolster their high-speed networks, said Mike Jude, an analyst at researcher Frost & Sullivan in Denver. The company already offers a wireless network in Mountain View, California, and is an investor in Clearwire Corp. , which provides Internet access using a technology called WiMax. “The more competition in broadband the better, the higher the bandwidth the better,” Jude said. Google’s plan to offer speeds of 1 gigabit per second may prompt competitors to follow, he said. “If Google went out and started delivering a gigabit per subscriber, it would show that anybody with fiber can do the same thing.” Verizon’s FiOS, AT&T’s U-Verse, and Comcast’s DOCSIS 3.0 services offer residential downloads no faster than 50 megabits a second, with the cheapest connections being 1 megabit or less. While the companies could offer faster speeds, they haven’t done so because there hasn’t been demand, said Lawrence Harris , an analyst at CL King & Associates in New York. A 1-gigabit service could be popular with video-game players and those who want faster video, and could eventually extend into 3-D viewing, Harris said. ‘Real Progress’ Google’s first step is to find cities that want the service, said Minnie Ingersoll, a product manager at the Mountain View-based company. She said Google will likely identify at least one city this year. The company’s engineers and outside developers will work on applications that illustrate the speed of the fiber connection, she said. Google plans to work with companies that build fiber-optic networks, Ingersoll said. Google is probably still soliciting interest from vendors, and companies that helped with Verizon’s FiOS build may be poised to benefit from the project, Harris said. Those include Alcatel-Lucent SA , BigBand Networks Inc., Tellabs Inc. and Corning Inc., he said. “Network providers are making real progress to expand and improve high-speed Internet access, but there’s still more to be done,” Google said on its blog. “We don’t think we have all the answers — but through our trial, we hope to make a meaningful contribution to the shared goal of delivering faster and better Internet for everyone.” Broadband ‘Testbed’ Google fell $2 to $534.45 at 4 p.m. New York time on the Nasdaq Stock Market. Comcast slid 8 cents to $15.31. AT&T fell 14 cents to $25.12 on the New York Stock Exchange, and Verizon rose 12 cents to $28.87. Google has urged the Federal Communications Commission to find new ways to promote high-speed Internet access. FCC Chairman Julius Genachowski said today in a statement that Google’s trial is a “testbed for the next generation” of Internet services. Bob Varettoni , a spokesman for New York-based Verizon, said Google’s network expansion is “another new paragraph in this exciting story.” AT&T spokesman Michael Coe and Comcast spokeswoman D’Arcy Rudnay declined to comment. “We look forward to learning more about Google’s broadband experiment in the handful of trial locations they are planning,” Brian Dietz , a National Cable and Telecommunications Association spokesman, said in a statement today. The cable industry will invest in and improve the speed of its networks, he said. Clearwire Investment Google will collect responses from communities until March 26, and will announce which areas have been chosen later this year. The company plans on building the fiber lines to the home, much like Verizon’s FiOS, and will be paying for the deployment, Ingersoll said. Verizon is investing $23 billion in its fiber-optic network. Ingersoll declined to specify how much money Google has dedicated to its venture. The company had $24.5 billion in cash and short-term investments at the end of December. Google is expanding in the telecommunications industry in other ways. In January, the company introduced a touch-screen mobile phone called Nexus One and opened an online store to sell the handset. In 2008, Google was part of a group of companies that invested in Clearwire, founded by mobile-phone pioneer Craig McCaw . ‘Grandiose’ Plans In 2008, Google pushed for spectrum being auctioned by the U.S. government to be open to any device or program. “Google’s announcement today amounts to a nationwide competition for communities to step up and make the case for what a next generation network could do for them and then show America what is possible,” Massachusetts Senator John Kerry said in a statement. “I believe in the power of big broadband pipes over which people are free to innovate and deliberate and will be watching this experiment carefully.” In 2006, Google won a bid to build a free Wi-Fi network in San Francisco. The plan was put on the back burner after EarthLink Inc., which was going to build the network, backed out and city politics delayed deployment. “Sometimes Google has a very short attention span, they have grandiose plans and then a year later everyone asks what have they done with that?” said Tero Kuittinen , an analyst at MKM Partners LP in Greenwich, Connecticut. “This announcement took everyone a bit by surprise and we don’t know what’s going to come of it.” To contact the reporters on this story: Ari Levy in San Francisco at alevy5@bloomberg.net ; Kelly Riddell in Washington at kriddell1@bloomberg.net

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`Blind Pools’ Lose Appeal as Ziman, Callahan Plan Real Estate IPO Comeback

February 9, 2010

By Dan Levy and Brian Louis Feb. 9 (Bloomberg) — Richard Ziman and Timothy Callahan want to raise money in the equity market after selling their real estate companies for a combined $12 billion before the property crash. Investors may balk at bankrolling their return. Ziman, former chairman of Arden Realty Inc., and Callahan, who ran Trizec Properties Inc., have each filed to offer shares in so-called blind-pool companies, which seek to raise money before owning any assets. They plan to use proceeds from the deals to acquire discounted office properties , hoping their talent and track records will lure investors. Their timing may be wrong. Recent blind-pool stock sales have been cut in size or canceled, or the shares are treading water, amid a slump in demand for initial public offerings. Meanwhile, real estate owners are trying to hold onto distressed or defaulted properties rather than unload them at fire-sale prices, leaving few buying opportunities. “Blind pools have huge negatives and only make sense if they have the perfect management and the perfect opportunity,” Mike Kirby , chairman of Newport Beach, California-based Green Street Advisors Inc., a research firm focused on real estate investment trusts, said in an interview. Almost $1 billion of commercial real estate-related IPOs registered as blind pools have been withdrawn or postponed in the past year, according to data compiled by Bloomberg. An additional $3.9 billion of deals are in the pipeline. Five of the seven blind pools that raised about $2 billion did so before October, the data show. Terreno Flops Terreno Realty Corp., a San Francisco-based fund formed to buy industrial properties, postponed a $200 million sale Jan. 25 after reducing it by a third, and cut it again yesterday by 13 percent. The company is set to price the offering today, according to Bloomberg data. Fairfield, New Jersey-based Chesapeake Lodging Trust raised 40 percent less than it sought, and the stock’s total return including reinvested dividends is down 5.5 percent after its Jan. 22 debut. Pebblebrook Hotel Trust , based in Bethesda, Maryland, is up 0.45 percent since going public Dec. 8. Blind pools are risky because “the commercial market is in abysmal shape” and investors are worried the economic recovery will sputter amid high unemployment, said Robert Edelstein , a professor specializing in real estate at the University of California at Berkeley’s Haas School of Business. The U.S. employment picture showed signs of improvement in January, with the jobless rate unexpectedly falling to 9.7 percent from 10 percent the previous month, the Commerce Department said Feb. 5. Unemployment touched a 26-year high of 10.1 percent in October. Commercial real estate transactions declined 64 percent last year to $52 billion, data from researcher Real Capital Analytics Inc. show. Distressed ‘Overhang’ Sales of commercial mortgage-backed securities, or CMBS, fell to $12.2 billion in 2009 from a record $237 billion in 2007, removing a major source of financing for building owners, according to JPMorgan Chase & Co. in New York, the second- largest U.S. bank. Delinquencies for loans packaged into CMBS rose to a record 6.5 percent in January from 1.5 percent a year earlier, Trepp LLC, a New York-based research firm, said Feb. 1. Only 14 percent of an estimated $150 billion in distressed U.S. commercial real estate has been taken back by lenders, according to Jessica Ruderman , director of research services at New York-based Real Capital. “There’s an overhang of real estate that no one is quite sure what will happen with,” Edelstein said. “The market is starting to recognize the complexities of owning troubled real estate.” Ziman and Callahan sold their companies a year before the collapse of subprime residential mortgages led to the worst financial crisis since the 1930s and a more than 40 percent decline in commercial property values from their 2007 peak. Beating REIT Index Ziman, 67, was chairman of Arden Realty when Fairfield, Connecticut-based General Electric Co. agreed to buy it for $3.2 billion in December 2005. Arden, which Ziman founded in 1990, had 116 office properties with 18.5 million square feet in Southern California. The Los Angeles-based company went public in October 1996 and returned 326 percent to shareholders, including dividends, through the announcement of the GE deal, according to a Dec. 18 IPO prospectus filed by Ziman’s new company, Halvern Realty Inc. That compares with a 237 percent return by the MSCI US REIT Index . Halvern, based in Los Angeles, is seeking to raise as much as $400 million, according to its filing with the U.S. Securities and Exchange Commission. The company intends to buy and manage Southern California office properties and will be organized as a real estate investment trust. REITs must distribute at least 90 percent of their taxable income to shareholders, and don’t pay corporate taxes on that amount. Zell’s CEO Callahan, 59, was chief executive officer of Chicago-based Trizec Properties from 2002 until it was bought for about $9 billion by New York-based Brookfield Properties Corp. and Blackstone Group LP of New York in October 2006. He was CEO of billionaire Sam Zell’s Equity Office Properties Trust, also in Chicago, from 1997 to 2002. Under Callahan, Trizec returned 189 percent, compared with a 125 percent gain by the REIT Index, according to a Dec. 11 prospectus by his new company, Callahan Capital Properties Inc. Equity Office returned 89 percent while he was in charge, twice the rate of the index. Callahan’s REIT plans to buy prime office properties initially in Boston, Los Angeles, New York, San Francisco, Seattle and Washington, according to its filing. The Chicago- based company may raise as much as $500 million in the IPO. Ziman declined to comment, citing the so-called quiet period required before an IPO. Callahan didn’t return calls seeking comment. IPO Slump The IPO market is slumping after the largest stock-market rally since the 1930s revived deals in the last four months of 2009 from a record slowdown that followed the credit crisis. This year, Boca Raton, Florida-based FriendFinder Networks Inc.’s $240 million initial offer and Los Angeles-based Imperial Capital Group Inc.’s $113 million sale were pulled; Cambridge, Massachusetts-based Ironwood Pharmaceuticals Inc. cut its share price by 30 percent; and Fort Lauderdale, Florida-based Patriot Risk Management Inc. delayed a $204 million deal. The Standard & Poor’s 500 Index has lost 5.1 percent in 2010, including dividends. U.S. IPOs will triple in 2010 to $50 billion, according to an estimate by Barclays Plc, the second-largest U.K. bank. Even with a projected rise, real estate investors may favor trusts that already own buildings rather than blind pools, said Craig Guttenplan , a New York-based REIT analyst for CreditSights Inc. “People are really wary of those,” Guttenplan said. REIT Appeal The load, or commission, for blind pools can reach 14 percent and covers underwriting and legal fees and general costs, according to Green Street Advisors’ Kirby. Terreno had a 10 percent load, one reason the IPO didn’t pass an “economic merit” test, he said. U.S. office REIT share prices are trading at 7 percent above the underlying value of their real estate and are a safer investment than blind pools, Kirby said. Blind pools face competition from other investors. Private- equity managers raised $21.4 billion for 50 North America real estate funds last year, according to data compiled by Preqin Ltd., a London-based research firm. Barry Sternlicht’s Starwood Capital Group LLC in Greenwich, Connecticut, has $900 million in a hotel fund, managing director Marc Perrin said Nov. 6 at a real estate industry meeting. Capital Raises The REIT boom that began two decades ago raised almost $27 billion in initial share sales from 1993 through 1998, according to the National Association of Real Estate Investment Trusts in Washington. More than 150 real estate companies went public in that period, and “few” of them were blind pools, said Michael Grupe , executive vice president for research. Last year, facing tight credit markets and needing to pay down debt, almost 90 existing REITs raised more than $21 billion in secondary share offerings, the most since 1997, NAREIT data show. Companies also raised more than $10 billion in unsecured debt. Still, buildings aren’t changing hands, and even established REITs can’t find deals because owners expect values to rise following the government’s massive support of capital markets, according to Dan Fasulo , managing director of Real Capital. “I don’t think we’re going to see the wave of distressed opportunities that everyone thinks is out there,” Fasulo said. “Lenders aren’t in a forced position at all. They’re not giving the good stuff away.” To contact the reporters on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net ; Brian Louis in Chicago at blouis1@bloomberg.net .

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Karen Cambray Named Chief Financial Officer at Mall Networks

February 8, 2010

LEXINGTON, MA–(Marketwire – February 8, 2010) – Mall Networks, the leading provider of merchant-funded loyalty shopping solutions, today announced that Karen Cambray has been appointed the company’s new Chief Financial Officer. Cambray brings more than twenty years of executive finance experience in early-stage, emerging technology companies to Mall Networks, where she will be leading the company’s finance, legal and administrative functions.

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Art Levine: Still Cool: Super Bowl Victory Also a Boon to Miami’s Rebounding Tourism Industry

February 8, 2010

It’s not just New Orleans residents and Saints fans who have reason to cheer Sunday’s victory, but some — if not all — hotel, club and restaurant owners in Miami-Dade’s tourist mecca, Miami Beach, even if the influx of Super Bowl visitors wasn’t all that they’d hoped for this past weekend. Prices at the new W hotel and other luxury resorts topped $1,000 a night, and at the swank oasis, the Setai, $2500 for a one-bedroom suite . Still, some owners complained shortly before this weekend that they weren’t getting they business they expected, as the Miami Herald reported on January 30th: The Super Bowl will add about $153 million to South Florida’s economy this year, about a 25 percent drop from the last time the big game was in town, according to PricewaterhouseCoopers. The report from the hotel consultancy should cheer Super Bowl boosters, who see the game as an economic windfall, even though the estimate falls a bit short of organizers’ claims of the game’s spending heft. In 2007, when the Colts played the Bears in South Florida’s last Super Bowl, PwC put the game’s impact at $195 million. Thanks to the recession, that remains an NFL record for PwC’s annual tally. When the Super Bowl came to Tampa last year — months after the worldwide financial crisis began — the game generated about $150 million, PwC said. “Spending will once again be constrained by prevailing economic conditions; however, compared to last year, South Florida will benefit from the return of several Super Bowl-related hospitality events, the higher hotel room rates in South Florida versus Tampa and a larger stadium capacity,” wrote Robert Canton, director of PWC’s sports and tourism division. While large hotels report near sell-outs for Super Bowl weekend, others say they’re disappointed by weak demand . Anbritt Stengele, whose website sportstraveler.net sells Super Bowl packages, said in recent days she’s been contacted by hotels anxious to fill beds they thought would be booked by now. I had the good fortune to visit Miami Beach two weeks before the Super Bowl to visit friends after leaving the town six years ago, and thanks to some dogged search for Web travel deals (shaped in part by the after-shocks of the recession ), I was able to find some great bargains. These included a round-trip flight from Washington to Miami for $169, and a stay at a first-class Art Deco hotel on South Beach, the Hotel Astor for under $100 a night for a weekend, before taxes. The sleek, modern interiors of the rooms plus a first-rate restaurant and a helpful staff, all a short walk from the beach, made for a high-end experience at a budget price. By Super Bowl weekend, my same room would shoot up to about $400 a night, if not more. Surprisingly, despite seeing one key marker of tourism plunge by nearly 25% during 2009 — per-room revenues — the signs of a rebound could be seen in some of the most popular locations in South Beach. Lincoln Road was packed with residents and tourists, and certain bars and restaurants that had been popular when I was there were still drawing crowds — like a gourmet pizza shop, Pizza Rustica, or the Van Dyke restaurant with its sidewalk cafe underneath the upstairs music club playing live Latin jazz. One sign of the South Beach’s returning confidence was in the continuing arrogance of bouncers at trendy nightclubs like the Set on Lincoln Road, formerly the site of the Living Room and countless other clubs that come and go like fireflies in South Beach. The appearance of elite cool was still the same, with dark-suited doormen glaring at you from behind velvet ropes, even if I used a press contact to get permission to enter. But there weren’t long lines, and despite the hype, few of the crowd inside were glamorous as long as they had the $25 cover charge needed to enter. The only seating — a ring of couches and some tables upstairs — was granted only to those willing to shell out about $1,000 for two bottles of liquor and tips, according to one sullen bouncer who angrily told me to stop taking notes quietly on the side. There were virtually no high-rollers seated anywhere, with just one group of young women celebrating what was presumably a bachelorette party. To my surprise, the newest and one of the priciest hotels, W, had a comparable no-entry policy for would-be visitors on a weekend. I feel sorry, though, for the hotel’s management if one of their hip doormen turns away a dorky baby-boomer in unfashionable clothing who turns out to be Bill Gates, but the strict policy is apparently designed to keep out riff-raff. Unless you had proof that you were a guest, were registering to stay or, maybe, visiting someone at the hotel, you couldn’t even get in to the lobby — unless of course you were a nightclub circuit insider or strikingly good-looking. I didn’t qualify on any count, but by claiming (justly) to be doing an article, managed to bluff my way in to the inner sanctums of wealth and luxury, going past one velvet rope after another until I and an attorney friend were allowed to sit poolside and order drinks. But the $30 Manhattan (including tip) my friend ordered was “terrible,” he reported, and as the wind started up and, even in Florida, gave us a bit of a chill, it was soon time to leave. Before we left, though, he turned back his untouched cocktail and was given a diet Pepsi he’d requested instead — but no refund or complimentary cocktail. Yet on Super Bowl weekend, real superstars came to town, and unlike a mere tourist, they didn’t have to wait behind any velvet ropes or flash a reporter’s notebook to make it inside, and almost everything was comped for them. By next weekend, prices at most hotels will likely plummet, but the allure of South Beach will remain. Here, for instance, is a list of some of the parties (via the website cooljunkie. com ) on South Beach few of us are either well-connected enough or willing to blow enough money to attend: That’s right people, Super Bowl weekend is finally days away and this year Miami is lucky enough to host the colossal sport event. While this is a huge boost to the economy in the city, it’s also creates a great opportunity for promoters throughout the city to put on really great events and show all the visitors what Miami nightlife is all about. Events are still coming in for this weekend’s festivities, but we’ve managed to narrow down the list for you a bit to bring the only the best Super Bowl Parties in Miami. Event : Rihanna Venue : Mansion Date : Thursday, Feb. 4th This just in…Rihanna’s in town this week! That’s right people, one of the biggest pop singers on the planet will be in Miami on Thursday night and hosting an event at one of the hottest nightclubs that South Beach has to offer, Mansion. This is definitely one of the top super bowl parties in Miami, so expect this one to be sold-out. We’re not entirely sure if she’s going to be performing, but if she’s in the house, expect her to jump on the mic for at least a word or two. Who knows, if you’re lucky enough she may just bust out a tune. Event : Friday Night Lights Venue : BED Date : Friday, Feb. 5th If there’s one event that really represents Miami football to the fullest it has to be Friday Night Lights at BED with special guest hosts Santana and Sinorice Moss. The Moss brothers are royalty in Miami, seeing as they’re legends in both high school and college football. This is definitely one of the top Super Bowl parties of the huge weekend ahead of us, and you can definitely expect this event to bring in some football greats that are from Miami. Event : Ludacris Venue : Cameo Date : Friday, Feb. 5th Cameo’s bringing in a big artist for this week’s Super Bowl weekend, and we expect this event to draw in massive fans of the hip hop star. This Friday night the one and only Ludacris does his thing at Cameo. Cameo’s been bringing in some great hip hop names to the club, and they’ve all been performing, so we’ll go ahead and say that we expect Luda to do his thing on the mic. We know that he’s a huge fan of sports, but we really didn’t think he’d be in town to perform as well. Event : DJ Clue’s Birthday Venue : BED Date : Saturday, Feb. 6th BED really outdid itself this Super Bowl by hosting what we think is the best string of events that the weekend has to offer. We usually never list a venue twice in our TOP articles, however, we just had to this week with BED since Saturday’s event is just as good as Fridays. This Saturday they’ll be celebrating the special birthday of the one and only DJ Clue, along with special host Warren Sapp. The music on this night will probably outshine the rest of the Super Bowl events in the city, and that’s because Clue will be in the house. Despite all the glamor and the great weather, the Super Bowl broadcast itself didn’t turn into the free promotion for Miami that local tourist officials were hoping for, but visitors there — especially when prices come back down to normal levels — are going to come back. So Super Bowl was a clear win for Miami’s image and the local economy , which is still reeling from foreclosures and the recessionary downturn, but now on the way to recovery. The Super Bowl telecast didn’t showcase Miami or its beaches, the Miami Herald reported , but that still won’t stop the comeback: This time, the Super Bowl weather conspired in South Florida’s favor. As the Mid-Atlantic dug out from a historic blizzard, a television audience expected to top 100 million people saw a far different climate as a mild, cloudless evening greeted football’s biggest game. It was an about face from Super Bowl’s last trip to South Florida, when a rare and relentless February downpour drenched the stands in 2007. “I couldn’t have fixed that better myself,” Tony Goldman, a South Beach hotelier and former chairman of the Greater Miami tourism bureau, said of the weekend snowstorm and cold snap. “I’m in New York. It’s about 17 degrees.” Even so, viewers of Sunday night’s broadcast could be forgiven if they forgot where this Super Bowl was played. Announcers mentioned the word “Miami” only a handful of times. And the first live shot CBS showed outside of Sun Life Stadium was not of South Beach or a palm tree, but of Bourbon Street in the moments after New Orleans won the championship. For a game that will cost local taxpayers more than $6 million, Super Bowl has always touted itself as a good investment for the exposure it brings a host city. “You read the stories about how much those commercials sell for,” said Peter Yesawich, chairman of Y Partnership, an Orlando firm that manages tourism campaigns in cities throughout Florida. “Destinations kill for that.” This year the publicity took on more importance as South Florida considers a proposal to spend tax dollars to make Sun Life Stadium a more attractive venue for the Super Bowl. Without a partial roof and other improvements costing about $200 million, the Miami Dolphins warn that it will be harder to lure the Super Bowl to South Florida — robbing the destination of both the tourist dollars the game brings and the free publicity it spawns. This year, more than 4,500 members of the media from 22 countries received Super Bowl credentials, organizers said. ESPN, NFL Networks and the CBS Early Show broadcast live from South Beach in the days leading up to the game. A pack of celebrities making the weekend Super Bowl party circuit generated untold inches of gossip-column fodder. But when Super Bowl actually kicked off Sunday evening, viewers saw the game and basically nothing else. When the playing stopped, CBS filled the gaps with quick segments on the teams and shots from the sidelines — viewers didn’t even get glances of celebrities sitting in the stands. And with a 30-second Super Bowl spot selling for more than $2 million, CBS apparently did not want to waste lucrative time reminding viewers where the game was played. During the game, there were no shots of South Florida scenery — shots that can turn a sporting event into a rolling tourism commercial. “In the past, we’ve had those great cutaways,” said Bruce Turkel, a partner at the Turkel advertising agency in Coconut Grove. “But I guess every moment is too precious now.” CBS had the option to cushion its commercial breaks with local landmarks: the post-game show includes an aerial shot of Ocean Drive. Still, the image of fans in short sleeves in the open air of Sun Life Stadium sent the right message, said Turkel, who crafts the advertising campaigns for the Greater Miami Convention and Visitors Bureau.

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Imperial Capital Delays IPO as Ironwood Pharmaceuticals Cuts Price by 30%

February 3, 2010

By Michael Tsang and Craig Trudell Feb. 3 (Bloomberg) — Imperial Capital Group Inc. postponed a $113 million initial public offering, becoming the second U.S. company to pull an IPO in 2010, and Ironwood Pharmaceuticals Inc. cut its price by the most of any sale this year. Imperial Capital, the Los Angeles-based investment bank that specializes in high-yield and distressed debt, planned to sell 6.67 million shares at $15 to $17 each, according to Bloomberg data. The IPO would have been the first by an investment bank in two years. Cambridge, Massachusetts-based Ironwood, which is developing a treatment for chronic constipation, sold 16.7 million Class A shares at $11.25 each yesterday after seeking as much as $16 a share. Buyers are extracting concessions on IPOs after two of the first three deals of 2010 fell more than the Standard & Poor’s 500 Index, which dropped by the most in a year in January. Imperial Capital was asking investors to pay three times the so- called median tangible book value for investment banks, while Ironwood took a 30 percent discount after trying to sell its shares at 31 percent more than what the company said was its “fair value.” “It takes a strong bull market climate to see IPO offerings accelerate and the probability of an IPO launch at the top end of the projected price range to happen,” Frederic Dickson , chief market strategist at D.A. Davidson & Co., which oversees $20 billion, said in a telephone interview from Boise, Idaho. “The IPO market will be volatile with issuers reading the daily tea leaves of broad market trends in trying to time their launch.” IPO Underwriters Bank of America Corp. of Charlotte, North Carolina, JMP Group Inc. in San Francisco and Imperial Capital were the lead underwriters for the sale. Ironwood hired JPMorgan Chase & Co. and Morgan Stanley of New York and Zurich-based Credit Suisse Group AG for its IPO. While Barclays Plc of London estimates that U.S. IPOs will triple this year to $50 billion, Alpharetta, Georgia-based Cellu Tissue Holdings Inc. has lost 12 percent since selling shares at 24 percent less than the price it sought. Chesapeake Lodging Trust in Fairfield, New Jersey, has retreated 5.3 percent since its offering, and Bellevue, Washington-based Symetra Financial Corp.’s deal priced 14 percent below the highest level sought. Terreno Realty Corp. of San Francisco became the first U.S. company to shelve its IPO in 2010 last week as the S&P 500 extended its January slump to 3.7 percent, the biggest monthly drop since the gauge’s 62 percent surge began in March 2009. IPOs in China Chinese companies, which accounted for six of the world’s 10 largest IPOs last year, are also accepting lower prices. China First Heavy Industries Co., a maker of equipment used in the mining and energy industries, today became the first mainland company in at least a year to price a domestic IPO at less than the highest price sought from investors. The company raised 11.4 billion yuan ($1.67 billion), 197 million yuan less than the maximum. The biggest U.S. stock-market rally since the 1930s revived deals in the last four months of 2009, with IPOs increasing from the slowest pace on record after the failure of New York-based Lehman Brothers Holdings Inc. froze credit markets. Imperial Capital projected that its revenue rose 29 percent to $115.3 million last year and net profit almost doubled to $18.2 million, according to its prospectus. Tangible Book Value The bank estimated that it has a net tangible book value, a measure of shareholder equity that excludes assets that can’t be sold in liquidation, of $3.41 a share. Imperial Capital would have been valued at 4.69 times its net tangible assets per share after the offering, assuming an IPO price of $16. That’s more than the median 1.52 times tangible book value of 48 investment banks and brokerages in the U.S., data compiled by Bloomberg show. New York-based Goldman Sachs Group Inc. , the most-profitable securities firm in the history of Wall Street, is valued at 1.77 times its tangible book value. Ironwood’s common stock had a “fair value” of $12.18 a share, based on models used by the drugmaker, its Jan. 20 filing with the Securities and Exchange Commission showed. That meant buyers were asked to purchase shares at a premium of 15 percent to 31 percent, data compiled by Bloomberg show. Venrock, the firm founded as the venture-capital arm of the Rockefeller family, New York-based Ridgeback Capital Management LLC, Polaris Venture Partners of Waltham, Massachusetts, and funds run by Morgan Stanley own stakes in Ironwood. Prior to the IPO, existing investors paid an average of $4.03 a share. Morgan Stanley As many as 8.89 million Ironwood shares, or about $100 million based on the 16.7 million share offer, may be purchased by those shareholders, including entities associated with Morgan Stanley Investment Management, according to a filing with the SEC yesterday. That implies Ironwood may raise less than half of its $188 million through the IPO from new investors. “Buyers are going to be a little bit more in control in pricing, and Ironwood is a classic example,” said Scott Billeadeau , who helps manage about $19 billion at Fifth Third Asset Management in Minneapolis. “The market’s going to be very choosy and try to put a valuation on companies that they’re comfortable with.” Ironwood used Ropes & Gray LLP in Boston for legal counsel, while Davis Polk & Wardwell LLP’s Richard D. Truesdell Jr. , co- head of the capital markets group at the New York-based law firm, represented the underwriters. The company’s shares added 1.7 percent to $11.44 as of 1:08 p.m. New York time in Nasdaq Stock Market trading. Drug Development The proceeds will help fund the development of Ironwood’s linaclotide drug, a treatment for chronic constipation and irritable bowel syndrome. The company, which has lost money for six years according to its filing, spent $58.8 million on research and development in the first nine months of 2009, or $78.4 million over a full year. That would be a 31 percent increase from 2008 and double its implied full-year revenue. Linaclotide is in so-called phase 3 clinical trials, the last of three stages of human testing generally required by U.S. regulators. Ironwood intends to seek approval for linaclotide from the Food and Drug Administration in the first half of 2011. Patriot Risk Management Inc. , the Fort Lauderdale, Florida- based firm that underwrites workers’ compensation insurance plans, plans to raise as much as $204 million selling 17 million shares at $10 to $12 each today, Bloomberg data show. The company would have a market value of $212 million based on the midpoint price. FriendFinder Networks Inc. , the publisher of Penthouse magazine, will try for a second time to sell 20 million shares at $10 to $12 each today after delaying its offering last week. The Boca Raton, Florida-based operator of AdultFriendFinder.com has lost money for five straight years. To contact the reporters on this story: Michael Tsang in New York at mtsang1@bloomberg.net ; Craig Trudell in New York at ctrudell1@bloomberg.net .

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Cisco’s Profit Exceeds Estimates as Corporate Customers Upgrade Networks

February 3, 2010

By Rochelle Garner Feb. 3 (Bloomberg) — Cisco Systems Inc. , the world’s biggest maker of networking equipment, topped analysts’ profit estimates after corporate customers resumed projects they had delayed during the economic slump. Second-quarter earnings , excluding costs such as stock- based compensation, rose to 40 cents a share, the San Jose, California-based company said today in a statement. Analysts in a Bloomberg survey had estimated 35 cents on average. Sales increased for the first time in a year. Chief Executive Officer John Chambers heralded a new phase of economic recovery, citing a “dramatic improvement” in Cisco’s business in most areas. Corporate customers boosted spending to accommodate increasing amounts of video, messages and other data sent over their networks. Phone carriers, accounting for about 35 percent of Cisco’s revenue , also stepped up equipment purchases at the end of 2009. “Cisco appears well positioned to emerge stronger from the downturn,” said Bill Kreher , an analyst at Edward Jones in St. Louis. He recommends buying the shares, which he doesn’t own. “The company saw strength across most business areas, which we view positively. They purchased some nice assets in the downturn and that puts them in a strong position as the economy moves.” ‘Clear Indication’ Net income for the period ended Jan. 23 rose to $1.85 billion, or 32 cents a share, from $1.5 billion, or 26 cents, a year earlier. Sales climbed 8 percent to $9.82 billion. Analysts had predicted $9.41 billion. Cisco , based in San Jose, California, rose 41 cents to $23.48 in extended trading. The shares, which advanced 47 percent last year, closed at $23.07 on the Nasdaq Stock Market. “Our outstanding Q2 results exceeded our expectations and we believe they provide a clear indication that we are entering the second phase of the economic recovery,” Chambers, 60, said in the statement. Chambers has said he plans to be more aggressive this year, buying more companies and entering new markets. That will help Cisco grow faster than its more-cautious rivals as the economy improves, he has said. The company bought Starent Networks Corp. for about $2.9 billion last quarter, gaining gear that wireless carriers use to help route mobile traffic. “They are making big bets by getting into new markets, and increasing the pace of acquisitions,” said Nikos Theodosopoulos , an analyst with UBS AG in New York. “They are certainly being aggressive for growth.” Industry Barometer Global data traffic probably will more than double every year through 2013, according to Cisco. The company aims to add technologies that boost Internet traffic, increasing demand for its routers and switches. Investors view Cisco as a technology-industry bellwether because it dominates the market for routers and switches, products that direct the flow of data. Large companies account for most sales of switches, used to run corporate networks. Phone carriers and Internet-service providers mostly purchase routers, which are costlier. In January, Goldman Sachs Group Inc. forecast worldwide spending on technology products will rise 5 percent this year, fueled primarily by countries in emerging markets. Technology spending in the U.S., Western Europe and Japan will advance 2 percent, Goldman Sachs estimated. Investors are keen to hear how Chambers describes the economy — and which sectors are buying — during today’s conference call, said Mike Binger , a Minneapolis-based fund manager for Thrivent Financial for Lutherans, which owned 4.4 million shares as of Sept. 30, according to Bloomberg data. “Chambers talks to a lot of CEOs, and has a good pulse on how the economy is going,” Binger said. To contact the reporter on this story: Rochelle Garner in San Francisco at rgarner4@bloomberg.net

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Penthouse Publisher FriendFinder Said to Delay Initial Offer to Next Week

January 27, 2010

By Michael Tsang and Nikolaj Gammeltoft Jan. 27 (Bloomberg) — FriendFinder Networks Inc., the publisher of Penthouse magazine, has pushed back its initial public offering scheduled for today until next week, according to a person familiar with the situation. FriendFinder, the Boca Raton, Florida-based operator of Web sites from AdultFriendFinder.com to Cams.com, had planned to raise as much as $240 million selling 20 million shares at $10 to $12 each today, according to a Jan. 8 filing with the Securities and Exchange Commission and Bloomberg data. Calls and e-mails to FriendFinder’s office were not immediately returned. The delay comes after Terreno Realty Corp. became the first U.S. company to postpone a 2010 IPO this week, Cellu Tissue Holdings Inc. cut its price by 24 percent and Chesapeake Lodging Trust raised 40 percent less than originally sought, Bloomberg data show. FriendFinder has lost money for five straight years and was in default on its debt covenants until October. “FriendFinder looks like an IPO out of necessity rather than opportunity,” Steven M. Rogé , manager at R.W. Rogé & Co. in Bohemia, New York, which has $200 million in assets, said before the delay. “A lot of companies have an IPO to get cash to grow. Whatever cash FriendFinder can raise is going straight to their creditors.” While U.S. IPOs are forecast to triple according to London based Barclays Plc, 2010’s first offers show buyers are wary of new deals after almost 40 percent of deals in the second half of 2009 left investors with losses. S&P 500 FriendFinder was offering shares after the Standard & Poor’s 500 Index fell the most since October last week. The publisher, which also runs so-called general audience social networking venues from SeniorFriendFinder.com to BigChurch.com, got about 70 percent of its revenue from its adult-themed Web sites in the first nine months of 2009, according to the SEC regulatory filing. The company was selling a 49 percent stake and planned to use the proceeds to pay down debt. After the offering, it would have $5.24 million in cash compared with $286 million in debt. FriendFinder’s sales would have declined 1.5 percent in 2009 from a year ago, based on $244 million in revenue generated in the first nine months of the year. Sales from both its adult- themed and general audience sites fell during the nine-month period from a year ago, while interest expenses exceeded operating profit by 66 percent. ‘Biggest Concern’ “The biggest concern is just the fact that it’s got a lot of debt and really hasn’t grown,” said Nick Einhorn , an analyst at Greenwich, Connecticut-based Renaissance Capital LLC, which has followed IPOs since 1991. The firm isn’t affiliated with FriendFinder’s lead underwriter of the same name. “Companies that have lots of debt and slowed growth have really not been attractive for investors,” he said before the delay. Playboy Enterprises Inc. , the owner of the namesake men’s magazine, had operating income equal to 1.02 times interest expenses of $4.46 million in 2008 as the Chicago-based company posted its biggest annual loss since at least 1987. FriendFinder has also lost about as many fee-paying subscribers from its adult-themed Web sites as it has gained in each of the past four years. It had breached loan agreements in such areas as failing to deliver certified annual financial statements, missing certain sales targets for the films that it produced and distributed and not keeping senior debt below certain levels. Renaissance Capital of Moscow and Ledgemont Capital Group LLC in New York are the lead underwriters for FriendFinder. Neither firm was credited with arranging any U.S. company IPOs last year, according to Bloomberg league tables. To contact the reporters on this story: Michael Tsang in New York at mtsang1@bloomberg.net ; Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net .

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Haitians Wait, Suffer as UN Works to Free Aid Deliveries After Earthquake

January 16, 2010

By Peter S. Green, Bill Varner and Blake Schmidt Jan. 16 (Bloomberg) — The U.S. and the United Nations struggled to coordinate relief efforts in Haiti as estimates of the death toll topped 100,000 and aid groups began bringing supplies overland from the Dominican Republic. The United Nations said it was in charge of distributing aid and security, even as several thousand U.S. soldiers prepare to deploy on the ground this weekend. Secretary of State Hillary Clinton , who will visit Haiti today, said UN police and peacekeepers “need help.” The country handed control of its only international airport to the U.S. yesterday. The Jan. 12 quake devastated much of Haiti’s already inadequate infrastructure, destroying a third of the buildings in Port-au-Prince, the capital, as well as its water and sewage systems, the UN said. The airport can’t handle the flood of relief arriving, and the port was declared unusable by the U.S. Coast Guard. That’s left aid workers short of the food and medical supplies required to help Haitians trapped in the city. “There’s a feeling of apocalypse in the streets,” Andre Davila, a coordinator with Brazilian aid group Viva Rio, said in an e-mail from the capital. “The state doesn’t exist anymore. There is some international aid arriving, but not very much.” Haitian President Rene Preval told UN Secretary-General Ban Ki-moon by telephone yesterday that the biggest problem was coordinating all the aid efforts, according to a UN statement. Deteriorating Security Clinton will travel to Haiti today to meet with President Preval and bring home Americans who want to be evacuated. She will be able to mediate between Haitian officials who are “reluctant to give up power,” and U.S. relief officials who are taking over much of the relief effort, Haiti’s ambassador to Washington, Raymond Joseph, said yesterday. U.S. and UN officials expressed concern about the deteriorating security situation as televised images showed groups of men armed with machetes in some parts of the stricken capital. Doctors were ordered to stop treating patients in one area of Port-au-Prince when they heard gunfire, CNN reported. The UN is concerned about the possibility of violence, triggered by frustration over the slow pace of aid distribution, Ban told journalists in New York yesterday. “So far, we have not seen major problems,” he said. Some 50,000 to 100,000 people may have died in the quake and its aftermath, said Dr. John Andrus, Deputy Director of the Pan American Health Organization. “We really do not know the number,” he said in a statement. Haiti’s government puts the death toll at as many as 200,000, Reuters reported , citing Interior Minister Paul Antoine Bien-Aime. Bodies in Streets Televised images showed bodies lying along the streets and in parks, and more bodies were visible in the wreckage of collapsed buildings. “What to do, what to do, what to do with all these bodies that are starting to decompose. People are starting to wear masks,” Richard Morse, an American musician who runs the Hotel Oloffson in Port-au-Prince, posted on Twitter yesterday. Haitian government workers are picking up and burying some corpses in mass graves, Stefano Zannini, the director of Haitian operations for the French medical relief group Doctors without Borders, said in a telephone call yesterday with journalists. Citigroup Inc., whose three-storey office in Port-au-Prince was destroyed in the earthquake, continued to search for as many as eight people believed to be trapped in the rubble, Liliana Mejia , a spokeswoman for the New York-based bank said. With water and sewage lines destroyed, the United Nations Children’s Fund, Unicef, said it was concerned cholera could break out. Eight hospitals in the Port-au-Prince area collapsed, and five are functioning, the Pan American Health Organization said in a statement. ‘Worst Emergency’ “This is the worst emergency we’ve ever seen,” said Caryl Stern , executive director of the U.S. Fund for Unicef. Her group is focusing on helping children orphaned or separated from their parents. The UN set up an operations center at the Port-au-Prince airport to coordinate the work of the more than 17 foreign rescue teams that have arrived so far, and is redeploying some 5,000 peacekeepers, soldiers and police officers from across Haiti to the capital, a UN official in Mexico said yesterday, according to Agence France-Presse. Ban asked for $560 million to provide food, water, shelter and medical care for earthquake victims over the next six months. He estimated that in Port-au-Prince, a city of about 2 million, about 30 percent of buildings are either damaged or destroyed and that 3 million people across the country lack access to food, water, shelter and medical care. U.S. Troops The World Food Program is feeding 8,000 people several times a day and is preparing to feed about 1 million people within 15 days and 2 million people within a month, Ban said. The U.S. Southern Command, which is responsible for coordinating military operations on the island, will send 6,300 personnel by Monday, adding to the 4,200 within Haiti and from U.S. Navy and Coast Guard vessels offshore, spokesman Jose Ruiz said in a statement on Jan. 15. Medical personnel and supplies from the U.S. Department of Health and Human Services have arrived in the island, HHS Secretary Kathleen Sebelius said in a statement. State Department spokesman P.J. Crowley said the airport will be able to accommodate as many as 90 flights a day. “With leadership established and a management team established we will have more coordination,” said Ban, who will visit Haiti on Sunday. Aircraft Carrier The U.S. aircraft carrier Carl Vinson was anchored off Port-au-Prince with 19 helicopters, water purifiers and hospital facilities. More U.S. ships and a 2,200-member U.S. Marine Expeditionary Unit with amphibious landing craft are scheduled to arrive Jan. 19, a Marine Corps spokesman said. The U.S. Army’s 82nd Airborne Division has 114 soldiers on the ground, and the rest of a 1,000-man brigade is expected tomorrow, said Robert Appin, a spokesman for the Southern Command, based in Miami. Restoring gasoline distribution in Haiti is key to the relief effort, Dan O’Neil, a relief specialist with the Organization of American States, said in a telephone interview. Chaos “dominates” the country, said O’Neil, who returned yesterday to Santo Domingo, the Dominican capital, from Haiti. Many quake victims, afraid that their homes could collapse on them, are sleeping outdoors, blocking streets, he said. Intermittent Communications To avoid the bottleneck at Port-au-Prince’s airport, aid workers are stocking up on gas and supplies and setting off on the eight-hour drive from Santo Domingo to Port-au-Prince, he said. Once inside, communications are intermittent and no fuel is available. “How do you do a big operation if all you have is a handful of satellite telephones?” said O’Neil. Getting from the airport into the city doesn’t seem to be a problem, said Rick Perera, a spokesman for Atlanta-based aid group Care. “The problem is once you get into the city limits, reaching some of the hardest hit neighborhoods, in particular the very poor neighborhoods where people may be living in shanty-type construction, where things were very hard hit and the roads may be completely inaccessible,” he said. President Barack Obama said yesterday the U.S. was committed to assisting the country’s long-term recovery. “I want the people of Haiti to know we’ll do what it takes,” Obama said after talking with Haiti’s president. Haitian nationals now in the U.S. will be allowed to remain for 18 months because of the devastation, Homeland Security Secretary Janet Napolitano said. Twitter, YouTube Within minutes of the earthquake aid organizations were updating followers on Twitter, and within a day were soliciting donations with videos on YouTube and Facebook, and posting podcast updates from personnel on the ground. In the U.S., $8 million has been raised through a ‘Text Haiti’ appeal that lets mobile-phone users make a $10 donation to the American Red Cross via text message. Jefferies Group Inc., a New York-based investment bank, said it expected to raise $6 million donating its net commissions and salaries from yesterday’s trading, Chief Executive Officer Rich Handler said in an interview. General Electric Co. announced a $2.5 million commitment. A fundraising broadcast, “Hope for Haiti,” presented by Viacom’s MTV Networks, will air Jan. 22 on networks including CBS, ABC, NBC and HBO. Actor George Clooney will co-host with Wyclef Jean, the Haitian-born musician, and CNN’s news anchor Anderson Cooper . The same night, Washington’s Kennedy Center will donate proceeds from a National Symphony Orchestra concert featuring Bach, Mozart, and Mahler’s “Das Lied von der Erde” (“The Song of the Earth”). The Orchestra expects to raise about $100,000 in ticket sales for the Haiti Relief and Development Fund of the American Red Cross. To contact the reporters on this story: Peter S. Green in New York at psgreen@bloomberg.net ; Bill Varner at the United Nations at wvarner@bloomberg.net ; Blake Schmidt in Granada, Nicaragua, at bschmidt16@bloomberg.net .

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Time Warner Cable, News Corp.’s Fox Resolve Dispute Over Programming Fees

January 1, 2010

By Kelly Riddell Jan. 2 (Bloomberg) — News Corp. ’s Fox network and Time Warner Cable Inc. resolved a fee dispute that threatened to keep football bowl games and dramas like “24” off the air in the cable operator’s two largest markets. The two companies said in a statement that they agreed in principle on a distribution deal, without disclosing the terms. Fox had said it would pull programs if the two parties failed to strike a deal by a Dec. 31 deadline, which was extended so talks could continue. The accord allows the cable operator to keep broadcasting college and National Football League games, as well as programs such as “American Idol,” the most-watched U.S. TV series. A blackout would have affected 3.9 million Time Warner Cable customers, including viewers in New York City and Los Angeles, which account for almost one-third of its subscribers. “The media landscape is being reshaped by this deal,” James Goss , an analyst at Barrington Research Associates in Chicago, said in an interview before the announcement. “All broadcasters will now try to get paid for their free over-the- air content.” He had predicted a payment of at least 50 cents per subscriber per month with some concessions by Fox. Time Warner Cable also was negotiating on behalf of Bright House Networks, the seventh-largest U.S. cable operator. The closely held company, with headquarters in Orlando and in Syracuse, New York, has more than 2 million subscribers, according to its Web site. Time Warner Cable dropped 44 cents, or 1.1 percent, to $41.39 on Dec. 31 in New York Stock Exchange composite trading . New York-based News Corp. fell 22 cents to $13.69 on the Nasdaq Stock Market. Past Practices For about two decades, the owners of networks gave away retransmission rights for their stations, relying on higher programming fees for their cable networks or better channel positioning to help drive sales . Time Warner Cable has been trying to stem costs by resisting retransmission demands. In national campaigns, Chief Executive Officer Glenn Britt asks subscribers to pressure programmers to keep costs low. Britt argues higher fees ultimately are billed to the customer and that network programming is free on the Internet and over the air. Time Warner Cable, the second-largest cable operator, has about 13 million video subscribers. Comcast Corp. is the largest cable company. Retransmission costs will continue to climb, according to research firm SNL Kagan. Total retransmission fees will increase to $1.3 billion by 2012, compared with $739 million in 2009, according to the Charlottesville, Virginia-based researcher. Programming cost disputes aren’t new to Time Warner Cable. A similar battle in 2008 with Viacom Inc. was resolved before channels like MTV Network went black. In 2000, the cable operator pulled ABC-owned stations briefly from its lineup during a dispute with Walt Disney Co. over carriage of its cable networks. To contact the reporter on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net

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Nortel Wins Bankruptcy Approval to Sell Its Optical Networks Unit to Ciena

December 2, 2009

By Steven Church Dec. 2 (Bloomberg) — Nortel Networks Corp. won permission to sell its optical-networking business to Ciena Corp. for $769 million after a judge rejected a higher, all-cash bid from Nokia Siemens Networks because it came in too late. U.S. Bankruptcy Judge Kevin Gross who is overseeing the liquidation of Nortel’s U.S. assets, ruled that Nokia’s $810 million offer should be rejected. Ciena argued that it has already started work on combining the two companies based on the results of the Nov. 22 auction. “There has been a lot of work done to begin a massive process of integrating” the businesses, Ciena attorney Douglas Bacon said in court. Nortel argued that allowing a bid after the auction had ended would disrupt the three remaining sales the telecommunications maker is planning as part of its bankruptcy. Potential buyers may not participate in future auctions because they wouldn’t know if the results would be final, company attorney James Bromley said in court. Gross said he expected to issue a final ruling in favor of the sale to Ciena after minor objections had been resolved later today. “Ciena’s bid was the highest and best bid,” Gross said in court. Nortel, based in Toronto, has held six auctions for its major businesses since filing for bankruptcy in January. Those auctions have brought in $2.9 billion, Bromley said in court. The company plans to sell three more businesses that have revenue of about $1 billion, he said. $810 Million Yesterday, Nokia Siemens challenged Ciena’s bid, submitting a new offer of $810 million in cash for the assets. That offer came more than a week after Nokia declined to top Ciena’s final bid at an auction for the optical-networking business that ended on Nov. 22. The next day, Nokia Siemens issued a statement saying “further bidding could not be financially justified.” During and after the auction Nokia Siemens, a joint venture between Nokia Oyj and Siemens AG, complained that Ciena’s offer wasn’t really worth $769 million in cash because it included $239 million in convertible notes. Creditors also had urged Gross to reopen the auction, arguing that it may increase their recoveries by $20 million. Gross, sitting in Wilmington, Delaware, held a joint U.S.- Canadian court hearing with Ontario Superior Court Judge Geoffrey Morawetz, who was in Toronto. The hearing was linked with an audio and video connection. Breakup Fee The Nokia Siemens offer was designed to provide Nortel $20 million more than Ciena’s offer because Nortel would have been forced to pay Ciena a breakup fee of about $21 million. Nortel also won permission to sell its so-called Global System for Mobil Communication for $103 million to the Telefonaktiebolaget LM Ericsson and Kapsch CarrierCom AG. The business provides products for wireless networks. Since filing for bankruptcy in January, Nortel has been selling units to pay creditors claiming to be owed more than $11 billion. The company was once the biggest maker of telecommunications equipment in North America. The case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington). To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net .

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Nokia Sees Stagnant Market Share in 2010 as IPhone Spearheads Apple’s Gain

December 2, 2009

By Diana ben-Aaron Dec. 2 (Bloomberg) — Nokia Oyj , the world’s biggest maker of mobile phones, expects its share of the global handset market to remain flat next year, amid mounting competition from Apple Inc. ’s iPhone and lower-end Chinese devices. Volumes in the mobile-phone industry will rise by about 10 percent in 2010, the company forecast at its investor day today in Espoo, Finland, where it is based. Nokia’s share of the smart-phone market, the industry’s fastest-growing piece, slid to 39.3 percent in the third quarter from 42.3 percent a year earlier, while Apple and BlackBerry-maker Research In Motion Ltd., gained, according to researcher Gartner Inc. “The goal of flat market share was surprisingly modest, tepid, I would say,” said Tero Kuittinen , an analyst with MKM Partners LP in Greenwich, Connecticut. “They are quite likely losing market share a bit in India and China. If they can offset that by an increase in North America and Western Europe it would be welcome.” The company is releasing new touch-screen phones and improved applications to compete with Apple’s iPhone, which has made the U.S. company the world’s most profitable handset vendor, according to market researcher Strategy Analytics. Nokia lags behind Apple in applications, the new battleground for handset makers. The company’s main business of mid- and low-end handsets, which accounts for 55 percent of devices revenue, is also being eroded by Chinese and emerging market rivals. Nokia fell as much as 15 cents, or 1.7 percent, to 8.76 euros and was down 0.6 percent as of 2.47 p.m. in Helsinki. The stock has dropped 20 percent this year, valuing the mobile-phone maker at 33.2 billion euros ($50 billion). Financial Outlook Nokia said in a statement that it will focus next year on expanding its services business, improving margins and pushing smart phones globally. “I see great opportunity for Nokia to capture new growth in our industry,” Chief Executive Officer Olli-Pekka Kallasvuo said in the statement. “We have measures in place to push smart phones down to new price points globally, while growing margins.” The Finnish company is targeting an operating margin at its devices and services business of between 12 percent and 14 percent in 2010. That compares with 11.4 percent in the third quarter, down from 18.6 percent in the year-earlier period. Nokia also expects operating expenses in the unit to be 5.7 billion euros in 2010. “The targets are reasonably optimistic,” said Pierre Ferragu , an analyst with Sanford C. Berstein Ltd. in London. “The 12 to 14 percent adjusted operating margin in devices is fairly conservative and I expect they will deliver close to the high end of the range.” ‘Product Milestone’ Nokia has lowered its margin guidance for the devices and services unit twice in the past year as it lost buyers to the iPhone. In the third quarter, the company said its average selling price declined to 62 euros in the quarter from 72 euros a year earlier. Today, Nokia said it sees lower average selling prices for devices in 2010. The company said it predicts net sales in services of 2 billion euros or more in 2011 and that it expects to deliver a “major product milestone” that year. Nokia began shipments this quarter of its N900 top-of-the- line handset, based on a new Linux-based software platform; and its X6 music phone, which comes with unlimited track downloads and has a more responsive touch-screen than previous models. Nokia has announced more than 45 new phone models and variants this year, including phones designed for the U.S. and China. Nokia posted a third-quarter loss of 559 million euros as it took a writedown of 908 million euros on its Nokia Siemens Networks joint venture with Siemens AG . To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Nokia Sees Industry Mobile Device Volumes Rising About 10%, Its Share Flat

December 2, 2009

By Diana ben-Aaron Dec. 2 (Bloomberg) — Nokia Oyj , the world’s biggest maker of mobile phones, said it expects the handset industry to expand about 10 percent in 2010, while projecting that its own share will remain flat. The company said at its investor day event today in Espoo, Finland, where it is based, that it will focus next year on scaling up its services business, improving margins and pushing smart phones globally. Nokia is releasing new touch-screen phones and improved software to compete with Apple Inc. ’s iPhone, which has made the U.S. company the world’s most profitable handset vendor, according to market researcher Strategy Analytics. The company expects its non-IFRS operating margin to break-even to 2 percent next year, it said. Nokia has lowered its margin guidance for the devices and services unit twice in the past year as it lost buyers to the iPhone. Handset profits fell to 11.4 percent of sales in the third quarter from 18.6 percent a year earlier. Its share of smart-phone sales slipped to 39.3 percent in the quarter from 42.3 percent a year earlier, while Apple and Research In Motion Ltd., maker of the BlackBerry, gained, according to researcher Gartner Inc. Nokia began shipments this quarter of its N900 top-of-the- line handset, based on a new Linux-based software platform; and its X6 music phone, which comes with unlimited track downloads and has a more responsive touch-screen than previous models. Nokia has announced more than 45 new phone models and variants this year, including phones designed for the U.S. and China. Nokia posted a third-quarter loss of 559 million euros as it took a writedown of 908 million euros on its Nokia Siemens Networks joint venture with Siemens AG . Nokia’s average selling price declined to 62 euros in the quarter from 72 euros a year earlier. To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Luxembourg’s SES invests in O3b Networks

November 16, 2009

Luxembourg’s SES invests in O3b Networks

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Stocks in U.S. Extend Second Weekly Gain on Disney, Abercrombie Earnings

November 13, 2009

By Mary Childs Nov. 13 (Bloomberg) — U.S. stocks rose, extending a second straight weekly advance, as higher-than-estimated earnings at Walt Disney Co. and Abercrombie & Fitch Co. overshadowed an unexpected drop in consumer confidence. The dollar declined against most major counterparts. Disney, the world’s largest media company, added 4.5 percent as higher fees for its ESPN channels helped lift profit by 18 percent. Abercrombie & Fitch rallied 9.4 percent as earnings excluding some items beat the average analyst estimate by 48 percent. J.C. Penney Co. jumped after raising its annual profit forecast, while Goodyear Tire & Rubber Co. advanced on Goldman Sachs Group Inc.’s recommendation to buy the shares. The Standard & Poor’s 500 Index rose 0.3 percent to 1,090.41 at 3:08 p.m. in New York. The Dow Jones Industrial Average gained 49.32 points, or 0.5 percent, to 10,246.89. Stocks in Europe advanced as the euro region’s economy emerged from recession in the third quarter. “The market has a little Teflon here,” said Mike Ryan , the New York-based head of wealth management research for the Americas at UBS Financial Services Inc., which oversees $655 billion. “That suggests that folks are looking past the current data releases.” Benchmark indexes briefly erased gains after confidence among U.S. consumers slid for the second consecutive month amid surging unemployment . The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 66 from 70.6 in October. The index was projected to rise, according to the median forecast in a Bloomberg News survey of economists. Rally Continues The S&P 500 has gained 2 percent this week and on Nov. 11 closed at its highest level since October 2008. The index has rallied 62 percent from a 12-year low in March, recovering almost half of its plunge from a record in October 2007, amid optimism that government stimulus programs and record-low interest rates are helping to drag the economy out of recession. Walt Disney added 4.5 percent to $30.35. Net income increased to $895 million from $760 million a year earlier. Excluding one-time items, profit of 46 cents a share beat the 41-cent average estimate of 21 analysts. Sales gained 4.5 percent to $9.87 billion in the period ended Oct. 3, topping the $9.3 billion average estimate of 18 analysts. Abercrombie & Fitch climbed 9.4 percent to $40.23 as the teen-clothing retailer reported a third-quarter adjusted profit of 30 cents per share, while analysts in a Bloomberg survey estimated 20 cents. Record Earnings Beat Eighty percent of S&P 500 companies that have released results exceeded the average analyst estimate for third-quarter earnings per share, marking the highest proportion for a full quarter in Bloomberg data going back to 1993, even as profits slumped for a record ninth straight quarter. J.C. Penney added 7.8 percent to $31.67. The third-largest U.S. department store chain raised its annual profit forecast to as much as $1.08 a share from a previous prediction of 90 cents a share maximum it previously predicted, citing better-than- expected results for the year so far. Goodyear added 3.9 percent to $14.28 after Goldman Sachs raised the shares to “buy” on prospects for improved earnings amid a “more favorable supply/demand balance in 2010.” Juniper Networks Inc . rose 6.2 percent to $26.22. The second-largest maker of networking equipment was raised to “outperform” from “market perform” at Oppenheimer & Co. McDonald’s Corp. rose following a report it plans to expand in Poland. The newspaper Puls Biznesu cited Grzegorz Chmielarski, a business development director in Poland. The shares gained 2.2 percent to $63.53. Consumer discretionary shares posted the steepest advance among 10 groups in the S&P 500, adding 1.5 percent. Dollar Slumps The Dollar Index, which tracks the currency of six major U.S. trading partners, slid 0.4 percent after a two-day rebound from a 15-month low. “This market right now seems to be driven by a weaker dollar,” said Robert Pavlik , chief market strategist at Banyan Partners LLC, which oversees about $400 million in New York. “We’re in a slow-growth economic recovery. It’s early on. There’s still more upside potential.” Nordstrom Inc. slid 1.9 percent to $33.84 after the department-store chain with more than 100 namesake locations predicted its gross margin would widen at most by 20 basis points for the full year. Bill Dreher , an analyst with Deutsche Bank AG projected a 34 basis-point improvement. A basis point is equivalent to 0.01 percentage point. Sunoco Downgrade Sunoco Inc. lost 3 percent to $26.39. The largest refiner in the U.S. northeast was cut to “sell” from “neutral” by Goldman Sachs and added to its “conviction sell list.” Sunoco’s “ongoing restructuring is not on-track to yield a materially improved company,” Goldman analysts wrote in a note. Liberty Global Inc., the international cable company controlled by billionaire John Malone , agreed to buy Unitymedia GmbH for about 2 billion euros ($2.98 billion). The stock fell 7 percent to $21.49. Esco Technologies Inc. lost 13 percent to $32.57. The maker of radio frequency shielding and filtration products said it expects to break even in the first quarter. Analysts, on average, estimated profit of 41 cents a share, according to a Bloomberg survey. Genzyme Corp. dropped 8.5 percent to $48.63. U.S. regulators said some lots of the company’s Cerezyme, Fabrazyme, Myozyme, Aldurazyme, and Thyrogen may be contaminated with stainless steel fragments, non-latex rubber, and fiber-like materials from the manufacturing process. Small-Cap Valuations Valuations for the smallest U.S. companies have climbed to the highest level in 13 years, raising concern they may start trailing returns from bigger stocks. The S&P SmallCap 600 Index trades for 34 times its companies’ earnings from the past year, or 56 percent more than the S&P 500 . Small-cap equities have gained 69 percent since markets bottomed in March, compared with 61 percent for the S&P 500, according to data compiled by Bloomberg. Investors poured the most money into U.S. stock funds in 11 months, leading global equity inflows amid a recovery in earnings and on expectations the Federal Reserve will keep borrowing costs low, EPFR Global said. Investors funneled $6.97 billion into U.S. equity funds, contributing to total inflows of $10 billion to stock funds during the week ended Nov. 11, EPFR said in a statement dated yesterday. Trade Deficit The trade deficit in the U.S. widened in September by the most in a decade, reflecting rising demand for imported oil and automobiles as the economy rebounded from the worst recession since the 1930s. The gap grew a larger-than-anticipated 18 percent to $36.5 billion, the highest level since January, from a revised $30.8 billion in August, the Commerce Department said. International Monetary Fund Managing Director Dominique Strauss-Kahn said the global economic recovery will take years and won’t be a one-size-fits-all situation. Asia will lead the recovery, followed by the U.S. and then Europe, he said in Singapore today. Higher joblessness is likely for advanced nations next year, he said. “The markets can make new highs,” said Richard Jeffrey , chief investment officer of Cazenove Capital Management in London who oversees about $15 billion of assets. “If we look towards Christmas and beyond we aren’t going to see substantial progress made in the near term and into 2010 we could see more volatility,” he told Bloomberg Television. To contact the reporter on this story: Mary Childs in New York at mchilds4@bloomberg.net .

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Olympics Sponsors Beat S&P 500, MSCI World Before Vancouver: Chart of Day

November 9, 2009

By Matt Walcoff Nov. 9 (Bloomberg) — Stocks of Olympics sponsors are winning medals for investors even before the Vancouver Winter Games begin. The CHART OF THE DAY shows the Dow Jones Summer/Winter Games Index of 36 sponsors and suppliers for the 2010 Winter Olympics has surged 34 percent since the measure began tracking the Vancouver event on Dec. 22. That compares with 23 percent for the Standard & Poor’s 500 Index and 27 percent for the MSCI World Index. “Olympic sponsors more often than not perform better than the standard,” said Michael R. Payne , a former marketing director for the International Olympic Committee who wrote a book in 2006 on sponsorships. Royal Bank of Canada, sponsor of the Vancouver torch relay, soared 63 percent as the lender beat analysts’ profit estimates three times. Teck Resources Ltd., producer of materials for the medals, increased sixfold after commodities rallied and the company reduced its debt. Coca-Cola Co. and McDonald’s Corp., which have the biggest weightings in the measure, have risen 22 percent and 0.5 percent, respectively. Companies are willing to pay as much as $100 million to sponsor the Olympics and millions more for advertising, proving how much they value the exposure, Payne said. Petro-Canada’s sponsorship of the 1988 Winter Games in Calgary helped transform the image of the oil company, then state-owned and associated with unpopular energy policies, Payne wrote in his book “Olympic Turnaround.” It’s now owned by sponsor Suncor Energy Inc. Not all of the Olympic sponsors have fared well. Nortel Networks Corp. and General Motors Corp., suppliers of telecommunications equipment and cars, respectively, filed for bankruptcy this year and were removed from the index. (To save a copy of the chart, click here.) To contact the reporter on this story: Matt Walcoff in Toronto at mwalcoff1@bloomberg.net .

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Alcatel-Lucent Third-Quarter Loss Widens More Than Estimates on Sales Drop

October 30, 2009

By Marcel van de Hoef Oct. 30 (Bloomberg) — Alcatel-Lucent SA , the world’s largest supplier of fixed-line phone networks, said its third- quarter net loss widened as sales fell. The net loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That missed the 174.4 million-euro loss average of eight estimates compiled by Bloomberg. Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros by the fourth quarter. “Our company continues its transformation journey,” Verwaayen said in today’s statement. “This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.” Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Nokia Oyj wrote down the value of its joint venture Nokia Siemens Networks by 908 million euros, citing a deteriorated outlook for the business. Ericsson AB , the world’s largest maker of wireless phone networks, posted a steeper-than- expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices. In the latest quarter, Alcatel sales fell 9.3 percent to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates. Before today, Alcatel-Lucent shares had gained 88 percent this year, after losing 69 percent in 2008. To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

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Alcatel-Lucent Third-Quarter Loss Widens More Than Estimates on Sales Drop

October 30, 2009

By Marcel van de Hoef Oct. 30 (Bloomberg) — Alcatel-Lucent SA , the world’s largest supplier of fixed-line phone networks, said its third- quarter net loss widened as sales fell. The net loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That missed the 174.4 million-euro loss average of eight estimates compiled by Bloomberg. Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros by the fourth quarter. “Our company continues its transformation journey,” Verwaayen said in today’s statement. “This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.” Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Nokia Oyj wrote down the value of its joint venture Nokia Siemens Networks by 908 million euros, citing a deteriorated outlook for the business. Ericsson AB , the world’s largest maker of wireless phone networks, posted a steeper-than- expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices. In the latest quarter, Alcatel sales fell 9.3 percent to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates. Before today, Alcatel-Lucent shares had gained 88 percent this year, after losing 69 percent in 2008. To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

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Alcatel-Lucent Third-Quarter Loss Widens More Than Estimates on Sales Drop

October 30, 2009

By Marcel van de Hoef Oct. 30 (Bloomberg) — Alcatel-Lucent SA , the world’s largest supplier of fixed-line phone networks, said its third- quarter net loss widened as sales fell. The net loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That missed the 174.4 million-euro loss average of eight estimates compiled by Bloomberg. Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros by the fourth quarter. “Our company continues its transformation journey,” Verwaayen said in today’s statement. “This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.” Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Nokia Oyj wrote down the value of its joint venture Nokia Siemens Networks by 908 million euros, citing a deteriorated outlook for the business. Ericsson AB , the world’s largest maker of wireless phone networks, posted a steeper-than- expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices. In the latest quarter, Alcatel sales fell 9.3 percent to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates. Before today, Alcatel-Lucent shares had gained 88 percent this year, after losing 69 percent in 2008. To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

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Alcatel-Lucent Third-Quarter Loss Widens More Than Estimates on Sales Drop

October 30, 2009

By Marcel van de Hoef Oct. 30 (Bloomberg) — Alcatel-Lucent SA , the world’s largest supplier of fixed-line phone networks, said its third- quarter net loss widened as sales fell. The net loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That missed the 174.4 million-euro loss average of eight estimates compiled by Bloomberg. Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros by the fourth quarter. “Our company continues its transformation journey,” Verwaayen said in today’s statement. “This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.” Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Nokia Oyj wrote down the value of its joint venture Nokia Siemens Networks by 908 million euros, citing a deteriorated outlook for the business. Ericsson AB , the world’s largest maker of wireless phone networks, posted a steeper-than- expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices. In the latest quarter, Alcatel sales fell 9.3 percent to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates. Before today, Alcatel-Lucent shares had gained 88 percent this year, after losing 69 percent in 2008. To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

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Alcatel-Lucent Third-Quarter Loss Widens More Than Estimates on Sales Drop

October 30, 2009

By Marcel van de Hoef Oct. 30 (Bloomberg) — Alcatel-Lucent SA , the world’s largest supplier of fixed-line phone networks, said its third- quarter net loss widened as sales fell. The net loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That missed the 174.4 million-euro loss average of eight estimates compiled by Bloomberg. Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros by the fourth quarter. “Our company continues its transformation journey,” Verwaayen said in today’s statement. “This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.” Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Nokia Oyj wrote down the value of its joint venture Nokia Siemens Networks by 908 million euros, citing a deteriorated outlook for the business. Ericsson AB , the world’s largest maker of wireless phone networks, posted a steeper-than- expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices. In the latest quarter, Alcatel sales fell 9.3 percent to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates. Before today, Alcatel-Lucent shares had gained 88 percent this year, after losing 69 percent in 2008. To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net

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Avid Announces the Election of Robert M. Bakish to Its Board of Directors

October 21, 2009

TEWKSBURY, MA–(Marketwire – October 21, 2009) – Avid® ( NASDAQ : AVID ) today announced that its board of directors has elected Robert M. Bakish as a Class II director of the company. His term will expire at the company’s 2010 annual meeting of stockholders. Mr. Bakish is president of MTV Networks (MTVN) International, a division of Viacom ( NYSE : VIA ) ( NYSE : VIA.B ), overseeing all MTV Networks operations outside of the United States. Mr. Bakish has served as president of MTVN since 2007. Prior to this, he held several executive positions within the company. Before joining Viacom in February 1997, Mr. Bakish was a partner with Booz Allen & Hamilton in its Media and Entertainment practice.

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US- Thales selects BelAir Networks Wi-Fi for Bergen Light Rail

October 21, 2009

US- Thales selects BelAir Networks Wi-Fi for Bergen Light Rail

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Dark Pools Face SEC Hurdles Curbing Expansion of Fastest-Growing Markets

October 20, 2009

By Jesse Westbrook and Whitney Kisling Oct. 21 (Bloomberg) — The Securities and Exchange Commission may halt the expansion of the fastest-growing stock networks in the U.S. with rules to improve transparency in so- called dark pools. The SEC will today propose lowering the amount of daily volume in a company’s shares that can be executed on the systems before quotes must be made public to 0.25 percent from 5 percent, according to two people familiar with the matter. Dark pools are electronic, off-exchange platforms that investors use to avoid revealing who they are and what they are trading. Democratic Senators Charles Schumer of New York and Ted Kaufman of Delaware are urging regulators to crack down on practices they say create an unfair advantage for the biggest investors. Regulators proposed banning so-called flash trades, in which some investors get a half-second glimpse at share orders before the public, last month. “It will initially take money out of many dark pools’ pockets,” said Matthew Samelson , the Stamford, Connecticut- based founder of market research firm Woodbine Associates Inc. “They’re either going to have to adjust their pricing to be more competitive with the current displayed markets or that flow’s going” elsewhere, he said. The proposal is the latest sign the SEC is toughening oversight of strategies spurred by the growth of alternative exchanges and advances in technology. Dark pools are sometimes used by so-called high-frequency traders, brokerages that execute thousands of orders in a second to profit from tiny price gaps. Sigma X Trading on dark pools such as Zurich-based Credit Suisse Group AG’s Crossfinder and New York-based Goldman Sachs Group Inc. ’s Sigma X, the two largest, has more than quadrupled to 9.4 percent of all U.S. equity volume in three years, according to Tabb Group LLC , a New York-based financial-services consultant. Under the SEC plan, dark pools will have to publicly report quotes once they handle 0.25 percent of a stock’s daily average volume. The electronic networks usually shut down trading in a security when they approach the existing 5 percent limit. John Nester , an SEC spokesman, declined to comment. NYSE Euronext and Nasdaq OMX Group Inc., operators of the biggest U.S. stock exchanges, may benefit from the rule change, according to Woodbine’s Samelson. Both have suffered market share losses as investors shifted to newer venues. The New York Stock Exchange handled 28 percent of all U.S. equity trading in September, while Nasdaq processed 22.7 percent. Their combined share has fallen to 50.7 percent from 74.1 percent in March 2006. Block Exemption The SEC will exempt block trades, or orders exceeding a certain number of shares, from the new rule, according to one of the people, who declined to be named because the discussions were private. Firms specializing in blocks account for 8 percent of all dark-pool trading in the U.S., according to data compiled by Aite Group LLC, a financial-services consultant in Boston. Transactions are biggest at New York-based Liquidnet Holdings Inc. and Pipeline Trading Systems LLC, where orders average 50,000 shares. That compares with 300 to 450 shares at venues such as Getco Execution Services, run by Chicago-based Getco LLC. Dark pools reduce costs and benefit small investors by letting mutual funds buy and sell securities in private, Goldman Sachs said in a statement posted on its Web site yesterday. “Institutional investors can improve their trading performance by executing in an anonymous manner that diminishes their footprint,” according to Goldman Sachs, the most- profitable securities firm in history. “In doing so, the clients of these institutional investors, for example mutual funds and pension funds where the bulk of small investors have their money invested, are direct beneficiaries.” Siphoning Liquidity Growth of the networks is hurting traditional markets, which face more regulation, the World Federation of Exchanges said in a letter last month to Mario Draghi , chairman of the financial-stability board of the Basel-based Bank for International Settlements. “The more the dark pools exist without any comprehensive regulation, the more you’re going to see liquidity siphon off from exchange markets,” William Brodsky , the chief executive officer of the Chicago Board Options Exchange and chairman of the WFE, said at a conference in Vancouver on Oct. 7. The new SEC threshold may push smaller orders off of dark pools and onto exchanges, analysts said. “If you were to limit the dark pools to that small amount of trading, it will be much harder to find a counterparty,” said Dirk Hoffmann-Becking , a London-based analyst for Sanford C. Bernstein & Co. For stock exchanges, “if they would see less competition from the dark pool world, that would certainly be a positive for them.” To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net ; Whitney Kisling in New York at wkisling@bloomberg.net .

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`Dark Pool’ Trading Limits Said to Be Reduced by 95% Under SEC Proposal

October 20, 2009

By Jesse Westbrook and Whitney Kisling Oct. 20 (Bloomberg) — The U.S. Securities and Exchange Commission will propose toughening its limits on the amount of anonymous trading carried out on stock platforms called dark pools, according to two people familiar with the deliberations. The commission will propose lowering the amount of daily volume in a company’s shares that can be executed on the networks before prices must be made public to 0.25 percent from 5 percent tomorrow, said the people, who declined to be identified because the discussions weren’t public. John Nester , an SEC spokesman, declined to comment. The rule change may curtail the number of transactions on dark pools, off-exchange platforms run by firms such as Goldman Sachs Group Inc. and Getco LLC that have drawn scrutiny from Democratic Senators Ted Kaufman of Delaware and Charles Schumer of New York. The systems usually shut down trading in a security when they approach the current 5 percent limit. “If you were to limit the dark pools to that small amount of trading, it will be much harder to find a counterparty,” said Dirk Hoffmann-Becking , a London-based analyst for Sanford C. Bernstein & Co. For stock exchanges, “if they would see less competition from the dark pool world, that would certainly be a positive for them.” Concealing Trades Traders turn to dark pools instead of public markets such as the New York Stock Exchange to avoid revealing their identities and giving competitors clues about their strategies. Kaufman and Schumer say the platforms limit transparency in securities markets and put smaller investors at a disadvantage. The SEC will exempt block trades, or orders exceeding a certain number of shares, from the new rule, according to one of the people. Firms specializing in blocks account for 8 percent of all dark-pool trading in the U.S., according to data compiled by Aite Group LLC, a Boston-based financial-services consultant. Transactions are biggest at Liquidnet Holdings Inc. and Pipeline Trading Systems LLC, where orders average 50,000 shares. That compares with 300 to 450 shares at venues such as Getco’s GES. The 0.25 percent threshold is smaller than Schumer has proposed. He sent a letter to SEC Chairman Mary Schapiro today requesting that the agency force dark pools to publicly display buy and sell orders after matching more than 1 percent of a stock’s average daily volume. Schumer, Niederauer Schumer, who held a press briefing today with NYSE Euronext Chief Executive Officer Duncan Niederauer , also wants the SEC to establish a “robust” approval process for new dark pools and treat some so-called indications of interest as formal bids. Brokers use indications of interest to demonstrate their willingness to trade shares. Schumer said they can be abused because they allow traders to gauge demand without the obligation to buy or sell. “We are not against dark pools,” Niederauer said. The NYSE just wants a “more level playing field,” he added. Employees at NYSE Euronext , the operator of the largest U.S. equity exchange, have contributed $27,250 to Schumer’s political campaigns since 2005, according to OpenSecrets.org. Trading on dark pools such as Credit Suisse Group AG’s Crossfinder and Goldman Sachs’s Sigma X, the two largest, has more than quadrupled to 9.4 percent of all U.S. equity volume in three years, according to estimates by Tabb Group LLC , a New York-based financial-services consultant. Bloomberg LP, the parent of Bloomberg News, also owns Bloomberg Tradebook LLC, an electronic stock-trading network that links to dark pools. Knight, ITG Decline Knight Capital Group Inc. fell as much as 4.2 percent in Nasdaq Stock Market composite trading, the most since July 28. Investment Technology Group Inc. fell up to 8.2 percent. Shares of Nasdaq OMX Group Inc. , owner of the second-largest U.S. equity exchange, climbed as much as 4.4 percent in the biggest rally since Aug. 7. Investors use dark pools to execute bigger orders and avoid revealing details such as price and size that could move a stock, according to Sang Lee , a market analyst at Aite . The growth is hurting traditional markets, which face more regulation, the World Federation of Exchanges said in a letter last month to Mario Draghi , chairman of the financial-stability board of the Basel-based Bank for International Settlements. “The more the dark pools exist without any comprehensive regulation, the more you’re going to see liquidity siphon off from exchange markets,” Chicago Board Options Exchange Chief Executive Officer and WFE Chairman William Brodsky said at a conference in Vancouver on Oct. 7. Publishing Data NYSE Euronext will begin publishing how much stock trading is conducted on dark pools every day on its Web site. The NYSE will let firms that run the private networks display trading volume starting in November, the company said in a statement today. Barclays Plc, Getco LLC, Goldman Sachs, Knight Capital Group Inc. and UBS AG plan to participate, NYSE Euronext said. Dark networks “can arbitrarily decide who gets to play in their pool and who doesn’t,” said Dan Mathisson , head of Credit Suisse’s algorithmic unit. “That’s something that needs to get cleaned up.” To contact the reporters on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net ; Whitney Kisling in Scottsdale, Arizona at wkisling@bloomberg.net .

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Nokia Posts First Loss Since 1996 on Siemens Networks Joint Venture Costs

October 15, 2009

By Diana ben-Aaron Oct. 15 (Bloomberg) — Nokia Oyj , the world’s biggest maker of mobile phones, had its first net loss since the company began reporting quarterly in 1996, hurt by costs related to a joint venture with Siemens AG and weaker demand. The net loss totaled 559 million euros ($834 million), after a profit of 1.09 billion euros a year earlier. Sales declined 20 percent to 9.8 billion euros, missing the average estimate of 10.03 billion euros in a Bloomberg analyst survey . Analysts had anticipated a profit of 367 million euros. The shares fell the most in three months. The Espoo, Finland-based company took a goodwill writedown of 908 million euros on its Nokia Siemens Networks venture and said the unit’s market share will drop more than expected this year as rivals slash prices. The company forecast an unchanged market share of 38 percent for handsets in the fourth quarter as consumers shun Nokia’s N97 smartphone in favor of Apple Inc. ’s iPhone. “Networks looks like an outright disaster,” said Alexander Peterc , a Paris-based analyst with Exane BNP Paribas who has an “underperform” rating on Nokia shares. “Sales are dramatically below expectations.” Nokia fell as much as 1.04 euros, or 10 percent, to 9.26 euros, and was trading at 9.52 euros at 4 p.m. in Helsinki. Today’s intraday drop was the biggest since July 16. The company has a current market value of 35.7 billion euros. Nokia Siemens Nokia Siemens Networks, which is consolidated in Nokia’s results, had previously booked operating losses of more than 1.6 billion euros over 2007 and 2008 as it struggled against carrier spending cuts and competition from new entrants in the network- equipment business. Nokia said it will stick with the venture. The company now expects sales in the unit’s industry to drop 5 percent this year in euro terms. The company had earlier forecast a decline of 10 percent for the market as a whole. “We continue to support Nokia Siemens Networks actions to improve its performance,” Chief Executive Officer Olli-Pekka Kallasvuo said in the statement. The company said adjusted operating margin at its Devices & Services unit is expected to rise one percentage point or more in the fourth quarter compared to the same period a year before. The margin was 11.4 percent in the third quarter, the company said, contracting from 18.6 percent a year earlier. ‘Revenue Miss’ “It’s not a great report,” said Ben Rogoff , who helps manage about $2 billion including Nokia shares at Polar Capital Technology Trust Plc in London. “With Apple set to increase its presence in Europe and the N97 going into the channels, it was a good chance for them to really show what they could do, and the bottom line is they didn’t, and there was a revenue miss.” Kallasvuo raised his expectation for industry shipments, saying they will fall 7 percent this year. The previous forecast was for a 10 percent decline. Nokia’s adjusted operating margin for devices will increase sequentially by at least one percentage point in the fourth quarter, the company said. The company sold 16.4 million smart phones, it said. Last quarter’s smart-phone sales were 16.9 million. ‘Underperformance’ “The report showed good resilience on mobile-device margins, chiefly from cost cutting which can only take Nokia so far,” Exane BNP Paribas’s Peterc said. “The underperformance at the high-end continues to worry everybody.” Sales of the N series multimedia phones were 4.5 million in the quarter, the company said, less than the 4.6 million reported in the previous three-month period. Nokia sold 4.4 million of the E series, consisting of business-oriented models that compete with Research In Motion Ltd. ’s BlackBerry, compared to 4.7 million reported last quarter. Nokia unveiled a scaled down version of the N97 touchscreen device in the quarter as it readied the N900, its first phone using a new software platform. To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Most Stocks in U.S. Fall on Whitney’s Goldman Downgrade; J&J Shares Slide

October 13, 2009

By Sapna Maheshwari Oct. 13 (Bloomberg) — Most U.S. stocks fell, pulling the Standard & Poor’s 500 Index down from a one-year high, as analyst Meredith Whitney downgraded Goldman Sachs Group Inc. and said she was “far less bullish” on banking shares. Goldman Sachs slipped 2.1 percent as Whitney cut the bank to “ neutral ” and said investors should take profits after the stock more than doubled since. Johnson & Johnson tumbled 2.6 percent on lower-than-estimated revenue. The market’s losses were limited as technology shares gained after Cisco Systems Inc. agreed to buy Starent Networks Corp. for $2.9 billion. Almost two stocks retreated for each that rose on the New York Stock Exchange. The S&P 500 lost 0.3 percent to 1,073.03 at 1:06 p.m. in New York after rising for the previous six days, its longest streak of gains since June 2007. The Dow Jones Industrial Average fell 10.51 points, or 0.1 percent, to 9,875.29. The Nasdaq Composite added 0.1 percent to 2,141.6. “We’ve had an awfully nice run in the market here, and I think we’re just at a process of digesting some of those gains,” said Joseph Keating , chief investment officer of Raleigh, North Carolina-based RBC Bank, which oversees $3 billion. “There’s some nervousness ahead of the big earnings week we’re having here.” The S&P 500 climbed to a one-year high yesterday amid speculation improving corporate results will extend a seven- month advance in equities. Alcoa Inc. last week began the third- quarter earnings season with an unexpected profit. Earnings Slump Companies in the S&P 500, which has rebounded 59 percent from a 12-year low in March, will report a ninth straight quarter of declining profits, the longest streak since the Great Depression, analysts’ estimates compiled by Bloomberg show. Earnings growth is projected to resume in the final three months of the year. Goldman Sachs, which is scheduled to announce earnings Oct. 15, slid 2.1 percent to $186.07 after Whitney downgraded the bank to “neutral” from “buy.” Goldman Sachs has surged more than 30 percent since Whitney, who correctly predicted Citigroup Inc.’s dividend cut in 2007, raised her rating on the New York-based bank to “buy” on July 13. She said in a note to clients today that while she remains “fundamentally constructive on Goldman Sachs over the long term, we prefer to invoke a ‘why be greedy’ rationale and lock in profits at these levels.” JPMorgan Chase & Co. slid 1.6 percent and Wells Fargo lost 1.4 percent, helping lead financial shares to the steepest decline among 10 industries in the S&P 500. Whitney said she has become less bullish on banks since they are now “at least fairly valued.” The S&P 500 Financials Index has rallied about 150 percent from a 17-year on March 6. Bank of America Bank of America Corp. lost 1.5 percent to $17.76. The largest U.S. lender by assets failed to persuade a Delaware judge to dismiss a shareholder suit challenging the fairness of its $33 billion stock-swap buyout in January of Merrill Lynch & Co. Johnson & Johnson, the world’s largest health-products company, lost 2.6 percent to $60.92 even after earnings topped analysts’ estimates. Revenue fell 5.3 percent to $15.1 billion, below the $15.2 billion anticipated by 14 analysts surveyed by Bloomberg. Sales of medical devices didn’t rise enough to counter slowing sales of drugs and consumer items. “The cost-cutting that some of the larger international companies have done will be what preserves and produces the surprises,” said Eric Teal , who helps oversee $5 billion at First Citizens BancShares Inc. in Raleigh, North Carolina. “Long-term organic growth seems to be out a few quarters.” Gold Rallies Newmont Mining Co., the largest U.S. gold producer, gained 2.7 percent to $47.71 as gold rose to a record of $1,069.70 an ounce in New York. Barrick Gold Corp. climbed 1 percent to $39.76. Starent jumped 17 percent to $33.92. The company Cisco agreed to acquire makes equipment to help wireless carriers understand the kind of traffic that’s crossing their networks, enabling speedy routing of that information to mobile devices. Cisco added 0.7 percent to $23.94. Mergers and acquisitions among U.S. companies are poised to rise, according to Goldman Sachs, which said shares are cheap and executives have cash. While the steepest rally in the S&P 500 in seven decades pushed the average price-earnings ratio for companies in the gauge to 20.3, the highest level since 2004, Goldman Sachs says most stocks remain cheap relative to their valuations in the last 10 years. Allianz SE, Europe’s biggest insurer, expects stocks to fall because the economic recovery is lagging behind the market’s rally over the past seven months. “The market rally right now is — my personal view is — way ahead of real-life developments,” Paul Achleitner , head of finance at Munich-based Allianz, said yesterday in an interview at Bloomberg headquarters in New York. “The expectation level is so high, you’re going to have the risk that there’s going to be a discrepancy in expectation” and economic data, Achleitner said. To contact the reporter on this story: Sapna Maheshwari in New York at smaheshwar11@bloomberg.net .

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Colin Doherty Appointed CEO of Arbor Networks

October 5, 2009

CHELMSFORD, MA–(Marketwire – October 5, 2009) – Arbor Networks ®, a leading provider of secure service control solutions for global business networks, announced today that CEO Jack Boyle is retiring. Colin Doherty, Arbor’s senior vice president of worldwide sales and customer service, has been appointed by the board of directors as CEO of the company, effective immediately. “I joined Arbor four years ago because I was so impressed by the people, the solutions they were developing, and most importantly, the passion with which they worked,” said Jack Boyle. “The timing is right for me to now step aside, personally and professionally. Having someone in-house with the skill and experience of Colin Doherty certainly made this an easier decision.”

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RCN Names Jose A. Cecin, Jr. Executive Vice President and Chief Operating Officer

September 28, 2009

HERNDON, VA–(Marketwire – September 28, 2009) – RCN Corporation ( NASDAQ : RCNI ), a leading provider of all-digital and high-definition video , high-speed internet , and premium voice services to residential and small-medium business customers, as well as high-capacity transport services to carrier and large enterprise customers, today announced that it has named Jose “Joe” A. Cecin, Jr., 46, to the newly-created position of executive vice president and chief operating officer. Mr. Cecin will lead RCN Residential and RCN Business Services, which had each been managed separately, and will report to Peter D. Aquino, president and chief executive officer. RCN Metro Optical Networks, l

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Stocks in U.S. Fluctuate as Declines in Commodities Offset Fed Speculation

September 23, 2009

By Rita Nazareth Sept. 23 (Bloomberg) — U.S. stocks fluctuated as declines in commodities tempered speculation the Federal Reserve will signal the economy is strengthening. The dollar rose from a one- year low against the euro, while oil, gold and copper retreated. Massey Energy Co. fell 5.6 percent and AK Steel Holding Corp. lost 2.3 percent to lead producers of energy and raw- materials to the steepest declines among 10 groups. Prudential Financial Inc. and Unum Group slid as Morgan Stanley downgraded life insurers, saying the shares are unlikely to rally further. General Mills Inc., maker of Cheerios, climbed 4.4 percent on better-than-estimated earnings, while Ford Motor Co. jumped 5.3 percent after predicting a rebound in demand. “There’s concern we’ve moved too far, too fast without any meaningful correction,” said Malcolm Polley , chief investment officer at Stewart Capital Advisors in Indiana, Pennsylvania, which manages $1 billion. “I do think any correction will be muted because the latest figures point to modest economic recovery. But we still need to see top-line corporate growth.” The Standard & Poor’s 500 Index was unchanged at 1,071.66 at 10:34 a.m. in New York after gaining as much as 0.2 percent. The Dow Jones Industrial Average added 0.76 point, or less than 0.1 percent, to 9,830.63. Benchmark indexes for Europe and Asia advanced for a second day. Equities have surged since March as the Group of 20 committed about $12 trillion to revive economic growth and the Fed kept overnight borrowing costs near zero to unlock credit markets. The 58 percent rally in the S&P 500 since March 9 has left the gauge trading at about 20 times its companies’ reported profits from continuing operations, the highest level since 2004, according to data compiled by Bloomberg. Fed Meeting Fed officials may signal today that the economy has started to recover while maintaining their pledge to keep the benchmark interest rate near a record low for an “extended period.” Officials will probably debate their purchases of $1.45 trillion in housing debt, including whether to extend the emergency program into 2010, analysts said. The Federal Open Market Committee is scheduled to issue its statement at around 2:15 p.m. Washington time after the end of its two-day meeting. Prudential Financial Inc. fell 1.4 percent to $51.28 and Unum Group lost 1.6 percent to $22.11. Morgan Stanley downgraded the U.S. life insurance industry to “in line” from “attractive,” while lowering Prudential to “equal weight” from “overweight” and Unum to “underweight” from “equal weight.” Juniper, US Air Juniper Networks Inc. declined 1.6 percent to $27.26. The second-largest maker of networking equipment was downgraded to “neutral” from “outperform” at Robert W. Baird & Co. US Airways Group Inc. fell 14 percent to $4.52. The Tempe, Arizona-based airline said it sold 26.3 million shares of stock to Citigroup Inc. as an underwriter in the public offering of the shares. Zions Bancorporation declined 1.5 percent to $18.79. The Utah lender was rated new “sell” by analyst Todd Hagerman at Collins Stewart. The 12-month share price estimate is $10. General Mills rose 4.4 percent to $63.68 after reporting first-quarter earnings of $1.28 a share, topping analysts’ estimates, and boosting its full-year earnings forecast to between $4.40 and $4.45 a share. On average, the analysts surveyed by Bloomberg estimated profit of $4.27. Ford led a gauge of automobile and components makers up 2.3 percent, for the biggest gain in the S&P 500 among 24 industries. The only major U.S. automaker to avoid bankruptcy expects domestic demand to pick up next year as the biggest financial crisis in more than six decades eases. Ford had the biggest gain in the S&P 500, rising 5.3 percent to $7.38. Xilinx Rallies Xilinx Inc. rose 4.7 percent to $23.78. The largest maker of programmable semiconductors raised its sales forecast for this quarter as demand picked up in “nearly all end markets and geographies.” AT&T Inc. gained 1.7 percent to $26.96. CNBC’s Jim Cramer recommended the shares, saying the company will benefit from its exclusive arrangement with Apple Inc. to sell the iPhone. AT&T is the “nice, safe” way of making money off the rise in the mobile Internet market, Cramer said on his “Mad Money” show. American International Group Inc., the insurer bailed out by the U.S., advanced 3.9 percent to $47.57. AIG shares have become a favorite of hedge-fund speculators and day traders seeking to capitalize on dramatic swings in share prices, the Wall Street Journal reported, citing traders such as Scott Redler , chief strategist at T3 Capital Management. Casinos Gain Casino shares gained after Stephen Wynn , the billionaire chairman of Wynn Resorts Ltd., said Singapore’s casinos won’t pose a threat to Macau, the world’s biggest gambling hub. Wynn, who is in Hong Kong to market his company’s initial public offering of its Macau casino assets, spoke at a briefing today. Wynn gained 2 percent to $73.37. Las Vegas Sands Corp. added 1.5 percent to $19.56. MGM Mirage advanced 2.1 percent to $13.79. Strategists at Wall Street’s biggest securities firms can’t keep up with the S&P 500 after the steepest surge since the 1930s. The benchmark gauge for U.S. equities climbed 0.7 percent yesterday to 1,071.66, leaving it above all but one of the 10 projections by forecasters in a Bloomberg survey this month, the first time that’s happened in data going back to 1999. The average forecast for the S&P 500 from the strategists is 1,022, about 5 percent below the index’s current level. To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net .

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Expand Networks wins Global Accountancy Firm

September 22, 2009

Expand Networks wins Global Accountancy Firm

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Timothy Karr: FCC Chief ‘Boldly’ Commits to Net Neutrality

September 21, 2009

The fight for Net Neutrality just took a big step forward on Monday with the chair of the Federal Communications Commission announcing plans to expand the rules to protect a free and open Internet. In a speech at the Brookings Institution , Julius Genachowski said the FCC must be a “smart cop on the beat” preserving Net Neutrality against increased efforts by providers to block services and applications over both wired and wireless connections. Genachowski’s speech comes as a breath of fresh air in a Washington policy environment that has long stagnated under the influence of a powerful phone and cable lobby. “If we wait too long to preserve a free and open Internet, it will be too late,” Genachowski said citing a number of recent examples where network providers have acted as gatekeepers: We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks) and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content. We have even seen at least one service provider deny users access to political content. A Call for Wired and Wireless Neutrality The agency had earlier noted concerns about the blocking of applications and services on new handheld Internet devices such as the iPhone. Ben Scott of Free Press responds to Genachowski’s speech Genachowski, who was an architect of President Obama’s technology agenda, proposed that the agency adopt new principles that would prevent discrimination and require full transparency from ISPs that seek to manage their networks. The new principles are additions to the ” Four Freedoms ” endorsed by the FCC in 2005. Genachowski asked the FCC to adopt the new principles as Internet rules, calling them “essential to ensuring its continued openness.” FCC Commissioners Michael Copps and Mignon Clyburn have already indicated they support stronger Net Neutrality action. “The rise of serious challenges to the free and open Internet puts us at a crossroads,” Genachowski said. “We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.” The Right Rules, Right Now In a panel of experts following the speech, David Young of Verizon Communications stated that his company is able to “live with” Internet openness standards. “Openness and innovation are keys to our success,” Young said, but added predictably that he prefers a “hands off approach.” Young later added a familiar lobbyist refrain that he “doesn’t understand what the problem is that we are trying to solve.” Verizon has already deployed 194 lobbyists at a cost of more than $13 million this year to fight Net Neutrality rules both at the FCC and in Congress. “The Internet has a long history of regulation,” said Free Press Policy Director Ben Scott in response to Young. “What were deciding is not whether to have Internet regulation or not. What we’re deciding is how to proceed with regulating the Internet right.” “What we heard today is a very common-sense approach,” Scott said. “But in this town, doing something common sense is considered bold.” “[This is] about fair rules of the road for companies that control access to the Internet,” Genachowski concluded. “We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.” The FCC Opens Its Doors Now the FCC has to actually write the new rules and invite comments from the public and interested parties. To engage more public participation in the process, Genachowski announced that the agency would hold a series of public workshops on openness. In addition, the FCC launched a new Web site, www.openinternet.gov , so the public can “contribute to the process.”

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Expand Networks Selected by Clear Channel Satellite to Provide Optimized Managed Services

September 14, 2009

Expand Networks Selected by Clear Channel Satellite to Provide Optimized Managed Services

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Expand Networks Selected by Clear Channel Satellite to Provide Optimized Managed Services

September 14, 2009

Expand Networks Selected by Clear Channel Satellite to Provide Optimized Managed Services

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Iris Martin: Homeowners: The War Games Have Begun

September 11, 2009

Homeowners across the nation have locked and loaded and are launching their mortgage wars. Sales of my new book, Mortgage Wars: How to Fight Fraud and Reverse Foreclosure are thriving among homeowners and attorneys alike. We have even taken over the airways, advertising the book on Monday night football! The book was requested for sale at the annual conference of the California Bar Association. More attorneys are being trained up, and California attorney Walter Hackett is in the process of announcing an institute for lending practices to help attorneys gear up faster. Lenders are besieged with mortgage audits, qualified written requests and predatory lending complaints. As a result, many lenders are postponing foreclosure sales time and again, and some states, like Florida and Ohio have become virtually, no foreclosure zones. The war games have begun and now it’s time for the predatory lenders, brokers and foreclosure consultants to sweat. The Fed is weeding out the predators who promise loan mods and can’t deliver after devouring huge fees. The tide is turning, as it must, if the largest lenders, like Chase, Citibank, Wells Fargo and the like, are to transform their predatory schemes against innocent homeowners. There has been so much progress since my book has hit bookshelves. Just ask forensic expert Marie McDonnell, who is offering a full securitization analysis for $1,500 dollars. She maps every transaction in the securitization daisy chain and prepares an expert report to demonstrate to the judge how the lender has no legal standing to foreclose. She is also available as an expert witness at trial. Or ask California attorney, Walter Hackett, who challenges the sanctity of a deed of trust when there has been no trust in the mortgage transaction. Or California attorney, Jeff Schwartz, who incorporates a lack of fiduciary duty claim into some of his well deserving complaints. Or ask Ohio attorney Dan McGookey, who just reversed a foreclosure action due to the lender not owning the loan and note. His pleadings are becoming legendary. Rock on, Dan! I receive daily calls from homeowners confused about the mortgage war plan of attack, and many have been incredibly misinformed. Some have committed bankruptcy fraud and didn’t know it, making themselves vulnerable to criminal charges. So here is the skinny on what to do and not do in your own mortgage war. The Dos: 1. Get a mortgage audit. For only $499.00, you can go to www.yourmortgagewar.com and order one. Our evidentiary audit has been designed by attorneys. It examines TILA and RESPA violations, fraud and illegal securitization. You will receive your report after two week upon collecting all the documents. 2. Second, if your audit warrants it, you can file a legal complaint. We can help you find a qualified attorney from our network, or from their networks. The good ones are always in contact with each other. 3. Your new best friend attorney will take the audit data and interview you at length. Based upon your responses, your attorney will prepare a legal complaint detailing the facts of your case and appropriate causes of action. You should not pay more than $2,500 for this service, including court filing fees. On that note, you should not pay more than $275 per hour for legal assistance, as that is the going national rate. 4. Your attorney will determine whether to file your complaint in state or federal court. TILA violations are heard in federal court, as are RESPA claims. However, many attorneys I chat with believe that predatory complaints involving other causes of action, such as fraud and lack of fiduciary duty, are best heard in state court. Your attorney can educate you on what’s best for you in your state. 5. Your attorney will also determine whether to demand a jury trial. The attorneys I know are split on this one: some believe a jury would side with a fellow homeowner. However, some cities may have jurors who cannot follow the proceedings, particularly with regard to technicalities in the securitization process. Your attorney will determine which choice is right for you. 6. Once your complaint is filed and served, your attorney can begin discovery after only a few days. Discovery takes the form of written demands for information from your lender, including who owns your loan and note. If your lender refused to answer, it can be compelled to do so by the court. Your attorney will also depose representatives from your lender or brokerage, and other parties with knowledge. Not a bad idea to search for whistle blowers who worked for your lender in sunnier times. 7. You will also get a trial date at a hearing known as a case management conference. Your trial date most likely will be scheduled many months in the future. 8. Your attorney can also begin settlement discussions with your lender. These take the form of a reduction in interest rate and principal balance. Just ask Florida attorney, Dawn Rapoport how lenders are responding, now that the number of plaintiffs is dramatically increasing. 9. Your judge, by the way, may very likely order you to meet with a negotiator or mediator to settle your case. Most judges do not want their courtroom crowded by enraged homeowners engaging in mortgage war. This is also a time to get a better deal from your lender in exchange for dropping your lawsuit. In my opinion, this is the only way to get a decent loan modification. 10. If you live in a non-judicial state, and your lender attempts to foreclose before your trial, your attorney will have to obtain a TRO, or temporary restraining order from the judge. The judge will have to be convinced that you will be irreparably harmed by the foreclosure, and that you stand a good chance to win at trial. This is a very good time to have Marie McDonnell prepare a report for the judge regarding who owns your loan and note. You may find you already own your home free and clear and don’t know it yet. 11. After obtaining the TRO, you will have to go back to court to obtain an injunction to stay the foreclosure pending outcome of your trial. The judge may demand that you post a bond to stop the bleeding for your lender. There is a new cottage industry sprouting in the bond business, and many companies are providing bonds using real estate as collateral. However, you cannot use the subject property as collateral. 12. You may receive several settlement offers pre-trial. Let your attorney determine which one is best for you. Or you may just roll the dice and take your war to the courtroom. 13. If you decide to go to court, your attorney may demand a portion of your settlement in exchange for litigating your case. This arrangement, called a contingency agreement, allows you to defer your considerable legal costs until the end of the trial. If you get nothin’, your attorney gets nothin’ as well. 14. If you don’t like the outcome of your trial and there were process errors, you may decide to appeal. This may also require the posting of a bond. 15. Or you may prevail, and win your mortgage war. It’s happening more and more every day. Here is my list of Don’ts when waging your mortgage war: 1. Don’t go pro per. There is nothing wrong with having an attorney write, file and serve a pro per complaint. This may save you money on the front end. After the complaint is served, your defendants, which should include all parties you have a beef with, such as your appraiser, broker, lender, title agent, servicer, trustee and beneficiary, have thirty days to respond. They generally respond with a “demur” which is an attack on your complaint. 2. Don’t go to court by yourself. You will need an attorney to oppose the demur in writing and at a hearing. Don’t’ play Perry Mason and think you can waltz into court and get the result that you want. Judges do not like pro per litigants, as they are ill-trained in courtroom procedure and etiquette. You may score a sympathetic judge, but sooner or later the lender’s attorneys will eat your alive. Don’t have a fool for a client, or go into battle without a loaded weapon. 3. Don’t believe that bankruptcy is the answer to your mortgage hell. Lender’s attorneys will request a lift of stay in a New York minute. They often get it, and you lose your home. File a predatory claim first. You can always succumb to filing bankruptcy. So don’t believe predatory attorneys who tell you that your only hope is to file bankruptcy without interviewing skilled predatory lending litigators. 4. Don’t play any tricks with having others take a piece of your home and then they declare bankruptcy. Whoever invented this illegal practice, ain’t doing homeowners a world of good. Especially when those homeowners are facing bankruptcy themselves and have already defrauded the court. 5. Don’t put your home in the hands of loan mod companies. I get calls every day from foreclosed homeowners who were told their loans were being modified and there was nothing to worry about. If this has happened to you, sue the loan mod company, or file a malpractice complaint against your loan modification attorney. The only thing that will stop your foreclosure is a signed settlement from your lender or an order signed by a judge. If you are one of the few that has gotten a loan modification on your own, make sure it is good for you. If not, sue the bastards. 6. Don’t deny your mortgage hell. If you are in delinquency or default, it is time to get moving. God helps those who get help themselves. I get many calls from homeowners whose foreclosure sale is imminent, and there isn’t much that can be done. Preparing and filing a legal complaint is required before you can seek a temporary restraining order. All this takes time. Good attorneys are swamped with clients. Plan in advance to save your home. 7. Don’t attempt a loan modification on your own. Attorneys tell me war stories that set my hair on file. How the banksters use every trick in the book to trap the homeowner into an unaffordable profile. This gives the lender even more ammunition to foreclose, especially because it has “cooperated” with the Obama plan. 8. Don’t drive your auditor and attorney crazy with all hours phone calls. Yes, you have every right to panic, and the threat of losing the roof over your head is a terrifying possibility. But you must control your anxiety so that your helpers can do their jobs. Constant demands for reassurance and advice only makes them want to avoid contact with you. 9. Don’t prematurely give up and turn in keys for cash. If you have been told by a reputable attorney that you have a strong case, persevere and fight on. The bank is not your mother or father. If your lender has violated laws, there are legal remedies at your disposal. But only if you use them. 10. Don’t rush or second guess the process. Every case is different, depending on a unique set of facts. Even attorneys disagree on various approaches to a complaint. It takes time and effort to research the law and what causes of action and motions are working. Mortgage war is a marathon, not a sprint. 11. Don’t get discouraged. You will have good days and bad days. It helps to meditate instead of awfulize. You will sleep better at night when you are sure you are following the best plan of attack for saving your home and waging war against your predatory lender and broker. I hope this helps answer some of your questions. I do try to call everyone who contacts me through our website www.yourmortgagewar.com . I am truly blessed to have chatted with so many smart, and justifiably, enraged homeowners in the throes of their mortgage wars. If you have a reaction to the book or have a question, feel free to e mail me. And give yourselves kudos for pioneering this war. It is only when the courts are overwhelmed with predatory lending lawsuits that the state and federal government may follow the steps of Ohio and force arrogant predatory lenders to prove that they have standing before filing a foreclosure action. So, in the spirit of celebrity chef Bobby Flay, Ohio, keep doing what you’re doin’. And the rest of America? Ask yourself this: Are you ready for a mortgage throw down?

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Verizon Business Helps European Companies Maximize the Potential of their IP Networks

September 9, 2009

Verizon Business Helps European Companies Maximize the Potential of their IP Networks

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Deutsche Telekom, France Telecom Near Agreement on Combining U.K. Units

September 7, 2009

By Anne-Sylvaine Chassany and Jacqueline Simmons Sept. 7 (Bloomberg) — Deutsche Telekom AG , Europe’s biggest telephone company, and France Telecom SA are close to an agreement to combine their U.K. mobile-phone units to create the country’s largest mobile-phone operator, according to two people familiar with the matter. The two companies may announce the merger as soon as tomorrow, said the people, who declined to be identified before an announcement. The talks haven’t been finalized so far, the people said. The venture would oust Telefonica SA’s O2 service from the top spot and will have 30 million subscribers, or 38 percent of the U.K. market, based on second-quarter results. The merger would allow Deutsche Telekom and France Telecom to slash costs by combining their networks and cutting jobs. A deal would reduce the number of mobile-phone operators in the U.K. to four, with the others being Vodafone Group Plc and Hutchison Whampoa Ltd. ’s 3. The accord would also end months of speculation during which Deutsche Telekom was predicted to sell or fold its U.K. unit into a joint venture. “Deutsche Telekom’s U.K. unit is just too small to compete in this crowded and saturated market and profitability is declining as a result,” Theo Kitz , an analyst at Merck Finck in Munich, said. Kitz has a “sell” rating on the shares. France Telecom may get cash or assets from Deutsche Telekom in return for contributing its stake in Orange to the joint venture, the people said. Orange is the U.K.’s third-biggest mobile operator. Vodafone, KPN Deutsche Telekom spokeswoman Anna Bischof declined to comment as did Michael Lange , a spokesman for T-Mobile International, and Tom Wright , a spokesman for Paris-based France Telecom. Phone companies are looking to reduce costs as clients spend less amid the economic slowdown. Vodafone, Deutsche Telekom, Royal KPN NV and Mobistar SA said in May that the recession was eroding profit as consumers and businesses reduced mobile-phone use. Bonn, Germany-based Deutsche Telekom had been in talks with Vodafone, Telefonica and France Telecom, and retained JPMorgan Chase & Co. to review options, three people familiar with the talks said in June. Newbury, England-based Vodafone and Telefonica made informal offers to buy it for about 4 billion pounds, the Financial Times said earlier today. Subscribers to T-Mobile UK services fell 0.6 percent in the second quarter from the preceding three months, according to Deutsche Telekom. It was the only one of the company’s 16 mobile divisions to post a decline in users. O2, owned by Telefonica , had 27.7 percent of the U.K. mobile-phone market by revenue in the second quarter, followed by Vodafone’s 24.7 percent and Orange with 21.5 percent, based on the companies’ results. To contact the reporters on this story: Anne-Sylvaine Chassany in Paris at achassany@bloomberg.net ; Jacqueline Simmons in Paris at jackiem@bloomberg.net .

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Expand Networks leverages VMware ViewTM to enable VDI deployment

September 3, 2009

Expand Networks leverages VMware ViewTM to enable VDI deployment

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