Lehman And PE A Year Later: By The Numbers

Mike Lucas for Dow Jones

Lehman Brothers Holdings Inc.’s bankruptcy one year ago had an undeniably huge impact on private equity. Over the past year, the bankruptcy and the economic downturn that followed rendered raising debt nearly impossible, brought deal-making to a halt, sent fund-raising into a tailspin and has pushed many portfolio companies into bankruptcy or to the edge of it.

Here, a look at some of the numbers. Our sources are our own publications (LBO Wire and Private Equity Analyst), as well as industry data tracker Dealogic.

Nine months: Amount of time it took for financial sponsor-backed loan volume to exceed $50 billion in 2009

Seven weeks: Amount of time it took in 2008

$55.4 billion: Financial sponsor-backed loan volume this year as of Sept. 14

$213.9 billion: Financial sponsor-backed loan volume as of the same date in 2008

$19.6 billion: Dollar volume of U.S. buyout transactions between Sept. 15, 2008 and Aug. 17, 2009

Roughly $61 billion: The full-year 2008 figure

Roughly $375 billion: The full-year 2007 figure

At least 75: Number of private equity-backed U.S. portfolio company bankruptcies since Sept. 15, 2008

$2.75 billion:
Valuation of the largest U.S. buyout so far in 2009 - of Skype by a Silver Lake-led group

$4.1 billion:
Valuation of the largest U.S. buyout in 2008 - of ConvaTec Ltd. by Avista Capital Partners and Nordic Capital

$45 billion: Valuation of the largest buyout ever - of TXU Corp., now Energy Future Holdings Corp., by Kohlberg Kravis Roberts & Co. and TPG Capital in 2007

$1.7 billion: Financial sponsor fees paid to banks this year through Sept. 14, 2009

106: The number of banks that have failed between Sept. 15, 2008 and Sept. 15, 2009, according to the Federal Deposit Insurance Corp.’s Web site

At least 10: Number of U.S. banks that have received or are planning to receive capital from private equity firms or individuals who head PE firms since Sept. 15, 2008 (Indymac, BankUnited, First Bank & Trust Co., First National Bank of Cainesville, Flagstar Bancorp, Guaranty Bancorp, Webster Financial Corp., FirstCity Bank of Commerce, First Bankshares Inc., First Southern Bank)

$71 billion: Amount raised by U.S.-based private equity, venture capital, mezzanine and secondary firms in 2009 through Sept. 9

Roughly $175 billion: Amount raised by mid-September of last year

-With Jennifer Rossa


Microsoft Launches Zune HD

Microsoft (MSFT) this morning announced the launch of its Zune HD media player.

The Zune HD features an OLED multi-touch screen, an Nvidia (NVDA) Tegra processor, an FM tuner with HD Radio capabilities, wifi capability and 720p HD video store and playback. Microsoft says the new Zune will have some new casual games, a calculator and an MSN weather application; later this year there will be Twitter and Facebook apps for Zune.  Games can be added via the Zune Marketplace.

The Zune HD is available from retailers now at $219.99 for a black 16 GB version, or $289.99 for a platinum 32 GB version.  Additional colors - red, green and blue - can be ordered on the Web.

Now let’s see if people actually buy them.

OpenTable Plans Secondary Offering

OpenTable Inc. (Nasdaq: OPEN), a San Francisco-based operator of an online restaurant reservation system, plans to offer 3.79 million common shares via a secondary public offering. It closed trading yesterday at $27.23 per share, compated to an IPO price earlier this year of $20 per share (it closed at $31.89 that day).

Selling shareholders include: Impact Venture Partners Partners (cutting its stake from 15.83% to 10.27%), IAC/InterActive Corp. (9.84% to 6.38%) and Integral Capital Partners (5.79% to 4.41%). Benchmark Capital, which holds a 23.91% interest, is not planning to sell any shares. www.opentable.com

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Best Buy looking to purchase Gamestop?

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Perhaps Best Buy Inc. (NYSE: BBY) is looking to make video games a centerpiece of its product offerings. Video game rival Gamestop Corp. (NYSE: GME) could be a potential takeover target for the largest consumer electronics retailer in the U.S. Best Buy recently stated that game sales is a focus area, so there is more truth to this rumor than not.

After all, retailers will use every trick in the book to get feet inside the doors. So many products in retail are loss leaders, but they get traffic inside, and statistically that translates into sales for a certain portion of customers. By buying Gamestop, Best Buy would become one of the premium video game retailers in the U.S., causing even more foot traffic to creep inside its brick-and-mortar locations. This has been a rumor in the past, but it makes sense now more than ever.

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An Early Bond Market Close Today September 15 2009

Administrative Note: I am writing this note about an hour or more earlier than usual because I have personal business to attend to this afternoon. As I begin it is 202PM on the South Shore of Long Island.

Prices of Treasury coupon securities are tumbling once again today as a variety of factors conspire to punch yields higher.

Early in the day the economic data dismayed the bond bulls as retail sales jumped more than expected and the New York Fed Empire survey climbed more than pundits had prognosticated.

That drove the 10 year note nearly to 3.5 percent (3.485 actually according to one salesman) and in front of 3.50 percent buyers emerged. The market edged back into the mid 3.40s but faded as Bernanke pronounced the recession “technically” over and stocks jumped higher.

The Open Market Desk did engage in a buyback today and purchased $ 2billion 0f 2020 through 2026 bonds.

The Desk has just about completed its mission of buying back $ 300 billion Treasuries. I picked up rumblings today from some traders who wonder who or what will replace the regular Federal Reserve purchases. I had picked up similar ruminations from mortgage market participants yesterday.

Later this week supply will raise its ugly head as the Treasury will announce the monthly ration of 2 year, 5year and 7 year notes. Expect a package of between $ 110 billion and 4 115 billion. One analyst with whom I just conversed anticipates $ 44 billion 2 year notes, $ 40 billion 5 year notes and $ 29 billion 7 year notes for a total of $ 113 billion.

The yield on the year note has increased 2 basis points to 0.94 percent. The yield on the 3 year note climbed 2 basis points also to 1.50 percent. The yield on the 5 year note increased 3 basis points to 2.40 percent. The yield on the 7 year note soared 5 basis points to 3.07 percent. The yield on the 10 year note increased 4 basis points to 3.46 percent. The yield on the Long Bond increased 3 basis points to 4.25 percent.

The belly of the curve is receiving a spanking. The 2 year/5 year /30 year spread began the day at 44 basis points. It is currently 39 basis points.

The 2year/10 year spread is wider by 2 basis points  at 252 basis points.

The 10 year /30 year spread is a basis point tighter at 81 basis points.

That redounds to the benefit of TIPS.

Ten year TIPS began the day at 180 basis points and I last observed them at 186 basis points.

Thirty year TIPS opened the day at 206 basis points and currently rest at 209 basis points.


Grand Canyon Education Offering Prices at $16.50 Per Share

(Reuters) - Grand Canyon Education Inc (Nasdaq: LOPE) said its share offering was priced at $16.50 a share, at par with the stock’s last closing price.

The company plans to sell 1 million shares and expects to use the proceeds from the sale for working capital, among others.

As part of the offering, 5 million shares are being sold by the company’s largest outside investor Endeavour Capital and the Richardson family, including Executive Chairman Brent Richardson and General Counsel and Director Christopher Richardson.

Grand Canyon said it will not receive any of the proceeds from the sale of common stock by the selling stockholders.

Shares of the company were up 82 cents at $17.32 in morning trade Tuesday on Nasdaq. They touched a high of $17.80 earlier in the session. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Pradeep Kurup)

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Apple Gets A New Lawyer

Apple (AAPL) this morning announced that it has named Bruce Sewell as general counsel and senior VP, legal and government affairs. He previously had a similar role at Intel (INTC). Current Apple GC Daniel Cooperman will retire at the end of this month.

Heidelbergcement Ag (HEI)

It's anticipated that HC will issue some shares which in turn could help the company's chances of successfully refinancing it's debt, according to S&P. S&P also mentioned it may raise the cement company's its credit rating. The short interest (as measured by Percent Shares Outstanding On Loan) for Heidelbergcement Ag (HEI) has risen 126.62% over the past week and now stands at 1.67%. This is up 397.37% from the 52 week low hit on August 26, 2009. Even though the security has seen an increase in short interest of the past week, when compared to other Europe Construction Materials companies, the short base is roughly in line the average of 1.71% for the sector. Over the past week the Negative Sentiment Indicator (DNS) for HEI saw a small increase to the tenth decile. The DNS for the security is now high indicating an increasing amount of negative short sale sentiment. The Price Squeeze Indicator (DIPS) remained unchanged and continues to be in the first decile which indicates a low probability of a price squeeze.

Download the full report by clicking here.

Across the Curve 2009-09-15 11:20:05

Mortgages are about 1/2 basis point tighter to swaps. The Federal Reserve has been a buyer of the 5s this day.

Volatility continues to have a bit of a bid. One trader reports that vol is directional and higher rates have caused some to buy protection. In addition, the same source reports that hedge funds had been short vol and they are now covering.

The breakeven on the three month 10 year has edged up 70 9.6 basis points.

The breakeven on the 5 year/10 has climbed to 7.8 basis points.


World Bank green energy spending tops $3 billion

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The World Bank Group's financing for renewable and efficient energy projects increased 24% in the last fiscal year. Reaching $3.3 billion, the bank's clean technology investments have reached their highest level ever.

At the Bonn International Renewable Energies Conference in 2004, the World Bank committed to increase its contribution to cleantech investments by $1.9 billion through 2009. Not only did last fiscal year's result more than double the five-year commitment, the World Bank's support surged by $7 billion.

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WSJ To Charge For Mobile Access

The Wall Street Journal will soon begin charging people to read the paper on mobile devices, News Corp. (NWS) CEO Rupert Murdoch said today, according to Reuters.

Speaking at a Goldman Sachs conference in New York, Murdoch said the company would start charging for mobile access in 1-2 months. He said the paper will charge $2 a week for non-subscribers, and $1 a week for subscribers.

Murdoch also said that video site Hulu.com, which is owned by a group of media companies, including News Corp., might add subscription and pay-per-view services, Marketwatch reports.

He also expressed concern about Redbox, the Coinstar (CSTR) unit that offersd $1-a-day DVD rentals. “At least with VOD, people are willing to pay $3.99 to watch a movie at home,” Murdoch sais. “The Redboxes of the world, doing rentals for $1 a day, is not something we like.”

Disclosure: News Corp. is the publisher of this blog.

Apple TV rivals offer far more features

While Apple figures out what to do with its languishing Apple TV - it quietly dropped its 40Gb model on Monday leaving only the 160Gb version - there are plenty of other contenders scrapping to bring networked content to the big living-room screen. Among them - FreeAgent Theater+, announced by Seagate today as an improved version [...]

Penury, self-imposed or inflicted, the new normal?

One of my favorite sources of information is The Liscio Report by Philippa Dunne & Doug Henwood. Among other things, each month they survey all the states about tax revenues, expenses and then give us the results in a very pithy fashion. No one pays taxes unless they have to, and thus taxes tell us a lot about the current spending and income situation. Taxes are a far more reliable indicator then surveys, which most “data” is based on. They also look at various trends in a variety of topics. No surprise, this issue they talk about the numbers on retail sales, noting certain segments are up (essential spending) but sales for non-essential items are way down. This is very interesting to me. It is, as they point out, part of the journey to the new normal. They graciously allowed me to send this letter on to you as this week’s Outside the Box. Those of you who might wish to learn more about theme can go to www.theliscioreport.com or drop them a note at online@theliscioreport.com.

John Mauldin
Editor, Outside the Box

Penury, self-imposed or inflicted, the new normal?

The Liscio Report on the Economy

In August, 30% of the states in our survey met or exceeded their forecasted sales tax collections. This is a big jump from July’s 12%, and the best showing since August 2008’s 50%. The percentage of states reporting growth over the year was just 1.43%, down from July’s 1.59%, so basically flat and zero, and the intensity index (over the year percentage change weighted by state population) rose to -7.0% from July’s -8.3%.

It is good news that actual collections are in line with forecasts for a larger percentage of our contacts, and in our universe narrowing the gap between actual collections and forecasts is the first step toward real improvement, no matter how weak those forecasts are.

We do want to underscore that forecasts have been revised down hard, and continue to be for extremely weak collections, in almost all cases negative over the year, and in some for double-digit declines.

Our sales tax survey began falling from its recent high of 81 in February 2006, edged back up to the low 70s in fall of 2007, and has fallen, albeit noisily, since. Sales receipts falling below prior-year levels has in the past been a sporadic and mostly calendar-driven event.

Currently many states have seen negative collections for over a year and, if we’re lucky, the survey is now stabilizing in “unheard of territory.” That’s what led one contact to say: “Now, before we throw a party to celebrate the best monthly performance since November (-3.6%) – let’s realize it still sucks and shows how much consumer retrenchment is still in place. Adjusting for calendar effects, we now have had 14 months of negative sales tax.”

jmotb091409image001

Tentatively encouraging news is that although there is no demographic or regional pattern, at least the survey did not come in with prior months’ resounding thud: although the majority of our contacts are not seeing any real improvement, and supplying discouraging details, some contacts are reporting an improving situation, along with some stability in housing and their own confidence surveys. But concerns about heavy headwinds and what will happen now that Cash for Clunkers has clunked out remain in the forefront.

Just The Essentials

It’s been a few months since we updated our graph of retail spending on essentials vs. more discretionary items. As of July, it looks like consumers are still concentrating on the essentials. Graphed below are the yearly (nominal) changes in spending in food and beverage stores and drugstores compared to the changes in all other spending (less autos and gas). (Gas is also mostly an essential, but its price has been so volatile that it clouds the picture somewhat; still, the graphs would look little different had we included it as an essential.) For the year ending in July, spending on essentials, by this definition, was up 0.6%; spending on everything else was off 6.2%. That gap, 6.8%, is the widest since the new retail series began in 1992. jmotb091409image002 A gap this wide looks like a real structural shift in spending behavior, as austerity becomes the new normal. Though Americans have shaken off bouts of prudence before, like that of the early 1990s, with consumer credit constricted, household balance sheets ravaged, and labor income weak, it’s probably going to take some time before anything resembling extravagance returns.

The Auto Bounce

That said, the federally subsidized bounce in auto sales in August was an extraordinary departure from recent trends (see graphs). It’s not the biggest monthly leap ever — sales rose 35% in October 2001 (thanks to the post-9/11 sales incentives), and 43% in January 1971 (following a strike against GM, which depressed sales late in 1970) — but it’s still impressive. Unit sales, which have been running almost 50% below trend for most of this year, rose to 82% of trend, the highest in nearly a year and a half. jmotb091409image003 As the graphs show, that bounce looks like earlier end-of-recession turns. The question is, of course, how much of this can be sustained without Washington’s help. A $4,500 subvention isn’t just gravy — it’s practically a meal in itself. Given how depressed sales have been — though there was no serious decline in auto sales during the 2001 recession, the recent slump is without precedent in more than 40 years of monthly unit sales data — there’s room for a substantial bounce. But will incomes and the credit markets be there to fund one?

Credit Retrenchment

Speaking of consumer credit, July’s decline, while not the worst ever, was about two standard deviations below the mean — and the yearly decline is now the sharpest ever. (See graphs) The decline is being driven by revolving credit, meaning mainly credit cards. Partly offsetting that contraction, though, is continued strength in revolving home equity lines of credit (HELCs), whose yearly growth is surprisingly closer to its 2004 high than the 0 line. jmotb091409image004 jmotb091409image005 And, as we keep pointing out, the longer-term picture suggests that deleveraging has only begun. Measured against after-tax income, consumer debt levels are drifting lower, but have a long way to go even to get back to late 1990s levels. That’s especially true if you add HELCs to the traditional forms of consumer credit. Recent declines in the consumer debt burden are considerably milder than we saw in previous recessions (and note that the declines typically continue for at least several months after the cyclical trough).

Benefit Squeeze

With health reform in the news, we thought it might be interesting to take a look at what’s been happening in the realm of employee benefits. In a phrase, it looks like employers have been enacting some reform of their own, and they may be feeling no great urgency for systemic changes. For the year ending in the second quarter of 2009, benefit costs for private employers are were up just 1.3%, the lowest since the BLS series begins in 1983. (See graph) That’s a remarkable swing from 2004’s rise of 7.4%. Benefit costs are now rising more slowly than direct pay, which has hardly ever happened in the last 25 years. jmotb091409image006 As the graph shows, the swing isn’t entirely the result of a squeeze in health benefits; other benefits, like pensions, are also being squeezed. Health insurance costs for employers are rising just over 4% a year. But that’s way down from the over-11% tempo of 2002. As the graph shows, though, that decline isn’t the result of any serious slowdown in medical inflation. No doubt there’s a lot of shifting of costs onto employees going on, either in the form of dropped coverage or higher co-pays. As we pointed out in our July 13 issue, a substantial portion of the rise in consumption over the last couple of decades has been driven by spending on medical care. With all this apparent cost-shifting from employers to employees going on, pressures on household budgets have been increasing — another reason to wonder where any sustained consumption revival can come from.

Tuesday’s Retail Numbers

We’re expecting August headline retail sales to come in at a stronger than consensus +2.5%, +0.6% excluding autos — and a much more tepid +0.2% excluding both autos and their fuel. States tax motor vehicle sales in different ways, but the majority of those that break out sales taxes on autos saw dramatic increases in July and in August, and we expect auto sales to make a larger contribution to the headline than July’s +0.5%.

In July the ICSC anticipated that a somewhat late back-to-school season moved 0.5% in sales from July into August, and their August numbers suggest this shift took place. Retailers were reportedly surprised that August was as good as it was, and the markets may well be surprised by a stronger than anticipated retail report.

Whatever the noisy series tells us about August shopping, however, we anticipate it will take an unusually long time for American consumers to have the confidence (and means) to begin spending again over the longer term.

– Philippa Dunne & Doug Henwood


Who Has All the Answers?

Justin Fox:

Hyman Minsky didn't have all the answers, by Justin Fox: Economist Hyman Minsky, who never got much attention while he was alive, has become one of the big celebrities of this financial crisis. In Sunday's Boston Globe, Stephen Mihm has the best account of Minsky's life and significance that I've seen so far. A sample:
Today most economists, it's safe to say, are probably reading Minsky for the first time, trying to fit his unconventional insights into the theoretical scaffolding of their profession. If Minsky were alive today, he would no doubt applaud this belated acknowledgment, even if it has come at a terrible cost. As he once wryly observed, “There is nothing wrong with macroeconomics that another depression [won't] cure.”
But did Minsky really have much to add beyond the crucial insight that financial systems are inherently unstable? His former student Eric Falkenstein, responding on his blog to Mihm's article, isn't so sure:
I was Minsky's TA while a senior at Washington University in St.Louis in 1987, and took a couple of his advanced classes, which regardless of the official name, were all just classes in Minskyism. He was a maverick, but perhaps a bit too much, being a little too dismissive of others, as he hated the traditional Samuelson/Solow Keynesians as much as the Friedmanite Monetarists. He always thought a market collapse was just around the corner. The S&P was 250 when I took his course, it went to 1500 in 2007 and then back to 735 in 2009. Does that prove he was right all along? ...
The problem ... is that his top-down theory is rejected by the data. Aggregate leverage ratios do not closely correspond to business cycles. If Minsky took microeconomics more seriously he could have made his theory more relevant, by noting that crises tend to occur in specific subsets in the economy: in 1990, hotels and Commercial real estate, in 2001, high tech, in 2008, mortgages. The mistake is not one made in aggregate, but in different sectors each recession. By noting these areas, but not the aggregate economy, had too much leverage, and depended on expected future increases in collateral value, he might have been more successful proselytizing his colleagues. But he was a traditional Keynesian, who liked to look at aggregate equations, like Profits=Investment + Deficits + Net Imports.
I think the broader point here is that there is no one Theory That Explains Everything in economics. Neoclassical economics certainly doesn't explain everything. Neither does Minskyism. Nor Austrian business cycle theory. Nor complexity theory. It seems like the best approach would be an eclectic one that takes lots of different economic models into account. But eclecticism doesn't get you far in academia.

There is no grand, unifying theoretical structure in economics. We do not have one model that rules them all. Instead, what we have are models that are good at answering some questions - the ones they were built to answer - and not so good at answering others.

If I want to think about inflation in the very long run, the classical model and the quantity theory is a very good guide. But the model is not very good at looking at the short-run. For questions about how output and other variables move over the business cycle and for advice on what to do about it, I find the Keynesian model in its modern form (i.e. the New Keynesian model) to be much more informative than other models that are presently available (as to how far this kind of "eclecticism" will get you in academia, I'll just note that this is exactly the advice Mishkin gives in his textbook on monetary theory and policy).

But the New Keynesian model has its limits. It was built to capture "ordinary" business cycles driven by price rigidities of the sort that can be captured by the Calvo model model of price rigidity. The standard versions of this model do not explain how financial collapse of the type we just witnessed come about, hence they have little to say about what to do about them (which makes me suspicious of the results touted by people using multipliers derived from DSGE models based upon ordinary price rigidities). For these types of disturbances, we need some other type of model, but it is not clear what model is needed. There is no generally accepted model of financial catastrophe that captures the variety of financial market failures we have seen in the past.

But what model do we use? Do we go back to old Keynes, to the 1978 model that Robert Gordon likes, do we take some of the variations of the New Keynesian model that include effects such as financial accelerators and try to enhance those, is that the right direction to proceed? Are the Austrians right? Do we focus on Minsky? Or do we need a model that we haven't discovered yet?

We don't know, and until we do, I will continue to use the model I think gives the best answer to the question being asked. The reason that many of us looked backward for a model to help us understand the present crisis is that none of the current models were capable of explaining what we were going through. The models were largely constructed to analyze policy is the context of a Great Moderation, i.e. within a fairly stable environment. They had little to say about financial meltdown. My first reaction was to ask if the New Keynesian model had any derivative forms that would allow us to gain insight into the crisis and what to do about it and, while there were some attempts in that direction, the work was somewhat isolated and had not gone through the type of thorough analysis needed to develop robust policy prescriptions. There was something to learn from these models, but they really weren't up to the task of delivering specific answers. That may come, but we aren't there yet.

So, if nothing in the present is adequate, you begin to look to the past. The Keynesian model was constructed to look at exactly the kinds of questions we needed to answer, and as long as you are aware of the limitations of this framework - the ones that modern theory has discovered - it does provide you with a means of thinking about how economies operate when they are running at less than full employment. This model had already worried about fiscal policy at the zero interest rate bound, it had already thought about Says law, the paradox of thrift, monetary versus fiscal policy, changing interest and investment elasticities ina  crisis, etc., etc., etc. We were in the middle of a crisis and didn't have time to wait for new theory to be developed, we needed answers, answers that the elegant models that had been constructed over the last few decades simply could not provide. The Keyneisan model did provide answers. We knew the answers had limitations - we were aware of the theoretical developments in modern macro and what they implied about the old Keynesian model - but it also provided guidance at a time when guidance was needed, and it did so within a theoretical structure that was built to be useful at times like we were facing. I wish we had better answers, but we didn't, so we did the best we could, and the best we could involved at least asking what the Keynesian model would tell us, and then asking if that advice has any relevance today. Sometimes if didn't, but that was no reason to ignore the answers when it did.

Is Steve Pagliuca The Next Senator from Massachusetts?

Yesterday afternoon, I tweeted my surprise that “some self-funded biz type isn’t jumping into the Mass senate race on the Dem side.” Apparently Bain Capital’s Steve Pagliuca is one of my followers, because news leaked several hours later that he was seriously considering a run at Ted Kennedy’s vacated seat.

I’m told that candidate Pagliuca is a near-certainty, which raises two questions: (1) How will this affect Bain; and (2) Does he have a shot to win?

The first answer is “relatively little.” Bain has lots of experience with this sort of thing, based on the electoral ambitions of firm co-founder Mitt Romney. In fact, Romney’s first race was for this very seat, against Kennedy back in 1994. That campaign included the regular apparences of laid-off factory workers from a Bain portfolio company, who were none too pleased with the future governor.

When Romney ran for president, Bain conducted an in-house investigation to uncover any skeletons from the Romney era (PR or otherwise) that might have embarassed the firm. Expect Bain to do the same again, but for the more recent era.

From a management perspective, losing Pagliuca (either temporarily or permanently) won’t be a crushing blow. He’s obviously one of Bain’s leading lights, but he also is just one of 30 managing directors. Bain switched to a committee model following Romney’s departure, in part to handle this type of situation.

Ok, let’s now move onto something I know a bit less about: Pagliuca’s chances at the polls. This also happens to matter at Bain, since a Pagliuca loss would probably mean he’d be back in his office by February at the latest (this is a special election, so the timetable is accelerated).

My gut feeling is that Pagliuca might want to call Steve Rattner about that house in DC. His current competition currently looks like this:

  • Martha Coakley: Current Massachusetts AG, and presumptive frontrunner. Possible pothole is that her campaign chest is for state races (needs federal-specific cash), which means she’ll have trouble matching Pagliuca’s personal millions. Tough to raise lots of money in a short election cycle.
  • Michael Capuano: Congressman (8th district), former mayor of Somerville. He hasn’t announced yet, but he’s basically a go. Could get portrayed as a Pelosi lapdog, but I might be biased because I worked against Capuano on election day in 1998 (in Somerville, where the local cops were just a wee bit protective of their boy).
  • Alan Khazei, co-founder of City Year. Here my bias swings in the opposite direction, since I used to be a City Year corps member. For the uninitiated, City Year is like an urban Peace Corps (and was a model used to create Americorps). It began in Boston, and has since spread nationwide. Khazei also has yet to formally announce.

I’m certainly not saying Pagliuca has anything close to a lock, particularly since he’s a “Wall Street guy,” has never been on the stump nor has he had his life dissected by the Boston media (no, puff pieces after you buy the Celtics do not count).

Then there is the issue of his positions on “the issues.” He’s clearly on the lefthand side of the ledger, given that he donated to Obama rather than to Romney (unlike virtually everyone else at Bain). But still an unknown.

What’s going for Pagliuca, though, is not just the money or the Celtics-related profile (although both are important in a short race). He’s also got the successful businessman thing, which could be persuasive for the state’s conservative-leaning unenrolled who might take Democratic primary ballots in order to vote for the least-objectionable. Better than taking a Republican ballot when that primary’s winner is likely to get slaughtered come the general.

Here are some additional thoughts I shared earlier today from the laundry room:

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Google Updates Chrome Browser

Google (GOOG) announced in a blog post today that the company has issues a “brand new stable release” of its Chrome web browser. The company said the new version provides “significant speed improvements,” as well as redesign of some features.

The new version features a redesigned, customizable new tab page, an improved “omnibox” search box/address bar and the introduction of themes.

I’ve been playing around with the new version, and it certainly seems pretty speedy; although I think the themes are more distracting than anything else.

BioCryst Pharma rallies after lining up three flu partners

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BioCryst Pharmaceuticals (NASDAQ: BCRX) was on the move Tuesday after inking letters of intent with three partners, who will take the lead on stockpiling, marketing, and distribution efforts for the company's influenza treatment in four countries. Marketing and distribution will be contingent upon local regulatory approval, but all three partners will immediately begin discussing stockpiling opportunities with the appropriate government officials.

Moksha8 Pharmaceuticals will be BioCryst's representative in Brazil and Mexico, which together account for 75% of the Latin American pharmaceutical market. Meanwhile, NT Pharma Co. is the company's Chinese partner, and Neopharm Group is taking the reins in Israel.

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