Tag: Securities and Exchange Commission

Bad Times / Good People

People had been there for 25 or more years and the worst part is, their loyalty paid off for nothing in the end. Seems to be the state of affairs anymore.

I heard a rumor a local news anchor has taken a pay cut and lost a newscast as financial conditions deteriorate. With a young child, maybe this is what she wants. Maybe it isn’t.

The Journal Register Company, publisher of a few Connecticut daily newspapers, including the New Haven Register I get every morning, is suffering as well. Already a ruthless cost cutter, JRC seems to have run out of things to cut.

From Editor & Publisher:

Journal Register Co., its stock now selling at about the cover price of its newspapers, disclosed Thursday that it is in danger of being delisted by the New York Stock Exchange (NYSE).

The Yardley, Pa.-based publisher of the Trentonian in Trenton, N.J., said in a Securities and Exchange Commission filing that it had been notified by the NYSE that it had fallen below the Big Board’s “continued listing standard” of minimum share price.

This morning ATA, a discount regional airline announced they were shutting down. Ben Popken at Consumerist.com interviewed a now cashiered employee.

benpopken: What was the mood like once people started finding out?

ATAinsider: Very sad. It seemed somewhat inevitable, but we all had hopes, you know? People had been there for 25 or more years and the worst part is, their loyalty paid off for nothing in the end. Seems to be the state of affairs anymore.

We’re now entering the part of a recession where no one, outside economists, sees the way out. You’ll be hearing lots of the word “cyclical” describing our economy, with little explanation of how and why it’s cyclical, attached.

Even if the economy has always been cyclical, there’s no guarantee it will be this time, or that you won’t be the excess weight tossed overboard as companies scramble to preserve profits and managers scramble to save their own jobs.

Alas, business is never more likely to share equitably than when times are bad.

It’s About Time

Pump and dump stock schemes are evil. Yes, gullible people will lose money – and I’m almost not sorry for anyone who responds to SPAM by buying shares of stock. More importantly, these stock touts undermine the integrity of the entire market.

From AP via the San Fransisco Chronicle: Federal regulators suspended trading in 35 companies Thursday in a crackdown on spam e-mail sent by unknown market manipulators who profit from a rise in the share price of thinly traded companies.

The Securities and Exchange Commission said it took the action to protect investors from fraud, because the accuracy of information in e-mails about the “spammed” companies was questionable.

E-mails with messages such as “Ready to Explode,” “Ride the Bull” and “Fast Money” clog people’s inboxes _ an estimated 100 million of them a week _ and spark dramatic spikes in trading and stock prices before the spamming stops and investors lose their money, the SEC said.

The suspensions are part of an SEC effort called “Operation Spamalot,” and will remain in effect through March 21.

A respected financial journalist, with whom I’ve exchanged emails on this subject, tipped me off to the SEC’s action. I responded:

I applaud the SEC, however, these companies now must pay the price for someone else’s crimes. I say that with the assumption they’re just innocent bystanders.

And, of course, there’s nothing to stop these pump-and-dump schemes from increasing the number of companies touted by a factor of 2 or 10 or 100.

It seems likely a common thread can be traced within the ownership of all these companies. Doesn’t it?

That seems to be where the SEC has dropped the ball. Shouldn’t they be able to put together a list of the shareholders of these touted companies and find owners that connect across more than a few of these very thinly traded operations? If I were the SEC, that’s how I’d do it.

Meanwhile, within a few moments of getting the original email, I got another pump and dump stock email. It is for a company that’s not on the list. Neither is the second!

Google, Easy As Pi

I just got this email from my friend Wendie:

go find the EXACT number of new shares of stock that google will be

selling in its secondary offering announced today.

tell me what it reminds you of.

w

So, I did.

Google Inc. Files Registration Statement with the SEC for a Proposed Public Offering

MOUNTAIN VIEW, Calif. – August 18, 2005 – Google Inc. (Nasdaq: GOOG) announced today that it has filed a registration statement with the Securities and Exchange Commission for a proposed public offering by the company of 14,159,265 shares of Class A common stock.

Get it?

It’s as easy as Pi (also known as &#028), which is 3. 14159265…

Sometimes, ya’ just gotta love Google.

Blogger’s addendum: I almost forgot. The number of shares shouldn’t be a surprise. After all, Google is named after a number. A “googol” is 1 followed by 100 zeros.

You Go Google

It is tough to turn on a financial show, or look at the Business Section of the Times, without reading more and more about Google. They have announced their IPO, and the two geeky boys who came up with the idea will be wealthy beyond anyone’s imagination.

If PR were the arbiter of how company’s do financially (and often, it is not), Google would be high atop the pack. Microsoft would be down at the bottom.

Google built its reputation by doing what it does – searching – better and faster than anyone else. There were plenty of search engines before Google, but none as good. And they did it without cluttering up the landscape with intrusive commercial content.

Stop and think for a moment of what Google has to do to perform searches for you. It seems as if they have the entire Internet cached on their servers – every single byte! Recent educated rumors say they have somewhere near 100,000 servers scattered around the globe.

Did I mention, it’s free!

After years of court battles, commissions and hearings, Microsoft is often referred to (at least on hobbyist bulletin boards) as the “Evil Empire.” Until recently, I had never seen anyone ever say a bad word about Google. There are concerns about Google’s new Gmail and its privacy implications – but even then, Google is criticized for underestimating the worry, as opposed to being a bad company.

Maybe I’m oversimplifying, but it seems the traits one normally needs to make a lot of money are hardly ever benevolent. So, Google comes across as a breath of fresh air because their whole reason for being seems to be based upon benevolence. And, the numbers seem to say, benevolence can work.

Wouldn’t you want your boss to speak like this as a letter to potential Google shareholders from company founders Larry Page and Sergey Brin did? The letter is located in Google’s registration statement filed with the Securities and Exchange Commission:

Our employees, who have named themselves Googlers, are everything. Google is organized around the ability to attract and leverage the talent of exceptional technologists and business people. We have been lucky to recruit many creative, principled and hard working stars. We hope to recruit many more in the future. We will reward and treat them well.

We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity.

The significant employee ownership of Google has made us what we are today. Because of our employee talent, Google is doing exciting work in nearly every area of computer science. We are in a very competitive industry where the quality of our product is paramount. Talented people are attracted to Google because we empower them to change the world; Google has large computational resources and distribution that enables individuals to make a difference. Our main benefit is a workplace with important projects, where employees can contribute and grow. We are focused on providing an environment where talented, hard working people are rewarded for their contributions to Google and for making the world a better place.

Here’s a success story where the main characters get rich because of what they did and did well – not because they screwed the other guy or played hardball in business or did anything underhanded.

Wake me. I must be dreaming.