Caterpillar Demands Concessions from Workers after Boosting CEO Pay by 60 Percent

Who Said life was fair???  How did they engineer this outrage in the age of Occupy Wall Street???

Illinois plant for the manufacturer Caterpillar have been on strike for a month after rejecting a concession-heavy contract proposed by the company. 

Yesterday, workers overwhelmingly rejected a second Caterpillar offer.
 

According to union officials, the contract “provided no raises, eliminated the defined benefits pension program, weakened seniority rights and required machinists to pay higher contributions for health care.” All of this, at a time when the company is making record profits. 

At the same time that it is refusing to give its workers a fair raise, the company saw fit to increase its CEOs pay by 60 percent:

The annual compensation of Caterpillar Inc.’s chairman and chief executive rose 60 percent in 2011, as the company posted a record revenue of $60.1 billion.

Douglas Oberhelman earned $16.9 million in 2011...

The typical American worker would have to work 244 years in order to earn what the average CEO makes in just one year. Over the last 30 years, CEO pay has increased 127 times faster than worker pay.

Originally published on ThinkProgress

by Pat Garofalo
Link: Mega Manufacturer Caterpillar Demands Concessions from Workers after Boosting CEO Pay by 60 Percent | NationofChange

Insider trading scandal

Maybe people should have remembered how Zukerberg treated his early partners in the creation of the social networking giant.

 Cameron Winklevoss and his brother Tyler are known for co-founding HarvardConnection (later renamed ConnectU) along with Harvard classmate Divya Narendra..,.considered to be the precursor to Facebook.

In 2004, the Winklevoss brothers sued Facebook founder Mark Zuckerberg for $140 million, claiming he stole their ConnectU idea to create the popular social networking site.

 One of ConnectU's law firms, Quinn Emanuel, inadvertently disclosed the confidential settlement amount in marketing material by printing "WON $65 million settlement against Facebook".( http://en.wikipedia.org/wiki/Cameron_Winklevoss)

If Zukerberg was willing to stiff  the guys that brought him the idea for Facebook, why would he stop unfair dealings at that point.  The public looks like a vast sea of 'easy' money to players in the money game. The scorpion's nature is to sting...

In Wall Street terms this was a successful distibution of a stock...they are underwriters not undertakers....the sooner they get Facebgook off their books and collect their fees, the happier they are... it allows them to free up cpital to do more deals.  They thrive on doing deals but you don't want to be around when the music stops.

 

Facebook IPO engulfed by insider trading scandal

Multiple investigations and lawsuits have been announced following reports of deceptive practices and insider trading in connection with the  $16 billion initial public offering of Facebook stock.

Reuters reported that the social networking company and its bank underwriters downgraded their forecasts for the company’s earnings shortly before they increased the number of shares and raised the offering price in advance of the IPO. 

Neither Facebook nor the banks publicly announced their downgrades. The major banks involved are Morgan Stanley, JPMorgan Chase, Goldman Sachs and Bank of America.

Morgan Stanley, the lead underwriter of the IPO, is specifically accused of informing institutional investors and favored clients of its downgrade of Facebook and not telling the investing public at large.

Pump and Dump


The stench of fraud is compounded by the frenzied media hype in the run-up to the IPO, which was instrumental in inveigling small investors into what appears to have been a trap laid by Facebook and the banks.

On May 9, nine days before the IPO, Facebook filed an updated 

IPO prospectus with the Securities and Exchange Commission in which it said its revenue and earnings prospects were threatened by a disconnect between the growth of its user base and advertising volume. Its users were growing much faster than its ads business, a problem the company attributed to the rapid growth of its mobile user base.

Facebook officials personally called stock analysts at its major IPO underwriters to advise them of these negative trends. Just days before the IPO, analysts at Morgan Stanley, Goldman Sachs, JPMorgan Chase and Bank of America lowered their forecast numbers for Facebook as a result. The banks then relayed the weaker forecasts to selected clients, one of whom reportedly was warned that second-quarter revenue could be 5 percent lower than earlier estimates.

The Wall Street Journal reported May 17 that Goldman Sachs, Tiger Global Management and Facebook director Peter Thiel, had more than doubled the volume of shares they planned to sell.
 

Forbes magazine reported Wednesday that Morgan Stanley and the other big bank underwriters made $100 million of profit by “shorting,” i.e., betting against, the Facebook IPO. 

“That’s on top of the $175 million in IPO fees the underwriting banks received for selling the deal,” Forbes wrote. 

That is $275 million in underwriting fees and trading profits betting against the shares they convinced their clients to buy...but don't feel too sorry for the clients who bought in, if they were among the sellers of Facebook shares:

The magazine added that Goldman Sachs sold $1.09 billion of Facebook stock it owned for itself and on behalf of its clients.

 

By Barry Grey
24 May 2012

Read More:
Source:
 http://www.wsws.org/articles/2012/may2012/face-m24.shtml

Knowledge@Wharton

Knowledge@Wharton

Online resarch and business ananysis journal of the Wharton School


Knowledge@Wharton


 http://knowledge.wharton.upenn.edu/

Wall Street Did It Again - Failed to provide full disclosure to all parties

 The way Wall Street underwriters behaved in this situation is referred to as

 PUMP and DUMP!!!

John  Maxfield wrote a strong indictment of the Wall Street inner circle who seem to have played some clients off against the rest by maybe giving information about possible problems at FB that could materially affect the valuation given to the company by buyers.  

Buyers might have even turned down the offering of over-priced shares of FB.  To my mind, the stock exchange listing FB needs to be looked at for any participation in the scheme to sell FB to one group of 'clients' while another coterie of 'clients was going short on the stock.  

Also, a large percentage of the offering was made up of insiders selling their 'founding' shares. which is a "Red Flag" in itself.

"57% of the Facebook stock being offered in the IPO is coming from insiders selling shares."

For some context on how unusual that is, the Wall Street Journal reports that only 37% of Google's IPO offering came from insiders, and 0% for Amazon and Yahoo came from insiders.

In Facebook's case, it's going public at a later stage in its development, so investors are itching to get out. And word is that Facebook asked insiders to sell during the IPO so they don't crush the stock when the lock-up period ends."
 




Oops! Wall Street Did It Again - DailyFinance
By John Maxfield, The Motley Fool

Posted 7:28PM 05/31/12  

Posted under: Investing
 

   

Facebook (NAS: FB)  ... the company's investment bankers rigged the initial public offering process to ensure you'd lose money.

Wall Street's role in the orchestrated Facebook debacle including Lloyd Blankfein, the CEO of Goldman Sachs (NYS: GS) 
 

Eric Bleeker  wrote that while Goldman was underwriting Facebook's IPO, it was also lending out shares to short sellers who "were likely acting on the knowledge of Facebook estimates that were reduced downward just days earlier -- again, information that was only selectively disseminated and wasn't known by the average individual investor racing to buy Facebook shares."

Two lessons from the Facebook IPO:
 
First, run in the opposite direction anytime somebody insinuates a change in paradigm.

Revenue, sales, and other traditional valuation metric were discarded during the dotcom bubble in favor of measurements such as "eyeballs" -- that is, page views -- only to be adopted again once the dust finally settled.

The same can be said of Facebook. At the IPO price of $38, the social networking giant was valued at 97 times earnings despite the fact that nobody knows for sure how it intends to monetize its user base.

Second, be wary of anything in which you're competing against Wall Street for a piece of, as they see it, their pie. 

The investment banks on Wall Street didn't float Facebook's IPO so individual investors could get rich. 

They did it so they could get rich, collecting an estimated $100 million in underwriting fees.


 


Source:

http://www.dailyfinance.com/2012/05/31/oops-wall-street-did-it-again/
by John Maxfield, The Motley Fool

Past Deals Gone Sour

Included in the article about Facebook were a litany of past deals in which Wall Street orchestrated financings to take advantage of investor credulity; that is, they pulled the wool over the heads of unsuspecting investors who were told that the rules were different this time around.  You can ignore mundane things like price earnings or the need for a well articulated business plan, i.e. how to monetize the very popular  "free" service that attraced millions of people to sign up and use for "FREE!".... Who can be made to pay for the right to advertise to this giant list of  potential  'suckers'?  GM dropped its Facebook Advertising just about the same time Facebook and Wall Street were telling you that "its different this time" just "trust us" because this IPO "is going to the moon" regardless of good old fashioned balance sheet issues and uncertainties.

The more we ignore history, the more likely history will repeat....

In the last 12 years alone, Goldman Sachs and other Wall Street firms have made us believe we were getting a good investment but:
In 2003, 10 of the largest investment banks in the United States -- including Goldman, JPMorgan Chase (NYS: JPM) , and Merrill Lynch (now a part of Bank of America (NYS: BAC) ), among others -- ch reports to inflate the value of their clients' IPOs.admitted to issuing fraudulent resear

In 2007, emails between Goldman bankers show how the firm created financial instruments designed to fail and then sold them to clients in the now-infamous TimberWolf deal

In October of last year, Rajat Gupta, one of Goldman's directors was arrested on charges of insider trading.
In November of last year, Goldman underwrote the disastrous Groupon (NAS: GRPN) IPO after the daily deals website over-reported its revenue by a factor of two.
In March of this year, a departing Goldman executive penned an op-ed in The New York Times revealing that managing directors at the firm regularly referred to their clients as "muppets."
And just this month, after attacking the proposed Volker Rule as unnecessary, which bans federally insured banks from proprietary trading, Jamie Dimon, the CEO of JPMorgan, was forced to acknowledge that this very behavior had cost the bank's shareholders over $2 billion in losses.

One would have thought investors had learned their lesson by now. But evidently not.



Source:

http://www.dailyfinance.com/2012/05/31/oops-wall-street-did-it-again/
by John Maxfield, The Motley Fool

Auto Outlook: Warren Buffett takes a liking to GM

Auto Outlook: Warren Buffett takes a liking to GM - UPI.com

 Don't look for General Motors Co. to shed the nickname "Government Motors" anytime soon even though billionaire Warren Buffett has taken a serious liking to the stock.

Buffett's Berkshire Hathaway disclosed in a filing it bought $256.6 million in GM stock, 10 million shares. The U.S. Treasury still owns about 500 million shares three years after the $49.5 million bailout.

GM, which is selling Buicks and Chevys like rice cakes in China, may be posting nice profits four years after its bankruptcy, but the Treasury still owns a 26 percent stake in the company and is in no hurry to part with it.

"Our perspective is that the company had made real progress, but the market hasn't given them as much credit for that as it might," Assistant Treasury Secretary Tim Massad, who oversees what remains of the Troubled Asset Relief Program, said in an interview with The Detroit News.

The News said the government would lose more than $15 billion of its investment if it sold its shares in GM at current prices. GM stock, which closed at $21.18 on Friday, would have to sell for $53 a share for Treasury to break even.


Administration officials told the News Treasury will not sell any GM stock before the fall election.

"We have to balance maximizing recovery for the taxpayers with the speed of exit," said Massad.

GM cut back its presence on Facebook before the social media Web site's initial public offering last week, saying it would save the $10 million it spent on paid advertising on social media because the ads were not generating sales.

The Wall Street Journal said GM spent $10 million for ads on Facebook and $30 million more on its Facebook fan pages -- a drop in the bucket of GM's $4 billion annual advertising budget.

GM still spends more than $1.1 billion a year on television advertising and a mere $270 million on the Internet.

"We regularly review our overall media spend and make adjustments as needed," a GM spokesman said. "This happens as a regular course of business and it's not unusual for us to move our spending around various media outlets -- especially with the growth of multiple social and digital media outlets. In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers."

Read more: http://www.upi.com/Business_News/2012/05/20/Auto-Outlook-Warren-Buffett-takes-a-liking-to-GM/UPI-20661337506200/#ixzz1vlrajcCE

Facebook Slides Amid Roadshow Questions - WSJ.com

This is bad news all around with all the speculative money getting drained off into this giant boondoggle!!!

Facebook Slides Amid Roadshow Questions - WSJ.com

by LYNN COWAN

Analysts for at least two of Facebook Inc.'s FB -6.61% lead underwriters revised their financial forecasts for the company while it was holding IPO roadshow meetings with investors, according to people close to the deal.
Morgan Stanley MS +2.31% and Goldman Sachs Group Inc. GS +1.89% updated their financial projections for the social network after the company added warnings to its initial-public-offering prospectus about how its user base is increasing more rapidly than the number of ads it delivers. That trend was blamed in part on increased use of Facebook on mobile devices, where it traditionally hasn't shown ads to viewers.

Although the exact date of the analyst revisions wasn't clear, people close to the deal said that they were changed soon after Facebook updated its prospectus on May 9, about a week before the offering priced.


Large institutions, whose interest in a stock offering is key to setting its price, would have known about Facebook's filing and the analyst revisions at least seven business days before they placed final orders for the IPO, according to people familiar with the situation.
In Goldman Sachs's case, the research revision was part of an updated offering memo sent out to prospective buyers by its equity capital market team. The memo went to all customers who had expressed interest in buying the stock, according to a person familiar with the situation.

Underwriters are barred by Securities and Exchange Commission rules from publicly issuing research on the IPOs they are involved in. But analysts are allowed to discuss their views with clients during these roadshows.

Goldman's customer base overwhelmingly skews toward large institutions, unlike Morgan Stanley, which also has a large individual-investor customer base.

Facebook's stock was recently trading down 4.5%. The stock lost 11% on Monday as more investors and analysts began to question the size of the company's public debut, which initially valued the company at $104 billion. The company is now worth about $90 billion, based on Tuesday's stock price.

The analyst revisions were earlier reported by Reuters, which also cited underwriter J.P. Morgan Chase JPM +5.17% & Co. as having revised its estimates.

Facebook surprisingly flat in market debut

If the CEO of a public company says the company's mission isn't to be a public company, wouldn't that make shareholders nervous? It might be a convenient way to cash out his holdings but it is no big deal otherwise?  Maybe $104 billion is a rich valuation and the underwriters left little upside for investors.

Facebook falls flat in market debut | SBS World News

 
Investors were expected to be hungry to get a piece of Facebook, which has become a global phenomenon since its humble beginnings in 2004 as a project of then-Harvard student Mark Zuckerberg and his classmates.

Zuckerberg, 28, wearing his trademark hooded sweatshirt, remotely rang the bell to open the Nasdaq, marking the start of trade.

He told the crowd at the company's new campus in Menlo Park, California, that going public was a "milestone" but added: "Our mission isn't to be a public company. Our mission is to make the world more open and connected."

Trip Chowdhry, who follows Facebook for Global Equities Research, said the "lacklustre" opening was because the company had failed to answer crucial questions about how it will boost revenues and adapt to the mobile internet.

"Management cannot sing and dance around the key issues," he said.

There are concerns about Facebook's long-term ability to generate ad revenues, fuelled by General Motors' decision earlier this week to pull its advertising.

GM had been spending about $10 million on paid advertising and $30 million on unpaid marketing on Facebook.

Another shadow hanging over Facebook is privacy.

Some consumer and privacy advocates say Facebook has been too loose with user data and hope that as a publicly traded company it may change its tune.

The IPO gave Facebook a dizzying value of $104 billion at its market debut.

Aura Minerals

 The story of this stock seems to have been about trying to pick a bottom on the stock price as analysts from several brokerages predicted a turnaround in the company's fortunes.



What you need to know before markets open | Marketscope | Investing | Financial Post



 Reuters  Mar 24, 2011
 Yamana Gold Inc: The company said it increased its stake in Aura Minerals Inc by four-fifths to 18.7% by buying about 19 million shares of the mineral exploration company.




Reuters  Mar 31, 2011

 * Aura Minerals Inc.: The gold producer’s quarterly net loss quadrupled as a three-fold rise in sales was offset by impairment charges, and the company said it expects to produce at least 13% more gold in 2011.

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