The Maven: The Hidden Beauty of Acquisitions

Marek Fuchs

There is a key to the seamless merging of so many newly acquired parts, Larry Ellison, chief executive of Oracle(ORCL), pontificates in this morning's Telegraph, while on a yacht with a basketball court and with his involvement in the America's Cup yachting regatta starting up. That key is to remain ruthlessly focused.

While getting to that issue of narrow, brutal, tunnel-thin focus, Ellison does take the time to note that shareholders aren't asked to foot the bills for his hobbies and luxuries. Getting back to what Ellison calls an "innovative" acquisition strategy (others call it a more traditional tack of buying up everything that is not nailed down the moment natural growth appears to be slowing), he said his American Idol is General Electric(GE).

"They take risks, they make decisions, they're incredibly disciplined and focused." No word whether Jack Welch, one-time king of soft-white light, ever managed his moving parts while risking motion sickness. But recent news from Oracle has been decent. Oracle, which reported good fourth-quarter sales growth, has spent more than $20 billion on acquisitions in the past year-plus, so the key numbers should come down the road.

Break 'Em Up

Speaking of companies led by a force of personality that gobbled up most everything that moved, Citigroup(C) got big play in this weekend's Barron's.

Specifically, despite the focused efforts of former leader Sandy Weill, who has never been known, as Ellison is, for such non-business distractions such as sailing racing yachts into hurricanes with famously disastrous results, the company is unwieldy, the stock dead in the (figurative) water compared with other financial stocks.

Weill's efforts to cut and paste a colossus together have not worked, the current leaders of the company are under intense pressure to reverse course, and a good case can be made that sold for parts, the company is worth more than it is now. Meanwhile, Barron's touches upon how, at least within the U.S., Citigroup is trying to shrink its ambitions, to concentrate on its financial service business, meaning retail banking, credit cards and consumer and commercial lending. Just like Larry said from far away on his yacht with visions of the America's Cup dancing in his head: focus is key. And if that doesn't work, maybe a fire sale.

China: The Big Dog

2006 is the year of the dog, but the question for investors this weekend is whether investing in China would mean dogs with fleas. Opportunities, in the big, hopeful sense of the concept, seemed to be the collective focus of this weekend's writing. It's no secret why: Bank of China, the country's second biggest lender, is a-comin' public soon.

The New York Times Magazine told us that the Chinese are buying cars at an incredibly thick-set pace. Sales were up over 54% in the first three months of 2006, there are now 20 million passenger cars on the road and, Ted Conover reports, car culture and all its attachments has hit China and their cheap imports will soon hit our shores.

But before you think Detroit meets dim sum, Slate has another big-picture look at China's future -- specifically, it has to do with big pictures. If Detroit was the center of America's old industry, Hollywood may be the center of its new industry, and Tim Wu covers China's attempts to develop its own Hollywood. The strategy is "half-succeeding," Wu reports, but to fully imitate America success, China is giving its investors the essential chance of losing their socks on margin, the Associated Press reports this morning.

The rules, announced over the weekend and to take effect August 1. The AP reports that margin financing will be limited to certain size and age brokerage houses, and a Chinese analyst is quoted as saying that this and other reforms will help stabilize what it is still amazing that China has: markets. And if it doesn't, of course, margin calls make good plot twists.

Fireworks in Frankfurt

Fireworks over July Fourth weekend in Frankfurt alert. Read anywhere you want about the Airbus ouster of Noel Forgeard and Gustav Humbert, the two causes (or victims) of flagrant production delays. Was this pair in charge of the world's largest large plane producer or Microsoft(MSFT)? Just wondering.

Anyhow, a glassmaker is now in charge of Airbus. "An odd choice," an aviation consultant calls the appointment of Christian Streiff, who has spent most of his career at Saint Gobain Group, banging out glass. But if he can solve basic production problems, the analysts continues in The Wall Street Journal, maybe he da' man. To its credit, the Journal then goes on to talk about the company's cumbersome two-headed organization and the success of Boeing's smaller planes. Problems seem bigger than one man, even a glassmaker.

The International Herald Tribune works the insider trading scandal into its lead, rightfully, as a parallel cause of the old guard's demise. French regulators have focused on some stock sales before announcements of big shareholder sales and delays (I hate when that happens.) The IHT also trumpets Streiff's international business experience. Making a big deal of an executive's experience working across borders these days is a little like saying someone "is a good people person." But what do I know?

Non-Farm Non-Event

Not much, at least about this coming Friday's non-farm payroll numbers,which should lead to more hand-wringing than anything else during this truncated week of trading. This morning MarketWatch said that a survey it conducted pegs the job growth increase at 160,000, which would probably be welcome news for the market: not too cold, not too hot. MarketWatch wasn't totally clear on whether it was surveying economists, job providers or Larry Ellison, but that's OK. To quote David Stockman: No one knows what's going on with all these numbers, anyway. We might as well hope for the best. Just make sure you also brace for the worst.

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