5. Yahoo's Freaky Friday
There's a chance that
will soon become "Ma-hoo." And while we may be laughing out loud at the very idea, we're actually not kidding either
Speaking last Friday afternoon at an event at Stanford University, Jack Ma, the founder and CEO of Chinese e-commerce giant
, said he's talked with Yahoo as well as others about potentially buying the troubled Internet giant. Yahoo owns a sizable stake of Alibaba Group, which owns multiple Internet businesses in China. Yahoo shares rose close to 3% Monday to $13.60 on the news, bringing its market-cap to just over $17 billion. Reports of a potential rekindling of interest from
Wednesday pushed the stock even higher later in the week, lifting Yahoo's market-cap to nearly $20 billion.
"We are very interested in Yahoo because our Alibaba Group is so important to Yahoo, and Yahoo is also very important to us," said Ma. "There are so many people who are interested in that, and we are also talking to them."
To be honest, we're not sure who Ma is talking to at Yahoo because we have no idea who is in charge over there. As far as we know, it's
time at Yahoo, not that former CEO Carol Bartz was much of a parental figure before she was dumped last month, even though she did frequently use adult language
That said, we do know Yahoo is up to something because the company has retained investment bank Allen & Co. to help it conduct a long-term "strategic review." And while Yahoo founder Jerry Yang apparently told the troops that the company was not for sale, we aren't sure how much weight Yang carries anymore since he moronically passed on Microsoft's $33 a share bid back in 2008.
Ma says he is planning to spend the next year in the United States learning more about the country and the market. If he is really interested in buying Yahoo then he may want to spend most of his tour studying the ways of Washington D.C. because it would be really hard for the government to sign off on such a deal, considering all the hacking that goes on over in China. And Ma may want to make a few friends on Wall Street as well since he scared off shareholders this summer by slyly transferring Alipay, China's most popular online-payment service, to a Chinese company under his control.
But if Ma beats those odds and pulls off this purchase it would actually be more like
, where the child becomes the parent, than any Macaulay Culkin movie. In 2005, Alibaba Group sold a 40% stake of itself to Yahoo for $1 billion. A share sale last month to investors valued closely held Alibaba at $32 billion.
Yeah, that's some serious role reversal.
4. Gorman's Rallying Cry
employees. All is well. And if you have any concerns about the future of your bank, then follow CEO James Gorman's orders and read the research notes of your competitors.
Yeah, we thought it was pretty ridiculous too, but that's the way Wall Street works sometimes. Bank analysts are not allowed to cover their own companies, so with his stock down almost 50% in the past three months and shortsellers on the attack, Gorman sent a memo Monday to his troops telling them to stop packing their personal belongings and pick up reports from
about the state of their company.
"It is easy to try to respond to the rumor of the day, but that is not usually productive. Instead we should let balanced third parties do their own analysis and let the facts speak," wrote Gorman.
Oh man, you know you are in bad shape when you have to count on Wall Street research to persuade your own employees that your ship is not sinking. And if anybody knows that those reports are pure poppycock, it's surely the employees of an investment bank that paid $125 million in 2003 to Eliot Spitzer's global settlement fund because Morgan's star analyst Mary Meeker was pumping up worthless Internet stocks.
And let's face it folks, the research has not gotten much better since then. Did you see all those fawning buy ratings on
back in June? Oy!
Look, we understand Gorman is in a tough spot trying to stabilize the company when credit-default spreads are flaring up, mostly because of worries about the bank's European debt exposure. And it's clear to us, if not the market, that Gorman is trying to be as forthright as he can during the company's quiet period ahead of its earnings report later this month. We must also admit that he's trying a much classier method to save the firm as opposed to telling Tim Geithner to "get f---ed," which is what his predecessor John Mack did the last time the bank was on the ropes in 2008.
But if this is all the ammo Gorman has left, then we surely understand why his troops are worried.
3. Homecare Hokum
No, no, no Senators. It's not that the nation's biggest home care providers are ripping off Medicare by making more and more and more visits to patients. It's just that they really, really, really care.
Yeah right. And if you believe that, we have a bridge to sell you.
got slammed early this week after a report released by the Senate Finance committee found the companies were increasing home care, even when patients may not have required extra attention. The incentive to bilk Medicare dollars was reportedly so strong that one company even went so far as to assemble a special crew to maximize the most profitable treatment regimens possible.
That's right. It may have looked like a never-ending stream of nurses looking after your loved ones, but it was really a SWAT team of swindlers ripping off you and me.
"Elderly patients in the Medicare system should not be used as pawns to increase a company's profits," said Senator Max Baucus in a statement. "Especially in these tough economic times, taxpayers simply cannot afford for their dollars to be wasted on unnecessary care."
Darn tooting Max! And you all better pay attention to the man because if there one group that knows how to spend money unnecessarily its Baucus and all his buddies in Congress.
LHC Group has already announced it's agreed to pay $65 million to settle a civil inquiry with the federal government over whether some government-reimbursed patient care was medically necessary. Under the agreement, LHC did not admit any wrongdoing and the company said it still disputes the claims. Same goes for Gentiva and Amedisys, which said it was "disappointed with the committee's conclusions" and that it stands by its "integrity, ethics and patient care practices."
If you ask us, all three companies should quit with the blah, blah, blah and clear their calendars for some very, very, very tough meetings. The
Department of Justice
is going to be visiting soon and they really, really, really don't want to hear excuses.
And that you can believe.
2. AMR Stays Aloft
It's easy to beat up on airlines. Stranded leisure travelers do it. Bumped business passengers do it. Late night comics do it. Let's face it, we've all done it.
But when Wall Street traders hammered shares of
, the parent company of American Airlines, down to $1.75 on Monday over bankruptcy rumors, well, that was less than fair in our opinion. And for the short-sellers who piled on when it went south of $2 ... well, that certainly wasn't the smartest move because the stock zoomed back above $2.50 barely a day later.
American Airlines has repeatedly said that is strongly opposed to filing for bankruptcy protection, and while we would normally dismiss this as corporate hooey, the company does have $4.2 billion in unrestricted cash to back up its boast. Monday's column in
The Wall Street Journal
, which detailed American's problems did not help quiet the bankruptcy chatter even though it concluded that the market for airline debt is healthy and that "American filing for bankruptcy out of choice is unlikely." Basically, it said that other airlines are better investments.
Duh! Of course they are.
, AMR's two principal competitors, went into bankruptcy in the middle of the past decade, reduced costs, and then merged with competitors to leap past American in the size of their global route structures. Now both have the advantages of lower costs and bigger networks.
, which also saw its biggest rivals go bust and then come back leaner and meaner, AMR is not a shoe-in candidate for Chapter 11. It may end up there eventually, especially if it does not solve its labor problems, but right now, the math says it won't happen because some short-sellers picked up the
and misread an article. Or at least it won't happen this week.
Shortly before Monday's close, AMR issued a statement, saying that "While we generally don't comment on AMR's share price performance, there is no company-driven news that has caused the volatility in AMR shares today. Regarding rumors and speculation about a court-supervised restructuring, that is certainly not our goal or our preference."
Shortly after the close, veteran Standard & Poor's airline analyst Jim Corridore reiterated a hold rating on the carrier, saying "We would be surprised by a bankruptcy filing in the next 12 months."
And while it's easy to beat up on Wall Street analysts -- heck, we do it every week -- his assertion seems more than fair in our opinion.
1. Bank of America's Yiddishe Mama
Bank of America's
, so-called system "upgrade" is driving all your customers absolutely
As if CEO Brian Moynihan didn't have enough
with a stock price now below $6, America's biggest bank -- which boasts 29 million online customers -- was struck with a new headache this week when its efforts to improve its online banking platform turned into a total
. For six days ending Wednesday, customers had problems accessing their accounts without a single word from BofA brass.
And as any
would say, 'Brian,
, you don't call? You don't write? Why do you treat me this way?'
Of course, the timing could not be worse for BofA's money
. The computer glitches started at the same time the company announced it was sticking its customers with a $5 monthly debit card fee. And while that may be a
for a big shot like Brian, over the course of a year that's some serious
for consumers who need another expense like they need a
loch in kop
. So much so that an online petition at Change.org asking the bank to reconsider the
fee had more than 132,500 signatures by Wednesday afternoon.
Things got so bad, in fact, that this whole
reached all the way up to America's main
, President Barack Obama, who said on Wednesday, "Well, you can stop
the fee if you say to the banks, 'you don't have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated.'"
To which Moynihan replied, "Butt out you
! I'm no
Actually, he didn't say that (although it would be hilarious if he did). But he did issue a retort to the president, saying "we have a right to make a profit."
And while we agree that's truly the
, and Brian's bank has a right to make money for its shareholders, we don't think it was the brightest move in the battle for public opinion to tell both his customers and the President of the United States to
kish mir in tuchas
We bet you do.
Written by Gregg Greenberg in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.