SAN FRANCISCO -- A weaker-than-expected NAPM report sparked a rally, but the advance went the way of the dodo as bonds struggled and trading remained soporific. (For more, see today's Market Roundup.)
Musta been a frustrating day for those who are long. Try
on the action, such as it was. That's frustration with a capital "fruh," my friends.
I'm expecting more of the same in the coming days, with most of the "big money" folks remaining poolside (or cabanaside), content to wait for economic data later in the week before making any big bets (either way).
Although much of the press has focused on Friday's employment data, don't overlook Thursday's second-quarter productivity figures, expected to rise 2.1%.
"I think people are playing connect the dots," said Alan Skrainka, chief market strategist at
in St. Louis (evoking a childhood favorite -- until
came around, that is). "If
says, 'This is what I'm watching,' I think you've got to take that seriously."
Meanwhile, there's so much negativity (or "bad vibes," as they say here) that some market players expect a trading rally will ensue if traders get a sense the productivity figures will be friendly. Assuming, of course, the bimonthly rumors about blockbuster employment figures don't emerge midweek.
Baby You Can Drive My Car
Following last week's hoopla about a deal with
said it would shed its
In an interview on
this afternoon, AutoNation Chairman Wayne Huizenga said the separation will take effect (in order of preference) using a spinoff directly to shareholders, via an IPO or through an outright sale.
Huizenga boasted about AutoNation's 60% year-over-year increase in revenue, as the company reported second-quarter earnings of 27 cents a share (excluding a huge one-time gain from the divestiture of its waste-hauling subsidiary
, but including 6 cents of earnings from discontinued operations). That matched the consensus estimate.
The former home video/waste management guru told Maria Bartiromo (back and as broad-shouldered as ever) that AutoNation's shareholders want the company to become a "pure" car-sales company, suggesting the rental business was holding it back.
I hope this latest bit of deck-shuffling gets that
Eye in the Keyhole guy to revisit Wayne's World.
Meanwhile, I'm reminded of a recent conversation with a hedge fund manager who happens to have family in the car business. (And I'm talking real blood relations, not "family," if you know what I mean -- nudge, nudge. Wink, wink.)
"As soon as a dealership sells out to Huizenga, sales fall off a cliff," the manager said. "Owners are ripping his throat out. Car people
he actually used a less family friendly euphemism are street toughs. They pat you on the shoulder, then walk off and your arm falls off. They sell out at huge premiums, then lock themselves in with huge management contracts. But they no longer have incentives to sell because of fixed pricing, and sales fall."
Occasionally, these car folks "buy dealerships back at a discount," he said. "They're tearing his throat out."
The hedge fund manager is long
, which is similar to what AutoNation looks like it's going to become (sans rentals, that is), but is run by "car people."
Judging by the accompanying chart (marking the TaskMaster's inaugural use of such newfangled technology), AutoNation shareholders no doubt wish they'd been long the little guy, too. (Today, AutoNation rose 2.1% to 15 1/4, while Lithia dipped 3.2% to 21.)
Of today's news, the hedge fund manager said via email: "AutoNation is having to radically readjust their battleplan, which has been a confusion since inception. The question is twofold: Can AutoNation make a horse race out of Internet vehicle sales, and if so, can Lithia turn itself into the other racehorse?"
gets the nod for detailing the challenges of retaining top employees after a Silicon Valley merger. Check out
RealNetworks Merger May Mean Dings at Xing.
For the Record
A headline last
Wednesday incorrectly identified Tom Taulli as a former "executive" of
. We apologize for the error and have
The error occurred because of a miscommunication with my editor, for which I feel partially responsible. If I'd spelled out the history a little better, it could have been avoided. So to prevent any more misunderstandings, here's a recap:
Taulli's official title at Go2Net was "part-time market analyst." From July 1998 through his termination March 8, Taulli claimed he wrote daily for
and sometimes on Sundays as well. (I know plenty of full-time journalists who won't dare work on the weekends and many more who file somewhere north of daily.)
Taulli was paid a measly sum of $500 a month, and that only because Go2Net insisted on some cash component. The analyst/writer says he only wanted options (new economy, indeed). Those options, as we previously reported, are now worth somewhere north of $3.5 million.
Adding insult to financial injury, Taulli said Go2Net did not make good on his unpaid wages when he was fired (again, without warning or provocation, he claimed).
"A couple of months later, they sent a backdated check to my attorney but didn't specify how they came up with the number," Taulli recalled. "I was writing an article every day for Silicon Investor and they completely revoked the options and sent my attorney $200."
Taulli said the check was returned and he continues to pursue the matter. (If you had more than $3 million on the line, you'd do the same.)
Other than calling Taulli a "disgruntled former employee," Go2Net declined to comment.
In another bizarre twist, Taulli confirmed today recent rumors he was approached by Steve Harmon about joining Harmon's new Internet VC and investment shop,
. Taulli, you'll recall, has been named to replace Harmon at Internet.com as senior Internet analyst, with an Aug. 6 start date. Taulli said he was approached by Harmon, but he added that the Internet.com agreement is "a done deal."
Harmon couldn't be reached for comment today. His only remark thus far about the new venture is that it will be "maximum bandwidth" (which to me sounds more like a bad
movie than a financial organization).
Meanwhle, the idea that Harmon would rather bring Taulli on board than see him assume the position suggests (perhaps) there's some ill will between Harmon and HIS ex-employer. (Even in cyberspace, it seems we can't all just get along.)
Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at
As originally published, this story contained an error. Please see Corrections and Clarifications