Hertz's Silly Suit
The car rental giant filed a lawsuit Monday against accounting research firm Audit Integrity, alleging it was defamed in a report which named Hertz as one of 20 major companies that could potentially go bankrupt. According to Audit Integrity's calculations, which include metrics such as liquidity, leverage and profitability, Hertz has a 3.99% chance of going belly-up.
"Not only are the conclusions about our financial health baseless, but questioning the integrity of our financial reporting is indefensible," Hertz Chairman and CEO Mark P. Frissora said in a statement. Hertz is seeking an undetermined amount in general and punitive damages, a retraction and apology from the company and attorneys' fees and costs.
Aw, come on Mark, look on the bright side. There's a 96.01% probability that you won't go bankrupt. That's gotta count for something, right?
Well, maybe not.
Audit Integrity CEO Jack Zwingli responded to the suit by accusing Hertz of trying to suppress his freedom of speech. Zwingli, who is directly named in the suit, said he stands "firmly behind our methodology and findings, and will vigorously defend ourselves against this unwarranted litigation."
Our feeling is that if Hertz simply ignored the negative report, then we probably never would have heard about it in the first place. The two firms topping the so-called bankruptcy list, Rite Aid (RAD) (10.54% chance of going under) and satellite radio provider Sirius XM Radio (SIRI) (Stock Quote: SIRI) (9.04% chance), have not threatened legal action against Zwingli or his firm (at least not yet). And those guys are in far bigger trouble.
Instead of making a racket, Hertz should have left its pride at the checkout counter and taken the high road.
Terra Stands Firma
Five rejections in less than a year? Come on guys, we believe in the merits of persistence, but face facts: Terra is just not that into you.
"Over the last nine months, our board has reviewed five proposals from CF -- and each time the board has unanimously determined that a combination of our companies lacks compelling industrial logic and runs counter to Terra's strategic objectives," Terra President and CEO Michael Bennett said in a statement.
Freddie Mac said Kari would be paid a base salary no less than $675,000, plus an added annual $1.66 million in installments and an annual target incentive of $1.16 million. Kari gets a $1.95 million cash sign-on bonus, "in recognition of the forfeited annual incentive opportunity and unvested equity at his current employer," Freddie said in a regulatory filing.
Amazing! For the first time in history, somebody is getting a raise to go to work for the government. And what makes it all the more impressive is that it comes after all that chest-thumping on Capitol Hill over executive pay.
"FHFA approved the compensation after consultation with the Treasury Department, as Mr. Kari is well-qualified for the position and the amount is comparable to market pay," says FHFA spokeswoman Stefanie Mullin.
Dumb-o-meter score: 85 -- Wonder what the government's paying at the post office these days?
SpongeTech Gets Squeezed
The New York-based cleaning products maker, which trades on the Bulletin Board, came under serious attack by the tabloid last Friday. The Post is alleging that SpongeTech is falsifying revenue by booking sales to fictitious customers. SpongeTech dropped to 8 cents a share on Friday, down from 9 cents the day before.
Unfortunately, after much searching, the reporters over at the Post could not track down a single representative for any of those companies except Walgreen. For example, the Post said it called the number SpongeTech provided for the Dubai Export Import Company only to see that number "disabled" a few hours later.
SpongeTech, famous for its "Smarter Sponge," responded on Friday with a press release calling the Post's accusations "inaccurate." The company maintained its operations were squeaky clean and that the customers cited in their financial statements are all current and active.
They went on to say that statements in the press that SpongeTech must restate its financial statements are "wrong." What's actually happening says the company, is that it has hired a new accountant to "re-audit," its books, not restate them.
If there is one thing we know, it's that those guys at the Post have put the squeeze on SpongeTech.
Starbucks' Instant Success
In an attempt to tap into the $17 billion market for instant coffee, Starbucks launched its Via Ready Brew product nationally this week after test runs in its hometown of Seattle, as well as in various locations in Illinois. Via is made by adding water to a single-serve packet. The packets will be sold in books of three for $2.95 or boxes of 12 for $9.95.
Wait a second there Howard! Are you saying that all we have to do is add hot water to your instant coffee mix and we can get the same Starbucks experience for a buck or less a cup?
Sarcasm aside, seems to us like Starbucks is -- quite literally -- diluting its high profile brand. And they are unabashed about it, even backing this new rollout with taste tests and even national television ads, something Starbucks rarely does. (Why should they advertise on TV when they have a store on every corner?)
That's great Howard. But we are talking about instant coffee here. So let's wait and see how long the buzz lasts!