VW frenzy will cause collateral damage 29 Oct 2008 The doubling in the German carmaker s share price has distorted Germany s DAX index. That wreaks havoc for anyone who has shorted the index or whose performance is measured against it. The proposed moves to fix the problem may not help and could even make things worse.
Volkswagen becomes a laughing stock 28 Oct 2008 VW became the biggest company in the world on Tuesday all because of a creeping takeover by rival carmaker Porsche. The surreal distortions in VW s shares make a mockery not just of Germany s governance and takeover rules, but its very stock market.
Porsche drives VW shorts into a tailspin 27 Oct 2008 The luxury sportscar maker revealed that it has, using options, effectively more than doubled its stake in its larger German rival to 74%. The murky workings of German corporate finance appear to have helped VW s shareholders, but put shortsellers on the spot.
Kerkorian’s Ford stake falls to oligarch disease 21 Oct 2008 The billionaire investor s decision to amass a 6.5% stake in Ford looked risky enough. But he compounded it by pledging plunging MGM stock as collateral. Now he s selling the carmaker, and sitting on a $650m loss. It s an ignominious end to his dabbling in Detroit.
US should be GM’s bankruptcy lender – and no more 20 Oct 2008 The cashburning carmaker is seeking up to $12bn in federal aid to fund a Chrysler merger. But unlike banks, GM s woes are chronic. If lawmakers do have to stump up cash, it shouldn t be to stave off bankruptcy: it should be to fund Detroit s Chapter 11 reorganisation.
Desperate mergers won’t solve Motown’s problems 13 Oct 2008 Cost savings would be huge. But Detroit s carmakers must shrink operations and douse their cash burn fast, not add rivals woes to their own with a promise of savings later. Consolidation makes sense once they ve dumped troublesome baggage through bankruptcy if necessary.
Cerberus can’t lose much more by adding to Chrysler bet 24 Sep 2008 The buyout firm may buy the 20% of Chrysler it doesn t own from Daimler. It will probably get the stake for a song given the state of markets and US auto sales. Cerberus is already deep into a binary bet on Detroit, it might as well take the whole shebang.
Why Detroit shouldn’t get any handouts 1 Sep 2008 The three big US car makers are angling for $50bn in government aid. It s understandable: they are struggling, and policymakers seem willing to throw money at financial sector basketcases. But helping Chrysler, Ford and GM would be much more dangerous, Richard Beales argues.
Why Detroit shouldn’t get any handouts 27 Aug 2008 The three big US car makers are angling for $50bn in government aid. It s understandable: they are struggling, and policymakers seem willing to throw money at financial sector basketcases. But helping Chrysler, Ford and GM would be much more dangerous, Richard Beales argues.
Schaeffler deal leaves Conti shareholders in limbo 21 Aug 2008 The German car parts maker has extracted just a 7% bump on a hardly generous initial offer. Schaeffler has accepted some conditions, but Conti s shareholders have little to be thankful for. Germany's takeover law left them open to a squeeze.
Conti squares up to imaginary enemy 12 Aug 2008 The German tyremaker can t easily squash Schaeffler Group s hostile E11.5bn takeover. Maybe it doesn t have to. For Schaeffler, a full takeover could easily turn into an own goal. Both sides have good reason to call a truce and it needn't be a bad thing for shareholders.
Wagoner should park his optimistic chatter 12 Aug 2008 The embattled General Motors boss says the carmaker may, operationally, be over the worst. But he s been upbeat in the past, and that was before the entire industry was suffering. Wagoner should have learned from this year s financial Pollyannas and kept schtum.
GM’s $15.5bn quarterly loss isn’t the worst of it 1 Aug 2008 The carmaker s US operations are in freefall, liquidity is worsening, and writedowns seem unending. Worse, GM has shown less willingness than Ford to face reality and focus on small cars. Until it does, investors should give its plans to raise capital the cold shoulder.
Continental AG should try a billionaire defence 24 Jul 2008 To fight Schaeffler Group s hostile bid, the German tyremaker must solve a tricky problem: what to do about the banks which hold 28% of its shares as part of a complex hedge. An unconventional white knight could be just the ticket.
Ford finally sees the light 24 Jul 2008 Neither the 1970s oil crisis nor the rise of Japanese rivals managed it. Instead, it took a housing bust, high petrol prices and an $8.7bn secondquarter loss to convince Motown s number two car maker to focus on cars that are more fuelefficient than the 100yearold Model T.
Conti needs to get its story straight 22 Jul 2008 The German tyremaker has slammed the opaque methods of bidder Schaeffler Group. But it too has some elucidating to do. First, on its private talks with Schaeffler two years ago and second, on how it will handle the conflicted role of its chairman.
Conti may struggle to defend the indefensible 17 Jul 2008 The German tyremaker can t easily stop Schaeffler Group from taking control on the cheap. Its best defence might be to invite in a rival wealthy investor as a counterbalance. There is also a nuclear option: threaten to jettison its highly regarded top brass.
How Conti fell victim to back door raid 16 Jul 2008 Germany s Schaeffler group built a secret 36% position in tyremaker Continental AG using cashsettled options, which don t need to be disclosed. It s a legal, but very aggressive, use of a regulatory loophole. Schaeffler s banks must have balls of steel.
GM tries recovery by a thousand snips 15 Jul 2008 The ailing car company is trimming everything from whitecollar staff to executive bonuses to the dividend in an attempt to raise $15bn. GM s whipround may stave off critics for a while. But getting the firm back on its feet may still require more drastic action bankruptcy.
Conti may fall to a different kind of locust 14 Jul 2008 Continental AG once swatted away private equity bidders. Now it is being circled by a closely held German family company. The Schaeffler Group has two things private equity didn t a big stake in Conti, and all the time in the world.