Tuesday, July 16, 2013

Carl Icahn Already Has A Short-List Of CEOs If He's Able To Take Over Dell

NEW YORK, June 7 (Reuters) - Carl Icahn and Southeastern Asset Management Inc are short-listing potential candidates to become the next Dell Inc chief executive should they succeed in a proxy battle against Michael Dell and Silver Lake Partners, two sources close to the matter told Reuters.

A number of high-profile industry executives have been identified as possible successors to the Dell founder, including: Cisco Systems Inc director Michael Capellas, former IBM Corp services head Michael Daniels, Oracle Corp President Mark Hurd and Hewlett-Packard Co PC boss Todd Bradley, the sources said.

Icahn and Southeastern Asset Management have already approached several candidates, the sources said on condition of anonymity because the discussions were private. Capellas, Daniels and Hurd were not immediately available for comment. Bradley said in an email he had not been contacted.

A representative for Southeastern declined to comment. Icahn did not return calls for comment.

Icahn, Southeastern and company founder Michael Dell are locked in a battle over the future of the world's No. 3 PC maker, a struggle precipitated by the swift decline of the global computer industry and the company's failure to arrest sliding revenues.

Its billionaire founder and Dell executives have argued the company has little future in PCs and needs to transform itself into an IBM-like provider of full-spectrum enterprise services - a makeover best done as a private company. But major shareholders decry Dell's offer as cheapening their stakes.

FAMILIAR LIST

Michael Dell and Silver Lake have proposed a $24.4 billion buyout of the personal computer maker. Meanwhile, Icahn and Southeastern Asset Management made a counter offer that would pay a $12-per-share special dividend and allow Dell shareholders to keep their shares.

Dell has set a special meeting of July 18 for shareholders to vote on the $13.65-per-share Dell-Silver Lake buyout.

Icahn and Southeastern have also put together a prospective board to replace all 12 of the current directors, though some analysts question the credentials of the proposed names, saying several lacked extensive turnaround or technology experience.

Some of Dell's top investors have expressed support for Icahn over the past few months, including money manager T. Rowe Price Associates Inc and Yacktman Asset Management LP.

This week, Dell's special buyout committee said Icahn is almost $4 billion short of the cash needed to fund his proposal for his proposed special dividend.

"We are going to vote against the Silver Lake deal," said Don Yacktman, president of Yacktman Asset Management, whose fund owns 14.9 million shares of Dell.

"Southeastern and Icahn make a strong case to go the other way." (Additional reporting by Poornima Gupta in San Francisco; Editing by Edwin Chan and Ben Berkowitz)


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The 17 Biggest Mass Layoff Announcements Of The Past Year

This week Zynga shuttered three offices, leaving 520 employees at the gaming company out of a job.

Even though the job market has slowly been improving, layoffs are still a perennial fear in this economy.

And some companies have announced massive job cuts as they try and cut costs. These big cuts have weighed on employment figures for the past year.

We looked at Bloomberg data to highlight the 17 biggest layoff announcements in the past year.

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Treasury Bond Funds Just Had Their Worst Week Ever

So did high yield bond funds, which lost $6.6 billion (1.7% of AUM). And so did mortgage-backed securities funds, which shrank by $0.8 billion (0.9% of AUM).

Combining these asset classes, bond funds as a whole saw a staggering $12.5 billion of redemptions – the second biggest weekly outflow ever, behind only October 2008 when global financial markets descended into crisis.

Below is a complete breakdown of this week's fund flows, via BofA Merrill Lynch Chief Investment Strategist Michael Hartnett:

Flows by Asset Class

Bonds: massive $12.5bn redemptions (second largest weekly outflows on record; record was back in Oct'08)

Equities: $6.2bn outflows (largest in 2013)

Precious metals: $1.6bn outflows (17 straight weeks = longest on record)

MMF: $3.9bn inflows (3rd straight week)

Flows by Fixed Income Sector

Record $6.6bn outflows from HY bond funds

Record $2.6bn outflows from govt/tsy funds

Record $0.8bn outflows from MBS funds

$1.0bn outflows from TIPS (2nd largest on record)

$1.5bn outflows from EM debt (6th largest on record)

$1.2bn outflows from munis (largest since Dec'12)

Floating-rate debt bucks trend with 50th straight week of inflows ($1.1bn)

Tiny outflows from IG bond funds (first since Feb'13)

Flows by Equity Region

$5.5bn outflows from EM equity funds = largest weekly outflows since Aug'11

Note that lion's share of outflows via GEM ETF's (EEM, VWO)

Another $12-15bn outflows over next 2 weeks will trigger contrarian “buy” signal from our EM Flow Trading Rule

Modest outflows from US ($0.5bn) and Europe ($0.3bn) (outflows in 13 out of past 14 weeks)

Japan eke out small inflows ($0.4bn) despite rout in markets

First outflows from real estate funds ($0.6bn) in 16 weeks; first outflows from financials ($0.3bn) in 6 weeks

Earlier this week, Morningstar estimated that PIMCO's flagship Total Return Fund saw $1.32 billion of redemptions in May, the first outflow since 2011.


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Here's Exactly How Much You'll Save If You Sell Your House Now [INFOGRAPHIC]

Yesterday we discussed Zillow CEO Spencer Rascoff's rationale for why you should sell your home now. 

It comes down to rates: they're going to keep rising thanks to still-constrained supply hitting pent-up demand.

So if you're in the trade-up market, it'll be more expensive to buy a home at a given price down the road than now.

Redfin has actually calculated exactly how much you can expect to save if you punch out today:

And here's their explanation (emphasis ours):

You can see that even though this homeowner would make $61,000 more by waiting to sell, the new house is $64,000 more expensive too, a difference of $3,000 in favor of moving up now.

But that’s not the complete picture. The monthly payment, which is driven by interest rates, will be lower for those who move up now vs. later.

Just in the next 12 months, the Mortgage Bankers Association expects rates to rise to 4.4%, which would mean a $130 higher monthly payment.

And that’s a conservative estimate. A typical interest rate, if you look at the past 20 years, is more like 6.5 percent, which is about $500 more per month, or an additional $6,000 per year out of pocket for the move-up buyer who waits.

They also have a handy calculator:

With inflation still pretty subdued, you could do a lot with an extra $6,000 a year.


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The 'Manufacturing Renaissance' Has Stopped Creating New Jobs

Rob Wile | Jun. 7, 2013, 9:34 AM | 406 |

Manufacturing output continues to rise.

But the jobs are still missing.

Today's non-farm payroll report from the BLS shows the U.S. manufacturing sector lost 8,000 jobs in May, the fourth-straight monthly decline.

Here's the chart from BLS since 2010, which shows we've now plateaued for about a year at the 12-million payroll level:

manufacturing payrolls chartBLS

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MISS: CONSUMER CREDIT RISES $11.06 BILLION IN APRIL

UPDATE: April consumer credit data are out.

Total credit expanded $11.06 billion – or 4.7% from a year ago – in April to $2.82 trillion after rising an upward-revised $8.37 billion in March.

Economists were looking for a $12.9 billion advance.

Revolving credit – credit cards and the like – rose $700 million, or 1.0% from a year ago, to $849.8 billion.

Nonrevolving credit – student loans, auto loans, and the like – rose $10.4 billion, or 6.4% from a year ago, to $1.97 trillion.

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