Seattle Times Business Headlines

05/18/2012

Questions and answers on blockbuster Facebook IPO

Questions and answers on blockbuster Facebook IPO
NEW YORK (AP) — Taking a company public isn’t as simple as collecting Facebook friends. When its stock started trading Friday under the symbol FB, buyers quickly bid the price up 6 percent. Even at that price, the 8-year-old social media company is worth $104 billion, more than such giants as Disney and Kraft. Selling stock to the public gives companies money to run their businesses, expand and buy other companies. Facebook says it wants to establish a public market for its shares in case it needs to raise money from investors in the future. Who owned Facebook shares before the IPO? Well-connected investors, employees and top insiders like company directors. The first are the investment banks that helped the company file IPO documents with regulators and contacted pension funds, mutual funds and other big institutions to gauge a price for the shares. In Facebook’s case, 33 banks helped; Morgan Stanley took the lead role. The underwriters guaranteed the company that they would buy all the shares at the IPO price. […] the underwriters had to negotiate a price with a second group of buyers — the institutions that had promised to buy shares from them. In Facebook’s case, all the underwriters’ shares were sold by Friday morning before the stock exchanges opened at 9:30 a.m. in New York. The new owners who want to sell their shares had to call their traders first. […] the traders had to call “market makers” at the Nasdaq stock market, where Facebook’s shares are listed. Market makers are firms that agree to hold shares in a company so buyers and sellers can easily trade them. Mark Zuckerberg, the founder and CEO, holds 504 million shares — about one-fifth of the shares that weren’t sold in the IPO. Zuckerberg also controls special shares that give him 56 percent of voting rights on shareholder proposals. David Ebersman, the chief financial officer, owns 2.4 million shares worth $91 million at the IPO price. […] it did list “restricted stock units” — equivalent to 403 million shares — given to staffers. Mail.ru Group, a Russian internet company that sold $745 million worth of shares in the IPO, still owns 35 million shares. James Breyer and Accel Partners, a venture capital fund where he’s a partner, invested in Facebook in 2005. Peter Thiel, the venture capitalist and a Facebook director, sold 17 million shares for $646 million.
05/18/2012

News Summary: Europe worries push stocks down

News Summary: Europe worries push stocks down
May 1, 2012, the Dow Jones industrial average hit its highest point in four years. Investors will be eager for signs of a plan to manage a potential Greek exit from the euro and generally contain any fallout from Greece’s debt crisis.
05/18/2012

Nasdaq glitch confuses investors of Facebook IPO

Nasdaq glitch confuses investors of Facebook IPO
The Securities and Exchange Commission is looking into the glitches in the trading of Facebook’s initial public offering around the time of its scheduled debut Friday on the Nasdaq Stock Market. Brokers who might have wanted to sell after the IPO was priced weren’t sure if they had received a piece of the highly-anticipated offering from the online social networking phenomenon. In March, there was a far worse technical foul-up at the intended IPO of BATS Global Markets Inc., a Kansas-based company that competes with Nasdaq Stock Market and the New York Stock Exchange in offering stock trading services.
05/18/2012

Quebec passes law in effort to end daily protests

Quebec passes law in effort to end daily protests
MONTREAL (AP) — Quebec’s provincial government passed an emergency law Friday that sets restrictions on demonstrations and shuts some universities as the government seeks to end three months of protests against tuition hikes.  Among the controversial provisions is one that calls for police to be informed eight hours before a protest and told the route of any demonstration that includes 50 or more people. Protests were planned in Quebec’s largest city, Montreal, later Friday to condemn the vote, which students and supporters say limits their ability to demonstrate their disapproval of the fee hikes. Proposed fines range from $1,000 to $5,000 for a student, $7,000 to $35,000 for a student leader and between $25,000 and $125,000 for unions or student federations if someone is prevented from entering an educational institution. Some of the loudest cheers early on Friday were reserved for one man who stood on a garbage can and burned what looked like a copy of the government bill. The conflict has caused considerable social upheaval in the French-speaking province known for having more contentious protests than elsewhere in Canada — and the country’s the lowest tuition rates.
05/18/2012

Tale of the tape: Google versus Facebook

Tale of the tape: Google versus Facebook
Facebook is the hottest Internet company to hit the stock market since Google went public in 2004. The Silicon Valley companies, located seven miles apart, also happen to be locked in a bitter battle for Web surfers’ allegiance and online advertisers’ money. The duel is likely to intensify now that the IPO has given Facebook Inc.’s social network billions of dollars to battle Google Inc.’s dominant search engine. ANNUAL NET INCOME: Figures include shares sold by early investors and exclude bankers’ option to sell more shares.
05/18/2012

Spain may have to revise its 2011 budget deficit

Spain may have to revise its 2011 budget deficit
News of the increase in bad loans followed a downgrading by credit ratings agency Moody’s late Thursday of the country’s banking industry. Moody’s acted late Thursday, citing Spanish banks’ heavy load of non-performing loans amid a recession-plagued economy, their trouble raising financing on capital markets and the government’s sovereign debt problems, which might make it hard for the government to come to the aid of banks. Spain is in the eye of the storm of the eurozone debt crisis amid worries that its banks are overexposed to an imploded real estate bubble and the government, fighting recession and a nearly 25 percent jobless rate, could not afford to bail them out if it needed to. Nuria Alvarez, a banking analyst with Madrid brokerage Renta4, warned that the rise in the bad loan ratio could mean that Spain’s banks will get hit harder as the country’s recession bites deep and unemployment worsens.
05/18/2012

Intelsat files plans for public offering

Intelsat files plans for public offering
Communications and satellite company Intelsat Global Holdings S.A has filed plans to go public and hopes to raise up to $1.75 billion in the initial public offering of its stock. The company filed regulatory paperwork Friday with the U.S. Securities and Exchange Commission for its offering.
05/18/2012

Amkor Technology to build plant in South Korea

Amkor Technology to build plant in South Korea
(AP) — Amkor Technology Inc., a specialist in packaging and testing computer chips, said Friday that it will build a $350 million semiconductor testing and packaging plant in South Korea. CEO Ken Joyce called the area a “worldwide center of excellence” for the semiconductor industry.
05/18/2012

Dollar falls against euro for first time in a week

Dollar falls against euro for first time in a week
NEW YORK (AP) — The dollar fell against the euro for the first time in a week, as excitement about Facebook’s initial public offering overshadowed problems in Europe. Greek voters gave support to anti-austerity parties, but politicians failed to create a new government. In other trading Friday, the British pound rose to $1.5803 from $1.5816 late Thursday.
05/18/2012

GM says Super Bowl ads too expensive and bows out

GM says Super Bowl ads too expensive and bows out
The Detroit automaker said Friday that it won’t be advertising on the Feb. 3 spectacle because of a steep price hike demanded by CBS, the network broadcasting the game. A person with knowledge of advertising costs said Friday that CBS wants 25-to-30-percent more for air time than NBC charged during this year’s game. GM advertised on this year’s Super Bowl with a spot that rankled rival Ford Motor Co. One of GM’s ads implied that its Chevrolet Silverado pickup truck was more dependable than Ford’s F-Series pickup. Hyundai Motor Co., which had five spots before and during this year’s Super Bowl, is willing to pay the price increase for next year’s game, Steve Shannon, vice president of marketing in the U.S., said Friday. The Korean automaker has used Super Bowl ads for the last several years to help build its image and raise its U.S. market share. Chrysler Group LLC has used lengthy spots during the past two years to highlight its comeback from bankruptcy protection.