Comments on: Bloomberg with attitude http://blogs.reuters.com/felix-salmon/2012/07/26/bloomberg-with-attitude/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: youniquelikeme http://blogs.reuters.com/felix-salmon/2012/07/26/bloomberg-with-attitude/comment-page-1/#comment-42093 Fri, 27 Jul 2012 20:01:44 +0000 http://blogs.reuters.com/felix-salmon/?p=16576#comment-42093 The NYT articlde was incomplete in that it didn’t provide links to documents or why they are not available…true, but it was a story woven to make Goldman look bad and remind us that Dragon was a pioneer in speech recognition that Suri is based on… yet now is defunct … and so it should!

Goldman may have legal standing to say only “Dragon” can sue and not the Bakers as it is now defunct. Goldman should not be able to stand on its comments that they followed it through to completion so, job well done and win the case without the fallout “due” on their reputation!

At an earlier time,in preliminary due diligence when seeking to invest themselves, Goldman spent very little time and trouble before considering L&H as a company they themselves would NOT invest in:

“Whenever we invest, we always want to talk to customers,” Luca Velussi, a Goldman analyst who worked on Project Sermon, later testified. Based on what Project Sermon’s team leader, Ramez Sousou, termed “preliminary” due diligence, Goldman declined to invest in L.& H.

Although you mention the elder of the 4 bankers going on vacation, reread it. He went on vacation TWICE during the crucial late stages of the negotiations. TWICE within a matter of weeks.

Yes realist50, “Cohan has the background to understand the role of different parties on an M&A deal, as well as the fact that quality of earnings reports are routinely commissioned even on deals much smaller than $580 million.”

If not to do due diligence in finding the right investor, exactly what was Goldman hired to do? Cohan also has the background of getting huge bonuses to do very little while promising much and sounds more as though he is defending Goldman to get hired rather than making counter points. That is a great way to get your resume out there…

It makes one wonder … whether the Goldman supervisor of the 4 banker assigned actually had anything to do with the clients being he has denied having been a part of the Dragon deal, whether the other client that had speech recognition interests might have meant there were some “other” conflicts of interest still to be determined, and who advised the UK Goldman analyst to take the call and lie about L&H to appease the Bakers when he had not been following them at all.

It makes one wonder, who sent the unsigned memo and why will no one take credit for it… was it a cryptic warning, from someone (a Greg Smith type) at Goldman who wished to remain anonymous, that Goldman knew something they didn’t and why do minutes from the meeting where the decision was made, say that Goldman bankers expressed confidence that the combination of Dragon and L.& H. would produce a market leader, when they had not done even the preliminary due diligence they had done to protect themselves?

Even though all that is pure speculation, at the very least the Baker’s lawyer is correct that “The Goldman Four were unsupervised, inexperienced, incompetent and lazy investment bankers who were put on a transaction that in the scheme of things was small potatoes for Goldman.”

So 10 years ago 5 million was a paltry sum that deserved little consideration to take to a task to “completion” (regardless of the actual outcome such as a total loss of their company and bankruptcy) how much $$$ does it take for actual competent consideration and “due diligence” now?

It also makes one wonder about $300 million Greece paid for the books to be more gently sauted after being julienned, leaving their taxpayers to fend for themselves. How much more do we not know about Goldman, after seeing “God’s work” in action?

I think Greg Smith, was being far too kind, knowing what we know about Goldman and other TBTF banks… Wall Street puts its own interests ahead of its clients and will screw anything or anyone along the way.

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/07/26/bloomberg-with-attitude/comment-page-1/#comment-42085 Fri, 27 Jul 2012 00:37:35 +0000 http://blogs.reuters.com/felix-salmon/?p=16576#comment-42085 While my prior comment ranged a bit broad, I meant to say in this case that Feldman’s NYT piece shows a lack of understanding of who does what in an M&A deal. M&A advisors are decidedly not in the business of attempting to detect fraud in a company that is offering stock to buy their client. They market a company and offer views on structure and valuation. It sounds like Goldman did an extremely poor job on this assignment, based on circumstances such as the bankers being AWOL for important meetings. That said, any M&A advisor is going to take at face value the reported financial results of an audited, publicly-traded acquiror in performing its analysis.

If one wants to conduct in-depth financial due diligence, one hires accountants. There are accounting groups both within and outside of large accounting firms who do just such “quality of earnings” reports, asking questions of a company (and its auditors) to identify sustainability of results and find suspect accounting policies or weak internal controls. Think of it as “auditing the audited financials”.

The difference here is that Cohan has the background to understand the role of different parties on an M&A deal, as well as the fact that quality of earnings reports are routinely commissioned even on deals much smaller than $580 million. The NYT instead sends a reporter who doesn’t have the background to ask the right questions.

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By: realist50 http://blogs.reuters.com/felix-salmon/2012/07/26/bloomberg-with-attitude/comment-page-1/#comment-42084 Fri, 27 Jul 2012 00:12:54 +0000 http://blogs.reuters.com/felix-salmon/?p=16576#comment-42084 The broader problem I have with the New York Times business section is that most New York Times business and finance reporters and columnists don’t seem to know much about business and finance. I think that the NY Times regards publications like the WSJ, the FT, and the Economist, and possibly bits of Bloomberg and Thomson Reuters, as the competition/peer group for its business section. The NYT shouldn’t think that way, because its business section is considerably lower quality than that group.

From what I can tell, the Times has focused its business reporting resources on a model similar to political reporting – trying to obtain scoops of deal news, publishing investigative stories that are based on cultivating sources to get at stories, and producing profile pieces on key people. That model works for a limited subset of business stories – the Wal-Mart Mexico bribery story is a good example of where it works. The problem is that these reporters don’t seem to understand basic finance and accounting. The number of times I’ve read an NYT story that says “balance sheet” when it should say “income statement” boggles my mind” and is a clear indicator that they aren’t equipped to cover a story with any finance/accounting angle, be that a company’s earnings report, the valuation of Facebook’s IPO, or the warning signs that Enron’s accounting was fraudulent.

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