Unstructured Finance

Check Out Line: Nintendo’s Wii is looking like a star

wii-2.jpgCheck Out Nintendo Co Ltd’s Wii video game console as a darling of the 2007 holiday shopping season. 

Strong demand for the Wii was key to U.K. video game retailer Game Group Plc’s  better-than-expected full-year profit forecast, the company said on Monday.

Last week, Amazon.com Inc said it sold nearly 17 of the popular systems per second when it had them in stock, helping the online retailer post the best holiday season in its history.

Last month, the system helped Nintendo remain king of the U.S. market with 981,000 Wiis sold in the console’s best showing since its November 2006 debut, according to market research firm NPD Group.

Also in the basket:

With Wii and DS, Nintendo has 2 Hit Game Devices (New York Times)

Credit Crunch, Housing Crisis Socks Retail (New York Post)

Macy’s to close nine stores, affects 899 jobs (Reuters)

Daily Briefing: Merrill Again?

John Thain, CEO of the NYSE Group, speaks at the Reuters Exchanges and Trading Summit in New YorkWith more write-downs looming, analysts have been expecting big Wall Street firms to head back to the wealth pools of Asia and the Middle East. So the Observer’s weekend report that Merrill Lynch is talking again with these sovereign funds could help answer the remaining question: who’s next. Given it is New Year’s eve, Merrill would be a pretty good bet. Its announcement last Monday that it was selling up to $6.2 billion in shares to Singapore’s Temasek and asset manager Davis Selected Advisers came on Christmas eve. The Observer article says Chief Executive John Thain has kept all his lieutenants holed up through the holiday season. 
Oil and gas exploration company Delta Petroleum said investor Kirk Kerkorian’s Tracinda Corp will buy a 35 percent stake for $684 million. Delta said Tracinda will buy 36 million shares at $19 apiece, a premium of about 23 percent to the stock’s Friday closing price, and get the equivalent board representation.
Alitalia has been exploited by politicians for too long, a top Italian politician told daily newspaper Corriere della Sera. Economy minister Tommaso Padoa-Schioppa said he was defending the government’s decision last week to approve Alitalia pursuing talks with Air France-KLM.  

Check Out Line: Finish Line and Genesco’s shotgun wedding

Check out a court ordering athletic shoe retailer Finish Line to complete its $1.5 billion purchase of Genesco.

In June this pairing seemed like a match made in heaven. Now they’re being forced to the altar kicking and screaming.

“When you combine the entities together we really have a strong positioning across all these multiple categories of footwear,” Finish Line Chief Executive Alan Cohen told Reuters back in June.

Daily Briefing: Buffett Basics

Billionaire investor Buffett counts money from his wallet during a meeting with employees of TaeguTec in DaeguFresh from taking a $4.5 billion stake in diversified manufacturer Marmon, Warren Buffett’s Berkshire Hathaway has returned to its insurance stronghold with the purchase of ING‘s Dutch reinsurance unit for about 300 million euros ($435.2 million) and plans, unveiled in the Wall Street Journal, to set up a municipal bond insurer. The new bond insurer, Hathaway Assurance Corp is set to start operating today in New York state, and guarantee the bonds that cities, counties and states use to finance public works, the report said, quoting Buffett from an interview.  The new fund poses a competitive challenge to bond insurers MBIA and Ambac, which have been struggling with the turmoil in the credit market. 

Bank of America has taken a significant step forward in China, with a $615 million leasing joint venture with China Construction Bank. The venture, the first in the sector, will focus on leasing equipment and facilities to China’s power generation and transmission and rail industries. The venture aims to eventually extend and obtain loans, sell leased items, and offer consulting, among other services.

Morgan Stanley has paid $217 million for a 10 percent stake in Petrovietnam Finance Corp, the financial arm of Vietnam’s state oil firm, ahead of an expected stock market listing early next year. The company is a de facto bank for oil monopoly Petrovietnam and finances energy sector projects. 
Sallie Mae, the largest U.S. educational lending company, said it sold $1 billion of convertible securities and $2 billion of common stock, raising more money than it had expected, to pay off bad derivatives bets.

Check Out Line: Despite pressures, consumer confidence edges higher

thurs-checkout-line.jpgCheck Out U.S. consumer confidence climbing slightly in December despite the fact that many American consumers are becoming increasingly budget-conscious as they deal with higher food and fuel costs and the subprime mortgage crisis.

Economists and policy makers are keeping a close eye on consumer spending — which is increasingly being viewed as the last line of defense for an economy that some fear is sliding into a recession.

The Conference Board on Thursday said its index of consumer sentiment crept up to 88.6 in December from a revised 87.8 last month. The media forecast among economists polled by Reuters was for a reading of 86.5.

Daily Briefing: Rapid Descent

Alitalia and Air One jets are seen on the tarmac of Fiumicino airport in RomeAlitalia shares fell more than 3 percent in their first day of trading since the loss-making airline’s board backed Air France-KLM‘s takeover bid, which valued the airline at about half where it currently trades in the market.

The center-left Italian government, which holds a 49.9 percent stake in the carrier, is due to decide by mid-January whether it, too, prefers Air France over tiny rival Air One, which has begun a frantic lobbying campaign to keep Alitalia in Italian hands.

Russian bank VTB has agreed to sell its 5 percent stake in European aerospace company EADS for about $1.43 billion to Russia’s Bank of Development, according to a source close to the Bank of Development board.   The price represents a premium of around 7 percent. Kohlberg Kravis Roberts has proposed to buy South Korean car part maker Mando Corp for $1.3 billion after years of stalled talks, according to the Korea Economic Daily.

Amazon.com’s Christmas Sales By The Numbers

A worker checks a shipment of boxes at the Amazon.com warehouse facility in New Castle DelawareRetail investors have long had to suffer the jargon and weirdness of same-store-sales reports and non-standard earnings periods. 
    So when Amazon.com announced it had its best 2007 holiday season ever, it offered a glimpse a new kind metrics, numbers perhaps more relevant to the 21st century, Web-savvy consumer.
    Amazon said in a news release its busiest day of its busiest season was Dec. 10 when 5.4 million items, or 62.5 items per second, were ordered. Last Dec. 11, their busiest day of the 2006 holiday rush, it had more than 4 million orders.
    It didn’t offer any overall metrics for the holiday period, or offer anything in dollars and cents. But here are a few of the factoids Amazon did disclose:
* Amazon.com sold Nintendo Wii systems at approximately 17 per second when they were in stock.
* Amazon.com sold enough high-def DVD players to cover seven football fields.
* If you lined up all of the GPS units Amazon.com sold this holiday, they would make a trail from New York to Philadelphia; however, a new trail wouldn’t be necessary with  the use of a GPS.  (sic)
* Amazon.com sold enough auto wrenches to stretch all the way around the Daytona 500 track.
* Amazon.com sold enough Hannah Montana wigs to outfit the
entire audience at her December 20th show in Providence, RI.

Check Out Line: Holiday sales not as bad as expected

reuters-christmas.jpgCheck out how holiday retail sales came in at the low end of expectations, but weren’t as a bad as some feared.

U.S. specialty apparel retailers saw sales rise 3.6 percent during the crucial holiday shopping period, which lasts from the Friday after Thanksgiving through midnight December 24, according to SpendingPulse data released on Christmas Day.

SpendingPulse —  a report compiled by MasterCard Advisors — had expected consumers to spend between 3.5 and 4.0 percent more on holiday gifts than they did last year last year.

Daily Briefing: Buffett’s Smorgasbord

Berkshire Hathaway Chairman Buffett laughs at a U.S. Senate Finance Committee hearing in WashingtonBerkshire Hathaway says its $4.5 billion swoop for manufacturing and services group Marmon Holdings Inc. is the biggest non-insurance deal it has done. Privately held Marmon, with an international association of more than 125 businesses in sectors including wire and cable, transportation services and industrial products, looks like a sensible fit for Warren Buffett, whose stable of interests ranges from insurance to media to metals. One wonders what the next Berkshire Hathaway CEO will have to do to make a mark on the Megalopolis that Warren built. 
Investor Christopher Davis, whose firm is buying $1.2 billion of stock in Merrill Lynch & Co Inc at a substantial discount, is known as a long-term value player who sometimes does years of research before making a portfolio decision. About 35 percent of Davis’ holdings are in financial services companies. Kenneth C. Feinberg, a co-portfolio manager for Davis, said his company contacted Merrill Lynch about two weeks ago, inquiring if it would be interested in getting an outside investor.
Banco Itau, Brazil’s second-biggest private sector bank, is set to spend around a billion dollars to buy Spanish group BBVA‘s private banking arm for Latin America, an unsourced newspaper reported. The deal could be officially announced in the coming days but it would have to be approved beforehand by the U.S. Federal Reserve, the newspaper said.

Daily Briefing: Merrilly Xmass

A Merrill Lynch office building is seen in Great Neck, New YorkChristmas may have come a day early for Merrill Lynch. The mortgage-debt-wracked investment bank is selling up to $6.2 billion worth of discounted new stock to Singapore’s Temasek Holdings and Davis Selected Advisers. The deal makes Merrill the latest in a growing number of Wall Street firms to receive cash from sovereign wealth funds — following Morgan Stanley, Citigroup and UBS.

Merrill is also selling most of its Chicago-based capital lending business to General Electric‘s commercial finance. GE Capital, which dominates the middle-market financing space, is set to buy Merrill Lynch Capital’s corporate finance, equipment finance, franchise, energy and healthcare finance units, which Merrill’s chief executive John Thain said would allow it to redeploy about $1.3 billion of capital. Merrill’s commercial real estate finance unit is not part of the transaction, which will add more than $10 billion in assets and $5 billion in commitments to GE Capital Commercial Finance’s base of $260 billion.  
Capgemini shares got a boost from a report that Indian software exporter Wipro would bid for the French computer consultancy firm. The Hindustan Times said Wipro was expected to bid for Capgemini by the end of January, citing unnamed sources. Shares in London-based media group Emap jumped briefly on speculative interest as some investors took the view that a counter-bidder may pitch for the company’s specialist publishing and conferences assets. In a surprise move on Friday, Emap said it had agreed to sell its specialist magazines and events business to privately owned Guardian Media Group and private equity firm Apax Partners for around 1 billion pounds ($1.98 billion). On Monday, the two groups said they had each bought 20.97 million Emap shares on Friday for a combined 19.4 percent stake.