Gold’s oil-buying power is at its lowest in three years. (The chart shows the price of oil rising relative to the price of gold.) Hedge funds and other traders who play the gold/oil spread could be taking profits. Otherwise, this is hard to explain, since gold is considered a leading indicator of inflation.
Citigroup‘s $3 billion $4.5 billion stock offering didn’t exactly dazzle one of its most well-known critics, as Oppenheimer analyst Meredith Whitney said the company will need to raise an additional $10 billion to $15 billion or sell assets worth billions to truly shore up its capital position. “The fact that Citi raised capital at this time did not come as a surprise to us, but the fact that the company raised such a small amount of capital at this time confounds us,” said Whitney, who correctly predicted last year that the company would have to cut its dividend.
Cox Enterprises, the parent company of Cox Newspapers and cable company Cox Communications, is buying online advertising firm Adify for at least $300 million — not a bad multiple on revenues of $7 million in 2007 and an expected $35 million this year, according to paidContent.org.
Check out those federal rebate checks.
Tax rebates began arriving in U.S. consumers’ bank accounts this week as part of Washington’s $152 billion stimulus package. (Direct deposits this week and paper checks next week.)
Clear Channel Communications says a Texas court has dismissed a request by a group of banks to delay a trial over the funding of the $20 billion buyout of the radio station operator. The banks asked to delay the June 2 trial until January, 2009, saying they needed more time to prepare, according to court documents obtained by Reuters. “Hopefully the banks are running out of delay tactics, and they will soon face a Texas jury who will make them take responsibility for their actions,” Clear Channel said in a statement. What could this defense be that requires another seven months to refine? Perhaps their lawyers are looking to twist the infamous Material Adverse Clause to protect lenders, not just borrowers.
While the skyrocketing cost of fuel is forcing U.S. airlines to consider cost-cutting measures — chief among them is consolidation — Continental Airlines has used the rising price of oil as one of the reasons to back out of advanced merger talks with United Airlines.
The convoluted history of attempted deals in the candy industry are enough to make an Oompa-Loompa’s head spin, but Mars’ $23 billion takeover of Wrigley may force rivals to reassess their options for consolidation, Bill Wrigley Jr said on Monday.