Twitter Updates for 2009-08-14

  • RT @mktbot From 10 Aug $CXN:ASX ConnXion Limited is $CXN:ASX ConnXion Ventures Limited http://is.gd/2gBot #
  • RT @mktbot From 12 Aug $ETC:ASX Entertainment Media #
  • RT @mktbot From 12 Aug $ETC:ASX Entertainment Media & Telecoms Corp.Ltd is $NBS:ASX Nexbis Limited http://is.gd/2gB5m #
  • RT @mktbot As of 14 Aug $GLI:ASX GoldLink IncomePlus Limited is now $BIV:ASX Blue Capital Limited http://is.gd/2gAeb #
  • ASX-listed Companies price sensitive announcements 14Aug $ACX $AGS $AVJ $AVO $BAR $BAU $BEL $BIV $BPT $BSR $CAB $CDI http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $CER $CGM $CKK $CNP $CNX $CRE $CUE $CWN $CXU $DCG $DDT $DEG http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $DGO $DIO $DLS $DMX $EMG $FNT $FUN $GCG $GCR $GMG $GPG $GRT http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $GXY $HAW $HAZ $ICN $IDG $IEF $IGR $LEI $LKO $LLC $LLP $LML http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $MAE $MAH $MAP $MCP $MCR $MEO $MMA $MOC $MPA $MSR $MTU $NEM http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $ODG $ORG $OTI $PDM $PMP $PRV $PTN $PXS $RAU $RHD $RHM $ROG http://bit.ly/6LMUV #
  • ASX-listed Companies price sensitive announcements 14Aug $SEG $STU $SYM $TCQ $TGX $VBA $WCN $WHN $WOT http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $ABM $ACK $ACZ $ADA $AGO $AGX $AHC $AIB $AIO $AIQ $ALF $ALK $ALR $AMP $AMU http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $AMX $ANZ $AOD $AQP $ARO $ARU $ASP $ATJ $AUP $AUZ $AVG $AVJ $AVO $AXY $BBG http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $BBI $BCS $BIV $BKN $BLP $BMN $BPH $BPT $BUL $BWN $CAM $CBA $CDI $CDM $CEY http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $CHN $CLO $CSJ $CSR $CSU $CSW $CTW $CUE $CXM $CYA $DBS $DCG $DIO $DLS $DUE http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $ECE $EHL $EMA $EMR $EON $ERC $ESG $ESN $EVE $FAC $FAS $FAT $FMG $FND $FPH http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $FUN $GIP $GMG $GMI $GRT $GUD $HAP $HAW $HAZ $HDN $HHV $HHY $HJB $HLS $HRL http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $HSN $HZN $IBC $IDG $IFL $IMA $IMD $IMU $INE $JVG $KAT $KIL $KNH $LBY $LEP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $LLC $LLP $LML $LUM $MAK $MAP $MBL $MBN $MCK $MCL $MCP $MCW $MGO $MIF $MLE http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $MMR $MMS $MMX $MPJ $MPS $MQG $MRI $MSO $MTH $MWG $MXQ $NEU $NGE $NHC $NSP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $NVT $OLH $OMI $ONC $ORC $ORN $PBA $PBB $PHG $PMH $PMP $PRG $PRV $PTN $PTR http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $PXS $QBE $QGM $QMN $QPN $RHD $RMS $ROG $ROY $SAK $SBS $SFY $SHX $SLF $SLV http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $SNB $SPI $SRE $SSS $STE $STO $STW $STX $SUL $SYG $SYL $SYM $SYS $TEN $TES http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $TGG $TLS $TOD $TON $TOV $TRS $TSF $TWD $TXN $TYS $UBS $UNX $UOS $URL $VBP http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $VIL $VMT $VTP $VXR $WAA $WAM $WAS $WBC $WDC $WHC $WHF $WHN $WIL $WME $WOT http://bit.ly/6LMUV #
  • ASX-listed Companies announcements 14Aug $XEN http://bit.ly/6LMUV #

Powered by Twitter Tools.

Strategic Mergers and Acquisitions for Fast Growth Firms

I’m working on a “How To” series on Strategic Mergers and Acquisitions for Fast Growth Firms. It covers the tools, skills and processes needed by firms pursuing acquisitions as a tempting path to growth. This is an audio presentation accompanied by detailed notes, checklists and templates.

Strategic Mergers and Acquisitions for Fast Growth Firms, Series 1 – Buy Side, Capturing Value Beyond Price

Highlights from Series 1: Buy Side

  • The M&A Process from the buy side
  • The Wealth Esteem M&A Checklist Methodology
  • Special types of M&A deals
    • the true “merger”
    • “Bolt-on” acquisitions
    • Vertical and horizontal integration
    • Diversification
  • M&A target identification and deal flow
  • Managing the M&A Project
  • Key roles and members of the M&A team
  • Valuing the business
  • M&A Negotiation
  • Earnouts
  • Financing the deal
  • M&A Due Diligence
    • Finance
    • Legal
    • Intellectual Property
    • Human Resources, learning & development
    • Marketing
    • Sales
    • Manufacturing and operations
    • R&D and innovation
    • Logistics and distribution
  • Integrating the Acquisition – the forgotten part of the Deal
    • the whole is greater than the sum of the parts
    • mitigating risk
    • integration planning
    • measuring integration success
    • practical integration improvement
  • Good to great: Post-Acquisition Review

Coming soon: Strategic Mergers and Acquisitions for Fast Growth Firms, Series 2 – Sell Side, Your Exit Strategy.

Sydney Roller Derby League

If you can't place nice, play roler derby
If you can't place nice, play roller derby

One of the world’s fastest-growing sports is making a comeback in the university gyms and school halls of inner-city Sydney. All-girl, flat-track roller derby revival is a punk, post-feminist, grrl power, contact sport with an emphasis on skill and safety. The competitors names reflect their on-track personalities like Miss Biff, Trippy Longstockings, Aprilla the Hun, Punky Chewster, and Surly Valentine.

I’ll be taking my daughters to watch the second bout of the new Sydney League (there are only 3 bouts in the inaugural league).

Bout 2: 28 JuneStarts 12.30pm, Doors open 12noon
Tickets from Sydney Roller Derby League
Tickets about $10.00/$5.00 concession
Sydney Boys’ High Stadium
Cleveland Street, Moore Park
NSW Australia

Wanna come? The bout will last an hour.

Like Tank Girl on roller skates with edge.

The Sydney Roller Derby League is bringing the wicked world of all-girl flat-track roller derby to Sydney and looking forward to taking on the globe – on the track and off!

What is roller derby?
http://en.wikipedia.org/wiki/Roller_derby

Sydney Roller Derby League
http://www.sydneyrollerderby.com/

Photos from the SRDL
http://www.sydneyrollerderby.com/mod/slideshow/view.php?id=153

Telstra and the National Broadband Network

IF you believe mainstream media, Sol Trujillo is the most unpopular man in Australia and Telstra is the most unpopular company [full disclosure: I am the beneficiary of a Telstra shareholding]. I don’t think I’ve ever forgiven Telstra for its monopolistic behaviour back when it was Telecom and I didn’t have a choice of carriers.

When Telstra was booted out of the National Broadband Network tender process for submitting a non-compliant tender, pundits were eagerly predicting Telstra’s demise or other “dark and awful consequences”. Telstra had submitted a tender that suited their business model, aspirations and view of the future. They signaled the only way they’d consider lining up for the $4.7 Billion AUD the government was offering. I congratulate them for having the balls to stick to their guns.

Today the Federal Government announced none of the remaining tenders were “value for money” and instead would form a new company to build a fibre to the home network to 90% of Australians. Much ink will be spilled in the future on this deviation from the tender outcomes requested, namely 98% fibre to the node.

Here’s my quick take home analysis:

  1. Submitting a tender of this size and complexity is a very expensive exercise.
  2. No tenderer was awarded a contract despite complying with the guidelines.
  3. Telstra spent a little money outlining the conditions they would accept.
  4. Who looks smart now?

This seems like a brilliant use of game theory by Telstra. Sol and his team have been called arrogant and out-of-touch, I think they protected their shareholders interests well.

Just because a deal is on the table doesn’t mean it’s always wisest to take it.

Culture of Secrecy

How can companies still think what they do is top secret. Note I’m not talking about intelligence, research or military organizations here. I mean general competitive businesses in a competitive marketplace.

How many of the projects we’ve been sworn to keep secret really needed or benefited from that? How many top secret projects failed to launch? Again I’m not talking about early gestation with limited resources, there’s a time and place for keeping something under wraps until it’s time – however even then most people keep it too secret for too long.

Enthusiasm is the hardest attribute to sustain in any endeavor.

I’ve found many companies with a Culture of Secrecy are really staffed by people avoiding scrutiny or responsibility. If they don’t say what they are going to achieve, they can’t be held accountable when they miss.

Everybody misses from time to time. Me included. Looking at what went wrong often more valuable than succeeding by a fluke.

Fear is the other great cause of the secrecy cult. Every manager worthy of the title has had an employee leave to work for a competitor. Weak managers of weak businesses respond by limiting the flow of ideas and information to the team that drives the business. They hope a defection cannot harm them again, without reviewing  if that harm was more than a bruised ego. This is overprotective thinking. When you fell over as a baby while learning to walk, you tried again until you mastered it. If a business is only as good as its secrets it has no better competitive advantage in the marketplace. Are there low barriers to entry for competitors?

Find your competitive advantange. That may be worth keeping close to the chest, but I doubt it. Your success flows from knowing what you do better than anyone else – what others cannot take from you.

Think of great global brands and great businesses like Coca-Cola, American Express, IBM, Toyota, McDonald’s. While some part of their operations are necessarily private they don’t have a culture of secrecy. Where do you want your company to be in 20 years?

For another perspective check out what Robin wrote a while ago at Snarkmarket on iPhone, Secrecy and Excellence

Transparency in Basketball Adminsitration

One criticism I forgot to make in yesterday’s NBL Beyond a joke post was the absolute lack of transparency by basketball businesses, administrators, marketers and promoters.

Fans of all types love talking about their favorite things. Basketball has been in crisis for a long time both in Australia and the USA. However the people at the top act as if Basketball is the dominant sports entertainment business and they try to manage the message to the fans. All this does is turn fans off and drive them to other more engaging areas.

As one of the highest participation and interest sports available, how would basketball look if it had an engaged fan base? The only way to get this is to stop trying to spin a message to that fan base. Three people can keep a secret if two of them are dead. Admit the problems, look for options to fix it and engage with the people who most care about the sport. That’s the fans.

I had lunch with a friend who likes basketball, but asked if it was still played professionally in Australia as he hadn’t seen anything about it in years. Those are the people Basketball needs to attract to fill venues at the professional level. In the nineties those people knew about their local team, were not die hard fans, but attended a couple of games per year to enjoy the spectacle. Normally they went because a fan invited them, not because they saw some advertising about a game.

Am I oversimplifying the problem? Do you agree, disagree or think I have no clue? Comment below.

NBL Basketball beyond a joke

Australia’s National Basketball League has become a joke. Now the Cairns Tiapans have gone into voluntary administration.

They join the Brisbane Bullets, Singapore Slingers and Sydney Kings in bowing out of the NBL this year alone. The Sydney Spirit (formerly the West Sydney Razorbacks) remain only because the NBL could not afford to allow the only Sydney team to stop playing mid season. To make this happen their players, coaches and staff reportedly took a 50% pay cut.

I have a complete set of 1995 limited edition NBL Car Collectibles (New in Box! – yes I’m that much of a geek). 10 of 14 clubs from 1995 are now defunct. Anybody remember: Canberra Cannons, Geelong Supercats, Gold Coast Rollers, Hobart Tassie Devils, South East Melbourne Magic, Newcastle Falcons or North Melbourne Giants? The Kings and Bullets were there too. Townsville were the Suns and not the Crocodiles (a pox on the Pheonix Suns for the trademark dispute). So only four of 14 clubs from 1995 are still around 13 years later, congratulations to Melbourne Tigers, Perth Wildcats, Adelaide 36ers and Illawarra Hawks – hat tip NLB stats.

The Taipans press release blames the international economic crisis for forcing Pacific Toyota to focus on core business and “no longer financially prop up the Cairns Tiapans”. Unfortunately Pacific Toyota’s executive chairman John O’Brien is also Cairns Taipans majority owner. So it sounds like another case of the sports team relying on the success or failure of the owners’ outside business to fund the team as a side venture. We’ve seen this happen with the Kings and the Bullets this year.

When a basketball club is run as a business in its own right, sponsorship deals are at arms length, cover the entire season, prepaid and enforceable. If the league cannot generate sufficient revenue to cover expenses the entire league is no better than an expensive exhibition tournament. Clubs then have sponsorship, merchandising and ticket sales targets to meet their projected expenses. Given the commercial changes occurring next year – possibly requiring a $1million bond for every team, it is not surprising that nobody is interested in keeping a team on life support in such an uncertain time. Why throw away money on a franchise that may not be around next year.

Lastly this season is a huge failure in sports marketing and sports administration. My initial reaction is the merger between Basketball Australia and the NBL is a bad idea. The elite professional game is about sports entertainment. BA’s concerns are sports development and grass roots. These two outcomes are complimentary but often in conflict.

I am currently reading the Australian Basketball Review Stage Two Report and will comment in more detail later. But I want to get this up now.

ASIC Lifts Ban on Covered Short Selling

From today covered short selling of non-financial stocks is allowed again on Australian stock markets. Obviously if you are a short seller you’ve known this for a week. What does it mean to us?

The disclosure and reporting details are in this Market Advice. Australian Securities and Investments Commission – Requirements for disclosure and reporting of short sales from 19 November 2008.

So naked shorts are still banned. Naked shorts means the seller has not yet borrowed the shares before placing the sell order. The seller expects to borrow or buy the shares in order to deliver on the trade.

Covered shorts are allowed for non-financial stocks. Covered shorts means the seller must actually borrow the shares before placing the sell order.

The financial stocks that are still banned from covered short sales are listed at the end of this post. But of course there are some exemptions to that ban

From today all sell orders must be identified as either long sale, short sale (for non-financial stocks) or Covered short sale exempt (you knew there would be an exemption somewhere for financial stocks). Sellers are required to indicate which category their order matches.

Ticker Name
ABP Abacus Property Group
AMP AMP Ltd
ASX ASX Ltd
ALZ Australand Property Group
ANZ Australia & New Zealand Banking Group Ltd
AUW Australian Wealth Management Ltd
AXA AXA Asia Pacific Holdings Ltd
BCM Babcock & Brown Capital Ltd
BJT Babcock & Brown Japan Property Trust
BNB Babcock & Brown Ltd
BOQ Bank of Queensland Ltd
BEN Bendigo and Adelaide Bank Ltd
BWP Bunnings Warehouse Property Trust
CER Centro Retail Group
CFX CFS Retail Property Trust
CGF Challenger Financial Services Group Ltd
CBA Commonwealth Bank of Australia
CPA Commonwealth Property Office Fund
DXS Dexus Property Group
FKP FKP Property Group
GMG Goodman Group
GPT GPT Group
HGG Henderson Group PLC
HFA HFA Holdings Ltd
IIF ING Industrial Fund
IOF ING Office Fund
IAG Insurance Australia Group Ltd
IFL IOOF Holdings Ltd
LLC Lend Lease Corp Ltd
MCW Macquarie CountryWide Trust
MDT Macquarie DDR Trust
MQG Macquarie Group Ltd
MOF Macquarie Office Trust
MGR Mirvac Group
NAB National Australia Bank Ltd
PPT Perpetual Ltd
PTM Platinum Asset Management Ltd
QBE QBE Insurance Group Ltd
SGB St George Bank Ltd
SGP Stockland
SUN Suncorp-Metway Ltd
SDG Sunland Group Ltd
TSO Tishman Speyer Office Fund
TAL Tower Australia Group Ltd
VPG Valad Property Group
WDC Westfield Group
WBC Westpac Banking Corp
Five additional Securities (being APRA regulated businesses)
WES Wesfarmers Limited
ROK The Rock Building Society Limited
WBB Wide Bay Australia Ltd
FCL Futuris Corporation Limited
CIX Calliden Group Limited

Calculate the Beta Coefficient of a stock

Beta CoefficientAs part of the Corporate Finance subject of my MBA we have to calculate the beta coefficient (aka Beta) of a company’s share price. The is applied economics and market mathematics, but it simply is a number which indicates how closely (or not) a company’s share price moves in relation to a broader market (or an index like the S&P ASX200 or the Dow Jones Industrial Average).

Anyway, part of the process is to create an excel format spreadsheet to aid with the calculation. I’ve done it and thought I share it with you. It will work with any spreadsheet program that can open .xls files

Update 1: 31 July 2009 the new version is available for testing by requesting it in a comment below. Once the testing is complete I’ll make it freely available to registered users.

Update 2: 7 July 2011 For a limited time you can get the Beta Coefficient Calculator without registering. Enter a valid email address in this form to receive a link to download the file. You’ll also get an email about new versions and bug fixes (with an opt-out link).

Update 3: 23 July 2011 If the form doesn’t work for you, please comment below and I’ll email it to you. The form is quicker but some people can’t get the download.

Enter your email address to download Beta Coefficient Calculator by Wealth Esteem

Version 0.9 beta_8
* Enabled automatic download via web form
* Added French and German to Translation tab (alpha code there)

Version 0.9 beta_7
* Fixed bug in date text description
* Updated sample data to 6 Jun 2011
* Changed sample data to BHP Billiton
* Made Instructions tab text translatable
* Cosmetic fixes

Version 0.9 beta_6
* Explained Translation tab in instructions and asked for volunteers
* Updated sample data to 2011
* Updated copyright date to 2011

Version 0.9 beta_5
* Added Change Log tab
* Moved text of index symbol & stock symbol to translation tab

Version 0.9 beta_4
* Added explanation of index and stock symbol fields on Beta Coefficient tab
* Updated copyright date to 2010

Version 0.9 beta_3
* Added email address to instructions tab

Version 0.9 beta_2
* Added logic to translate number of periods to a date range and show that range to users in Beta Coefficient tab at C11
* Swapped order of Security and Index tabs
* Fixed bug in coefficient calculation
* Introduced version numbering and control

Version 0.9 beta_1
* Updated instructions tab

Version 0.9 beta
* Initial public version

Support and feedback via the comments below.

Porsche Fleece Hedge Funds for 12 Billion Euro in Volkswagen Sting

Porsche There is No Substitute!

The background:

  • In September 2005 Porsche bought 20% of its larger but less profitable German rival Volkswagen.
  • In March 2007 Porsche bought another 19.9% (to 39.9%) and launched a takeover bid.
  • In October 2007 the law preventing the takeover of Volkswagen was scrapped.
  • On 20 October 2008 Volkswagen’s share price fell 23% on short selling by global hedge funds who bet the price of Volkswagen was too high and Porsche could not economically acquire more stock.
  • On 26 October 2008 Porsche announced it controlled Volkswagen through 42.6% direct holding and call options exercised over the another 32.4% (=75% !). As most of the balance is owned by the state or index funds, that left only about 5% on market to cover the shorts the hedge funds sold.
  • On Tuesday 28 October Volkwagen became the biggest company in the world momentarily when the hedge funds had to buy “at any cost” driving the price to €1,005 (from below €200 a year ago)
  • Late Tuesday Porsche agreed to release an addition 5% of stock to the market to maintain liquidity
  • The hedge funds then complained to the regulators that Porsche built a stake without their knowledge.

The sheer arrogance of Hedge Funds crying foul over this should offend me, but it’s their modus operandi to bully, lie and sneak around to make a buck. They have been accused for years of selling naked shorts. Normally you or I must first borrow the stock we plan to sell short before we are allowed to sell it. We’d pay a fee to the lender of the shares. If you sell without borrowing the shares first you are naked. It’s riskier but often more profitable if you can buy the stock on-market after sentiment has turned against a company. Nothing turns sentiment against a company like a huge overhang of stock on the offer line of the quote screen.

So if you can sell a naked short because you think German Automobile Manufacturers are in for a tough time in this economy, it is in your interests to get that story out after you’ve sold. Short sellers told everyone they could that Lehman Brothers was in trouble after they’d sold.

Now naked short sellers represent a counter-party risk of failure to deliver the stock at Trade plus 3 days (T+3).

Take a look at the failure to deliver reports produced by various exchanges. Some companies are consistently targeted by naked short sellers and the sellers regularly fail to deliver stock without serious penalty.

Finally someone with the clout to take on Hedge Funds called their bluff and made a bundle. So the hedge funds cried to the regulators.

These are the same hedge funds ignoring T+3 delivery dates on equities. Imagine what happens if you or I fail to deliver.

What makes me assert these were naked shorts? If the Volkswagen volume was mainly covered shorts it is unlikely the hedge funds would all need to return their borrowed shares on Tuesday 28 October. The borrowing would all be on a normal distribution. So there would not be a spike on 28 October intraday to €1,005. The price would be elevated but it would shake sellers out to the market.

Similarly any index funds or active investor should have been reweighing their portfolio, so the impact should be relatively minor compared to the recent overall market malaise.

Sadly there is a cost to the punters of this lesson. Most hedge funds do not take retail investments from small investors. Instead our retirement and superannuation funds place some of our pooled funds into them. So a hedge fund’s loss does come home to its small investors.

It still felt good to see hedge funds take a hit.

Wealth is created between your ears