Tag Archive | "california"

Morgan Solar brings in $16.5M for lower-cost solar

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Solar startup Morgan Solar plans to announce Thursday that it has raised $16.5 million in venture-capital funding. After declines in the second half of 2010, U.S. cleantech investment has been on the rise so far this year, with solar companies getting the most money, analysts say.

Founded in 2007 by company president John Paul Morgan and his brother Nicolas, Morgan Solar has developed a concentrating-photovoltaic technology that it claims can convert more sunlight into electricity at a lower cost than competing technologies. The technology involves staggered rows of thin, hexagonal optics that direct light to triple-layered solar cells positioned at the edges of the rows.

The company says the initial commercial panels will be able to convert sunlight into electricity with 25 percent efficiency, which is higher than most conventional silicon-based panels but lower than some other concentrating PV technologies. Even at its current low volumes, its cost is on par with that of traditional panels, Morgan told us in an interview, adding that the company expects to be able to deliver a levelized cost of energy – meaning the total cost of energy, with everything included – competitive with that of thin-film solar in many markets by 2012.

Still, he acknowledged the company faces plenty of challenges in the next year to make that happen. “I don’t want to stop at just being better than solar; I want to compete with coal,” he said. “A lot of things have to be executed correctly – we have to ramp up right and drive down this plan of bringing costs down and efficiency up.  … The details are what are going to make us take this to the next level. And the details are where we’re at now.”

Morgan Solar’s latest deal is the first tranche of its second round, which the company expects to close with $25 million in the next few months, company president John Paul Morgan told us.

News of the funding comes at an important stage for Morgan Solar, when the company hopes to transition from demonstration projects to its first commercial shipments. It is installing a 200-kilowatt demonstration plant in Lancaster and plans to ship its first commercial panels this year. The company, which is already shipping test panels, had previously aimed to ship its first commercial panels last year.

“2011 and 2012 are going to be the most important years in this company’s history,” Morgan said. “This year, when we’re really demonstrating [our product] in the market, taking it to customers and deploying it on a large scale, is really going to be what tests the mettle of the team and of the company and demonstrates to the world how big of a deal this all is.”

Morgan Solar ran into some speed bumps during its internal testing last summer, when it discovered some issues that could result in some defective panels, he said. “We’ve ironed all that out,” he said, adding that he now expects the panels to get international certification by early next year.

The company plans to use its newfound cash – along with its $3.3 million loan guarantee – to grow its optics factory in Chula Vista, Calif., which Morgan said is on track to begin production in the next few months. The factory already has some of its equipment in place and will initially have the capacity to produce 5.5 megawatts a year, then will expand to 50 megawatts of annual capacity by the end of next year, he added.

The 50-megawatts of capacity near San Diego will cost $13 million, Morgan confirmed. “We can ramp up much more cheaply than other companies,” he said, adding that most of the company’s first-round funding went into research and development, lab equipment and testing equipment, not capital expenses. “That’s why we’re not trying to raise $100 million.”

Morgan Solar will also use some of its new capital to expand its panel assembly, as well as research and development – including testing, engineering and design work – at its Toronto headquarters, Morgan said.

Investors in the latest tranche include big Spanish utility Iberdrola’s venture arm, Inversiones Financieras Perseo, which led the deal; existing investor Nypro, which makes Morgan Solar’s optics; and pharmaceutical billionaire Phillip Frost’s The Frost Group, a new investor. Turnstone Capital Management, which led Morgan Solar’s first VC round, didn’t participate in this tranche.

The deal brings the Toronto-based company’s total private capital to $26.3 million. It also has received $10.3 million in U.S. and Canadian government funding, and has won a $3.3 million loan guarantee from the California Energy Commission.

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Article courtesy of VentureBeat » deals

Apple: Al-Waleed Reaffirms His Faith On CNBC

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In case you missed, Saudi prince Al-Waleed Bin Talal was on CNBC this morning — he’s 26th on the Forbes billionaire list with $19.6 billion in personal net worth, in case you’ve lost count — and he was talking about about Apple (AAPL), among other things.

“We got into Apple at $9 many years ago, and Steve Jobs is my friend, I always visit him in California,” said Al-Waleed. “We always believed in Apple. Apple is a very good company, and they are the leader right now in the technology industry. Clearly, there are lots of challenges, they are being attacked from all fronts, but Apple is a big force to be reckoned with in the technology industry.”

(In the video clip below, the discussion of Apple comes in at about 7:40 into the set.)

Asked about growth, Al-Waleed said that the tablet and phone markets have “not yet peaked” for the company. Al-Waleed was also asked about the fate of the company given CEO Steve Jobs’s leave from day-to-day operations.

“Steve Jobs is a unique person, and he has good people with him. You know, he’s not managing the company on a day-to-day basis, but still the company is on a good track and doing good.”

On the general economic outlook, Al-Waleed said that the global economies went through “intensive care,” and “you don’t expect someone to go walking and jogging right away. Hopefully some jogging will take place soon.”

Remarking on the impending end of the Fed Reserve’s “QE2″ program of bond purchases, he likened it to a “scaffolding” of a building, arguing that when a scaffolding is taken away, the “building has to stand.” He doesn’t believe, in other words, that when QE2 ends in June, it will have a major impact on markets. Of greater concern is what is done with the U.S. budget deficit and “brinksmanship” over the U.S. debt ceiling, which he called a “time bomb.”

As long as the U.S. issue can be taken care of, there will be low growth for several years to come, he avers, but not a return to recession, despite European debt issues.

Article courtesy of Tech Trader Daily

Opening Bell: 05.18.11

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For States, a Glimmer of Hope on Deficits (NYT)
From stronger-than-expected tax collections in deficit-ridden California to projected surpluses in struggling states like Michigan and Pennsylvania, a growing number of recession-weary states are finally announcing a bit of good budget news for the first time since the downturn began. But it would probably be premature to pop the Champagne, or even the prosecco — or to otherwise declare the fiscal crisis that has hammered states to be over.

Howard Marks’ Oaktree Capital sows seeds for listing on NYSE (FT)
Oaktree Capital Management is planning to list its shares on the New York Stock Exchange in a deal that would value the asset manager at between $8bn and $9bn, people familiar with the matter said. Oaktree, which manages $85bn, mostly in debt investments, listed shares four years ago on a quasi-public exchange set up by Goldman Sachs.

DSK Accuser Is ‘Afraid,’ ‘Overwhelmed’ (WSJ)
Investigators swabbed a sink and removed a section of carpet from the hotel suite where International Monetary Fund chief Dominique Strauss-Kahn allegedly assaulted a hotel housekeeper, a New York law-enforcement official said Tuesday, as a clearer profile began to emerge of the alleged victim. Her attorney [Jeffrey Shapiro] characterized her as a “simple woman, with little education” who is a single mother from Guinea. Mr. Shapiro said his client, a 32-year-old widowed mother of a 15-year-old girl, was granted asylum in the United States seven years ago from her native country of Guinea.

Fed seeks annual US bank stress tests (FT)
The Federal Reserve wants to subject US banks to annual capital tests, reserving the right to veto dividend pay-outs if they do not pass.

‘Gang of Six’ on verge of collapse as Republican Sen. Coburn withdraws (WaPo)
Since January, six senators have engaged in difficult negotiations and made painful concessions in a politically dangerous quest for something that has long eluded Washington: a bipartisan compromise to control the nation’s mounting debt. By Tuesday evening, however, the “Gang of Six” was on the verge of collapse. Sen. Tom Coburn (R-Okla.) withdrew from the bipartisan working group, saying the senators simply could not overcome the polarizing political pressure that each faces.

Senate rejects measure to end subsidies for big oil companies (WaPo)
A Democratic measure that would have repealed tax subsidies for the five biggest oil companies failed to clear the Senate on Tuesday, falling short of the 60-vote threshold needed to advance in a near-party-line vote.

Geithner Warns On Debt Ceiling, Talks IMF Crisis (DJ via WSJ)
In his first public comments since International Monetary Fund Managing Director Dominique Strauss-Kahn was jailed on sexual-assault charges, [Treasury Secretary Timothy] Geithner added that the institution should establish a plan to fill its leadership vacuum on an interim basis, given that the IMF chief was “not in the position” to make decisions during a critical time. In remarks to the Harvard Club here, Geithner cautioned the GOP leadership against tying their budget blueprint to the contentious talks to lift the U.S.’s $14.3 trillion debt ceiling.

Citigroup’s Gain on Mortgage Hedge Fund Jumps as Volcker Trading Ban Looms (Bloomberg)
Citigroup’s Mortgage/Credit Opportunity Fund climbed 16 percent in the first four months of 2011, almost doubling its pace last year, according to internal reports obtained by Bloomberg News. About 90 percent of the $395 million invested in the fund is the bank’s own capital, said a person with direct knowledge of the matter.

Dan Zwirn Seeks Comeback With Alda Three Years After Shutting Hedge Fund (Bloomberg)
Daniel Zwirn, the New York investor forced to shut a $4 billion hedge fund because of client withdrawals, is starting over with a new publicly traded fund that will be safe from redemptions. Zwirn will help manage a closed-end fund for Alda Capital Corp. that will lend to small and medium-sized companies, the Chicago-based firm disclosed in a regulatory filing this month with the Securities and Exchange Commission. Alda plans to raise about $50 million for the fund, according to the filing.

Morgan Stanley Sets Up Yuan Fund (WSJ)
Morgan Stanley said Wednesday it has set up a private-equity joint venture in the affluent eastern Chinese city of Hangzhou, launching its first yuan-denominated fund that aims to raise 1.5 billion yuan ($231 million).

Oyster Herpes in France Ravages Harvest (Bloomberg)
A deadly virus is stalking France’s coastline, killing at least 60 percent of the young oysters there since 2008…The virus is not just a blow to France, Europe’s biggest producer. The global industry, worth at least $3.3 billion in 2009, has been plagued by OsHV-1 in Ireland, England and Australia.

Article courtesy of Dealbreaker

Opening Bell: 05.17.11

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IMF chief claims consent in hotel ‘attack’ (NY Post)
“The evidence, we believe, will not be consistent with a forcible encounter,” said Ben Brafman, the high-powered lawyer of IMF chief Dominique Strauss-Kahn, at the suspect’s sensational arraignment in a packed criminal courtroom. A source close to the defense later told The Post, “There may well have been consent.”

New York Investigates Banks’ Role in Fiscal Crisis (NYT)
The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses. Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly.

How Big Investors Are Betting (WSJ)
Mr. Cohen, whose SAC Capital reported a 9.3% increase in securities holdings in the quarter ended March 31, increased a stake in consumer electronics retailer Best Buy Co. to 2.3 million shares from 53,306 at the end of the previous quarter. SAC also more than doubled its stake in BJ’s Wholesale Club Inc. to 2.8 million shares from 1.1 million.

John Paulson Loves Hewlett-Packard (Deal Journal)
The $5 Billion Man, hedge fund manager John Paulson, reported plowing $1 billion into Hewlett-Packard, pared his stake in Citigroup and is standing pat with his big investment in a gold ETF…Paulson & Co. also disclosed owning 123.6 million shares of Bank of America, down by 226,522 from the end of 2010. And one interesting new holding showing up on Paulson’s radar: Lubrizol.

Soros Fund Cuts Gold, BofA, J.P. Morgan Stakes; Adds to Citi, Wells (Deal Journal)
Soros decreased his holdings of the SPDR Gold Trust, a gold-backed exchanged-traded fund, by 4.7 million shares to 49,400 shares, valued at $6.9 million at March 31…The fund lowered its Bank of America holding by 1.2 million shares and now owns 29,400 shares. Soros sold 378,050 shares of J.P. Morgan, leaving him with 624,600 shares. In contrast, his firm tripled its stake in Citigroup to 29.4 million shares. Soros’ stake in Wells Fargo climbed six-fold to 3.5 million shares.

Bill Ackman Throws in the Towel on Target (Deal Journal)
Pershing Square reported owning 7.4 million Target shares as of Dec. 31, but there is no whisper of the Target investment in Pershing’s latest snapshot of its stock holdings as of March 31.

David Einhorn Buys…General Motors (DJ)
David Einhorn’s Greenlight Capital investment fund reported new ownership stakes in two newly public companies, hospital operator HCA Holdings and General Motors, a.k.a. Government Motors.

Falcone’s Harbinger Holdings Adds Bunge Shares, Trims Gold Stake (Bloomberg)
Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company Bunge Ltd. (BG) in the first quarter and sold shares of SPDR Gold Trust, according to a regulatory filing.

Schwarzenegger fathered a child with longtime member of household staff (LA Times)
Former California Gov. Arnold Schwarzenegger and his wife, Maria Shriver, separated after she learned he had fathered a child more than a decade ago — before his first run for office — with a longtime member of their household staff.

Jump in Revenue Helps Halve California Deficit (NYT)
After months of doomsday scenarios and apocalyptic warnings about cuts to California schools, parks and the police, the news from Gov. Jerry Brown on Monday was nothing short of startling: California is now expected to see $6.6 billion more in revenue over the next two years than had been expected.

U.K. Inflation Quickens More Than Forecast (Bloomberg)l
Consumer prices rose 4.5 percent in April after a 4 percent increase in March, data today showed. The median forecast of 32 economists in a Bloomberg News survey was 4.1 percent. Core inflation quickened to the fastest in at least 14 years. King said in a letter to Chancellor of the Exchequer George Osborne that the surge is being driven by higher sales tax and increases in energy and import prices.

London Finance Job Openings Climbed 15% in April (Bloomberg)
The number of openings in the City, London’s main financial district, and elsewhere in the capital rose to 6,426 last month from 5,569 in April 2010, executive search firm Morgan McKinley said today. The figure was flat compared with the previous month.

President, first lady’s assets valued at $1.8 million to nearly $12 million (WaPo)
Financial disclosure documents released Monday showed the assets for last year…Assets are listed in wide ranges on the disclosure forms — for example, between $1 million and $5 million — making it difficult to determine their value with precision. Royalties from Obama’s books, “Dreams From My Father” and “Audacity of Hope,” totaled between about $1 million and $6 million.

Man To Eat 25,000th Big Mac (HP)
Wisconsin-based Don Gorske plans to eat his 25,000th Big Mac on May 17, 2011, 39 years after his first Big Mac bite on May 17, 1972. He averages two Big Macs per day and has 10,000 Big Mac cartons still in his possession. He keeps two Big Macs in his luggage in case he cannot find a McDonald’s when he travels. Gorske believes he has drank over 200,000 Cokes along with his burgers.

Article courtesy of Dealbreaker

Opening Bell: 05.06.11

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Goldman BRIC Fund Among Most Hurt in ‘Panic’ Commodities Selling (Bloomberg)
The $831 million Goldman Sachs BRIC Fund (GBRAX) and the $825 million Templeton BRIC Fund (TABRX), which focus on Brazil, China, India and Russia, both fell 5.7 percent in the week ended yesterday. The funds, from New York-based Goldman Sachs Group Inc. and San Mateo, California’s Franklin Resources Inc., lost the most among diversified equity funds with more than $500 million in assets and at least 20 percent in energy or basic materials stocks, according to data compiled by Bloomberg.

Glencore IPO Orders Continue To Roll In (WSJ)
Glencore on Wednesday set the price range for the offer at 480 pence to 580 pence, valuing it at around $61 billion, including the new money being raised. Around $10 billion in shares will be sold, plus a $1 billion overallotment. Most of the offer is in the form of new shares. Bankers said the order book was covered after the first day of subscriptions. One on Friday said a “material” amount of orders were added to the total on Thursday, even as oil and silver prices slid sharply.

Paulson’s Biggest Fund Said to Be Down in 2011 After April Gain (SFGate/Bloomberg)
Paulson’s Advantage Plus Fund, which uses strategies designed to profit from corporate events such as takeovers and bankruptcies, is down 1.7 percent in 2011 after gaining 0.1 percent last month, said the person, who asked not to be identified because the returns are private. The fund’s gold- denominated share class rose 6.3 percent in April and 4.9 percent this year.

Bank of America Had Positive Trading Revenue Every Day of First Quarter (Bloomberg)
Trading-related revenue was positive every day and exceeded $25 million on 98 percent of days during the year’s first three months, the Charlotte, North Carolina-based lender said today in a filing with the U.S. Securities and Exchange Commission. In 2010, it had gains on 90 percent of trading days, with perfect records in that year’s first and third quarters, according to previous filings.

AIG quarterly net income drops 85% (MarketWatch)
First-quarter net income attributable to AIG was $269 million, compared with $1.8 billion a year earlier, the company said. On a per-share basis, AIG reported a net loss of 35 cents, versus a profit of $2.66 a share in the first quarter of 2010…AIG expected to make 34 cents a share, according to a FactSet survey of three analysts. A Thomson Reuters survey of three analysts came up with a consensus estimate of a loss of 15 cents a share.

JPMorgan Chase Said to Be Subpoenaed by SEC Over Mortgage Debt Documents (Bloomberg)
JPMorgan received a subpoena from the U.S. Securities and Exchange Commission over failed mortgages, a person familiar with the investigation said, as the agency probes banks including Credit Suisse Group AG for allegedly failing to share refunds from sellers of faulty debt.

RBS core operating profit jumps 25 pct (Reuters)
RBS, which is majority-owned by the British government, made a first quarter loss of 528 million pounds ($841.5 million) after it racked up 1.3 billion pounds in bad debts at Ulster Bank… RBS said Irish loan losses would stay high this quarter before “gradually declining” in the second half of the year. The bank’s core business – namely its main retail and investment banking arms and excluding its insurance unit which is due to be sold off or floated on the stock market in 2012 – had an operating profit of about 2 billion pounds a quarter.

Schumer Tilts Toward Offer by Germans for Big Board (WSJ)
Chuck Schumer, a New York Democrat, remains publicly neutral on the competing proposals: a roughly $10 billion bid from Deutsche Börse AG, which agreed in February to buy NYSE Euronext, and a hostile, $11 billion offer from Nasdaq OMX Group Inc. and IntercontinentalExchange Inc.  But Mr. Schumer is favoring the German deal as the best way to protect New York, according to the people who have spoken with him. Mr. Schumer focuses on the question so much that he tracks the number of Bloomberg terminals sold in major financial capitals.

Coffee, Sex, Blowing Nose May Increase Risk of a Stroke, Dutch Study Finds (Bloomberg)
Researchers from University Medical Center in Utrecht, the Netherlands, analyzed 250 patients who survived such a stroke and identified eight risk factors tied to the event. They included drinking a cup of coffee, which carried the highest risk, having sex, physical exercise, nose blowing, straining to defecate, drinking cola and being startled or angry.

Carlyle faces questions over China investments (FT)
Carlyle, the US private equity group, is facing questions over its investments in two Chinese companies that have been accused of fraud and suspended from trading on stock exchanges in Hong Kong and New York. The scrutiny comes at an unwelcome time for Carlyle, as the manager of some $106bn in funds seeks to burnish its reputation ahead of a planned initial public offering. China Forestry, a Hong Kong-listed plantation operator in which Carlyle has an 11 per cent stake, and China Agritech, a Nasdaq-listed fertiliser maker in which Carlyle has a 22 per cent stake, have both had their shares suspended from trading in recent months.

CME launches London clearing house (FT)
CME Group is considering offering clearing services to exchanges in Europe as the largest US futures exchange establishes a beachhead in the region by launching a new clearing house in London on Friday.
The move into clearing in Europe highlights the Chicago-based operator’s ambitions to expand into Europe, where CME’s two biggest rivals, IntercontinentalExchange (ICE) and Deutsche Börse, have established clearing businesses.

US Lawmaker Wants To Require Whistleblowers To Report Internally (DJ via WSJ)
A U.S. House Republican lawmaker plans to introduce legislation that would require whistleblowers to report wrongdoing to their employer to be eligible for a Securities and Exchange Commission bounty program, Dow Jones reported.

Indonesia Imposes More Sanctions on Citigroup (WSJ)
Bank Indonesia on Friday announced a raft of additional sanctions against Citigroup Inc. as investigations continue into the alleged embezzlement of millions of dollars and the death of a debtor…[Bank Indonesia Deputy Governor Budi] Rochadi said, the central bank imposed a number of restrictions on Citi’s operations in Indonesia, including a one-year ban on the local unit signing new clients to its Citigold wealth-management unit and a two-year ban on it issuing new credit cards. The central bank also forbade Citi’s local unit from opening new branches in Indonesia for one year and imposed an offshore travel ban on some of the unit’s executives, effective from Friday, while investigations continue.

Allen Stanford Indicted Again as Prosecutors Drop 7 of 21 Criminal Charges (Bloomberg)
The original indictment contained 21 criminal counts. The new one contains 14, including conspiracy to commit money laundering, obstruction of a U.S. Securities and Exchange Commission investigation, wire fraud and mail fraud. Two wire-fraud counts were dropped as were five mail-fraud charges. Stanford, 61, still faces five of each count, conviction for any one of which could result in a maximum sentence of 20 years in prison.

A wide-open Derby field of odds (USA Today)
With so many unknowns among local 3-year-olds, it might pay to take a chance on Master of Hounds, a new face shipping in from afar — Ireland, via Dubai in the United Arab Emirates. Trained by perpetual Irish champion Aiden O’Brien and owned by the imposing Coolmore partnership, Master of Hounds has never raced on dirt, but the same can be said for several other leading Derby contenders. Bred to stay every yard of the 1¼-mile Derby distance, Master of Hounds was beaten by a nose in his last start, the UAE Derby run on a synthetic surface in March. Master of Hounds stalked the leaders, burst to the front in the stretch and was just caught after battling gamely all the way to the finish.

Article courtesy of Dealbreaker

First Round Of Lenny Dykstra Interviews Allegedly Involve Nude Massages

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From time to time around these parts, we like to offer some pro-tips for those interviewing at various banks and hedge funds, given that each firm is unique and offers its own kind of curve balls. A successful (lunch) interview at Goldman Sachs, for instance, will require one to order within 30 seconds of the menu hitting the table; at Bridgewater, one must have his/her “views on God and abortion” ready. Today’s tip is for anyone potentially interviewing for a housekeeping job with Lenny Dykstra, who expect a demo of not only your cleaning skills but your skills as a masseur as well.

Bankrupt former MLB star Lenny Dykstra allegedly told a prospective housekeeper he expected her to give him massages – then took all his clothes off and demanded a trial-run. The 48-year-old is now being investigated for lewd conduct after the woman complained to police about the interview at his California mansion.

The unnamed 47-year-old woman…claims when she arrived at the house, thought to be his $18.5million Californian mansion, he told her she would be required to give him massages as well as clean. He then allegedly took all his clothes off and told her he couldn’t hire her until he had tried out her massaging skills.

Bring your Twizzlers.


Article courtesy of Dealbreaker

Legendary Investor Lenny Dykstra Charged With Fraud, Arrested On “Unrelated Charges”

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Lenny Dykstra, described by his ex-best friend Jim Cramer as one of “the greats” in the investing industry, has reportedly been charged with with bankruptcy fraud for “selling items from his $18 million California mansion.”

That would, of course, be the Sherwood mansion he bought from Wayne Gretzky in 2007 and was later kicked out of, but refused to leave before stripping the bathroom fixtures out of the place, which were presumably among the items he sold. Also! Apparently Nails was arrested last night by the LAPD on “unrelated charges.” Those are all the details we have at this time, so while we wait, how about we take a stab at what LD got cuffed for. Being the Dykstra scholars we are, the first things that comes to mind are that his “In the Money Calls” raised a red flag with the SEC, which got him on insider trading or he was caught patronizing a hooker. Alternatively, as he’s hit rock bottom, he could have been arrested for attempting to be a hooker. Additionally, it’s possible he was caught breaking into a Twizzlers factory. What say you?

Article courtesy of Dealbreaker

Opening Bell: 04.05.11

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David Sokol’s Ways Questioned In Past Suits (NYT)
The most serious lawsuit centered on the accounting of an irrigation project by MidAmerican Energy, where Mr. Sokol was chief executive when Berkshire bought it in 1999. In a rebuke last year, the judge ruled in that case that MidAmerican had improperly changed its accounting on the project and criticized Mr. Sokol directly. The change in accounting was “intended to eliminate the minority shareholders’ interests,” the judge wrote, awarding more than $32 million to the minority shareholders. The case had taken more than five years to work its way through the courts. During that time, Warren E. Buffett, the chief executive of Berkshire, expressed confidence in Mr. Sokol by broadening his portfolio beyond MidAmerican to include Netjets, a company that sells fractional use of private aircraft.

Bernanke Downplays Inflation (WSJ)
Bernanke said the recent rise in prices of oil, grains, and other global commodity prices is likely to be temporary and won’t translate into a broader inflation problem. However, the Fed chief was quick to add that if his prediction is wrong and inflation begins to mark strong gains, the central bank would respond. “I think the increase in inflation will be transitory,” Bernanke said. He attributed the sharp increases in prices for oil and food to “global supply and demand conditions,” adding he reckoned these prices “will eventually stabilize.”

Geithner Sees ‘Severe Hardship’ If Debt Limit Isn’t Reached (Bloomberg)
Congress needs to raise the limit to maintain vital services and avoid “questions about our ability to defend our national security interests,” Geithner said. The U.S. would face sharply higher interest rates and would have to stop or delay payments to the military, retirees and others, he said. “Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover,” Geithner said. “For these reasons, default by the United States is unthinkable.”

Apple Crunched In Nasdaq Rebalance (WSJ)
In a move likely to ripple across the stock market, Nasdaq OMX plans to announce Tuesday a rare rebalancing of its Nasdaq-100 index, which will reduce the big weighting of Apple Inc. The company currently makes up more than 20% of the index.

Barclays Chief Set To Raise Appetite For Risk (FT)
Bob Diamond has decided Barclays must increase its risk appetite amid internal expectations at the bank that a key measure of its profitability will fall or stay stagnant this year. Barclays’ new chief executive is considering increasing the bank’s risk profile, in order to hit profitability targets over the next three years, according to people familiar with the bank’s thinking. Mr Diamond, who began in his job in January, has set a target of achieving a 13 per cent return on equity by 2013.

Santander Tops Goldman As Greenest Bank (Bloomberg)
At Banco Santander SA headquarters on the outskirts of Madrid, Joaquin de Ena says he’s gotten used to wearing his sweater vest indoors after the bank turned down the heat to trim power use and greenhouse-gas emissions. “This is OK,” de Ena, director of corporate social responsibility, says with a laugh as he looks at a conference room thermostat as a chilly wind blows through the capital on an early March day. “I’m not sure if it should go any lower.” Santander’s in-house conservation and ecominded investments won it top billing in Bloomberg Markets’ inaugural ranking of the world’s greenest banks…Goldman Sachs was second overall and topped the list for green investing. New York-based Goldman, along with No. 4 bank Credit Suisse, managed the $3 billion initial public offering of Enel Green Power SpA, Rome-based operator of wind, geothermal and hydropower plants. Goldman also co-led the IPO of Tesla Motors, the Palo Alto, California, maker of the $109,000 all-electric Roadster. Read the full story

Tesla: 50-Page Morgan Stanley Opus Sets $70 Price Target

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The Tesla Model S: From 2,000 units in 2012 to a peak of 26,000 in 2017?

How about that Morgan Stanley mega report on Tesla Motors (TSLA), the one that has pushed the shares up and up by $4.56, or 19%, today to $28.27?

In raising the firm’s rating on Tesla from Equal Weight to Overweight this morning, you’ve got to hand it to Adam Jonas and his team for sheer chutzpah: the price target is, well, a bit above the current price, at $70.

Jonas writes that the “conditions are ripe for a shake-up of a complacent, century-old industry,” and that as electric cars come to comprise “a significant minority of global light vehicle sales medium-term and the majority long-term,” Tesla will be “America’s Fourth Automaker.”

What conditions, you ask?

High oil prices, and “government support accelerate the shift away from the internal combustion engine,” writes Jonas. That should lead to electric vehicles being 5.5% of global car shipments and 7% of U.S. shipments by 2020.

The key for Tesla is making electric vehicles a “mass market” phenomenon in the $30,000 price tag-range. And key to that is “fully utilizing” its facility in Fremont, California, where partner Toyota (TM) had produced half a million cars annually until it was shuddered a year ago, following which Toyota in May said it would purchase $50 million of Tesla stock and help the company build its “Model S” sedan at the Fremont plant.

Tesla is a top-line story,” writes Jonas, “driven by their ability to capture a modest share of the growing electric vehicle market.” Out of that total 5.5% of global shipment that ma be electric in 2020, Jonas models the company selling 7.3% of that.

He sees the Model S shipping late next year, at a volume of about 2,000 units, and then the “Model X” by 2014, and the “Gen 3” in 2017. In 2020, Tesla should be getting 9% of its shipment volume from the Model S, 17% from the Model X, 62% from Gen 3, less than 1% from the “Roadster,” and 11% from “the supply of third-party power trains.”

By that time, unit volume will have surged from an estimated 2,400 units this year to 240,000 units, bringing in sales of $9.5 billion, Ebitda of $1.5 billion, and net income of $976 million.

But the in the meantime, the company’s biggest hurdle will be its burn rate: Tesla may reaching operating profitability by 2014, but it’s cash crunch will come in 2013, when “gross liquidity” falls to $146 million from what may be $362 million this year. Positive cash flow will be crucial then.

As for valuation, the discounted cash flow model used to derive the $70 target reflects a weighted average cost of capital of 12%, and 60% to 70% of the value is in the terminal value, Jonas notes.

But given losses over the next few years, Jonas adds the caveat, “On any valuation metric one would use to value a traditional auto company over a typical earnings horizon of 2 to 3 years, Tesla will appear anything but cheap.”

Article courtesy of Tech Trader Daily

Radio Shack Up 6% On Rumor Of iPad 2 Sales

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Shares of Radio Shack (RSH) are up 84 cents, or 6%, at $15.14 after a report by AppleInsider’s Neil Hughes that he’s confirmed that the chain will start selling Apple’s (AAPL) iPad 2 tomorrow, citing anonymous sources.

The deal was finalized in the last few days, Hughes writes.

Apple shares are up 88 cents at $352.42. The stock has seen some pressure this afternoon following another briefing by AppleInsider, a report that there was an evacuation of an Apple facility in Sacramento, California that is used for returns, refurbished products, and other functions, following a bomb threat.

Update: Dow Jones’s Steven Russolillo reports Radio Shack confirmed it will start selling the iPad 2 tomorrow.

Article courtesy of Tech Trader Daily