Filed under: Major movement, Analyst reports, Forecasts, Market matters, Citigroup Inc. (C), Boeing Co (BA), Goldman Sachs Group (GS), Lockheed Martin (LMT), Politics, Headline news

It was only last week that Goldman Sachs (NYSE: GS) caused havoc in the stock market (or at least lead the charge) downgrading Citigroup Inc.(NYSE: C), and General Motors (NYSE: GM) among others, but now they have started to express concern that some of the defense sector stocks might be vulnerable to the next president’s ax.

Bloomberg is reporting that last month Goldman Sachs was issuing warnings to their clients about the fact that Barack Obama and John McCain both might seek to reduce or end large ticket defense purchases such as Lockheed Martin (NYSE: LMT) F-22 fighter and the Army’s $159 billion Future Combat Systems, a modernization plan jointly managed by Boeing Co (NYSE: BA) and SAIC Inc.

It was only a few weeks ago I posted Chasing Value: General Dynamics & Raytheon: The defense does not rest and things continued to look bright until a few days later, perhaps after the GS behind the scenes warning started to have an impact on the market that the sector took a mysterious swoon — now I know why.

If Goldman Sachs, one of the few investment houses with any credibility left, makes a move everyone else seems to want to get out of the way.

I’ve viewed the defense sector favorably this year and will not abandon ship because GS is getting cold feet. They have been rather negative on everything lately and I do not think the (stock) world is coming to an end.

The Bloomberg article notes that while some programs will be cut others will be added. It is all a guessing game as either presidential candidate will want to review the entirety of defense expenditures in a new administration.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of GD.

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Filed under: Raising money, Venture capital industry, Private equity industry, Public or private?

If you have been following the substitute energy saga alongside ridiculous oil prices going from rising to high to astronomical, you’ve run across the name Tesla Motors. Tesla is a venture capital and privately funded auto maker that produces a high performance electric powered sports vehicle.

The Tesla Roadster and soon to be sedan are now both now going to be manufactured in California, or so a report in the San Francisco Chronicle and elsewhere are noting. Governor Schwarzenegger included some incentives that have kept the electric auto maker from moving manufacturing to New Mexico (besides the Governator ordering one unit for himself). But it appears that the Say of California is giving it more than mere tax incentives.

It appears that this is going to get equipment leases from the say, as well as additional allows. What is interesting here is that this gets the company even further on the map. There have been recent reports that Tesla was in the market for another big financing. Whether or not that comes about now is not certain. Other reports show that the company may even supply battery units to Daimler or other automobile manufacturers.

What is becoming fairly certain is that Wall Street expects to see Tesla file for an initial public offering. As capital intensive as these businesses are, the company needs to have a steady automobile (no pun intended) to be able to raise the capital it needs.

Think of the good news…. At least one US auto manufacturer will be considered cool.

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Filed under: Ripoffs and Scams

With scrap metal prices going the same direction as the price of gas at the pump it’s no wonder that thefts of metal have been trending up as well. Recently a disturbing trend has shown up in cities across the U.S. where manhole covers are being stolen and sold for scrap! This rash of heavy metal thefts has led some cities to begin welding the covers in place, which has unfortunately prevented the Teenage Mutant Ninja Turtles from getting their fill of delicious pizza!

On a more serious note, the theft of manhole covers isn’t just only an pricey pain for cities to deal with — replacement costs range from $200 to $500 — but also a danger for pedestrians. In Philadelphia, where 600 covers went missing last year, two kids have already fallen into the uncovered manholes. Thankfully they only suffered minor injuries. The missing covers have also done damage to many cars whose owners are asking the city to cover the damages.

With all of the problems these thefts create, and the fact that it takes quite a bit of work to replace a 200-pound manhole cover, you’d be surprised to learn that the manhole bandits only receive $10 to $15 per cover. Some of the blame for these rash of thefts lays with unscrupulous scrap metal buyers who don’t comprehend that manhole covers emblazoned with “Property of NYC” mean exactly that!

Even if we take into account the diminished ethical capacities of someone who would steal a manhole cover weighing more than most men, the return on investment is horrible! Assuming the thieves drive to the manhole and then again to a scrap metal location, they’ll easily use a gallon of gas, leaving a net profit of $6 to $11. Unless the thief is a body builder the final take will need to be split in half which leaves barely enough to order off the value menu at Taco Bell; let alone enough to buy a significant amount of drugs. With meth’s prices starting at $20 for a 1/4 of gram, a team would need to steal four manholes to make a buy, and causing between $800 and $2000 in labor and materials for cities, not to mention any children or vehicles damaged due to the theft.

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Filed under: Entrepreneurship, Ripoffs and Scams, Shopping, Technology

Like my fellow writer, Gary Sattler, I’m a pretty huge fan of eBay. Over the years, I’ve watched the site grow. I’ve used it to raise money, get rid of junk, purchase presents for my wife, and generally just drool. In the ideal of times, eBay has represented a sort of capitalist utopia, where buyers and sellers work together to find the best price for an item, exchange stuff, and generally keep the US Postal Service in business.

Of course, like Gary, I’ve also watched as my capitalist utopia has grown to represent the dangers of any unregulated market. Predatory sellers offering substandard crap to unwitting sellers, predatory sellers withholding money or threatening ratings, counterfeit items, incomplete descriptions, and a devil’s roll-call of other tricks that undermine trade and pit users against each other have all conspired to transform my eBay from the best store in the world to a substandard back alley where getting cheated is not just a possibility but a probability.

I’ve had to become very cautious; nowadays, before I put down a bid, I read every description like it’s a legal document, searching for the loophole that my opponent — excuse me, seller — is going to use to cheat me. In the process, eBaying has lost a lot of its fun.France’s courts have decided to fight back. Earlier this day, a French court ruled that eBay must pay approximately $63 million to French companies whose products have been victimized by the on the internet marketer. The plaintiff, LVMH, which represents several French luxury brands, argued that its business has been hurt by eBay. In addition to allowing counterfeit duplicates of Vuitton and Dior bags to appear on the site, eBay was attacked for permitting actual bottles of Dior, Kenzo, Givenchy and Guerlain perfume to be sold, as these are only supposed to be marketed under the direct supervision of a specialist dealer.

Personally, I don’t know where I stand on this. On the one hand, I’ve been burned a couple of times by dishonest dealers on eBay. On the other hand, my wife is a perfume junkie, and I appreciate the fact that I have the ability to pick up her favorite fragrances for a fraction of the retail price. While there’s no question that eBay needs to take a stronger hand in policing its dealers, I’m not sure I want to be left to the not-so-tender mercies of “specialist dealers” the next time I decide to purchase my wife a bottle of Cannabis Rose!

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. He’s spent years looking for the next eBay. Still looking…

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Filed under: Ripoffs and Scams, Transportation, Travel

Grant Martin reported on our sister blog Gadling that Delta is going to levy a $25 fuel surcharge on domestic tickets purchased with frequent flyer miles. International flights will ring up a $50 charge.

Does this make sense? The airline convinces me to sign up for its frequent flyer program hoping to gain my loyalty by giving me swag for each flight. Now I’m sold, and fly Delta for a few years, the very epitome of a loyal customer. The marketing tactic has succeeded brilliantly. Each company lusts for loyal customers.

Then I go to redeem those frequent flyer miles, and I find that most of the flights I want are booked (but I can have all the free magazine subscriptions I want). When I finally do manage to use my miles to book a flight, Delta hits me up for chump change at the gate.

Now I’m no longer a loyal customer; I’m a pissed ex-customer. How many dollars were spent on cultivating me as a customer? Thousands. How much did it cost the to destroy all of that marketing? $25. Is it any wonder the airlines are a mess?

More travel stories

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Filed under: Rumors, Management, Rants and raves, Microsoft (MSFT), Yahoo! (YHOO), Headline news

It should be no surprise to anyone that despite all the ranting and raving to the contrary Mr. Carl Icahn, billionaire investor, shareholder white knight and corporate raider is heating up things in the Yahoo! Inc (NASDAQ: YHOO) boardroom.

It has been reported that he bought a sizable chunk of the company in the neighborhood of $25 per share, hoping to make another fortune pushing Yahoo back to the negotiating table with Microsoft Corp. (NASDAQ: MSFT).

This morning AP reported that Jerry Yang, CEO and company are lobbying major shareholders to rally support for their position that Yahoo! should get a higher offer or stand alone as an independent company. It seems to me that they are standing on lose ground given that many huge and small shareholders alike have already spoken, and they would have taken the deal.

The market has spoken as well, with Yahoo stock losing over a third of it’s value recently and nearing $20 per share this morning Icahn is losing 20% of his investment as things look this day. This is turning into the battle of the billionaires.

One small problem the billionaire boys in Redmond are not that hot on the deal any more because, as Gates Leaves Microsoft, he Calls Yahoo Deal Unlikely.

I think this whole saga might make a adorable Neil Simon play if they would let him into the meetings to take some notes.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I don’t own shares in the stocks mentioned in this story.

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Filed under: Food, Ripoffs and Scams

I’m in New York City this week and one of the exciting things about that is that I have the ability to try a wide variety of foods that Cape Cod grocery stores don’t have. Today I purchased a package of “Glenny’s Low-Fat Soy Crisps” and, while they were quite good and relatively healthy for a packaged snack food, the consumer advocate in me has some complaints about the advertising on the package at right. It reads “10 Grams pure Soy Protein” and “Only 65 Calories per Serving.”

This is a classic example of advertising spin: it isn’t false and it isn’t even misleading necessarily — but it’s a case of the company putting its best nutritional foot forward, and health-conscious consumers will need to be vigilant.

A look at the nutritional fact shows that there are indeed 65 calories per serving, with 2 servings per bag for a total of 130 calories. Each serving contains 5 grams of protein and the entire bag contains 10.

My beef with the marketing here’s that they present the one you want a lot of — protein — on a per bag basis and then they present the calorie count on a per serving basis. 10 grams of protein appears right above 65 calories, but you’d actually have to eat 130 calories to get the 10 grams of protein.

Moral of story: pay no attention to “low -fat”, “high protein”, “light,” “low calorie”, etc labels on the front. If you want to know what you’re eating, flip the product over, put on your glasses, and read the nutritional label: “just the facts ma’am.”

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