AIG is in the news again: The US government wants to sell the interest it acquired in this giant insurance company upon bailing it out in the horrid autumn of 2008. After a period of braggadocio about how the spin-off was going to net enough money to make the taxpayers whole -- in fact, to make us taxed folk net gainers on the deal -- everybody involved seems to have realized that this is not the case after all.
Here is what Forbes has to say. And here is a few words from Reuters.
'Lest we forget, AIG came to a bad end in its previous incarnation largely due to the Financial Products unit (AIG FP), which was taking the long side of mortgage derivatives long after more savvy folkk had grown wary of it. Here are a few words from Roddy Boyd's recent book on the subject, FATAL RISK.
This represent's Greenberg's thinking on the subject of FP as of the autumn of 2001:
"Nor is it a stretch to imagine Greenberg thinking that as long as he had a smart, hardworking sort in that slot who respected him and the AIG legacy well, that was all you needed. There developed a widespread perception that managing FP was very similar to being in charge of an elite military unit: with a clearly defined mission and parameters, close supervision from an experienced member of the ranks and enough operating latitude, positive results were nearly assured. There had, after all, been almost a decade since any material FP screw up."
Showing posts with label Roddy Boyd. Show all posts
Showing posts with label Roddy Boyd. Show all posts
12 May 2011
04 June 2010
Boyd's New Blog
Roddy Boyd has begun a new blog The Financial Investigator. I expect he will have much of interest to say there.
For the uninitiated, Boyd has written on business/financial issues for both the NEW YORK POST and FORTUNE.
On p. 169 of Sauer's recent book on short selling and the SEC, Boyd's name is misprinted. He becomes "Roddy Body." Misprint notwithstanding, I suggest people read the passage. Boyd made the phone call no one else would make, and added a piece to the puzzle of ongoing debate about short-and-distort tactics, etc.
Boyd's newest venture has already attracted a fair amount of attention. For example, here is the write up in Big Money.
Here it is in Business Insider.
And here is the 'talking' from Talking Biz News.
His first entry concerns SpongeTech Delivery Systems, who deserve to be remembered for a sexy-girl- washing-car video. God knows the world needs more of those. But, alas, they will probably be remembered for false SEC filings, fraudulent press releases, and such.
Good job, Mr. Boyd, and keep these stories coming.
For the uninitiated, Boyd has written on business/financial issues for both the NEW YORK POST and FORTUNE.
On p. 169 of Sauer's recent book on short selling and the SEC, Boyd's name is misprinted. He becomes "Roddy Body." Misprint notwithstanding, I suggest people read the passage. Boyd made the phone call no one else would make, and added a piece to the puzzle of ongoing debate about short-and-distort tactics, etc.
Boyd's newest venture has already attracted a fair amount of attention. For example, here is the write up in Big Money.
Here it is in Business Insider.
And here is the 'talking' from Talking Biz News.
His first entry concerns SpongeTech Delivery Systems, who deserve to be remembered for a sexy-girl- washing-car video. God knows the world needs more of those. But, alas, they will probably be remembered for false SEC filings, fraudulent press releases, and such.
Good job, Mr. Boyd, and keep these stories coming.
23 January 2010
Boyd story and the fall-out
Roddy Boyd has a neat story about Overstock.com in The Big Money.
I'm rather late to the buzz about this piece, so I'll only make the observation that Boyd buried his lede. The story isn't really about Byrne's "nasty" streak, as the headline suggests. Nor does it use Overstock in any very helpful way as a microcosm of how and why the financial press fell down on the job of reporting the roots of our financial troubles before the big blow-up, despite the opening paragraph.
No ... what the story turns out to be about once it settles down is the fall-out from the Gradient/Rocker lawsuit. That lawsuit has been settled, and arguments over that settlement have occupied familiar positions.
Overstock: We were right, which is why they gave us money. We are vindicated!
Skeptics: They gave you money because you are a nuisance, trials are expensive, and they just wanted you to go away.
But Boyd's story tells us that the reason Overstock had for settling the lawsuit exceeded the money received. It may have settled because it was concerned about certain materials that would have come out had there been a trial. Did Boyd meet Mark Felt in a garage to get this stuff? I don't know. But ... Boyd does seem to be familiar with evidence that may well have accumulated during discovery proceedings.
One of the defendants in the lawsuit, Gradient, had issued a research note in May 2005 offering a detailed criticism of certain diamond/jewelry wheelings and dealings going on at the time. Gradient wondered whether the structuring of the deal was intended to allow the company to report top-line benefits without reporting losses.
But, Boyd now tells us, Gradient was over-analyzing. It wasn't accounting trickery. It was apparently a tax dodge, known within the company by the lovely name, "Operation Heist and Freeze."
Here, by the way, is Byrne's initial response to Boyd's questions. In response to a question about the avoidance of sales taxes, Byrne says he is giving the "same answer" as he had to the earlier questions (that the issue didn't require disclosure because it was immaterial): "plus tax is discussed in the due course of the
conduct of any business plus have you ever considered trying the fact-fact-logical-inference thing instead of the stuck-on-stupid-reporter thing?"
Notice the difference between Byrne's initial response, to which I've just linked you, and his later reconsidered response. With regard to the bit near the end that I just quoted, there is no difference. The difference you may want to notice, though, is at the start. Byrne decided to dial back the oral-sex-obsessed insult with which his initial riposte had begun. Good move, but on the internet, all is forever.
So even though the story doesn't turn out to be about Byrne's "nasty" streak especially, Byrne's responses surely reveal one.
I'm rather late to the buzz about this piece, so I'll only make the observation that Boyd buried his lede. The story isn't really about Byrne's "nasty" streak, as the headline suggests. Nor does it use Overstock in any very helpful way as a microcosm of how and why the financial press fell down on the job of reporting the roots of our financial troubles before the big blow-up, despite the opening paragraph.
No ... what the story turns out to be about once it settles down is the fall-out from the Gradient/Rocker lawsuit. That lawsuit has been settled, and arguments over that settlement have occupied familiar positions.
Overstock: We were right, which is why they gave us money. We are vindicated!
Skeptics: They gave you money because you are a nuisance, trials are expensive, and they just wanted you to go away.
But Boyd's story tells us that the reason Overstock had for settling the lawsuit exceeded the money received. It may have settled because it was concerned about certain materials that would have come out had there been a trial. Did Boyd meet Mark Felt in a garage to get this stuff? I don't know. But ... Boyd does seem to be familiar with evidence that may well have accumulated during discovery proceedings.
One of the defendants in the lawsuit, Gradient, had issued a research note in May 2005 offering a detailed criticism of certain diamond/jewelry wheelings and dealings going on at the time. Gradient wondered whether the structuring of the deal was intended to allow the company to report top-line benefits without reporting losses.
But, Boyd now tells us, Gradient was over-analyzing. It wasn't accounting trickery. It was apparently a tax dodge, known within the company by the lovely name, "Operation Heist and Freeze."
Here, by the way, is Byrne's initial response to Boyd's questions. In response to a question about the avoidance of sales taxes, Byrne says he is giving the "same answer" as he had to the earlier questions (that the issue didn't require disclosure because it was immaterial): "plus tax is discussed in the due course of the
conduct of any business plus have you ever considered trying the fact-fact-logical-inference thing instead of the stuck-on-stupid-reporter thing?"
Notice the difference between Byrne's initial response, to which I've just linked you, and his later reconsidered response. With regard to the bit near the end that I just quoted, there is no difference. The difference you may want to notice, though, is at the start. Byrne decided to dial back the oral-sex-obsessed insult with which his initial riposte had begun. Good move, but on the internet, all is forever.
So even though the story doesn't turn out to be about Byrne's "nasty" streak especially, Byrne's responses surely reveal one.
20 February 2009
Shorts were right about ArthroCare
Roddy Boyd wrote about AthroCare (a Texas-based supplier of surgical devices) in Fortune about a year ago.
AthroCare's pride and joy is its Coblation technology, which (I quote from its website here), "uses low-temperature radio frequency energy to gently and precisely dissolve rather than burn soft tissue."
Boyd conveyed, rather sympathetically, the complaints of the company bigwigs that they were under an unjustified short-seller's siege. The company "has done admirably" he said, "in nearly every area traditionally used to judge a company's performance."
So why, he wondered aloud, was its stock price going down? Perhaps because short sellers (who "by definition" he reminded his readers "have an interest in a stock's going down" -- do Fortune readers need to be told this?) were spreading misconceptions about its relationship with a particular billings services provider.
The billings company, DiscoCare, was in time acquired by AthroCare. That change in the design of the corporate flow-chart didn't bring an end to the questions. Boyd said artfully that the purchase "made the short sellers go nuts."
If the shorts are wrong about this, Boyd cautioned, then ArthroCare had as of a year ago "lost $700 million in capitalization for no good reason," and there is a "human cost" measured for example in the aggravation felt by the CEO's ill father, who surfs the internet and reads the "innuendos."
This seems to be one of a growing list of cases (Enron itself was one, so was the now-forgotten AremisSoft click here) in which a company starts off criticizing the short sellers for spreading vicious rumors and ends up admitting that, yes, there was some truth to them.
Michael Baker, the CEO who complained to Boyd about the harm the "innuendo" was doing to his sick father, has now vacated that office. The company said Wednesday that it is under formal investigation by the SEC and is the subject of investigations as well by two US Attorney's offices.
The release telling us this also says: "The Company has sent a notice of claim pursuant to the Escrow Agreement established in connection with the Company's acquisition of DiscoCare to the sole selling stockholder of DiscoCare alleging breaches of certain representations and warranties in the stock purchase agreement. The notice of claim is intended to have the effect of preventing the release of $1.5 million in escrow and can lead to further proceedings against the sole selling stockholder. The Company expects the notice of claim to be disputed in arbitration proceedings."
So: "we bought a pig in a poke when we bought DiscoCare" is now the official company position -- it is no longer a possibility stigmatized as "innuendo"!
I am reminded of comments by Jonathan R. Macey, in his recent book Corporate Governance, in which he compares short selling with corporate "whistle blowing" of the Sherron Watkins sort. "Short selling is likely to be a far more credible signal [of real trouble at a company] than whistle-blowing, because the talk involved in whistle-blowing is cheap, while the trading involved in short selling is costly to the short seller whose information about the underlying company is erroneous."
AthroCare's pride and joy is its Coblation technology, which (I quote from its website here), "uses low-temperature radio frequency energy to gently and precisely dissolve rather than burn soft tissue."
Boyd conveyed, rather sympathetically, the complaints of the company bigwigs that they were under an unjustified short-seller's siege. The company "has done admirably" he said, "in nearly every area traditionally used to judge a company's performance."
So why, he wondered aloud, was its stock price going down? Perhaps because short sellers (who "by definition" he reminded his readers "have an interest in a stock's going down" -- do Fortune readers need to be told this?) were spreading misconceptions about its relationship with a particular billings services provider.
The billings company, DiscoCare, was in time acquired by AthroCare. That change in the design of the corporate flow-chart didn't bring an end to the questions. Boyd said artfully that the purchase "made the short sellers go nuts."
If the shorts are wrong about this, Boyd cautioned, then ArthroCare had as of a year ago "lost $700 million in capitalization for no good reason," and there is a "human cost" measured for example in the aggravation felt by the CEO's ill father, who surfs the internet and reads the "innuendos."
This seems to be one of a growing list of cases (Enron itself was one, so was the now-forgotten AremisSoft click here) in which a company starts off criticizing the short sellers for spreading vicious rumors and ends up admitting that, yes, there was some truth to them.
Michael Baker, the CEO who complained to Boyd about the harm the "innuendo" was doing to his sick father, has now vacated that office. The company said Wednesday that it is under formal investigation by the SEC and is the subject of investigations as well by two US Attorney's offices.
The release telling us this also says: "The Company has sent a notice of claim pursuant to the Escrow Agreement established in connection with the Company's acquisition of DiscoCare to the sole selling stockholder of DiscoCare alleging breaches of certain representations and warranties in the stock purchase agreement. The notice of claim is intended to have the effect of preventing the release of $1.5 million in escrow and can lead to further proceedings against the sole selling stockholder. The Company expects the notice of claim to be disputed in arbitration proceedings."
So: "we bought a pig in a poke when we bought DiscoCare" is now the official company position -- it is no longer a possibility stigmatized as "innuendo"!
I am reminded of comments by Jonathan R. Macey, in his recent book Corporate Governance, in which he compares short selling with corporate "whistle blowing" of the Sherron Watkins sort. "Short selling is likely to be a far more credible signal [of real trouble at a company] than whistle-blowing, because the talk involved in whistle-blowing is cheap, while the trading involved in short selling is costly to the short seller whose information about the underlying company is erroneous."
Subscribe to:
Posts (Atom)
