Want to be the first to know what companies will be the next household name? BusinessWeek has started a section on its webpage that will keep track of promising start-ups that might see the limelight. Flip through the slide show for a look at all the profiles. You can also make a suggestion of a new company worth profiling and send it in to BusinessWeek.
Welcome to America’s Most Promising Startups, an ongoing series profiling new companies from across the country that embody the creativity and resiliency common among today’s entrepreneurs. Based on suggestions from our readers and staffers, we’ll be adding more profiles on a regular basis, so check back often. Our goal is to showcase promising companies before they become household names.
Russia’s default in 1997 and the stock market devalued rapidly. Browder (founder of Hermitage investment fund) lost, by his estimate, 90% of his money during this time that he had invested in Russia. More onerous, was the wholesale “stealing” by the Russian oligarchs.
Rather than put up with this, Browder met with company employees to hear first-hand about the scams that were going on within the companies. Watch the story yourself at the bottom of this post (7min). For a complete coverage of Browder’s speech at Standford GSB click here.
Browder started with $25 million in 1996, achieving almost tenfold gains in 18 months and then raised $1billion from new investors. At one stage the pot totalled $4 billion and Hermitage became Russia’s biggest foreign portfolio investor.
However, Mr Browder offended someone with great power – he insists that he still does not know who – and in November 2005 was refused re-entry into Russia. Since then Browder is one of the biggest enemies of the Russian state. [Source 1] [Source 2].
American finance has a new, if reluctant, kingpin: the government. In a dramatic move on the evening of Tuesday September 16th the Federal Reserve agreed to provide American International Group with a loan of $85 billion (€59 billion) to help it stave off bankruptcy.
In return, either the Fed or Treasury will take effective control of the company, which until recently was an icon of private-sector capitalism. After the historic events of the past fortnight, who would bet that AIG will be the last lumbering giant to need resuscitation? Source.
On another note. Gold prices exploded Wednesday — posting the biggest one-day gain ever in dollar terms ($90.40, or 11.6 percent, to $870.90) — as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying. Read more.
Once the gold standard in the insurance industry, AIG is the latest victim of the meltdown in the credit markets. The insurance business is all about risk—understanding it, minimizing it, pricing to compensate for it. But American International Group (AIG), the biggest insurance company in the world, seems to have had very little concept of the risk it held in its own businesses. If AIG goes, it is hard to think what else would be considered as too big to fail.
Barry Ritholtz, a prominent financial pundit, writes with tongue not entirely in cheek that the first lesson from the government’s bail-out of Bear Stearns in March was to “Go Big”. “Don’t just risk your company, risk the entire world of finance. Modest incompetence is insufficient—if you merely destroy your own company, you won’t get rescued. You have to threaten to bring down the entire global financial system.”
Executives at Lehman Brothers are racing to meet a deadline of Sunday night to find a new owner for the troubled bank, the BBC has learned. More in-depth coverage can be found at Financial Times and BusinessWeek.
In an attempt to revamp its organisational and corresponding stock performance, General Electric will reorganise its operations by folding its six business segments into four.
The new GE units now comprise technology infrastructure, energy infrastructure, capital and NBC Universal. The move continues a trend over the years of consolidating the sprawling company’s multiple divisions.
“We have been upgrading our portfolio of businesses and simplifying our organizations for market focus, efficiency and execution,” Immelt said. “We have higher-growth, higher-margin businesses and organizationally have simplified the company from 11 business segments in 2001 to four segments today.”
The pressure to lift the share price is building. But CEO Jeff Immelt’s options are limited. After a historic first-quarter fumble (earnings miss of 7Cents below expectations) GE met targets for Q2 FY2009. But the market didn’t reward GE. The battered stock price rose just 2Cents on the day’s news, to US$27,66. Since the beginning of the year it’s down 25%, compared with a 15% drop in the S&P 500-stock index.
Now, GE’s CEO Immelt is fighting to revive faith in the sprawling US$173 billion conglomerate, even as forces are working against him. The credit crisis and GE’s April 11 earnings miss have put him under tougher scrutiny than at any time in his seven-year tenure as CEO. Investors are questioning the size and complexity of the company, and want him to move faster to shed assets.
Immelt is acutely aware of the pressure, even as he continues to build GE for the long term. He has overhauled the business portfolio, buying US$88 billion of assets in high-tech growth areas like alternative energy and bioscience while dumping more than US$55 billion of less attractive plays such as GE Plastics. With respect to the need for a better diversified income ratio. Immelt says “asset disposals and the boom in infrastructure should bring the ratio back to about 60% industrial and 40% financial by 2010″ (now half the net).
Immelt says he doesn’t plan to change his strategy—other than raising his cost—cutting targets by $1 billion to $3 billion for this year. While he may not like the economic climate, he’s confident that the shares will ultimately reward solid execution. In the meantime, he’s doing what he can to help GE thrive. “Everybody would like to see the stock price higher,” he says, “me at the front of the list.
Today, (February 1st) Microsoft Corporation, the world’s biggest software maker, made an unsolicited $44.6 billion offer for Yahoo! Inc. to challenge Google Inc.’s dominance in Internet search services and advertising. The proposed deal, which would transform the software and internet-services industries, values Yahoo! at $31 a share, a 62% premium over the closing price on Thursday. What will the outcome be?
And in a class all by itself, the US$1 trillion (1,000,000,000,000) club.
On Monday, the 4 billion A-share offering, priced at 16.7 yuan per share, finished its first day of trading on the Shanghai Stock Exchange at 43.96 yuan, rising as high as 48 yuan intraday. At US$1.005 trillion, PetroChina’s market cap is more than twice that of its US peer, Exxon Mobil (USD $486 billion), even though Exxon Mobil generated four times as much revenue last year and trades at only a quarter of PetroChina’s price to earning ratio, 13 to PetroChina’s 55.
But the craziness doesn’t end there. The lofty market cap comes with an asterisk: US$1 trillion only if you go by PetroChina’s local valuation. Shares traded overseas (Hong Kong and New York) values the company at roughly US$400 billion. One HK share (H-share) confers equity holders the same amount of ownership as one A-share, and one share of ADR traded on the NYSE grants 100 times as much ownership.
While PetroChina’s A share closed up today at 43.96 yuan, its H-share finished down 8.2 percent at HKD $18, or 17.65 yuan (1 yuan=1.02 HKD). The gaping difference is a function of many factors: Beijing’s restriction on capital flow, lack of investment choices in China, and of course, out-of-control greed coupled with widespread ignorance on the part of Chinese retail investors.
In a related story, billionaire investor Warren Buffet sold his entire PetroChina stake several months ago, calling the price action in China “carried away.”
America is the world’ s biggest market for cars and General Motors (GM) is the world’s biggest car manufacturer. In a few years, Toyota’s relentless growth is likely to render this statement only half true.
After several recent pieces of bad news and a share price languishing at a ten-year low, GM has revealed how it intends to keep itself at the top, at least for the moment. On Monday April 4th, Rick Wagoner, the firm’s chairman and chief executive, said that he would assume direct responsibility for GM’s North American operations in an attempt to reverse the company’s decline. But it is unlikely that GM and Detroit’s two other car making giants, Ford and Chrysler (the Detroit-based arm of DaimlerChrysler), will be able to keep Toyota and the rest of Japan’s high-revving carmakers at bay for long.
Is there anything US car suppliers haven’t tried to counteract the enormous purchasing power of the handful of car manufacturer that make up their customer base? As the suppliers’s profit margins have been squeezed again and again, they have responded with an array of strategic initiatives, including diversifying their customer base, going global, positioning themselves further upstream in the value chain, and actively helping to design components in hopes of capturing more value than they could by simply bending metal. In the 1990s, the industry also went through an M&A wave that many hoped would deliver the heft needed to push back against the car manufacturers.
Currently, facts speak for themselves, dwindling market share in the face of fierce competition from Japan has forced General Motors to shake up its management. Ford faces similar problems. DaimlerChrysler’s American arm is taking advantage of their misfortune but may be held back by problems at the group’s European operations. Detroit has bounced back before. Can it do so again?
The winning car suppliers of the future won’t try to fight size with size to gain an advantage against their big customers’s purchasing power. Only a restructuring that focuses on excellent processes as well as excellent products will provide the precision-targeted leverage suppliers need to fight back effectively and to preserve the long-term health of their industry.
Want to be the first to know what companies will be the next household name? BusinessWeek has started a section on its webpage that will keep track of promising start-ups that might see the limelight. Flip through the slide show for a look at all the profiles. You can also make a suggestion of a new company worth profiling and send it in to BusinessWeek. 
Russia’s default in 1997 and the stock market devalued rapidly. Browder (founder of Hermitage investment fund) lost, by his estimate, 90% of his money during this time that he had invested in Russia. More onerous, was the wholesale “stealing” by the Russian oligarchs. 
And in a class all by itself, the US$1 trillion (1,000,000,000,000) club.
America is the world’ s biggest market for cars and 
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