Whenever you find yourself on the side of the majority, it is time to pause and reflect.
― Mark Twain
- Carlos Slim to Dismantle Mexican Empire (Bloomberg): Regulatory changes in Mexico are forcing a restructuring of American Movil, the telecommunications company controlled by Carlos Slim. With American Movil currently having 70 percent market share in mobile phones, and 80 percent in landlines in Mexico, complying with new guidance requiring the company to get below 50 percent market share will require substantial divestitures, likely inserting considerable dynamism into the Mexican telecom market.
- How To Blow $9 Billion: The Fallen Stroh Family (Forbes): Bet the company acquisitions, too much debt, and a failure to adjust to shifting market dynamics doomed Stroh’s to a value-destruction spiral from which it never recovered.
- American Apparel Deal Gives Retailer a Lifeline (New York Times): Hedge fund Standard General and American Apparel recently came to terms, in an agreement that extends a lifeline to the troubled company. Standard General agreed to both 1) provide a $25 million infusion, which will allow American Apparel to retire $10 million in debt from Lion Capital and 2) desist from acquiring any additional shares (including control over ousted CEO Dov Charney’s shares, the firm has voting authority over 44% of American Apparel’s shares).
- Kior Considers Selling Itself After Missing Loan Payment (Bloomberg): Despite backing from venture capitalist Vinod Khosla and Microsoft co-founder Bill Gates, biofuel producer Kior, long struggling, is investigating an expedited sale process after failing to make a $1.9 million interest payment..
- The Not-So-Sunny Side of Pension Obligation Bonds (Governing): Too many governments have tried to paper over pension funding difficulties with pension obligation bonds, only to later discover the downsides of that approach.