December 2006
15 posts
1 tag
Employee Stock Options: Powerful Tools When Used...
Two recent articles prompted me to write a short note concerning employee stock option plans, specifically addressing: (1) the appropriate use of employee stock options; (2) certain misconceptions that have arisen due to the recent options backdating scandal and other historical abuses of stock option plans, and; (3) the SEC’s recent adoption of a rule governing how option costs should be...
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I Guess There is Always a First Time...
…for doing something seriously goofy. Not that this is my first time - only that there is a first time for everyone. Some of you may be aware of this game of cyber tag that is going on (you know, the one where if you are tagged you need to post five things about yourself that most people don’t know and then torment five other people by tagging them). I was tagged by Kris Tuttle, who...
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Hedge Fund Convergence: Strategy versus Structure
Strategy convergence across asset management firms in general and hedge funds in particular is one of the most important and defining trends of the past year. This was most recently highlighted by DE Shaw’s increased investment in building a true private equity operation within the $23 billion hedge fund behemoth. And it is, without question, a trend that will continue for the forseeable...
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Yet Another Misguided Attack on the Blogosphere
I left town for a few days to hang with family, committed to the fact that I wouldn’t blog, but a little piece I read in the Wall Street Journal made my hiatus a brief one. Joseph Rago, an Assistant Editorial Features Editor at the WSJ, penned an article titled “The Blog Mob - Written by Fools to be Read by Imbiciles.” Needless to say, I don’t think Joe and I are going...
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Wall Street Compensation: A Flexible Model for a...
Overview Well, it’s that time of year again. For the bitching and moaning, both within and without Wall Street firms (but mostly without this year given the magnitude of Wall Street bonus pools, with the possible exception of some unhappy folks at firms like Credit Suisse, JP Morgan and Morgan Stanley). And Andrew Ross Sorkin’s piece titled “Goldman’s Season to Reward and...
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The SEC's Silver Bullet - the eInformation...
The eInformation Initiative is Big - awesome After distilling the news from yesterday’s SEC meeting, the item that I feel holds the greatest promise for positively impacting shareholder value is what I refer to as the SEC eInformation Initiative. This incorporates issues raised both yesterday and in prior months, such as Jonathan Schwartz’s (the CEO of Sun Microsystems) request to the...
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Google and Citadel: Innovation at Work
Overview Well, Google finally did something many of us in the derivatives business had talked about for years - create a vehicle for transferring and monetizing employee stock options prior to exercise. Why? To capture the time value inherent in an option prior to maturity, which is lost once the option is exercised. And this is something that is easy to do if you are a dealer (by delta hedging,...
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Microsoft vs. Apple: Is Vista the Answer in the...
Overview I am back to share more thoughts about Microsoft. And Vista. And Apple. I have used my company’s pretty neat tools over the past few days to do some research, collect some data and develop a view about what is up with Microsoft. This is going to be a pretty long post so I understand if you want to get off here. But there is so much to talk about that requires both historical...
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Microsoft: Dazed and Confused
Overview Microsoft. This was a name that inspired fear and loathing among those in both technology and corporate purchasing circles, certainly until the end of the 1990s. Given their dominance in operating systems and control of the desktop, how could they be stopped? A rapidly rising stock price, a market cap approaching $600 billion, the ability to buy top talent from any company, any place,...
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Update on Sony, EA and Nintendo - The Internet Got...
Roger and Video Game Shopping I thought you’d be interested to know that I did a little holiday shopping last night. I went into the Nintendo Store near Rockefeller Center to check out the wares. Yes, I am finally capitulating to the video game “thing,” at least on some level, for my 9-year old son. I was on a mission to buy a shiny white DS Lite with some cool games he’d...
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A Tougher Gate at DE Shaw: Investor Protection vs....
I caught a story in Marketwatch concerning a material change in the gating provisions around one of DE Shaw’s major funds, the Oculus global macro fund. Although not in possession of all the facts, I find this whole story-line very interesting and worthy of some discussion and analysis. The Marketwatch story is provided here: DE Shaw’s multi-billion dollar global macro Oculus fund is...
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Domain Expertise: The Key to Next Generation...
There has been so much talk about Web 2.0, Web 3.0, the Semantic Web, blah, blah, blah. I feel like I am back in my days as a derivatives pro - where the use of fancy words and domain-specific jargon created an aura of sophistication and complexity that made us seem really smart to our clients. This was, of course, a bunch of garbage. Can derivatives be complex? Sure. So can genetics, molecular...
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Citadel's Bond Financing: We're Going Public, Baby
Citadel’s recent announcement that it plans to issue up to $2 billion in bonds has caused quite a ruckus among those in the hedge fund-watcher community. The general theme: securing long-term leverage that is fundamentally more stable than bank-based financing. Jenny Anderson over at the New York Times wrote a nice piece on this yesterday. Citadel Finance, a unit of the Citadel Investment...
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Baidu - Icarus in the Making?
Note: this post was carried today on Wallstrip Overview Baidu is an awesome company. Their success in fending off, no, actually trouncing, the likes of Google and Yahoo! at home is something to behold. They have been at this six years and kicking some serious butt in the process. However, now they are getting aspirational and wanting to compete in far-flung markets against both global and...
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Buybacks Again? This Time the NYT Does It Right
As my readers know, I’ve been pretty frustrated by much of what has been written in mainstream media concerning stock buybacks. And this frustration has clearly been reflected in a few of my recent posts (calling out both the NYT and the WSJ). The root of my frustration has been the combination of throw-away generalizations (“buying back shares increases EPS”), inadequate...