The CIT Group, which is the middle-market lender that has struggled under the weight of the financial crisis, has unveiled a management-sponsored restructuring plan and has strongly urged investors to get behind the plan. In fact, CIT has told its investors that passing the plan is the only way to avoid losses of 63 to 94 cents for every $1 invested.
According to its restructuring presentation, CIT will have to resort to bankruptcy unless this specific plan is not passed, a situation that would involve great losses for the CIT investor and sacrifice control of the changes. The plan would involve …read more

After two straight sessions closing above 10,000, the Dow Jones industrial average fell 67 points, or 0.7 percent, to close under the level that has long been a psychological milestone for investors. The first part of the week had been very positive for investors, but General Electric and Bank of America’s disappointing quarterly results were enough to keep investors at bay.
The S&P 500 index fell 9 points, or 0.8 percent, while the Nasdaq composite fell 16 points, or 0.8 percent, signaling a disappointing end to a promising week, one that saw stocks rise to year-high levels, and then some.
Analysts say …read more

At a time when a withering recession and the shadow of the financial meltdown weigh on America’s economy, it seems almost implausible that the initial public offering market is doing exceedingly well. However, a report released today by PricewaterhouseCooper’s Transaction Services showed that the third quarter’s of 2009’s 20 offerings raised a total of $5.8 billion, compared to the first quarter’s five offerings raising $967 million.
The report shows that the IPO market has gone from what many analysts call rock bottom in the first quarter of the year to the IPO market’s strongest showing since early 2008. Throughout 2009, the IPO …read more

Delphi, the automotive parts maker that was spun off from General Motors, has finally emerged from its stay in bankruptcy after a protracted four-year stint with bankruptcy protection as the company got its financials back in order. According to the company, the final push to get Delphi out of bankruptcy involved the sale of assets to lenders and to General Motors, its parent company.
The new company, post-bankruptcy, will be called Delphi Holdings, and its newfound stability comes as a great relief to General Motors. GM has spent plenty of money to make sure that Delphi’s reorganization went through smoothly, placing …read more

Despite the fact that it exploded on to the scene and has become one of the most popular websites in the world, Twitter has still not managed to figure out its business model. A new deal that could get Twitter as much as $100 million, though, may give the website the time it needs to become profitable.
The funding would come from an investor group that includes mutual-fund giant T. Rowe Price Group Inc. and private-equity firm Insight Venture Partners, both of which have not yet invested any money into Twitter. Existing Twitter investors are also expected to participate in this …read more

There have been many reports indicating various signs of economic recovery that have turned out to be less than definitive, but it seems that everyone has faith in the economy as of late. The Federal Reserve is the latest entity to express its optimism for the economy, releasing a positive assessment of the situation that has rallied investor confidence.
In its statement, the Fed also revealed that it would slow the purchase of mortgage debt in order to keep the program alive until next March, a sign that the sense of urgency on the part of the Fed to take action …read more

According to New York Democratic Senator Charles Schumer, many of the more prominent Wall Street firms have a significant advantage over smaller firms because of their ability to access certain information more quickly. In order to alleviate this discrepancy, Schumer has called for federal regulators to keep a more vigilant eye on these firms.
 
In a letter addressed to the Securities Exchange Commission’s chairman, Mary Schapiro, Schumer encouraged the SEC to take action regarding this practice. Schumer also warned the SEC that if it would not be able to do anything to remove or mitigate the advantage, he would be forced …read more

Most people probably would not have a clue when it comes to assigning a monetary value to the giant social networking website Facebook.com. However, a Russian investment firm has offered to buy $100 million worth of Facebook shares at $14.77 per share, putting the value of the company at $6.5 billion minimum.
 
The same investment group, Digital Sky Technologies, bought $200 million worth of preferred Facebook shares back in May, which would mean that Facebook is worth $10 billion. This means that one could estimate Facebook’s open market value to be anywhere from $6.5 billion to $10 billion because of the …read more

It is the kind of news that investors all around the world dread: Allen Stanford, founder and chairman of the Stanford Group, an entity that took in billions of dollars worth of private investments, has been charged with fraud. His investors, including some outside of the United States, have started referring to him as a scam artist on the level of Bernie Madoff.
 
Stanford’s business had been in sharp decline since February, when regulators started accusing him of perpetrating massive fraud, but now that he has been indicted on fraud, conspiracy, and obstruction charges, Stanford faces significant legal punishment. Those who …read more

New book Microfinance for Bankers and Investors, is being touted as a road map for those ready to embrace the challenge of providing financial services to emerging markets. These so-called bottom of the pyramid (BOP) consumers are the four billion people in the world who live on less than $3,000 per year.
Written by Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION International and one of the world’s foremost experts on microfinance, Microfinance for Bankers and Investors explores in-depth the challenges of profitably delivering credit, savings, insurance, and remittance services tailored to serve the BOP.
The Money’s in …read more