More Tech Firms Stung By Weak Financial Sector

from the ouch dept

Because a company can only be as strong as its customers, there's no way for tech companies to be completely insulated from broader economic events. Companies with a lot of exposure on Wall St. are going to be particularly susceptible to a slowdown, as some companies, like Cisco, have already stated that they're seeing weakness in this market. The latest to sound a similar warning is Tibco, a software provider with a lot of customers in finance. The firm described the financial sector as "notably weak" blaming it for an overall earnings shortfall. It should be noted that Tibco hasn't had a particularly stellar few years, so the company was already struggling a bit. Still, what's affecting Tibco is likely to affect a host of other related companies. Right now, there's a lot of concern about the health of the financial sector, but if troubles continue to persist, then the malaise is likely to spread elsewhere, potentially leading to spending slowdowns in other sectors.

Filed Under: credit
Companies: cisco, tibco

Pockets Of Private Equity Still Very Much Alive

from the dealflow dept

Fears of a credit crunch have put a chill on fresh private equity activity, while several pending deals are thought to be in trouble. But there are still signs of life in some parts of the industry. There continues to be strong interest in medium-sized media deals, as funds that specialize in this area continue to raise money and make moves. Considering the challenges facing many media companies, it makes sense that private equity investors would think there's an opportunity to pick up assets at a bargain, reformulating them into something of more value. Obviously, the private equity industry isn't going to grind to a halt. Deals that are predicated on nothing more than cheap credit will become rare, but investors will always be on the hunt for undervalued companies that can be turned around.

Filed Under: credit, m&a, private equity

Peer-To-Peer Lending Sites Weather Credit Market Storms

from the distributed-credit dept

Will all of the turmoil in conventional credit markets spur greater interest upstart peer-to-peer lending exchanges? It seems possible, since, in a way, sites like Prosper and Zopa are the antithesis of the highly impersonal, securitized industry that's facing so many problems right now. From the outset, these P2P lending sites have emphasized diversification, manageable risks and direct relationships between lenders and and borrowers. Whereas traditional loan brokers are closing their doors left and right, these sites continue to do brisk business. Lenders aren't seeing mass defaults, because the standards have been high since the beginning. Of course, the scale is different. You still can't finance a house through one of these sites, but for other needs, they may work just fine. Between the lack of available credit to consumers and a desire to diversify investments on the part of individuals, this moment in the business cycle offers these sites an excellent chance to really prove their worth. Update: A number of commenters make some interesting points about default rates, suggesting that they may be higher than these sites would have you believe. Also, it's pointed out that there are a number of users playing both sides of the game -- borrowing at one rate only to lend out at a higher rate, which is not so different than traditional financial institutions.

Filed Under: credit, p2p

Clear Channel Facing Multiple Hurdles In Attempt To Go Private

from the the-sale-before-the-sale dept

Last November, radio broadcaster Clear Channel announced that it would be taken private by a group of private equity firms for $19 billion. But the deal is just one of many such deals whose status is currently in doubt, as financing and credit have significantly dried up of late. As part of the preconditions for the sale, Clear Channel agreed to dump nearly 400 local stations across the country. Now, however, that's proving to be a significant snag, as buyers of the stations are now going back on their agreements (via Deal Journal), due to the same financing issues affecting everyone else. Assuming that agreements can't be worked out, the company may be forced to slash the prices on these stations or risk imperiling its own plan to go private.

Filed Under: credit, private equity
Companies: clear channel