Wall Street Looking To Continue Its Buy 'Em Up Then Break 'Em Up Strategy With Yahoo?

from the next! dept

In the past, we've joked about Wall Street's amazing ability to convince companies that they need to acquire each other and merge to bring out "synergies" and then convince those same firms to later break themselves up into separate companies to "release shareholder value." It's all part of the shell game, where the investment bankers on Wall Street get to take out their huge fees whether a company is being built up or broken apart. It looks like the latest such target may be Yahoo, as an analyst at Sanford Bernstein has kicked off the discussion by noting that the company could release shareholder value by breaking itself up into three companies. Which companies? Well, it would want to split up the search and the advertising parts of the business... you know, the same parts of the business that folks convinced Yahoo it needed to buy four years ago if it was going to successfully take on Google. Now, of course, the only way for it to successfully take on Google is to get rid of those businesses. Luckily, the folks on Wall Street will happily help with both ends of the transaction for a small significant fee. Sometimes I think I'm in the wrong business.

Filed Under: acquistions, investment banks, mergers, spinoffs, wall street
Companies: sanford bernstein, yahoo

Investment Banks Asked To Make Private Exchanges More Compatible

from the network-effects-baby dept

We've been following the recent rise of private electronic stock exchanges established by the major investment banks for the purpose of offering companies a place to sell stock without being subject to SEC regulations. While there seems to be interest in this model, a potential complication would arise if the various exchanges were incompatible. It would hamper liquidity if a company going "public "on Goldman's exchange, for example, was only open to investors participating on that exchange. According to Dealbook, listing firms are prodding the banks to open up their exchanges to promote liquidity. If this does happen, there's a much better chance of these markets having a significant impact. One other problem that won't be solved easily arises from an SEC rule which states that any company with more than 499 public shareholders is necessarily a public company and thus compelled to abide by the full spate of regulations. If participation is limited to a handful of large investing institutions, this might be okay, but the rule will prevent this system from getting too popular.

Filed Under: investment banks, private stock exchange, sec
Companies: goldman sachs