The US Postal Service Should Privatize and Do an IPO on NYSE

The U.S. Postal Service is the largest company in terms of being a government-owned agency, but in recent years, it has been drowning in the red. Today’s the WSJ reports that the it has a $5.2 billion quarterly loss.

The fact is; nothing else better can be done to save and rescue it other than privatizing it and taking it public on NYSE. By doing this, it’s the only viable option to keep it from eventually filing for bankruptcy and completely shut down. Because UPS, DHL, FedEx, and other rapid and express service providers will eventually drive it completely out of business.

So Mr. US Postal Service, do the privatization and list on NYSE!

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Facebook IPO’s Valuation Gone Bad?

If Facebook is debuting at the valuation of $96 billion, then I presume that they have done the valuation of the Company based on its active users in developed countries especially in the US and the UK. Because most of the Facebook active users in developing countries primarily use Facebook via their mobile phones and have rarely few or no capacity of making purchases by clicking on the Ads found on Facebook; hence there’s a possible lower ROI for the Advertisers targeting Facebook users in developing countries. I just hope that Facebook’s IPO won’t become the largest tech-IPO burst in the history of the US financial market.

Groot Property Group (Pty) Ltd Authorizes to Issue 10 Million Shares

FOR IMMEDIATE RELEASE

WINDHOEK, Namibia – October 1, 2011 — /GPG/ — Groot Property Group (Pty) Ltd is developing a new township namely, Groot, an upscale multifarious community to be comprised of more than 2,100 commercial retails with light and heavy industrial parks and more than 160,000 residential housing units on a private land near Etosha National Park in Namibia.

In an effort to help finance its initial green scheme projects for the development of Groot, the Company has authorize to issue 10 million shares, which is comprised of 5 million shares of ordinary (common) stock and 2 million shares of preferred stock, of which 80,000 shares of ordinary stock have been issued.

The Company hopes to raise more than US$9 million (N$65 million) from the sale of the issued stocks, for which is by invitation only. The capital from the sale of the issued shares will finance the needed preliminary technical work for the green scheme projects as required for the successful development of Groot.

The total budget for the complete planning, development, engineering and construction of Groot is about N$6 billion. The Company plans to raise the total budget through a combination of debt and equity financing through a network of connected financial institutions in the US and Europe, while Standard Bank will finance 50% of the total budget for the development of Groot.

“The market scope for Groot and all of business-cum-industrial entities it will create will inevitably be not just Namibia with its limited population size but also the various Southern African Development Community (SADC) member countries bordering on Namibia.” Says Simon Kapenda, Chief Economist of Groot Property Group.

Groot is poised to become one of the fastest growing and largest towns in Namibia, an innate character, a center of attraction for the concentration of a multitude of essential socio-economic activities with supportive and complementary relationships. A corollary of this will be applied necessity to mobilize a diversity of professional inputs in areas of engineering, socio-economic research, entrepreneurial development, social services and others for the greater good of Namibia.

About Groot Property Group (Pty) Ltd
Groot Property Group (Pty) Ltd is a premier rapid industrial development and foreign direct investment management company which focuses on implementing applied neuroeconomics and systems dynamic to efficiently explore, develop, and manage self-sustained ecosystems for the slow-developing and stagnant economies. Learn more about Groot Property Group (Pty) Ltd at www.grootgroup.com/investor.

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Source:
Groot Property Group (Pty) Ltd
Web site: www.grootgroup.com

Does It Matter that Former Yahoo Exec Brad Garlinghouse Has Joined AOL?

TechCrunch reports that former Yahoo Executive Brad Garlinghouse has joined AOL. But does that cause to help AOL?

Nope, not even a little. It won’t help make a difference with AOL. Brad would have been better off if he had joined either LinkedIn, Facebook, or Twitter (or even my next project Welated.com or Laatie.com).

AOL as a brand has lost its mojo. The only difference would be if AOL changes its name and brand to something else other than AOL, and completely revamp its business model and focus.

Even for someone to still has an email address @aol.com seems so a hundred years ago, and if you still have an @aol.com email address, that may even likely cause you not having anyone taking you seriously, because that’s so a century ago, it’s like carrying around and listening to a walk-man while everyone else is listening to an iPod, plus nothing new or really good has been coming out of AOL as a company lately.

The solution for AOl is; change the name from AOL to something else, bring in new management as it’s doing now and get rid of all the old ones, and then rebrand and refocus the business model, but keep the AIM solutions, that’s the only way out for AOL.

An IPO for AOL without doing any of the above will likely to be a disaster in terms of stock and company value both in the short and long run.

Kraft Foods, Inc., An American Made, Globally Inspired

If you order a Big Mac or hamburger with cheese at any of your favorite restaurants, anywhere in the US, then chances are, your cheese is made by Kraft Foods, Inc., (NYSE: KFT), (“Kraft Foods”), the largest branded food and beverage company in the United States and the world’s second largest, only behind Nestlé, based on 2000 pro forma revenue. The company’s fiscal year is December, and as of January 21, 2009, according to the company’s web site, Kraft.com, it has approximately 103,000 employees worldwide and more than 180 manufacturing and processing facilities worldwide.

Based in Northfield, Illinois, Kraft Foods, Inc’s North America unit makes the world’s largest cheese brand (Kraft), owns the cookie and cracker business (Nabisco) and makes the US’s most favorite, Oreos. Its brand products are distributed worldwide through its international business unit. Kraft Foods has one of the world’s most recognizable core brands which are sold in more than 140 countries, and according to A.C. Nielsen, are enjoyed in 99.6% of the households in the United States.

The company’s brands and businesses including; Oscar Mayer, Kraft, Philadelphia, Maxwell House, Nabisco, Oreo, Jacobs, Milka, and LU brands, which together have quarterly revenues of nearly $10 billion (MSN Money). The company was founded in 1767 and in 1988, Kraft, Inc (http://www.kraft.com) became a part of Altria Group, previously known as Philip Morris Companies Inc., which purchased Kraft for $12.9 billion, and operated it as a wholly-own subsidiary until 2007 when it was spun off, amid that the Altria’s tobacco lawsuits, a result of alleged second hand smoke would tarnish Kraft’s image, in terms of consumers.

Prior to going public, Kraft Foods generated 2000 pro forma revenue of $34.7 billion and 2000 pro forma earnings before interest, income taxes, depreciation and amortization of $6.3 billion. The company filed with the US Securities and Exchange Commission (SEC) for its long awaited and most anticipated Initial Public Offering (IPO) on March 13, 2001, and went public on June 10, 2001, traded on New York Stock Exchange (NYSE) under the ticker symbol; KFT. Its initial proposed stock price was set at $30.00 to $31.00, but the actual offer price was $31.00. Its stock price on the first day of trading was $31.00, and closed at $31.25 at the market closing time, a net gain of 25 cents. The company’s shares offered at IPO was 280 million shares, with an offering amount of $8.7 billion, making it one of the largest IPO offering, ranked only second behind 2001’s $10 billion-plus offering of stock in AT&T Wireless, which by far, was the richest U.S. initial public offering ever.

The offering price valued Kraft Foods at about $53.8 billion, and as of today, January 21, 2009, 5:00 PM EST, according to Yahoo! Finance, Kraft Foods market capitalization is value at $41.62 billion, a 22.64% drop since its IPO.

“The 280,000,000 Class A shares offered in the IPO represent 16.1% of the combined total of 1,735,000,000 Class A and Class B shares outstanding immediately after the offering. Net proceeds of the offering of approximately $8.4 billion will be used to repay a portion of Kraft’s long-term notes payable to Philip Morris” (AllBusiness.com).  “We will use the net proceeds from this offering to retire a portion of an $11.0 billion 7.75% note payable to Philip Morris, due in December 2002, incurred in connection with the Nabisco acquisition” (Edgar Online).

The company’s shares outstanding at IPO were 555 million, but its post IPO offering were 1,735 billion shares. Today, January 21, 2009, Kraft Foods stock closed at $28.33, its highest traded price was on May 28, 2002, at $43.01, that’s a drop of 65.56% since May 28, 2002, and its lowest trading since it went public was when it closed at $26.56 on November 17, 2008.

“Kraft Foods’ IPO was underwritten by several underwriters including; Credit Suisse First Boston, Salomon Smith Barney, Deutsche Banc Alex. Brown, J.P. Morgan Securities, Inc., Morgan Stanley Dean Witter, UBS Warburg LLC, BNP Paribas Group, HSBC Securities, Inc., Lehman Brothers Incorporated, Blaylock & Partners, L.P., Dresdner Kleinwort Benson, Prudential Securities, Inc., Ramirez & Co., Inc., Sanford C. Bernstein & Co., Inc., and Utendahl Capital Partners, L.P” (Edgar Online).

On November 15, 2007, Kraft Foods agreed to merge its Post cereals business into Ralcorp Holdings, Inc., and on June 25, 2008, “Kraft commenced its exchange offer related to the split-off transaction of its Post cereals business. Kraft will provide indicative calculated per share values and exchange ratios for each of the trading days that the exchange offer is open. The final exchange ratio will be calculated using the volume weighted average stock prices (VWAP) of Kraft and Ralcorp on July 30, July 31 and August 1, 2008, and will be announced by 4:30 pm ET on August 1. The exchange offer will expire at 8:00 am ET on August 4, 2008, unless extended” (Edgar Online).

The lowest drop in its stock price on November 17, 2008, was probably the result of its Post merge with Ralcorp Holdings, Inc. According to its balance sheet for the quarter ended on September 30, 2008; the company had a cash and cash equivalents of $737 million, while its total current assets are capped at $11.3 billion, total assets of $66.9 billion. Its total current liabilities are $10.3 billion, with total liabilities of $40.5 billion. The net tangible assets are (-$15.7 billion), while its long term debts are $18.9 billion. The company’s account payable is $6.09 billion. (Yahoo! Finance).

Today, amid the current US economic crisis and the recession, Kraft Foods, Inc. is still strong, its stock performance is relatively steady, part of the Dow 30, and is one of the world’s most actively traded companies on Wall Street.

Disclosure

I am currently not an investor nor do I have an immediate investment interest in Kraft Foods, Inc. I have not been compensated by anyone, in any way, shape or form, to write and publish this article anywhere.
 
References

MSN Money. “Kraft Foods Inc”.  IPO Center. Retrieved on Wednesday, January 21, 2009, from http://premium.hoovers.com/global/msn/factsheet.xhtml?ID=103392.

US Security and Exchange Commission. Edgar Online. Retrieved on Wednesday, January 21, 2009, from http://www.sec.gov/edgar/searchedgar/companysearch.html.

Yahoo! Finance. Kraft Foods Inc. (KFT). Retrieved on Wednesday, January 21, 2009, from http://finance.yahoo.com/q?s=KFT.

Kraft, Inc. Official Corporate Web site. Investor Center. Retrieved on Wednesday, January 21, 2009, from http://www.kraft.com/default.htm.