The chase by Marty Cej:
Cyber Monday is a silly thing to say.
Thin on news, markets rallied yesterday on optimism that European authorities were finally shuffling their slippered feet towards a solution to their sovereign debt crisis and evidence that U.S. consumers continue to shop like, well, U.S. consumers. Today, we are spoiled for choice.
AMR, the parent company of American Airlines, filed for bankruptcy protection in a New York court. The airline is the last of the U.S. heavyweights to file for protection after managing to hold out through the financial crisis and the industry downturn in the wake of the September 11 terrorist attacks.
The company said it will continue to operate as usual as it reorganizes "to achieve a cost and debt structure that is competitive in the airline industry." While its competitors restructured their debt under bankruptcy protection, cut their costs and pension plans, American decided to gut it out and is now paying the price for deals it cut with employees a few years ago. Calls are out to principals and analysts. For some unique insight into the industry and how the filing could affect Canadian travelers, we'll sit down with Greg Saretsky, CEO of WestJet, at 3:10 pm Eastern.
In Europe, finance ministers meeting in Brussels today are tasked with doing the grunt work ahead of a meeting of European leaders on Dec. 9. Their work will include finalizing details of the enhanced bailout mechanism, or EFSF. German Chancellor Angela Merkel made clear again this morning that her priority is a rewriting of the relevant euro-zone treaties to impose tighter budget rules and greater oversight/influence on the ne'er do wells by the core countries (ahem, Germany, ahem).
In the meantime, the ECB, which is not allowed to backstop sovereign governments, found that it was unable to fully "sterilize" the 203.5 billion Euros of government bonds that it has purchased since May of last year to provide liquidity but not – it insists – not to backstop needy governments. Frances will try to explain the process to me on Business Day and says she will speak slowly and use hand gestures when I get confused.
Germany's biggest potash company, K+S Aktiengesellschaft, or Aktiengesellschaft for short, said it will spend $3.5 billion on developing its project in Saskatchewan and expects to be in production by 2015. Kristine Owram is on the story in the early going today and I would like to see our coverage expand to include the bigger picture of Saskatchewan being open for business.
Like, way open. Home prices in Regina are climbing, Saskatchewanionians (sp?) who went west in search of their fortunes are returning home to find them. I'd like to hear a little bit more about what is going on there and see whether lessons have been learned from the boom and bust cycles of a certain neighbour.
One story that has jumped out for me is Compton Petroleum. The company said late yesterday that President and CEO Tim Granger is stepping down. Oh, and Chief Operating Officer Shannon Ouellete will also be resigning. And let's see… oh, yes, Theresa Kosek, the CFO will also be departing the company. And David Horn, VP of business development, too. A few quarters ago, this company had a market cap of more than a billion dollars. Now it's a small cap. Brett Harris will take a look at this company's short and bumpy trip to the bottom.
Still in the oil patch, Nexen has given its 2012 production and expenditure forecasts this morning and announced a joint venture with Japan's Invex to develop its Horn River, Cordova and Liard basins in BC.
Industry Minister Christian Paradis was expected by some to announce changes to foreign investment rules in the telecom industry at a speech in Ottawa today but the Globe and Mail says not to hold your breath. The Globe also reports that the minister has cancelled meetings with telecom analysts in New York this week and could signal in his speech today that a decision on the rules may not be reached at all this year. The news will disappoint potential investors and competitors from abroad who have been waiting for an opportunity to enter the Canadian market. It will also disappoint the incumbents who have been asking for clarity.
Oh, and unnamed sources are telling The Wall Street Journal and Bloomberg that Facebook is getting closer to filing for a $10-billion IPO that would value the company at a whopping $100 billion. Me, I'd like to test that valuation against what we know about the company's growth, its revenue, profit, management and the market's appetite for new listings. The IPO would not take place until the spring, at the earliest, sources say.