Thursday, December 18, 2014

Archive: June, 2011

POSTED: Thursday, June 16, 2011, 11:41 AM

Big recent events in telecom-land show that competition in the personal-communications business is now "AT&T versus Apple," and mobile-phone expansion can't become big enough or cheap enough to replace cable and wire networks, writes Craig Moffett of Bernstein Research.

How's he figure?

1) Pricing plans. AT&T, Verizon and T-Mobile, like the cable companies, are all moving toward metered pricing. For cable companies like Comcast, this is just an attempt to make more money, because they can. But for wireless companies, it's "a matter of rationing" to prevent online services like Netflix from wiping out their profits. Netflix has already responded by demanding some of the revenue it's creating for the communications companies.

POSTED: Thursday, June 16, 2011, 11:05 AM

Price-chopping competition among property-and-casualty insurers could mean another round of big losses for the industry, warns Evan Greenberg, boss of Ace Ltd., the Swiss insurer whose biggest employment center is in Old City Philadelphia (Ace is a successor to the old Insurance Co. of North America).

Greenberg's comapny "has been shocked at the feeding frenzy that has been occurring for new business," writes analyst Paul Newsome, in a report to clients of Sandler O'Neill + Partners today. "Irrational underwriting" has hurt business for "responsible companies" like Ace that refuse to write policies at premium levels that they don't think will cover future claims, costs and profits.

Better computer systems and data haven't stopped insurers from writing at unsustainable prices, especially in lines where it's still hard to estimate claims, Ace says.

POSTED: Thursday, June 16, 2011, 10:15 AM

St. Joseph's University still doesn't have a permanent President to replace Father Timothy Lannon, who announced his departure last September (corrected). But its board, headed by Philadelphia police officer turned investment manager Paul Hondros, has meanwhile raised over $150 million to expand the campus, from alumni donors led by:

James J. Maguire, insurance magnate (Philadelphia Consolidated), gave $15 million;
Brian Duperrault '69, also an insurance magnate (Ace INA) gave $11 milion;
Michael Hagan, marketing genius (VerticalNet, NutriSystem) gave $10 million;
John W. Post '58, industrialist (Post Precision Castings) gave $9 million

St. Joe's is spreading across City Line Ave. with its acquisition of the former Episcopal Academy site, now dubbed the Maguire Campus. 

POSTED: Thursday, June 16, 2011, 9:43 AM

Once upon a time, Philadelphia was a place ambitious men went to make fortunes in trade, and finance, and manufacturing.

But nowadays our most lucrative businesses all involve mass-marketing stuff that's not healthy for children: Beer and soda, and Cable TV, and Gambling;

And porn: Read about Center City's own Richard Cohen, the Northeast Philly native turned Society Hill and Margate millionaire who operates the HotMovies porn-on-demand site, the A-1 National phone-sex center, the PrimeTel Communications 800-number monopoly, and, formerly, Escorts-dot-com, as the Daily News' Pulitzer Prize-winning Wendy Ruderman and Barbara Laker report here. 

POSTED: Wednesday, June 15, 2011, 2:54 PM

Reuben Canada's Jin-Ja ginger beer (ginger, cayenne, lemon, mint, green tea, sugar, non-carbonated, non-alcoholic), brewed at the Rutgers Food Innovation Center down in Bridgeton, retails for $16 a .75-liter bottle, $9 for .375L, which is about three times as expensive as the wines I buy.

"It's a high price. We struggled. The first week, nobody bought it," says Ezekiel Ferguson, a manager at Di Bruno's on Ninth Street.

"But then we got him out here and did some samplings. And when people noticed the taste, all the strong flavors, we sold a ton of it. He sold three cases that Saturday. Then two and a half cases that Sunday." That was in May.

POSTED: Wednesday, June 15, 2011, 12:16 PM

Rick Santorum, the US Senator (R-Pa.) voted out of office by Pennsylvanians in 2006, has quit his post as a member of the board of directors of Universal Health Services Inc., a  for-profit mental-health hospital chain that relies on taxpayer-funded programs for 38% of its revenues, "as a result of his recent and formal announcement" that he's running for President of the US, Universal said in a statement.

Santorum is saying good-bye to a post that paid him $168,000 in cash and stock last year for attending board and compensation committee meetings, where his duties included approving a $10 million CEO cash, stock and insurance compensation package for Universal boss Alan B. Miller. 

Universal relied on taxpayer-funded Medicare and Medicaid payments for 38% of its $5.6 billion in revenues last year, according to the company's annual report. The company collected profits totalling $230 million.

POSTED: Wednesday, June 15, 2011, 9:51 AM

First Niagara Bank is looking to buy another $1 billion-plus Philadelphia area bank to combine with the former Harleysville National and put a dozen newly-hired business lenders to work, reports Jason O'Donnell, bank-stock analyst at Boenning & Scattergood in West Conshohocken.

Surviving banks that size that could possibly be buyout targets include Beneficial, Bryn Mawr Trust, Firstrust and Univest, among others. Bigger banks that would also bulk First Niagara's upstate assets include Fulton, National Penn, Susquehanna.

Separately, ING Direct Bank, Arkadi Kuhlmann's $80 billion-asset online and phone lender that employs 1,000 at its Wilmington headquarters, could be sold by its Dutch-Belgian owners as early as today to satisfy European Union bailout requirements. Companies that have been identified by the usual unnamed investment-banker gossip sources in  Wall St Journal, Reuters, Bloomberg and other news services as possible bidders include GE Finance, Capital One and KKR.

POSTED: Wednesday, June 15, 2011, 3:41 PM

Every salesman needs a story. And if you're selling stocks, bonds and funds into an uncertain market, you need more than one.

To fine-tune their stories, more than 100 of the 700 financial advisers at Janney Montgomery Scott trooped into a Center City meeting room or linked up by phone to hear Janney chief investment officer Mark Luschini and Standard & Poor's boss investment strategist Sam Sam Stovall exchange sometimes contradictory views of what happens next, at Janney's quarterly "outlook event."

Luschini pushed large-cap, dividend-paying stocks with foreign customers. He likes Big Tech - Hewlett-Packard, Cisco, Microsoft, Intel. He's underweighting consumer-discretionary stocks due to "jobs, or the lack thereof."

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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