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Archive: July, 2009

POSTED: Tuesday, July 14, 2009, 8:05 PM

TechnicallyPhilly is a daily menu of tech-related and emerging-company information posted by Brian James Kirk, Sean Blanda and Christopher Wink, three recent Temple grads who support their online-news habit with their parttime writing gigs. HQ is upstairs in an airy ex-Sandoz drug warehouse-turned-storage units/artist studios/recent-college-grad flophouse, in a rowhouse-and-factory block of East Tioga Street up in Harrowgate.

The trio wants to make a paying gig. Wink doesn't think there's enough online advertising to go around, he told me over the kitchen table/command post. But it takes cash to make cash. So last week they posted an ad for a Commission-Based Ad-Sales Rep as "the next step in creating a sustainable news product."

The goal, Wink told me, is to move from display ads to "a jobs board we have in development, e-commerce, events and some other smaller pieces, leading to a membership structure" later this year.

Joseph N. DiStefano @ 8:05 PM  Permalink | 0 comments
POSTED: Tuesday, July 14, 2009, 3:59 PM

Exxon Mobil Corp., which earned $45 billion in profit last year, says it will spend $600 million over the next five years trying to figure out ways to turn algae into gasoline in a proposed San Diego lab and sites around the U.S. (As Congress presses forth with the Waxman-Markley biofuels subsidy bill.) 

Exxon says half the money will go to Synthetic Genomics Inc., a private company started by former human genome impresario Craig Venter, "to research and develop next generation biofuels from
photosynthetic algae." That's algae you feed sunlight and carbon dioxide, not expensive corn or sugar. 

Venter and Jacobs took questions from reporters this morning. Excerpts:

How you gonna grow algae? "That could be an open pond, a closed pond, or a photobio reactor," said Jacobs. "Right now we're at the very early stages. Craig and his team have done work on the algae strains," while Exxon looks at refining and distribution. "Our intent is to make hydrocarbons that look a lot like today's transportation fuels."

Joseph N. DiStefano @ 3:59 PM  Permalink | 0 comments
POSTED: Tuesday, July 14, 2009, 3:02 PM

Archer Daniels Midland Inc. Co., Decatur, Ill., says it's closing its Glassboro cocoa-processing plant and ending jobs for 53 workers there. The work is moving to ADM's new 500,000 square foot cocoa plant in Hazleton, Pa., north of Reading, which opened last fall, says spokesman Roman Blahoski. He told me some, but not all, of the Glassboro workers, represented by UFCW Local 152, will be transferring up to Hazleton.  "We don't know yet" how many.

ADM built new plants in Hazelton and in Kumasi, Ghana, West Africa, over the past two years. The Hazleton plant, which employs 400, turns cocoa into chocolates and into chocolate powder and cocoa butter used by other foodmakers. ADM has no plans to close its other U.S. cocoa plants, Blahoski says.

Joseph N. DiStefano @ 3:02 PM  Permalink | 0 comments
POSTED: Monday, July 13, 2009, 2:17 PM

While President Obama said over the weekend he wants to give last Spring's "stimulus" spending time to speed the economy and slow job loss, instead of boosting it, a couple of University of Delaware economists claim the government could well afford a 300 percent jump of the government's planned tax cut, unemployment, purchase and other stimulus payments, to $800 billion, instead of the planned $200 billion, in the second half of this year.

What would that accomplish? Citing data from Yale economist Ray Fair, UD's Laurence Seidman and Kenneth Lewis project unemployment will fall to below 8%, from the current 9.5% and rising, as companies add 4.6 million jobs due to higher government payments and purchases, instead of the projected 1.7 million additional jobs. They also treat the increase as permanent, on the theory more jobs create their own "macroeconomic" recovery, even if the "stronger" stimulus ends next year.

How could we afford this? Debt as a percentage of gross domestic product is already expected to rise to around 52%. Adding most of the cost of a bigger stimulus, the debt ratio rises to "only" 53.7%, which Seidman and Lewis consider a small price to pay for adding a few million jobs. Seidman says he'll send a longer version of his and Lewis' position to anyone who asks me for a copy.

Joseph N. DiStefano @ 2:17 PM  Permalink | 0 comments
POSTED: Monday, July 13, 2009, 1:38 PM

Venture capital funds raised just $1.7 billion during the first quarter, down from a peak of $12.3 billion in the last quarter of 2007, says the National Venture Capital Association Just 25 funds reported raising any money, the fewest since the third quarter of 1996, reports Emily Mendell, Philadelphia-based spokeswoman for NVCA.

Venture capitalists invest in unprofitable new companies, as compared to "private-equity" investors who typically buy or refinance existing companies.

Better news from hedge fund trackers like the folks at Hennessee Group Plc, who claim the lightly-regulated investment funds were up 10% during the first half of 2009, on average, compared to a 20% drop last year. That's a lot better than stocks or bonds did. We're just not too sure of hedge numbers, since most hedge funds and their pension, college and charity-fund investors don't report where their hedge assets are actually invested on a given day, so claimed results are hard to verify.

Joseph N. DiStefano @ 1:38 PM  Permalink | 0 comments
POSTED: Monday, July 13, 2009, 12:36 PM

It's a case of political buyers' remorse,  former Mitos Group ceo Steven Welch wrote me in a note, explaining (since I asked) why he's running as a Republican for the House seat currently held by US Rep Joe Sestak, D-Pa-7th, after helping fund Sestak's first campaign three years ago.

Or maybe he's just against whoever's in power: In 2006 Welch blamed the GOP for Bush-era incompetence; now he's holding Sestak personally responsible for the slow economy, since Democrats took over last year. Excerpts:

"When the 2006 elections approached, I was one upset Republican.  Congress was spending more and more, and getting less and less actually done. Hurricane Katrina had demonstrated that while the government had grown larger, it had also become less competent.  I watched as the Republican leadership spoke of a limited and responsible government and personal freedom, but practiced something much different.

"Then one day I got a call from someone who had a pretty good story to sell.  Joe Sestak actually came to my house, sat in my kitchen with my wife and me, and spoke about making government live within its means and balancing budgets.  He touted how he would be an independent voice.  He was selling exactly what a frustrated voter wanted to hear, and I made the mistake of believing him. Not only did I vote for Joe, but in fact for the first time in my life I even gave a politician a check for $300.

Joseph N. DiStefano @ 12:36 PM  Permalink | 0 comments
POSTED: Monday, July 13, 2009, 10:30 AM

Wireless heart-monitor maker CardioNet, Conshohocken, whose share price tumbled two weeks ago when it admitted lower-than-expected income and sales, warned yesterday it faces a further "unjustified reduction" in payments from Highland Inc., the Pittsburgh-based Blue Cross insurer.

Analyst Greg Chodaczek at Boenning & Scattergood, in West Conshy, told clients this morning that CardioNet learned from Highmark Medical Servcies last week that as of Sept. 1 Highmark "was adjusting its reimbursement rate" from Medicare for a key CardioNet product  "to $754 per service. 

"While we had modeled a 20% cut in our 2010 model, we did not expect Highmark to not only lower their reimbursement rate 33%, but to make this cut effective in the middle of calendar year 2009...

"We believe this cut will not only affect CardioNet’s Medicare revenues, but will also allow commercial payers more room to renegotiate their reimbursement rates... Unfortunately for CardioNet, their business model is not set up for such a low Medicare reimbursement level, and will have to pursue a change in cost structure.  Until this CMS reimbursement situation gets straightened out and CardioNet revamps their cost structure, we will remain on the sidelines with regards to CardioNet shares."

CardioNet had been a rare good-news story: It was hiring salesmen in a tough employment market, and its share price was up in an awful stock-market year.

Joseph N. DiStefano @ 10:30 AM  Permalink | 0 comments
POSTED: Monday, July 13, 2009, 4:33 PM

During the global merger boom of the 1990s, Philadelphia enjoyed "this heavy wave of significant French investment," recalls Yves Quintin, partner at Duane Morris LLP and author of Franco-American merger textbook Les Fuisons-acquisitions aux USA (2005, Editions Lyon Blais).

Center City-based chemical maker "Pennwalt was acqured by Elf, now it's Arkema." King of Prussia insulation-"CertainTeed was acquired by Saint-Gobain. Rhone-Poulenc bought (local drugmaker) Rorer, merged with Hoechst, became Aventis, and was acquired by Sanofi. These were very large transactions."

The deals brought a cadre of French managers and professionals to the Main Line, and with it mixed institutions like the French International School of Bala Cynwyd, with its French and American student body and governing board.

"That wave of large investments has not continued," Quintin added. Not all the French investments were successful. Not all arrivals stayed in Philadelphia.

Today his practice is widely spread. Clients include family-owned French firms with U.S. acquisitions, such as Prosodie, an acquisitive call-center firm that's moved its U.S. operation to Florida; publisher Lagardere (its magazines include Marie-Claire) in New York and Paris; Chargeurs (adhesive films), with its U.S. office in Boston. And French Canadian firms like Atrium Innovations (nutritional supplements) and Sigma Industries (mixed manufacturing.) 

These days, there's also disappointed companies trying to get out of their U.S. investments. Buying or selling international assets "is still not an easy process" in a down market.

Joseph N. DiStefano @ 4:33 PM  Permalink | 0 comments
About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at, 215.854.5194, @PhillyJoeD. Read his blog posts at and his Inquirer columns at Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at or 215 854 5194.

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