Archive: December, 2012
American International Group says it is buying TV ads to run during the NCAA and NFL championship games, the Today Show and Good Morning America, newspaper ads in New York, Los Angeles and Houston (where AIG has major operations), additional ads in the financial press and on Google's YouTube, Yahoo, MSN.com, with the message, "Thank You America," highlighting the insurer's current managers' gratitude for its government takeover and taxpayer financing during the late 2000s financial crisis, when the company would otherswise have failed, due to billions in losses from defaulted mortgages and bad securities bets.
According to AIG, "through asset sales and other actions by AIG, the Federal Resreve, and the U.S. Department of the Treasury, America recovered that $182.3 billion, plus a positive return of $22.7 billion," clinched by Treasury's Dec. 14 sale of its last $7.6 billion in AIG shares.
Not content with bragging they've paid back America, with interest, AIG's ads will "also show how AIG helped American communities rebuild" by paying claims from Midwest tornadoes and Hurricane Sandy. "We thank America for allowing us to insure a brighter future and to bring on tomorrow," says AIG boss Robert H. Benmosche in a statement. AIG spokesman Jon Diat assures me the ad campaign is genuine.
All the recent bond-buying is likely to end badly: "We don't see [bond interest] rates rising in the first half of the year, but, when they move higher, the move could be swift," warns Michael A. Galantino, managing director at Boenning & Scattergood in West Conshohocken. Boenning is warning clients that a 2% jump in interest rates is likely to knock more than 15% off the trading price of existing US Treasury 10-year debt, forcing funds to mark down a broad range of debt asset values.
Even with the year's stock market rebound, bond funds are flush with nervous investors' cash: "The most recent mutual-fund flows are astounding," Galantino told me. In 2012, "stock funds have seen [net] withdrawals of over $100 billion in assets, while bond funds have attracted over $300 billion. People are reaching for yield like never before." Boenning led nearly 100 Pennsylvania municipal bond deals in 2012, with mutual fund managers and other institutions buying up much of the issuance, Galantino notes. So there's a lot of potentially vulnerable muni as well as government and corporate paper out there.
Which means "it's time to be cautious," he concludes. Boenning has recommended clients "significantly reduce" average bond maturity in their portfolios, from the recent average of 15-18 years, to the 5-7 year range. "Our clients sacrifice short-term income for more downside protection and significantly reduced volatility," Galantino said. "We continue to focus on attractive bank preferred stocks, high quality dividend-paying commmon stocks" (for companies with "strong balance sheets and respencted management," and covered-call options on dividend-paying stocks. So there's at least some cash flowing back home.
The Philadelphia area "could be the best place in the country to start a software company in the life sciences,' says Zikria Syed. A veteran of Micorsoft's Malvern-based pharma software business and, before that, of Shared Medical Systems, Syed now employs 80 engineers, programmers and businss people at his company, NextDocs.
Syed plans to triple the headcount at his new West Conshohocken office (formerly home to Jacobs Engineering) to 250 (by 2014, I understood him to say; in February, spokesman David Cahill called to tell me it may take longer.) Sales are approaching $20 milllion this year, growing 50% a year, Syed says.
Sales are approaching $20 milllion this year, growing 50% a year, Syed says.
Like a lot of the bright digital developers and marketers building small app businesses around Philadelphia these days, Jason Angelides used to work at Traffic.com, the Malvern-based, U.S.-backed highway-traffic digital-reporting firm (owned in succession by Navteq, Nokia and now Utah-based Matchbin).
Toward the end of his Traffic.com stint, in the mid-2000s, "we were trying to make it into a consumer brand," Angelides told me, from his new office at start-up OneTwoSee, across the street from Comcast headquarters in Center City Philadelphia.
His OneTwoSee partner Chris Reynolds was at the time heading a busy effort to add Traffic.com apps to mobile phones. The services were hugely popular, but especially after the Nokia takeover in 2007 "we understood we were moving toward free apps, and the writing was on the wall," Angelides told me.
Updated: Philadelphia lawyer Randy Maniloff, partner at White and Williams LLP, author of textbooks (General Liability Insurance Coverage, Oxford University Press, in two editions, with Jeffrey Stempel), compiler of an annual list of Top 10 insurance decisions that highlighted the ridiculous as well as the useful, an eager commentator on public issues (like Justice Sonia Sotomayor's pre-Supreme Court pro-insurer tilt), was looking for something a little more.
Now Maniloff has taken the big step. "I am maintaining a fulltime practice representing dozens of insurance companies," but he has also stepped away from his partnership title - so he could start and own "my nights and weekends project," a biweekly newsletter, Coverage Opinions, which has in two months signed up 9,000 subscribers. It's free; Maniloff wants to make it ad supported and "use it as a platform" to improve continuing-education classes.
And he's trying to liven up items on Nevada's Cumis rule, Florida's auto exclusion and the late Andy Warhol's role in defining New York's evolving Professional Services Exclusion, with some antic bits. "I pick cases that have a story behind them and teach a lesson," Maniloff said. "I talk about why the court did what it did and what impact it makes for the future.
Christmas retail sales may have been weak this year, but retail software data action is way up: "Just about every metric we look at has doubled this year -- revenue, customers, emplyee count," says David Brussin, CEO at Monetate, the First Round Capital-backed, West Conshohocken-based retail shopping data software and strategy firm that cliams Dick's Sporting Goods, Frontier Airlines, Macy's, Patagonia, PetCo. QVC, Tommy Hilfiger, and unnamed "publishing and social media and airline" firms as clients.
"Thanksgiving to Cyber Monday, we influenced over $1 billion in transactions for our customers, a new record for us, and a second straight year of more than 20% of U.S. retail flowing through our platform. Cyber Monday, we did about half a billion page views. Yahoo's biggest-ever day was 400 million, with that [British] royal wedding. So we beat Yahoo's biggest trafic day by 20%," Brussin adds. He won't share hard revenue numbers. But he says emplyoment has doubled, to 130, since last year. "And we're profitable.'
How can data services thrive when underlying retail sales are hobbling along? "This is a really interesting inflection point for the business. The market has become much more broadly aware of the space where we work," Brussin told me. "Harvard Business Review did a story on Big Data," all the customer information now pouring into corporate IT listening posts via smartphone location, transaction, search and social media preference data.
Construction crews, absent since the mid-2000s from Wilmington's overbuilt banking and corporate headquarters district, are midway through a $500 million+ expansion of the University of Delaware campus in nearby Newark.
“We have the good fortune to be engaging on a majolyr campus construction project at exactly the right time: the construction industry is in the tank, and we have developed a major capital campaign. It's given us a choice of excellent builders,” says Delaware vice president David W. Singleton, who with school facilities executive Kathy Comisiak is coordinating work under Delaware's board and President Patrick Harker, who arrived at Newark five years ago (after serving as Penn's Wharton School dean) with a mandate to grow.
For 90 years, publicly-traded Warwick Valley Telephone (WVT) prospered with a local monopoly on wire-based phone service in a few patches of upstate New York. But with more Americans relying on mobile or Internet service and cutting their old phone cords, WVT boss Duane Albro saw its future depended on finding new clients beyond the Hudson Valley.
So the mini-telco bought Philadelphia-based Alteva Communications from founders Bill Bumbernick and Mark Marquez last year, and bet its future on Alteva's growing business supplying Internet-based phone service to midsized companies.
Backed by WVT cash, Alteva moved its headquarters last summer to a glass walled "Innovation Center" and headquarters in former Wells Fargo Bank space at 401 Market Street, a block up Independence Mall from its previous offices at the Bourse.