U.S. subprime deal reported close
Treasury Secretary Henry Paulson and other officials are close to reaching a deal with major U.S. lenders to temporarily freeze interest rates on certain subprime mortgages, The Wall Street Journal reported. The details could be announced as early as next week, but the banks have reportedly agreed to extend lower introductory rates for some borrowers at risk of defaulting. (Reuters) When you get regulators and private lenders together, “you’re likely to come up with something that will work both in the marketplace and honor the sanctity of the contracts involved,” said Wayne Abernathy of the American Bankers Association. (Bloomberg)
Dell earnings up, market share down
Dell reported a 27 percent rise in profits, to $766 million, but its stock dropped about 10 percent in extended trading on a cautious forecast. (MarketWatch) In the company’s first earnings conference call in more than a year, Dell executives said near-term earnings could take a hit from continuing restructuring costs. “The bottom line is that people were disappointed,” said Endpoint Technologies analyst Roger Kay. “People expected more than they got.” (Reuters) Desktop PC sales fell 1 percent, while laptop sales rose 19 percent—but both numbers were far below rival Hewlett-Packard’s. HP now has 20 percent global market share; Dell, 15 percent. (AP in Yahoo! Finance)
Sprint rejects money-for-CEO offer
Sprint Nextel rejected a $5 billion investment offer from a group that includes former Sprint chairman Tim Donahue, South Korea’s SK Telecom, and Providence Equity Partners, according to several published reports. One of the conditions was that Donahue, who was also Nextel chief executive, would return as Sprint CEO. (MarketWatch) Embattled Sprint CEO Gary Forsee quit in October, and analysts said new leadership is Sprint’s most pressing need right now. (The New York Times, free registration required) “Sprint is suffering from a lot of problems, but I do not think they’re facing a liquidity crunch,” notes Stanford Group analyst Michael Nelson. (Reuters)
Blue-blood social networking
In their own way, social networking sites exclusively for the rich make a lot of sense. Wealth likes to hang out with wealth, and the rules that govern blue-blood social clubs are pretty easy to transfer to the Internet. The best-known site, aSmallWorld, is suffering from growing pains, though, as invitations to join are sold on eBay or given to commoners. Stephen Martiros, a managing director of the Boston-based CCC Alliance of rich families, says that when sites lose exclusivity, the wealthy leave. “If you have one guy worth $100 million sitting at a table with a guy worth $1 million,” he notes, “only one of them is going to be excited to be there.” (The Wall Street Journal)