It's September, Time To Buy

At the beginning of the month, we referenced an article which suggested that investors should sell in September. And we are happy we didn't follow the advice in the article. For the record, the S&P 500 increased by about 2.4 percent in September, from 1,406.58 to 1,440.67. We would be happy with that return in any month.

Duke Energy Coup, Part Deux

Back in July, we posted about the two hour CEO job that William Johnson held for two hours as CEO for the merged Duke Energy/Progress Energy. As with many complicated stories, time allows for more information to be disseminated. For example, in an interview, old/ex/new CEO Jim Rogers said that he had only given up his position as a CEO of Duke Energy in order to pay a lower premium for Progress Energy. This implies that William Johnson helped aid the sale of Progress at a discount in order to be the CEO of the combined company, an accusation he vehemently denies.

Investors Happy About RIM Loss

Research In Motion (RIMM), the manufacturer of the Blackberry, announced a loss of $235 million or 45 cents per share for the second quarter compared to a profit of $329 million or 63 cents per share in the second quarter last year. The loss per share excluding one-time expenses was 27 cents per share. While this would seem to be bad news, RIMM shot up 14 percent after the announcement. So why the big jump in the stock price? Analysts had expected a loss of 46 cents per share. As one analyst stated: "It's still bad, but it's a much smaller disaster than expected."

Student Loans Climb

The average student loan debt has climbed to $26,682. Currently, unsubsidized Stafford loans have an interest rate of 6.8 percent. So, if you graduate with an average student loan debt and pay off your loan over the next 20 years, what are your monthly payments? See if you don't agree that it will be $203.67 per month.

IPO Doubles Stock Market Size

Morgan Stanley has withdrawn as the lead underwriter for the Asiacell IPO, which is set to take place on the Iraqi bourse. It will be the first major IPO on the Iraqi market since 2003. One interesting fact about the IPO is the large size relative to the Iraqi bourse. The Iraq Stock Exchange has a market capitalization of about $3.4 billion and trades an average of $3 million per day. Asiacell is expected to have a market capitalization of about $4.4 billion on its own.

GM Looks For A Revolver

GM is seeking a new revolver, or revolving credit line, for between $8 and $10 billion. The revolver will be used to replace an existing revolver of $5 billion, pay down other debt, and to provide liquidity. The commitments from individual banks will start at $600 million and go down to $350 million for the second tier. The upfront fees are 35 to 50bp (bp is a basis point, or 1/100th of a percent. One basis point is equal to .01%) depending on the amount committed by the bank. The interest rate on the loan is expected to be 250bp over LIBOR, and GM will pay 37.5bp on the unused amount of the revolvers.

IPO Bump?

It is well documented that there are cycles in IPOs. Recently, the IPO market has been relatively slow, but some analysts believe that the time may be right for an increase in the number of IPOS. The stock markets have experienced good returns over the past year, recent IPOs have performed relatively well, and the VIX, the market's "fear gauge," is low.  Additionally, the JOBS Act, which allows companies to file a confidential first draft of its registration documents, may increase the number of publicly traded companies.