Daily deal websites like Groupon and Woot.com are all the rage right now. They offer heavily discounted products or services to consumers who often buy them up in droves. The businesses do this with the expectation that although they might be taking a loss on those sales, they will then garner repeat customers. This is, for the most part, not accurate. So, this article about BidMyWay caught my attention. It is well worth the read for anyone who does not understand the daily deals industry as it exists now.
Recognizing the frustration in the marketplace, John Shave launched BidMyWay less than a month ago. The daily deal Web site is currently focused only in the Chicago area, but has plans to expand into other cities. Subscribers to the site have the option to buy a deal at the current deal price or bid for what they think it’s worth. Merchants are able to set a range for what they will accept and if a bid falls into the range, the consumer wins the deal.
Sites like BidMyWay could be very effective, especially if the business has the fortitude to make it into a global or nationwide venture. The whole daily deals structure depends upon companies willing to discount products and services heavily, though, so I’m unsure if a model like BidMyWay’s is really all that tenable. We shall see, I suppose.
AIG, the recipient of so much ire in the wake of the American bailouts of several banks, is now striking a deal with one of its competitors. AIG has been awash in bad press because of bonuses to its executives which the American public did not like very much–but the public should be happy to see AIG selling off its Asian unit to Prudential, a chief rival. Why? Because this means AIG has recognized that it needs to raise some capital and cut down on expenses.
Under the terms of the deal, AIG plans to pay $16 billion of the cash component back to the government to buy back preferred shares given in the bailout.
The remaining $9 billion in cash will be used to pay down the more than $25 billion outstanding under a credit facility from the New York Fed.
Shares of AIG rose 8% in premarket trading.
The deal marks yet another step in getting AIG out from the nearly $132 billion it borrowed from the federal government beginning in 2008 to avoid collapse.
That’s a good first step.
2009 has brought nothing but bad news to investors, businessmen, and consumers–all of whom depend upon a strong economy for various reasons. Investors in the stock market, especially, have had a rough year. But today, at the very end of 2009, there seems to be a bit of hope for an improving economy.
Japan’s Nikkei average rose to its highest in four months in early Monday trading as exporters climbed, helped by stable currency moves, while Sharp gained after it reached a cross-licensing agreement with a resin and rubber parts maker.
Takashimaya rose after the firm kept its full-year profit forecast unchanged. Japan’s third-largest department store chain left the forecast steady despite a slide in sales, saying extra cost-cutting would make up for the shortfall.
In light trade, the benchmark Nikkei was up 1.1% at 10604.90 by the midday break, having earlier climbed as high as 10,627.14, its highest since Aug. 31. The broader Topix added 0.8%.
South Korea’s Kospi was up 0.2%. Australia and New Zealand were closed for Boxing Day.
It seems that this might be a glimmer of hope for the worldwide economy, shortly before the beginning of the new year.
Scott Rothstein was certainly a successful scammer, accruing over $1 billion in a Ponzi scheme that eventually got him caught. Ponzi schemes are essentially scams which trick innocent people into “investing” money which they will never see again, a process first used by Charles Ponzi in 1919. The process involves using new investors to pay off old ones, a cycle which will inevitably lead to some investors (the newest ones) holding nothing. However, no one could accuse him of trying to be stingy–he spread the money around once he got it. In fact, one might say his buying-spree looked a lot like the stimulus plan from earlier this year. Rothstein appears to have bought up an eighty-seven foot yacht, twenty luxury cars, shares of successful companies, and $12 million stashed away in Moroccan banks.
The feat rests of thievery, but it is nonetheless pretty impressive. This man stole a lot of money from a lot of people. This should serve as a lesson to investors, always check every investment out with a respected authority before signing any checks or contracts.