Kingdom Holding Co. said the investment firm and its chairman, Saudi Arabian billionaire Prince Alwaleed Bin Talal, invested $500 million in General Motors Co.’s recent initial public offering. The transaction represents 1% of the value of GM’s subscriptions, Kingdom Holding said Tuesday in a statement emailed to Zawya Dow Jones. The firm cited “the global strength of the General Motors brand, the relatively attractive offering price, and the company’s growth prospects in Brazil and China.” [WSJ]

Article courtesy of Dealbreaker

Goldman Says Bernanke Engineers `Substantial Pickup’ (Bloomberg)
Goldman Sachs Bernanke’s decision to pump money into the U.S. economy after officials in Germany, China and Brazil criticized the plan. The move will spur gross domestic product growth and reduce the risk of deflation, Jan Hatzius, the New York-based chief U.S. economist at the company, wrote in an e-mail to clients. Because the Fed’s target for overnight loans between banks is near zero, the central bank is doing “the next best thing,” according to Goldman, one of the 18 primary dealers that are authorized to trade directly with the central bank. “The widespread hostility to the Fed’s actions is misplaced,” Hatzius wrote. “Downside risks to the economic outlook have declined significantly. U.S. inflation is unlikely to become a problem for years.”

BofA May Pay Bonuses In Stock As Deadline Looms On Capital Gap (Bloomberg)
The gap of about $1.1 billion at Bank of America, the largest U.S. lender by assets, stems from its accord last December to repay $45 billion of federal bailout funds and escape TARP. As part of the deal, the bank agreed to sign contracts by June 30 for asset sales that would raise capital. The sum, originally $4 billion, was later reset at $3 billion and the deadline extended to Dec. 31. With two months left, the Charlotte, North Carolina-based company said in a Nov. 5 quarterly report the bank “must raise a commensurate amount of common equity” if asset sales don’t bring in the necessary funds. Bank of America raised $1.9 billion so far to meet the commitment, and the gap may be closed by issuing stock to some of its approximately 284,000 employees, according to the filing. “They are going to meet their commitment and if they have to, they’ll do it through their employees,” said Mark Borges…Any new shares issued to employees would immediately vest and could be traded right away, according to the filing.

Green Shoots Are Piercing Through The Gloom (FT)
Steve Rattner: “The US economy might be struggling but it is not quite the basket case that dominates the public consciousness. And neither are its prospects – at least in the medium term – quite as gloomy as the daily drumbeat of apocalyptic forecasts would suggest.”

Buffett’s Buyout Search Aided by Biggest Cash Hoard Since 2008 (Bloomberg)
“The fact that he’s got $34 billion means that he can go hunting again,” said Jeff Matthews. “Burlington Northern was the first really big elephant that came along. And he’s got the cash to do it again.”

Taking on a Second Mortgage to Pay the Foreclosure Lawyer (NYT)
The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even they acknowledge it offers a solution to a vexing question: How do they get paid? After recent revelations that banks were sloppy in processing many foreclosures and in some cases lack standing to seize a house, potential clients seeking to challenge their lenders are flocking to lawyers. But while these distressed homeowners might have a case, they generally lack the resources to pay legal fees. Being in foreclosure usually means being broke. “We thought, ‘Why don’t we use a bit of ingenuity to find an affordable way to represent them?’ ” said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla. “It’s a new model, a new paradigm.”

Failed Al Qaeda plot involved sewing bombs inside dogs (NYP)
The diabolical plot failed because the bombs were so badly stitched inside the poor pooches that they died, said the Paris daily Le Figaro.

CEOs Most Optimistic on U.S. Profits in Bull Signal for S&P 500 (Bloomberg)
The last time executives were this optimistic, stocks climbed 39 percent over the next 3 1/2 years, data compiled by Bloomberg show.

Weddings: Tali Farhadian and Boaz Weinstein (NYT)
The bride, 35, is a lawyer with the United States Department of Justice. The bridegroom, 37, is the founder of Saba Capital Management, an investment firm in Manhattan.

Fortress Investment Profit Rises 37% (Bloomberg)
Pretax distributable earnings were $78 million, or 15 cents a share, compared with $57 million, or 11 cents, a year earlier, the New York-based firm said today in a statement. The results beat the 11-cent average estimate of seven analysts surveyed by Bloomberg. Earnings were boosted by $75 million in performance fees, mostly from the credit funds and liquid hedge funds, which rose above their previous peak asset values.

World Bank Chief Sparks Gold Standard Debate (FT)
Robert Zoellick, the bank’s president since 2007, says a successor is needed to what he calls the “Bretton Woods II” system of floating currencies that has held since the Bretton Woods fixed exchange rate regime broke down in 1971.

Geithner, Mukherjee Discuss Economic Agenda (WSJ)
Mr. Geithner and Mr. Mukherjee talked about technical cooperation on capital markets, infrastructure investments, and about joint efforts to combat money-laundering and terrorism financing, the spokeswoman said…The U.S. Treasury Department has been advising India on its plans to expand its small capital and debt markets.

Article courtesy of Dealbreaker

Billionaire Ken Fisher Sees 16% S&P 500 Rally After Elections (Bloomberg)
“Right now, every politician is chirping and burping and carrying on,” said Fisher. “It’s been in the interest of the Republicans running for office to talk down the economy. That goes away immediately after the election. Come June, you’ll see how quiet the political landscape will be — very little legislation and a lot of baby kissing…Next year is the sweet spot. Most political risk aversion occurs in the first year when the president has the most relative power to the opposition party he will ever have. He tries to get through whatever his toughest bills would be, and that freaks people out.”

Mohamed El-Erian: We’ve voted. What’s next for the economy? (WaPo)
Simply put, these realities make it necessary for Washington to resist two years of gridlock and policy paralysis. Democrats and Republicans must meet in the middle to implement policies to deal with debt overhangs and structural rigidities. The economy needs political courage that transcends expediency in favor of long-term solutions on issues including housing reform, medium-term budget rules, pro-growth tax reforms, investments in physical and technological infrastructure, job retraining, greater support for education and scientific research, and better nets to protect the most vulnerable segments of society.

California Voters Reject Legalization of Marijuana (AP)
Burn.

Morgan Stanley Slowly Rebuilds Fixed Income (NYT)
“We think management has a credible plan to rebuild the trading franchise,” wrote Schorr, after meeting with Morgan Stanley executives. But he added that the plan will take time and returns are likely to remain sluggish in the near term so Nomura remains neutral on the stock.

Freddie Mac Reports $2.5 Billion Loss (WSJ)
Freddie Mac reported a third-quarter net loss of $2.5 billion and asked the U.S. Treasury to provide a $100 million infusion, raising the government’s tab for its rescue of the mortgage-finance company to $63.2 billion. The third-quarter loss, the 12th in the last 13 quarters, compared with a year-earlier net loss of $5.4 billion.

GM Could Be Free Of Taxes For Years (WSJ)
According to documents filed with federal regulators, the revamping left the car maker with another boost as it prepares to return to the stock market. It won’t have to pay $45.4 billion in taxes on future profits.

Harry Potter Blamed For India’s Owl Crisis (AP)
Indian Environment Minister Jairam Ramesh has blamed fans of Harry Potter for the demise of wild owls in the country as children seek to emulate the boy wizard by taking the birds as pets. The hit books and films, which are popular in India, feature a snowy owl called Hedwig who is a feathered sidekick for the Potter character and used to deliver mail. “Following Harry Potter, there seems to be a strange fascination even among the urban middle classes for presenting their children with owls,” Ramesh said Wednesday, according to comments reported by the BBC. His remarks came as wildlife group Traffic presented a report called “Imperilled Custodians of the Night” which warned about the declining owl population in India. Researchers found that a growing number of owls were being trapped, traded or killed in black magic rituals.

Dream Choice Can’t Resist Lloyds Challenge (FT)
António Horta-Osório was always going to be a dream choice for Lloyds to draft in as its next chief executive. Having turned a clutch of troubled UK lenders – Abbey, Alliance & Leicester and the relatively healthy half of Bradford & Bingley – into a big profit engine for the Santander group, who better could Lloyds chairman Sir Win Bischoff find to return Britain’s biggest high-street bank to health? The 46-year-old Portuguese-born banker has spent the best part of two decades at Santander. He has held three big jobs and in each case has built businesses from a position of weakness – first in Brazil, then in Portugal, and finally in the UK. And he had been widely seen, both inside and outside Santander, as the heir apparent to the chief executive, currently held by Alfredo Saenz. “It definitely would have happened. It was just a matter of time,” confided one colleague. “But the immediate challenge of Lloyds was just too good an opportunity to pass up.”

Proprietary Trader First New York Securities Said to Plan First Hedge Fund (Bloomberg)
First New York is seeking outside money after returning an annual average of about 20 percent in the past five years, according to a person with knowledge of the matter. The firm may hire as many as 40 traders in the next six months, the person said.

Business Looks to Republicans to Block Obama on Rules, Taxes (Bloomberg)
“You’d have to say job one is get this tax situation at least stabilized, let’s decide what we’re doing on the tax-cut extensions, let’s not be raising taxes while we still got 9.6 percent unemployment,” John Engler, NAM’s president and former Michigan governor, said today on CNBC.

SEC Mulls Ban on Unfettered Access to Markets (Reuters)
The SEC will meet later on Wednesday to decide whether to require brokerages to have rules in place to protect against potential mishaps from unlicensed traders when brokerages rent out their access to the markets. The SEC is also expected to propose a controversial plan that would allow it to reward whistle-blowers if the information leads to a successful enforcement case.

Article courtesy of Dealbreaker

Spain’s largest online sales club, Privalia Venta, is taking sharp aim at a booming Latin America. The company announced today that it has received a $95 million infusion of  financing from Index Ventures and General Atlantic.

Privalia, which already holds majority market share in Italy, Mexico, Brazil and Spain, says it intends to use the funding to tackle new markets after its sales jumped 158 percent over the first half of 2010.

The latest round of fund-raising far outpaces Privalia’s initial four rounds of funding, which had netted the company only $21 million over the last four years. The credit crunch and increasingly savvy fahionistas have given a boost to the site — as international shoppers turn to web retailers as a way to find the latest styles at the lowest prices.

Targeting the rapidly growing markets of Brazil, which ecommerce tracker eBit projects has 18 million online shoppers at the end of 2009, and Mexico, where Privalia saw sales leap 300 percent year-over-year, is a smart move for the 5-million member club.

Privalia said the money would now help it lock down its market leadership in Latin America, while simultaneously allowing it to grow through mergers and acquisition in the region. Founders Lucas Carné and José-Manuel Villanueva have long said they would be looking abroad when the group eventually expanded — presumably in Argentina and Colombia — and this considerable chunk of funding should certainly lend them the international cachet to do so.

Venture capital firms General Atlantic and Index Ventures joined current shareholders Highland Partners, Nauta Capital and Caixa Capital in backing the Barcelona-based fashion brand club.

Photo via Chris Willis

Tags: deal, entrepreneur corner, Europe, funding, latin america, online sales, spain

Companies: caixa capital, General Atlantic, highland partners, Index Ventures, Nauta Capital, privalia venta

People: jose-manuel villanueva, lucas carne

Article courtesy of VentureBeat » Deals & More

$$$ Porsche’s $275,000 911 Speedster May Sell Out by Late October [Bloomberg]

$$$ `Potentially Habitable‘ Planet Discovered Orbiting Nearby Star [Bloomberg]

$$$ Irish face bill of up to €50bn for bank rescue [FT]

$$$ Icahn Pressures MGM [WSJ]

$$$ The Ties That Bind At The Federal Reserve [Reuters]

$$$ Vote A Clown Or Porn Star Into Office In Brazil [WSJ]

Article courtesy of Dealbreaker

If so, might we suggest you tell whoever makes your travel arrangements to book you a flight on Colombia’s Aires airline, whose planes are protected by some sort of force field that allows them to struck by lightening, break into three pieces and only have one person (out of 131) die (and not as a direct result of the crash)? [WSJ]

Article courtesy of Dealbreaker

• Man claiming to be LeBron's father is suing the baller and his mama [TMZ]
• Bill Clinton will spend the next 3 years helping rebuild Haiti [HuffPost]
• Jesus leaves Madge in London to attend a concert in Brazil [NYPost]
• Conan O'Brien gets an Emmy nod while Jay Leno gets none [Popeater]
• Did you guys feel that little earthquake yesterday? [KTLA]

Article courtesy of Los Angeles | Guest of a Guest – Los Angeles People, Places, Parties & Nightlife

With the recent news that Groupon, the well-funded group buying site, just acquired two start-ups in Latin America, many in the region view it as a sign of things to come. Whereas, previously, only well-financed startups with strong revenues made it onto the radar of potential strategic acquirers; today, smaller startups in the region, such as Argentinean start-up, Three Melons, which was recently acquired by Playdom, are fair game. So, what has changed?

For one thing, with a user base of more than 170 million and boasting the fastest growth rate in the world, the Latin American market is getting tougher to ignore. According to Comscore, the region represents 8% of the global Internet audience, and Latin Americans spend more time online, on average, than users across the globe.

Also, the regional culture is extremely social, making Latin Americans heavy users of social media and mobile devices. Although e-commerce is still nascent and focused on sites outside of Latin America, Brazil is a notable exception, representing more than half of retail e-commerce with only 34% of the Internet users in the region.

Secondly, some early-movers have already established themselves and piqued the interest of global investors. For instance, last year, the South African media group, Naspers, invested $342 million for 91% of comparison-shopping site Buscapé while Mercado Libre, an ecommerce site with a $2.5 billion market cap, went public in 2007.

Finally, many trends are producing a gale wind in the sails of the Latin American online market. From a macro economic standpoint, most countries in the region are growing at a strong clip. Brazil, for one, has one of the fastest-growing economies (9%) in the world, e-commerce growth of 30% and, thanks to government support, broadband penetration that some project to grow to 50% of households (from 25% today). The country has become a more visible global player thanks to some high-profile acquisitions by Brazilian companies in the United States as well as playing host to the next World Cup and Olympic games.

Historically, web start-ups at an early stage in their development have rarely looked to Latin American for talent or market positioning. Previously, factors such as low Internet penetration, per capita income below $7,000, uneven transportation and communications infrastructure, low credit-card penetration and volatile currencies, among other issues, were enough to dissuade companies from considering entering Latin America.

While these issues continue to exist, some are improving. In the meantime, they provide what Warren Buffett might term as effective moats that can serve to protect higher returns. For example, Mercado Libre boasts EBIT margins (e.g., greater than 30%) on a par with eBay’s, with the caveat that Mercado Libre’s earnings grew more than 100% compared to a year ago as the company’s sales continue to grow (42%) and it achieves greater economies of scale.

Additionally, as Sarah Lacey mentioned a few months ago, some Brazilian start-ups are not only innovative, but are reminiscent of similar companies in Silicon Valley. Angel investors such as New Yorker, Michael Nicklas and Californian James Gray, have both invested in Latin American start-ups with strong teams and solid plans and are positive on the potential in the region.

Either way, Groupon’s and Playdom’s recent acquisitions of Latin American startups signal something that many Latin American entrepreneurs already sense: 2010 marks an inflection point in terms of the investment environment in the region. If nothing else, if we accept SXSW’s ability to predict future trends, it’s interesting to note that they are planning a panel on Latin America at next year’s event.

Tags: latin america

Companies: Groupon, Playdom, Three Melons

Article courtesy of VentureBeat » Deals & More