Wednesday, December 12, 2007

Paperstand (CS, BBY)

The WSJ’s “Heard on the Street” column discusses Credit Suisse (CS), which has largely escaped the subprime woes. Credit Suisse's success is even sweeter b/c its hometown rival, UBS, is the one with the big problems. UBS, normally the more staid of the two, has ousted two top execs, taken $14.2bn in write-downs and losses and was forced to get an infusion of capital from investors in Singapore and the Middle East. In addition, CS surprised rivals by reaching a deal last week to form an investment-banking joint venture in China. Historically, CS has been mgmt-challenged, says analyst Kian Abouhossein, of JP Morgan. "You normally have a blowup in this type of environment, but this time they've done extremely well," Mr. Abouhossein said. Mr. Abouhossein notes that Credit Suisse exposure to risky subprime mortgages and collateralized debt obligations, which are backed by assets such as mortgages, is less than $2bn, a fraction of the $39bn held by UBS when the mortgage crisis hit.

“Inside Track” section reports that Best Buy (BBY) founder and Chmn Richard Schulze sold more than $145m in co shares over the last week. Mr. Schulze sold 2.85m shares for an avg price of $51.32 a share. Mr. Schulze's stock sales came during a holiday season in which retailers typically look to boost their sales. According to Ben Silverman of, Mr. Schulze's sales send an "incremental negative" signal to investors.

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