For some investors, one way to make money is to find a company that is the target of a buyout and purchase its stock before the merger is announced.
It's a risky strategy, but one telltale sign is often movement at the top of the corporate organizational chart. After a merger, only one of the CEOs involved in the deal can maintain the top position with the new company. That often leads the "losing" CEO to leave the company prior to the announcement.
The resignation may take place weeks or months ahead of a merger, but for investors it's almost always too late to wait for the merger announcement before buying stock. That was exactly the scenario in a retail merger proposed last week.
Cincinnati-based Federated Department Stores Inc. is buying rival May Department Stores for $11 billion. The deal combines Federated's Macy's and Bloomingdales stores with St. Louis-based May Company's Marshall Field's and Lord & Taylor chains.
The merger had been discussed for years but didn't come to fruition until May CEO and chairman Gene Kahn abruptly left the company in January. That cleared the way for Federated Chairman and CEO Terry Lundgren to head the new entity.
By the time the deal was announced, though, both companies' stock prices were near their 52-week highs, dampening prospects for new investors.
You snooze, you lose
Are you a procrastinator? If so, it's likely you'll be one of the more than 8 million Americans asking for an extension with the Internal Revenue Service next month. Or perhaps you'll simply be one of the many millions more waiting until the April 15 deadline to file your income taxes.
Either way, delaying the inevitable creates unnecessary stress and increases the risk of errors on your return. "Don't wait for the motivation or desire to do your taxes because it may never come," warns Michelle Tullier, author of The Complete Idiot's Guide to Overcoming Procrastination.
For starters, say tax experts, begin collecting information that applies to your tax situation. In addition to W-2 forms, this could include unreimbursed work expenses, charitable donations, tuition payments, mortgage and home equity loan documents, medical bills, home office expenses, and union dues.
If you wait until the last minute, you may be unable to locate these documents and miss out on potential savings. Jackson Hewitt Tax Service said among these overlooked expenditures that can mean tax benefits are student loan interest, alimony, personal property taxes, work uniforms, job search expenses, professional dues, and a variety of medical costs.
· Starbucks launched its first alcoholic drink in collaboration with Jim Beam this month. The new Starbucks Coffee Liqueur, however, will only be sold in restaurants, bars, and liquor stores-not in Starbucks' popular coffeehouses.
· Good news may be on the way for U.S. beef producers. After meeting with Secretary of State Condoleezza Rice, Japan is considering lifting its ban on imports of U.S. beef. The ban took effect in December 2003 when the first U.S. case of bovine spongiform encephalopathy or BSE, was confirmed. Before the ban, Japan was the most lucrative overseas market for U.S. beef producers, buying $1.7 billion in beef in 2003.
· Expect to see more "Yellow" trucks on the interstates this summer as Yellow Roadway Corp. has agreed to buy rival USF Corp. for $1.37 billion in cash and stock. The merger is expected to result in savings of about $40 million in the first year and long-term savings of at least $150 million, but there was no word on possible layoffs.
· Southwest Airlines began offering a quicker way for customers to find its cheapest fares late last month. Through the company's website, customers can download "Ding!," a free software that automatically informs customers when new deals are available. Ding! fares will be slightly cheaper than those offered through Southwest's weekly e-mail offers.