"Whether or not we get to low [green], I'm hopeful, but I still think it's years away." -- Homeland Security Director Tom Ridge, unveiling the color-coded terrorist alert system It was supposed to be one of the new highfliers of success-starved Silicon Valley. But three weeks after BusinessWeek revealed that home-entertainment startup Moxi Digital was facing a cash crunch and other troubles (BW--Mar. 4), the company appears on the verge of being acquired. Sources close to the companies say that Vulcan Ventures, Paul Allen's investment company, is negotiating to buy Moxi. They're not revealing numbers, but they'll be significantly lower than the $267 million the company was once valued at.
That's quite a comedown for a company that won heaps of praise just two months ago when it launched its star product: a home-entertainment console that combines TV, video, music, and the Internet. But a cash crunch and the Feb. 20 replacement of CEO Steve Perlman have raised doubts about Moxi's viability. Vulcan and Moxi declined to discuss the talks.
A previous offer in the last few months by AOL Time Warner (AOL) for around $100 million was rejected, according to a Moxi exec and a source close to AOL. Other undisclosed offers from EchoStar Communications (DISH) and even from Vulcan also fizzled. But now, with its cash rapidly dwindling, $100 million might be looking pretty good. There are pessimists, and then there are pessimists. Laurence Tisch, co-chair of the Loews conglomerate whose chronic bearishness was borne out in 1987 and 2000, is trying to outdo them all. Tisch recently told Bloomberg News that he "wouldn't be surprised" to see the Nasdaq Composite fall to 1000--a 46% dive.
Are things really as bad as Tisch says? Well, other big names in the investing world, including chief strategists Barton Biggs at Morgan Stanley and Jeffrey Saut at Raymond James, disagree.
On the one hand, they say, Tisch's assessment that tech stocks are still overvalued is correct. (The tech-heavy Nasdaq trades at 86 times expected earnings, vs. 22 for the S&P 500.) But they don't think the Nasdaq will take a huge plunge. Reasons they cite: The economy is once again gathering steam, profits are expected to rise in 2002, and cash-rich hedge funds seeking places to put their money are unlikely to avoid tech stocks altogether. "If everything's right with the world, the Nasdaq's not going to break 1,000," says Biggs.
Rather, they predict the Nasdaq is likely to stay flat. "I'm not expecting the markets to make new lows," says Saut. "I just think the upside is going to be muted." Compared with Tisch, who wouldn't comment for this story, that's not such a bad outlook. The nation has come down with reading fever. After Seattle and Chicago started One City, One Book--the project that picks a title for everyone in the city to read at the same time--the phenomenon spread to more than 50 cities from coast to coast.
While mass public reading may be cause for snickers among the literati, booksellers are thrilled with the sales boost. "It's the greatest thing since Oprah's Book Club," says Lori Hile, marketing manager at Borders Chicago, where sales of Elie Wiesel's Night have shot up 83% since Feb. 10, when it was chosen as Chicago's second book, following last year's To Kill a Mockingbird. At the three Chicago Barnes & Noble outlets and suburban locations, Mockingbird climbed to the Top 10 list in the seven weeks between being picked and being discussed at a public event.
Amazon.com also reported a sales spike. In Seattle, which started it all in 1998, the four books chosen each year became city best-sellers. Says a spokeswoman for Borders: "Any kind of project that gets people to read is obviously a great trend and also good for our sales." Clearly, it's a fever bookstores want more and more cities to catch. A gaggle of high-profile personalities has left CNN recently. Here are some* of the biggies and what they're doing now:
Founded public-relations firm Atamira with her husband in March
GRETA VAN SUSTEREN
Defected to Fox News in February to host daily show On the Record
Hired by CNBC in January after leaving co-anchor post at Moneyline
Defected to Fox News just as the U.S. launched the war in Afghanistan
Downsized in 2001; now hosts World Fashion Tour on USA Networks' Trio
Retired in 2001 after 20 years at CNN; now writing his memoirs
* Peter Arnett left in 1999 after Tailwind reporting controversy; now reporting on the war for independent video group BNN What's a shy and retiring accountant? An accountant who's half a million shy and that's why he or she is retiring.
How 'bout this one: When do people become accountants? When they realize they don't have the charisma to be undertakers.
O.K., they're bad. But in case you've been hiding under a rock, accounting jokes are in season in this post-Enron world. And with the Academy Awards coming up on Mar. 24, bet on the ceremonies being chock-full of one-liners at the expense of the poor PricewaterhouseCoopers accountant handing out the envelopes.
Pricewaterhouse not only counts the Oscar ballots for the Academy of Motion Picture Arts & Sciences, it also plays the increasingly taboo dual role of consulting as well as auditing for the Academy. Its executive director, Bruce Davis, vouches for the system, saying Pricewaterhouse has placed the names of Oscar winners in sealed envelopes under famously military-like secrecy since 1935 and audited the books since 1927. The results, tallied in an undisclosed location, are kept in a safe until an auditor hands them over from the wings on the big night.
This year, that unlucky soul will be PwC partner Greg Garrison, who's been trying to anticipate what, exactly, the jokes will be. "I'm bracing myself now," he says. "I figure we're going to get a bunch of them." Can it be that Alfred E. Neuman, the gap-toothed, apple-cheeked, freckle-faced moron from Mad magazine, is enjoying a renaissance?
'Tis true. In January, Neuman appeared in a "Got Milk?" ad sporting a milk moustache--with the gap in his smile replaced by a sparkling incisor. This month, he popped up on the Lands' End catalog. (The ad exhorts, "Look Smart.") In May, he'll grace bottles of a chocolate concoction from PepsiCo's SoBe. There's even talk of a tie-in with the World Wrestling Federation.
What gives? For starters, Neuman's "What--Me Worry?" credo may be filling a void at a time when there's plenty to worry about. Add to that the Boomers who grew up reading Mad and now hold influential jobs in marketing. Indeed, each of these deals has at its heart an exec who admits to having been an avid reader. Some even credit the ubiquitous 2000 campaign caricature that depicted then-candidate George W. Bush as Neuman-like.
"Lately we're getting more responses to Mad than even to our superheroes," says Joel Ehrlich, a senior vice-president at DC Comics. In a world now full of real heroes, it kinda makes sense. Five years ago, twenty-somethings were out swilling martinis. Now they're spending nights with friends over yarn and needles, gathered at each other's homes in knitting circles.
Yes, knitting--that folksy craft practiced mainly by the over-50 set, is suddenly popular among young women. As Americans hunker down after September 11, more and more are seeing it as a way to connect. "A lot of things were going on after September 11, and I had to find something to do with my pent-up energy," says Marney Anderson, 28, an assistant in the insurance department of Morgan Stanley Dean Witter who took up knitting in December.
At New York's Gotta Knit, a store that also offers classes, all beginning sessions are booked through May, mainly with women in their 20s and 30s. "People are spending more time at home, and they're looking for a distraction," says Diane Friedman, whose wholesale yarn business, Tahki Stacy Charles, saw January-February sales grow 35% over that period last year.
Movie stars are helping the trend: Daryl Hannah, Julianne Moore, and Bridget Fonda are devotees. They're contributing squares to celebrity afghans to be auctioned on e-Bay next month to raise money for the New York City Police & Fireman's Widows & Children's Fund.