Finance Blog number 1

BP will have to pay the U.S. government royalties on oil that spilled into the Gulf of Mexico if it is found that "negligence or regulatory violations" contributed to the accident, according to a government statement Thursday.

U.S. regulators are investigating what caused the April accident, but the findings aren’t expected for several months.

All oil companies pay royalties on oil produced from wells on government land or water.

BP is currently paying royalties on the oil that it is collecting and selling from its damaged well. BP is donating proceeds from those sales to a wildlife fund.

Based on the oil BP has collected as of last week, current oil prices, and the 18.75% royalty rate on the well, BP has paid about $8 million to the government.

But the well is estimated to be leaking up to 60,000 barrels a day. If the company was charged for that full amount, it would owe another $65 million.

BP has set up a payment plan with the government where it has promised at least $20 billion to pay for damages caused by the spill.

BP officials did not immediately respond to a request for comment. 

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Epocrates Inc. said on Friday it plans to sell up to an estimated $75 million in an initial public offering.

This is second attempt at an IPO by the San Mateo mobile drug data company. It withdrew a previous effort in late 2008 amind the economic downturn that year.

Epocrates said it plans to trade on the Nasdaq Global Market with the EPOC symbol.

The company showed a loss in the three months ended March 31 of $855,000 as its revenue dropped 1.6 percent to $24.3 million. It showed a profit of $993,000 a year-earlier in the same quarter no faxing 1 hour payday loans.

Epocrates said it will use money raised through the IPO to pay dividends due to the holders of its Class B preferred stock and for general corporate purposes.

Epocrates said in its filing that about 40 percent of U.S. physicians use its mobile drug reference tools and interactive services, aout 1 million users.

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Florida International University’s Herbert Wertheim College of Medicine secured its ninth clinical partner by signing an affiliation agreement with Cleveland Clinic Florida.

The 150-bed hospital in Weston has 922 employees, including 166 physicians on staff. The nonprofit admitted more than 12,000 patients last year.

With the agreement, fourth-year FIU medical students could get clinical training from specialist physicians at Cleveland Clinic Florida.

“We are very excited to be affiliated with such a respected institution that has an excellent national reputation,” FIU College of Medicine Dean Dr. John Rock said in a news release same day payday loans. “Cleveland Clinic is world renowned for providing quality health care at an affordable cost, and we are proud to partner with them to train the next generation of doctors.”

The state university’s medical program also has affiliation agreements with Baptist Health South Florida, Jackson Health System, Mount Sinai Medical Center, Miami Children’s Hospital, Mercy Hospital, Leon Medical Centers, Broward Health and Memorial Healthcare System.

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Denise Rehg, president of Culture Works, has stepped down to take a new position.

Rehg, who headed the Dayton-based arts funding, services and advocacy group for nine years, has taken the position of assistant senior vice president for major gifts with the United Way of Central Ohio, according to a press release.

Until a new president is found, Kathy Hollingsworth will be the interim president and chief executive officer, effective Aug. 2. Hollingsworth co-founded Innovative InterChange Associates, a Dayton consulting company low rates payday advance.

Culture Works provides some general operating support to the largest performing arts and arts education organizations in greater Dayton including: Cityfolk, Dayton Ballet, Dayton Contemporary Dance Company, Dayton Opera, Dayton Philharmonic Orchestra, The Human Race Theatre Company and Muse Machine, among others.

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A $900 million search ad deal between Google Inc. and News Corp. expires this summer, reportedly setting up a competition involving the search giant, Yahoo Inc. and Microsoft Corp.

But declining Web traffic and other milestones on News Corp.'s MySpace have been far short of the goals laid out in the existing contract which expires in August, according to the Wall Street Journal, which is owned by News Corp.

The Journal cited unnamed sources familiar with the matter on Tuesday who said that any deal will be for significantly less money and will be much narrower.

The ad contract was a major factor in News Corp.'s ownership of MySpace, which it paid $650 million for.

But the social network has been surpassed by Palo Alto-based Facebook Inc payday loans., which has more than half a billion unique users compared to MySpace's 109 million users.

A number of high-level executives have left the company, amid a 30 percent cut in work force and a $450 million write down of the value of MySpace and other digital businesses by News Corp.

TechCrunch reported Tuesday that the search ad contract competition comes at a time that News Corp. may sell the Fox Audience Network (FAN), which it says serves most of the ads on MySpace. The blog reports that Menlo Park-based Silver Lake Partners is among the bidders and that if FAN is sold, MySpace is likely to quickly be sold as well.

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BP’s stock price has fallen far enough for the oil company to become an attractive takeover target for its biggest rivals, according to industry analysts.

BP’s (BP) stock finished at $28.88 Wednesday, a plunge of more than 50% from its close of $60.09 on April 19, the day before its leased oil rig, the Deepwater Horizon, exploded and sank in the Gulf of Mexico.

Fred Lucas of JPMorgan believes that investors have overdone it, making the stock an attractive value for buyers — including other companies.

"In theory, either Exxon Mobil or RD Shell could consider a bid for BP," wrote Lucas in a note to investors. "We focus on these two names because they have similar business models and similar global asset structures. They also bear the lowest political risk to a potential combination with BP."

Lucas said that his idea of a proposed takeover of BP was "prompted by the gap between the current market value of BP and the intrinsic value that we see in BP."

Another oil industry analyst, Douglas Youngson of Arbuthnot Securities, told CNNMoney last month that if BP’s stock dropped below $30 a share, it would become an attractive takeover target.

"If the share price continues to fall, other companies may see this for the bargain it will be," said Youngson on June 2, when BP’s stock closed at $37.66.

Of the various big players in the oil industry — including Gazprom and PetroChina (PTR) — Lucas believes that ExxonMobil (XOM, Fortune 500) is in the best position to be the acquirer.

He wrote that Exxon Mobil "has the largest rating advantage and strongest balance sheet," providing it with enough cash to handle the deal.

"Exxon Mobil has also proven its ability to integrate a very large transaction successfully — its merger with Mobil was a resounding success," added Lucas low fee cash advance. "RD Shell has no large-scale merger integration experience."

Gazprom wouldn’t be a contender because of a "low stock market rating," he said, while PetroChina "would encounter major political barriers given its controlling shareholder - the Chinese government."

BP has been purging itself of cash to try and fix the environmental and economic aftermath of the disaster.

The company said it has paid out $2.65 billion for the clean-up, and another $130 million on 41,000 claims from workers and business owners who lost their livelihoods in the wake of the spill. More than 80,000 claims have been submitted so far. Bowing to pressure from the U.S. government, BP has put $20 billion in escrow to cover damages.

Lucas figures that the leak will stop sometime in July, meaning a finite cap to the liabilities. So this might be a good time for Exxon Mobil to swoop in, especially since the oil giant has had its own experiences with catastrophic oil spills.

Before BP’s environmental disaster in the Gulf, Exxon had the dubious distinction of causing the nation’s worst oil spill, when the Exxon Valdez oil tanker ran aground off the coast of Alaska in 1989.

"In many respects, an accurate valuation of BP today depends less on a valuation of its assets, but more on an accurate value of its potential liabilities," wrote Lucas. "Who knows better how to price potential clean-up costs and associated civil claims than Exxon Mobil?"

Spokesmen for BP and RD Shell declined to comment on this story. Exxon Mobil did not respond to messages from CNNMoney.com. 

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The leaders of the Group of Eight global economic powers pledged Saturday to continue working together as the world "begins a fragile recovery from the greatest economic crisis in generations."

In a statement concluding the two-day summit in Muskoka, Canada, the leaders said they were committed to open trade and that they would "resist protectionist pressures."

In addition to the United States, the summit included Canada, France, Germany, Italy, Japan, Russia and the United Kingdom.

The summit immediately preceded a gathering in Toronto of the G-20, which includes the leaders of other important economies, most notably China.

In the run-up to the meetings, President Obama had stressed the need to keep economic stimulus measures in place to prevent a global slowdown. But European nations have been moving toward more conservative fiscal policies as the region grapples with an ongoing debt crisis.

In a letter to G-20 leaders sent earlier this week, the president wrote that safeguarding and strengthening the economic recovery should be "our highest priority in Toronto."

"In fact, should confidence in the strength of our recoveries diminish, we should be prepared to respond again as quickly and as forcefully as needed to avert a slowdown in economic activity," he wrote.

Meanwhile, European nations have been cutting back on public spending and raising taxes to cope with massive budget deficits.

Since Obama issued his call to focus on growth, German Chancellor Angela Merkel called budget cuts "urgently necessary," and European Central Bank President Jean-Claude Trichet said stronger public finances are part of a "policy which we would call confidence-building."

Last week, the United Kingdom unveiled one of its harshest budgets in decades payday loans.

In a statement Saturday, U.S. Treasury Secretary Tim Geithner acknowledged the differences, while again stressing the need for pro-growth policies: "We all need to act to strengthen the prospects for growth. This will require different strategies in different countries. We are coming out of the crisis at different speeds." Geithner added, "We need to act together to strengthen the recovery and finish the job of repairing the damage of the crisis." (See ‘The great spending debate’)

Also expected to be discussed at the G-20 meeting will be China’s currency, the yuan. China moved last week to begin letting it trade freely against the U.S. dollar, but the move may have been too little to head off debate. Since 2008, China has pegged its currency to the dollar, and many think it is artificially cheap, making it harder for U.S. companies to compete.

The yuan has risen only slightly against the dollar in the past week.

Still, Geithner praised China’s move: "China is acting to allow its exchange rate to appreciate in response to market forces. This is an important step toward helping China better meet its own challenges and providing a more level playing field for all its trading partners."

Separately, President Obama met with the president of South Korea. Obama hopes to complete a free trade agreement with South Korea later this year, according to a senior White House official.

The plan is to double U.S. exports over the next five years, he said. The United States already exports $50 billion worth of goods and services to South Korea, which is the world’s 14th largest economy. 

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The iPhone 4 has arrived, but for some people the wait continues as Apple sprints to keep up with fierce demand for its latest gadget.

From Tokyo to St. Louis, some stores started selling out of Apple Inc.’s newest iPhone just hours after it went on sale Thursday. Some anticipated the demand and made sure they were in line early to get one.

Malinda Hagenhoff, of Jefferson City, stayed in her car in a parking lot overnight Wednesday to be among the first in line at West County Center in Des Peres on Thursday morning.

"I’m kind of a techy person who loves techy stuff," said Hagenhoff, who already owns an iPhone but wanted the newest model.
She was No. 30 in line when mall opened at 6 a.m., but that put her ahead of 120 others to await the Apple Store’s 7 a.m. opening.

As the line stretched farther and farther into the mall, other fanatics sought different sources.

Tyler Woods, 20, of south St. Louis, traveled with two friends to a Walmart store in Arnold.

"This has to be some kind of miracle," Woods said when he arrived in line at the Walmart store at 8:45 a.m. and was told he would get one of the 24 iPhones the store had in stock.

Similar stories were told around the globe. Thousands lined up outside stores in Tokyo, Berlin, New York and elsewhere. Some said they waited 11 hours to get through the lines.

Going into Thursday, concern was raised about limited supplies after more than 600,000 people rushed to pre-order iPhones on the first day they were available, prompting Apple and its U.S. carrier, AT&T Inc., to halt orders for shipment by Thursday’s launch. On Apple’s website, new orders weren’t promised for delivery until July 14.

Apple spokeswoman Natalie Harrison said demand was "off the charts," and that the company was working hard to get phones into customers’ hands as quickly as possible.

Some stores sold out within hours. Brian Marshall, an analyst for Gleacher & Co., said certain Apple stores likely had enough iPhones to last into today before selling out. A new shipment could be in stores as early as Saturday, he said, but more likely won’t arrive until early next week.

Apple is having a hard time getting enough of the new custom parts for the iPhone 4, such as its new higher-resolution screen, Marshall said.

Apple has said the white iPhone it plans to produce has been more challenging than expected and won’t be available until late July. Only black models went on sale Thursday.

The Associated Press and Robert Cohen, Kim Bell and Matthew Franck of the Post-Dispatch contributed to this report.

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St. Louis Brewery, maker of Schlafly craft beer, is for sale. But company founders Tom Schlafly and Dan Kopman say they are in no rush to sell their stakes, and they would strongly prefer a local ownership group that includes current brewery workers.

The main reason for the "for sale" sign outside St. Louis’ largest craft brewer is succession planning, they said. Schlafly, 61, who owns nearly 80 percent of the company, has no family interested in running the business. Kopman, 48, who holds about 20 percent, also does not see his school-age children becoming involved with the brewery.

"At some point, the brewery is going to move to additional ownership," Schlafly said Monday.

And they wanted to begin thinking about that now. So earlier this month they asked the brewery’s senior staff to look for ways they could buy the company.

"We’re exploring this on the basis that we want our employees to have a long-term stake in the company," Kopman said.

St. Louis Brewery joins a generation of craft brewers now confronting questions about what future ownership will look like. Anchor Brewing Co. in San Francisco, which is considered the brand that launched the microbrew movement, was sold earlier this year to Bay-area entrepreneurs. Rogue Ales in Portland, Ore., is being handed down from the founder-father to son.

St. Louis Brewing, founded in 1991, sells its beer under the Schlafly name and operates two brew pubs, in downtown St. Louis and Maplewood. It posted nearly $12 million in sales last year and ranked No. 41 among the nation’s largest craft brewers, according to the Brewers Association.

James Ottolini, head of brewing operations, is one of the longtime workers whom Schlafly and Kopman hope will lead the buyout effort. Ottolini, who holds a freshly minted Washington University MBA, said he was excited by the opportunity.

"Our efforts will be to put together an investment group" that includes outside investors and workers, Ottolini said.

Schlafly, an attorney not involved in the day-to-day operations, said he hoped to retain a small, unspecified stake in the company. Kopman said he might not sell any of his share. In any case, he planned to stay on as chief operating officer "for the foreseeable future."

They sounded reluctant to sell to venture capital firms seeking outsized returns or to take the company public, with heavy compliance costs and focus on making quarterly numbers.

The most likely scenario, Kopman said, is local investors and some form of employee-stock ownership plan buying a majority stake.

"We don’t want to see what we’ve helped build diminished," Kopman said.

Schlafly said he was motivated to seek a buyer, in part, because the growing company faces a looming decision on building a new brewery, "and I don’t have the appetite for the debt that it would involve."

The brewery could roughly fetch $5 million to $18 million, based on revenue and estimated margins, said Tom Lee, senior vice president with Mercer Capital in Memphis, Tenn.

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AOL said Thursday that it sold Bebo, the struggling social networking site, to Criterion Capital Partners, a private equity fund, for a fraction of what AOL paid for the site two years ago.

Terms were not disclosed, but reports pegged its value at $10 million or less. AOL paid $850 million for it.

AOL once had high hopes that Bebo would help it to regain momentum, especially with younger audiences and advertisers, and to catch other fast-growing Internet franchises. At the time, it was popular in Britain.

When it bought Bebo, the chief executive of AOL at the time, Randy Falco, called it a "game-changing acquisition" that would turn AOL into "a social media powerhouse." AOL also had hopes Bebo would help AOL’s instant messaging service bring in revenue. But Bebo was eclipsed by Facebook, which now has 500 million members around the world.

At the time of the deal, AOL was owned by Time Warner. Now, AOL is independent, and its new management team, led by Tim Armstrong, the chief executive, is struggling to engineer a turnaround.

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