ISS Backs Dell's Bid: Money Moves (07/08)

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July 8 (Bloomberg) -- "Money Moves" brings insight to investors looking for alternatives Deirdre Bolton talks to the professionals in hedge funds, private equity, venture capital, angel investing and real estate. Find out where they see opportunities. (Source: Bloomberg)

Hit by an emergency vehicle on the runway.

When the think we might get an answer to this?

In another corner is looking into this very possibility.

It certainly seems that everyone wants to know what, exactly, happened?

There will be a lot of questions going forward in the next half hour when the ntsb will offer a briefing as well and then we will get more on the house, presumably, possibly with more information about the pilots themselves and what they had to say.

That will presumably tell the fundamentally, that will inform the data that we saw the the coming in.

We will know all lot more before the next hours.

We will be covering the ntsb press conference right here.

He will be live ours year.

We will see you on the late edition of "bloomberg west" and thank you.

It is time now to move on to "money moves" and deirdre bolton in new york.

We are going to kick off "money moves" as we cover the new york venture-capital and hedge funds, private equity and real estate.

Dell, the pc maker, is in the final stages.

He says investors should accepted 20 four billion dollar buyout rather than the deal offered by carl icahn.

The iss endorsement was a surprise.

It gives ammunition to michael dell.

Does anyone listen to iss?

Mutual-fund, then the insurance companies, they were looking for the iss recommendation because investors were being painted such divergent pictures of the company.

Michael dell was saying it was in shambles.

And that you are going to take on a lot of risk, mr.

Shareholder, if you continue to hold this stock.

And at the same time carl icahn is saying there's still a lot of upside.

This company is still generating cash.

Given the divergent pictures that were painted, iss is very influential in this case, and it does put this into michael dell's favor.

There are a lot of big voices, carl icahn, michael dell.

Why did it iss back him up?

At the end of the day, they essentially said a bird in the hand is worth it to death row -- is worth two in the bush.

Not only do you have concern over whether carl icahn will pull off the deal -- because remember, not only do shareholders have to vote him down more but they have to pull off the board of directors.

And a portion of the company will still be publicly traded.

He will be exposed as a shareholder to the rest of that turnaround.

And michael dell is saying to keep in mind to the longer-term prospects of this company.

This company has not revised earnings projections for this year, meaning it will still generate $3 billion in cash.

At the end of the day, shareholders tend to be a little bit more short-term focus.

As always, cristina alesci there with the latest on del.

The four more with the legal wrangling, steve: may escape prosecution for trades made in the the -- steve: may escape prosecution for trades made in 2008. the statute of limitations does run out this month, but it doesn't mean that doesn't meancohen himself was in the clear.

Patty has been following the case.

How could he still be charged with insider trading?

The government is saying that they are not leaving any time soon.

We understand there are still continuing to investigate other traits that he may have done -- other trades that he may have done.

It is not just about india.

It could be other trades as well.

Right, and there are possible conspiracy charges they could bring against him for alleged insider trading.

What specific evidence are prosecutors looking for at this stage?

Have they just given up on nvidia and focusing on other possibilities?

That is certainly what the "wall street journal" is reporting.

There are other trades that cvohen has been involved in.

We have seen in the house about the dell trade in 2008. the -- we have seen e-mail exchanges about the dell trade in 2008. is there anything else the government can do to bring a case against steve cohen?

There are other trades, jamboree as well as weight watchers and others.

The government says, you have been trading all of these years.

You better have been hit yourself very well or you are in trouble.

-- you better have behaved the either yourself a well or you are in trouble.

Nine people have been implicated in insider-trading.

At least five of them have pled guilty and are cooperating with the government.

There are a lot of people out there that may know something and could be talking to the government and helping them.

We're going to stay with hedge funds, because john paulson is not worrying about the legal problems right now, but he may be worrying about his position in gold.

It just fell another 23% in june and he has lost 65% in volume so far this year.

He does remain bullish on precious-metals.

Kelly is with me with the numbers.

Why is john paulson still so bullish on gold, even though he is -- has lost so much money?

It as going back to 2009, he put a lot of money into the economy for stimulus.

He thinks that gold will keep serving as a good hedge against currencies.

He thinks stimulus will continue, even though the fed will -- the fed has told us that it will start winning pretty soon.

Keep in mind that this is just one of his many positions.

What is the larger context?

A lot of his main strategies are doing very well this year.

In june, he did post losses.

But so far this year, his funds are up in the double digits.

His investment and insurance companies and other asset management are doing well.

Those funds are doing really well.

And how much investor on how big as or dissatisfaction have you heard through your sources?

In 2011, $38 billion was the peak of his assets.

But he has to have some redemption throughout the years . $19 billion is still a lot of assets.

There are still some investors in the gold fund.

People are sticking with him.

Thank you, kelly bit.

Wheeler you that the stocks are up.

Julie hyman has more.

Indeed, they are.

And the first member of the dow jones will be reporting its numbers after today's trading.

We do see a rally, such as it is.

And right now, we look at where we have, after may 22nd.

That is the day that this tapering talk began with bernanke that day.

Sentiment, at least to some degree, seems to be stabilizing if not improving.

In terms of individual movers, walter energy helping to lead some of the coal miners.

The company is said to present its second quarter operating plan, and part of that may idled.

The heading on production may potentially be good for cold -- coal prices.

And one reason the nasdaq is underperforming, chipmakers.

Intel underperforming, among others.

Mother analyst echoing similar commentary today.

Not only intel falling today, but the philadelphia semiconductor index.

Julie hyman, thank you.

When we come back, another round of financing in a pretty high valuation.

We will talk about the chances of new york heading toward a tax bubble.

-- technology bubble.

Will give you details on blackstone's new housing strategy.

? welcome back.

The the -- "money moves" is streaming on bloomberg of a long period if you are a sharper, you may already know the fancy.

Its latest round values the company at around $600 million.

Investors include american express, land club bought neck, and also actor will smith.

It was bought by tumbler for one when $1 billion.

Brooklyn based makerbot was purchased for an efficient -- for an initial $403 million.

We're joined by the founding and managing partner of bold start.

We just went through a laundry list of all of these exits for e-commerce comedies -- companies.

What do you make of it now?

Are there too many the market -- e-commerce companies?

I look at the valuation that we have today less as a new york thing, but more as a consumer thing.

There are a few common themes.

They are consumers, most pieces are e-commerce, and the final piece is buying in a higher ground or for significant valuation.

The five dancers are not just in and for the valuation, but also in it from another perspective, such as the market.

It would suggest pricing and valuation.

Would you stay healthy or unhealthy?

It consumer space is really difficult in the sense that " something that is hot one day is not the next day sometimes.

It is almost like a game of musical chairs.

Let's look at the enterprise side of things.

What are you seeing there?

What is the new york system like?

It is pretty exciting because i have been doing this for about 17 years.

Enterprise investing in the first round was not really possible 15 years ago.

It used to take $3 million to $5 million to figure out the if you wanted to buy the software.

And now we have pretty smart engineers to figure out whether or not it is worth the business.

Our mantra is to take a little bit of dollars to scale it.

Seed enterprises have not been so common, but now they are more so.

Absolutely.

There is one company that we invested in the, which with a $1.5 million first c. brown, there were about -- they were able to develop software to the the allow employees to develop an enterprise persona and track investors.

Another we invested in allows you to use your mobile handset without a mobile desk phone at your desk.

Another example of mobile enterprise combined together.

As far as the software as a service, both of these play into that, right?

I was the first investor in my person, which is a $600 million company in new york right now.

When we first started this company to buy it took $10 million to figure out there is a market.

Today, i can figure out there is an opportunity and scale it pretty quickly.

We talk about big data and things like the company's mastering the larger businesses as the ones that have the competitive advantage over their peers.

What kind of investments are we making on that?

I happen to be one of the first investors in greenbaum, which we -- green plum, which resells for quite a bit about.

We look at how to maximize lifetime customer value with a new algorithm.

It is not about storing it, but what you do to create value.

Thank you for joining us.

And when we come back after this break, the world's largest piece flashy firm deviling down on recovery.

-- the world's largest soft p/e firm doubling down on recovery.

? blackstone has bought more than $5 million -- $5 billion in residential landscape in the past few years.

It is now the country's biggest landlord.

The firm wants to increase even further into housing?

People close to the matter said that blackstone is hiding up a finance company that would -- is heading up a finance company that would buy properties from other lamellar its.

After spending $5 billion to buy 29,000 homes in distressed markets, blackstone confirmed with bloomberg last month that it is entering its final stages of its buying spree.

At this point, it is hard to say how far this will get.

The environment is more challenging now, given that and more investors are coming into the market.

We think there is still an opportunity.

For that opportunity, at least one of them was loaned to these small landlords.

And the buying frenzy has fueled the fastest growth since 2006. and we have never seen investors invent -- involved to this extent in the rental market, right?

Right, and blackstone has not either.

More than 100,000 homes in the past two years, all of those to capitalize on distressed prices.

This was formerly the mom-and- pop market.

Blackstone is poised to take any and bigger bite out of the market, which is estimated by goldmansachs gb $two 0.8 trillion -- $2.8 trillion.

And by creating this lending unit, blackstone joins joins cerberus capital's first key lending.

Usually, investors have to go and sell properties before they can buy more.

Collett and institutional lending factor and it totally changes the game.

Thank you, sue keenan.

When we come back, we will take you for a test drive in nissan's super car, the vgr.

It goes from 0-60 in three seconds.

When you think of nissan, super car is probably not the first term that pops into your head.

But the company actually produces 1000 each year, the nissan gtr.

We go for a test ride.

Carmakers have been making super cars for decades, but not usually to sell them as daily drivers.

I wanted to test out the new gtr.

It is all very comfortable in a car that can go from 0-60 in 2.9 seconds.

It is kind of ridiculous.

I don't know where i would use all of that power.

If i live in wyoming, but i don't. i live in new jersey.

But this model is easy performance that you do not have to be a highly skilled, highly trained driver to take advantage of everything this car would be able to offer you.

I have used it to run errands.

I the can't imagine having the car and using it in that way.

-- and you can imagine having the car and using it in that way.

Why would they make a car like this?

The answer is simple.

Maybe it persuades you unconsciously to pick the nissan altima the instead of the honda accord.

All the features you expect on a price the car are here.

It has the vice those sound system.

-- the nice bose sound system.

If i want to see what's behind me, it's like eminem minivan.

No other car house this kind of instrumentation.

As far as performance is concerned, it is every bit the equal, and in some ways a superior to the portion 9/11 turbo.

-- to the portia 911 porrsche 911 turbo.

Will we come back, we will get an update on the plane crash.

And we will have richard falkenrath.

? collect and deirdre bolton . welcome back to "money moves", where we put our focus on alternative assets, places investors are putting their money outside traditional stocks and bonds.

We want to bring you our top headlines this hour.

Adam johnson is in the newsroom.

Dell shares up nearly 3% today after institutional shareholder services endorsed michael dell's buyout plan.

It gives michael dell and silver lake more ammunition as they encounter billionaire investor carl icahn.

And bill ackman is -- has a new target.

He is pushing squares to raise money in the next 10 days to buy stock in the largest undisclosed stake in the company.

He will seek to confer with management, according to a mysterious letter.

And warren buffett is giving back stock to the bill and melinda gates foundation.

He is a trustee of the foundation and also the world's third richest man with a net worth of about $61 billion, according to the billionaire index from bloomberg.

That is it for now.

Will turn our attention to san francisco because the chairman of the ntsb will be holding her second press briefing of the day.

She will give an update as to what caused the crash landing on saturday.

While we wait, on bloomberg editor at large cory johnson is with us from the san francisco international airport.

What new details may be released in this conference?

We do not know what they're going to tell us.

One news conference ended just moments ago and that was with the first responders to the crisis.

In particular, the police department of san francisco as well as nearby san mateo county.

The individual firefighters who were there dealing with this crash and a chaotic moments just afterwards were talking about what they encountered and what they saw the, and the descriptions of encountering a plane where a whole had opened up in the plane and gasoline was spewing out like from a fire hose.

People were trying to rush out of the plane.

Take a look at what one of the first responders had to say.

We went right up the issue and at the same time, i took one or two passengers off.

There was one gentleman standing up there and then he was the last one off, i believe.

A very emotional press conference as these people were describing their act -- their actions.

What they did not answer was whether one of the fatalities happen if as a firefighter might have run over her.

I will find out.

Here is the ntsb chairman.

Take a listen.

We held our first progress meeting and we talked about what needed to be done and we designated parties to our investigation.

It the parties to our investigation are the federal aviation administration, boeing, pratt and whitney, and we are also supported by the korean either aviation -- the career in aviation and rail accident investigation board -- the korea aviation and rail accident investigation board.

They are our counterpart.

We rely on our parties to provide as information, to assist us, and particularly to provide technical expertise.

For example, with boeing, that would be about the design and the performance and function of the aircraft.

Brought and whitney, that would be the engine.

-- pratt and whitney, that would be the engine.

We have a number of activities that we are undertaking to talk about our operation and our human performance teams.

They have documented the top -- the cockpit, the switch position, the locations.

They are also located the pilot flight bag and the chart the that they used for flying.

They found the appropriate chart for the airport and the approach in place in the cockpit.

They are now reviewing manuals and training.

They are working to conduct a 72-hour work rest history and in the 72-hour histories, they're looking at the the pilot flight and duty time.

They're looking at the opportunities that have taken place in the days leading up to the crash.

In our investigations, we are often looking for things that might have affected human performance like fatigue, elisas, medications, health issues -- illnesses, medications, health issues and so forth.

We will be looking at all those things that will affect how they might have performed their jobs.

We are interviewing all four pilots.

There were two pilots, and many of you have talked about those two pilots.

There was a captain, working on his initial operating experience in a triple seven.

He was not an experienced captain, but he was working on getting his rating for the triple seven.

He was offline with the training captain.

And then there were two the the other crew members, another captain and first officer, who were also flying.

Remember, this is a very long trans-pacific flight.

The four crew members are there either for relief is of the others can get rest.

When we interviewed -- when we interview the those four crew members, we will get a lot more into it -- information about their activities, their work, their training, with the pilot was in command at the cockpit at the time of the accident.

We will be looking to correlate all of that information with what we are finding on the cockpit voice recorder and flight data.

It was important for us to wait for our korean counterpart when we conduct interviews.

We utilize the party process.

We do group interviews.

And we also have pilots who might need translation services during those interviews.

The want to make sure those interviews are effective and comprehensive.

I know you have a lot of questions about the pilots and their training.

I will tell you that when we debrief tomorrow, i hope to have a lot more information about the pilots just to head off some of the questions i may not be able to answer today until some of those compete -- those interviews are complete.

Our team has looked back through communications, through voice communications.

As i shared with you yesterday, we have no evidence of any distress calls or problem reports with respect to the aircraft prior to the accident.

We will be reviewing data for prior flights coming into san francisco the -- into san francisco in the hours and the days coming into the accident to see if there were in recent issues with the construction of the runway or the glide slope outage.

This crew was factored in for a 17-mile strip in the final visual approach.

They were vector in from the northern california triton, which is located sacramento, and asiana 214 reported they had the airport in site and were cleared for the visual reproached -- approach.

And they transitioned for tower control.

They were cleared to land by the tower.

And then there was the accident sequence and the subsequent launch of the emergency responders on the airport property.

Some of that we have already talked about yesterday.

I have seen and heard some reports about a four thousand permanent foot -- a four thousand ft per minute descent rate.

They have reviewed the radar data and the groups that were reviewing the initial radar data have indicated that there was no abnormally steep descent that occurred in the data that they have.

The it -- our power plants team have conducted and on seeing examination of the two engines.

They indicate -- those preliminary evaluations indicate that both engines were producing power at the time of intact.

And as is consistent with information -- and this is consistent with the ever mention we also see on the flight data recorder.

There was no evidence of containment.

The number two engine was found in the in the fuselages and there was evidence of high rotation at and packed.

That is the chair of the ntsb speaking about the state of the investigation.

We will go back to cory johnson at the airport in san francisco.

Our chief washington correspondent has also been listening from d.c. is there new information there?

Yes, they are continuing to look at other factors besides the pilots.

The the san francisco has become an important global business hub.

It has been expanded.

There is a somewhat new edition.

Terminal two is completely remade.

The airport pushed a very controversial runway set up and this is one of a flight that crashed here today.

During the runway expansion, they turned up one of the older safety measures.

It gives them hope to see exactly where they were.

There were many other safety devices and that is not the most important thing they would have used, but it is one more piece of information that they might have had that they did not have yesterday.

That is something they're looking at here.

Thank you, cory johnson, there at the san francisco international airport.

Peter cook, i'm going to bring you in now from d.c. i just heard the spokespersons say there.

To wait to interview some of the crew.

What could that change?

That could change pre much everything, because we have all been waiting to hear the the -- pretty much everything, because we have all been waiting to hear from them.

You just heard the chairman say they're looking for collaboration with the south koreans.

They want to let them get to california to be there for these conversations.

This is very sensitive stuff for the airlines involved and the countries involved.

They want to be as careful as they can the the to give them the same opportunity to hear exactly what the pilots have to say.

But there has been some time since the crash happened.

Since its is lots -- since it is not a domestic carrier, you can be sure that they would have already spoken with the pilots it did was.

She does not like to offer up a lot.

What she is offering in every press conference so far is that there is no indication of a malfunction on the plane.

It nothing indicates something was broken or not working properly.

By saying that, she is in and of itself suggesting that the fault may live with the pirates.

-- may lie with the pilot.

No explanations at this point, but we are waiting to see a host of testing.

An investigation still needs to happen, and she would be the first to say so.

We're going to take a break.

When we come back, richard falkenrath will join me with his reaction to the press conference and what the crash means for the aviation industry.

? we're still learning more about what caused the crash landing of the flight in san francisco.

Some reports are indicating pilot error, but that has not been confirmed yet.

We're joined by richard falkenrath, now principal at the trough group.

You personally survived a plane crashed about 20 years ago, right?

Yes, it was in the former soviet union.

It was nothing like this.

Elaine yuengling did not come down.

But it was still very scary.

An aircraft like the 777 is an incredibly safe craft to travel in, nothing like what i was in years ago.

Just to put it in context, it is a lot riskier getting into your car.

That is right.

The best measurement is by passenger mile.

There.

01 fatalities per 100 million passenger miles.

-- there are 0.01 fatalities per 100 million passenger miles.

And it's gotten even better than it was in the 1990's. what did you make of the press conference that we just heard about what we know so far or what authorities are willing to share so far?

They're willing to share very little, just basic procedural steps.

This is like a law enforcement investigation where they know they have to have a press conference to deal with the press.

They gave a few indications of what they've got to do, but many details will come out on the future.

What about the passengers?

They will have to interview them to find out how the emergency response went.

The ntsb is also responsible for what happens on the ground.

They want to find out how well the flight crew.

Reacted, how the people were evacuated, communication with first responders.

We're talking about the focal point, which today seems to be pilot error.

You said that pilot error is actually "good" for the industry.

Correct, and if it were a technical problem, that would be a major issue for boeing.

If it turns out to be pilot error, then boeing is off the hook.

There's no technological problem with this aircraft, which we have seen from the 787, that it turned out to be difficult for the company to deal with.

And then there is the diplomatic element as well, which is another factor.

That is right, south korea is a very technologically advanced allied.

Never were found to be a malicious act, which is possible, that the pilots -- if it were found to be a malicious act, which is possible, that the pilots would be arrested.

But it is more likely that is a mistake and the ntsb will get to the bottom of how it happened.

We have a break to take.

When we come back, expanding your investment vocabulary with bob's buzz word.

Trend line yield is the term.

? welcome back to "money moves" and time for our daily buzzword.

Bob wright is here from davide capital partners, also the author of the alternative answer, non-traditional investment that drive the yield.

Trend line yield about what we talking about?

It sounds like it should be about the yield curve or the bond market, but it is not.

It is a different kind of alterative investing all together, farmland.

It refers to how productive a cropped acreage is over the the time.

Over 150 years you see some amazing results on a graph.

These are color coordinated, even.

Yes, pretty cool looking.

You see after four major aspects here.

-- you see four major sectors here.

The the -- it curves right after the dust bowl years when we started using hybrid seeds.

There's a huge pick up there.

And then there is the third section that utilizes pesticides.

Now we are in new really modern era and there is an uptick from improving the seed technology every single year.

And of course, a lot of synthetic products are contributing.

A lot of technology is going into it.

You do not think about farm land as a technology investment, really.

But it turns out that it is.

It is a lot more than just saying i'm going to invest in a commodity like corn.

The yields can be driven up every year by the technology.

And as the that goes up, revenue goes up and the land values go up.

What does this mean for investing in farm land?

It is not an easy thing to invest in, unfortunately.

E.t.f. the'as -- etf's relate to the actual agricultural land.

They do not get out the actual either underlying farm land, which is why the tend to want to

This text has been automatically generated. It may not be 100% accurate.

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