Comments on: Wild Ass Rumor of the Day: Cerberus Sells Chrysler, GMAC

By: iNeon

iNeon — Tue, 03 Jun 2008 03:12:40 +0000

I sure would like to read more negative Chrysler ‘news.’

Please oblige with tomorrows WARotD.

By: johnny ro

johnny ro — Tue, 03 Jun 2008 01:44:02 +0000

81.1%, 19.9%, these are accounting driven numbers. 20% or more means you use equity method, unless you demonstrate you have no significant influence over the investee. Significant influence means what it sounds like. You speak, they listen and seriously consider your wishes, maybe they have to arrange votes around you if need be.

Equity method means you record your proportionate share of income/losses. This is bad because you have income volatility and well, losses in this case.

Next step down accounting decision tree, absent influence, you record investment at cost, then merely record regular dividends as income, if ever. This must be what they are doing.

So they game it by keeping 0.1% under 20%. Its deliberate bad accounting, surprised their auditors let them get away with it. Imagine, Cerberus has no significant influence over Chrysler.

Yeah right.

By: windswords

windswords — Mon, 02 Jun 2008 20:39:50 +0000

Does anyone know why Daimler owns 19.9% of Chrysler? I thought the company was “worthless” in their eyes? It seems to me they want something from them.

By: The Luigiian

The Luigiian — Mon, 02 Jun 2008 19:53:17 +0000

Truth be told, Cerberus was the guard to the afterlife, not the guard of Hell.

Greek mythology had Hades as the only place mortals could go when they die. In Christian mythology, it’s where people go to await judgment from God-not necessarily in torment, according to Wikipedia.

I would definitely consider what’s gonna happen to Dodge “the afterlife”. And comparing Mr. Feinberg to the Devil is a bit much. He may have sold his soul to the Devil (Hell if I know) but I would consider Hitler or Saddam Hussein closer to Satan than some overpaid Wall Street broker.

By: Cicero

Cicero — Mon, 02 Jun 2008 19:00:41 +0000

Cerberus has three heads but none was able to spot an oncoming freght train.

By: truthbetold37

truthbetold37 — Mon, 02 Jun 2008 18:32:51 +0000

Who would start a company and name it “Cerberus” (dog that guards hell), but the devil himself.

Would you trust the devil???

By: pnnyj

pnnyj — Mon, 02 Jun 2008 16:57:39 +0000

‘It was a ‘trust me’ kind of trade,’ says one investor, who bought a small piece of GMAC. ‘You had no time to do real due diligence. But it was a hot deal and everybody wanted in as part of the gang.’ Many of the people who took part in the deal were friends of Steve Feinberg, founder of Cerberus, and said they invested as a sign of faith in him…

On Wall Street the word friendship is defined differently than it is everywhere else.