Bear Stearns, which saw two hedge funds collapse and a dramatic slide in earnings this summer, said it would lay off 310 workers and combine its two mortgage businesses. Meanwhile, Credit Suisse said its mortgage-market woes could linger for up to 18 months. The credit crunch has pinched a crucial Wall Street profit source.
Nearly 30% of the midsize firms with revenue between $25 million and $1 billion see acquisitions as a primary goal for seeking future financing, according to a survey by the Economist Intelligence Unit and CIT Group. Acquisitions was second only to acquiring new technology as a reason for getting financing. Meanwhile, the survey indicated few companies would look to file initial public offerings.
High fees for managers dampen the return of hedge funds, according to research, and a computer can replicate hedge fund returns for a small fraction of the fees. Those revelations may make hedge funds, which were previously seen as a vehicle that offered returns not available elsewhere, less appealing to investors.
In a video interview with TheStreet.com, Jim Cramer, the host of CNBC's "Mad Money," created a stir by suggesting that the illegal practice of "fomenting," in which a hedge fund manager drives a stock price through misinformation, is widespread in the industry.
The $3.2 billion deal Cisco Systems struck to buy WebEx Communications, which specializes in Web conferencing, highlights the recent trend of major tech firms using the Internet for jobs that used to be done by software. Microsoft Corp., Google and other tech giants are also buying up companies that focus on Web technology to perform tasks.