A $25 Million Charade Over a Bid for Dell

Is Stephen Schwarzman’s Blackstone Group really bidding for Dell Or is it part of a bizarre, high-stakes charade

That’s the question left lingering in the air in the wake of Dell’s 274-page proxy filing made late last week with the Securities and Exchange Commission about the continuing battle for the company.

Mr. Schwarzman’s firm submitted a letter two weeks ago asserting that it planned to pursue a formal bid for Dell worth at least $14.25 a share, more than the $13.65 offer that Dell’s board had already agreed to accept from Michael Dell, the company’s founder, and Silver Lake Partners.

To avoid the appearance of a conflict of interest given Mr. Dell’s insider status, the company’s board was given 45 days to continue to shop the company in hopes of finding a better offer. And, indeed, the appearance of a conflict of interest for Mr. Dell has become the running narrative. The cover of Barron’s over the weekend featured a cartoon of Mr. Dell running away with a laptop under his arm, suggesting he was trying to steal the company, with the headline: “Not So Fast, Michael.”

But over the last 45 days, virtually no competing bidders emerged, suggesting perhaps that nobody thought Dell was such a steal after all. It wasn’t for lack of trying. Evercore Partners, the investment bank, was offered an incentive payment of $30 million if it could complete a deal for Dell at a higher price. According to Dell’s proxy, Evercore contacted “67 parties, including 19 strategic parties, 18 financial sponsors and 30 other parties.”

Most were not interested. And then Blackstone arrived.

What did Mr. Schwarzman see that all of the other prospective bidders must have missed That remains a mystery.

But what Mr. Schwarzman did next, thanks to Dell’s disclosure, may go a long way toward explaining what’s truly going on: Blackstone told Dell that it would not even consider bidding for the company unless Dell offered to pay the firm’s expenses, up to a whopping $25 million.

Yes, you read that correctly. Blackstone demanded that Dell pay it to go through the motions of bidding.

Here it is in the proxy: “The Blackstone consortium informed the special committee that it was not willing to proceed with its evaluation of the transaction contemplated” unless “it received an agreement from the company to reimburse the Blackstone consortium’s out-of-pocket expenses in connection with its evaluation of a possible transaction.”

Here’s what’s not in the proxy: Originally, Blackstone did not demand to be reimbursed for just out-of-pocket expenses â€" for consultants, travel and the like â€" but also sought to be able to receive payments for the time of its own executives, according to people involved in the process. Just think about it: How much would Mr. Schwarzman bill for his time $10,000 an hour

Ultimately, Dell’s special committee agreed to pay Blackstone’s out-of-pocket expenses but not hourly fees or contingency fees for its banking advisers. (By the way, the special committee also agreed to pay Silver Lake the same reimbursement to make the process fair.)

The fact that Blackstone refused to bid unless its costs were covered by Dell â€" a highly unusual maneuver â€" just goes to show you how little confidence it has that it expects to submit a winning bid for Dell.

Blackstone also required Dell to indemnify the firm from any lawsuits stemming from its involvement in the auction process, according to Dell’s documents.

For Dell’s special committee, agreeing to these bold demands from Blackstone is probably good business. If the board can keep a second bidder at the table, even if the suitor never makes a firm bid, Dell’s special committee will have insulated itself from criticism that it did not run a competitive process.

The real question is why, despite the $25 million reimbursement guarantee, Blackstone is risking its reputation to even contemplate a deal for Dell.

If Blackstone makes a formal bid â€" and so far it has not lined up financing â€" it will most likely be competing against a bid from Mr. Dell. While Blackstone has clearly been invited into the auction process, if Mr. Dell quits or is ousted as a result of a winning bid from Blackstone, the firm will appear to have made a hostile bid. Private equity firms have spent the last 25 years avoiding anything that could make them perceived as hostile because they typically want management teams to want to do business with them.

Last week, two Blackstone partners, Chinh Chu and David Johnson, who recently defected from Dell, met with Mr. Dell at his home. Mr. Dell is said to be open to working with Blackstone if they can agree on strategy, operations and corporate governance.

But by the looks of it, Blackstone and Mr. Dell are coming to the table from entirely different angles. Mr. Dell wants to keep the company intact and reinvest in developing the personal computer, tablet and emerging-market business. Blackstone’s strategy appears to center on selling Dell’s financing arm â€" it received some interest from GE Capital â€" and focusing on its services business.

What happens if Mr. Dell comes out with the following statement “Unfortunately, after holding talks with Blackstone in good faith, I can’t participate in their transaction because of a disagreement over strategy. Their plan is a short-term and shortsighted effort to break up the company and put in peril Dell’s more than 100,000 employees.”

All of sudden, Blackstone would look like a barbarian at the gate in a big and very public nasty battle. (Some would claim Mr. Dell was being selfish, but the damage would be done â€" to Blackstone.)

Alternatively, is it really possible Blackstone would try to embrace Mr. Dell and make him the chief executive â€" which they have said they are open to doing Blackstone has already been canvassing for other candidates. In fact, the firm contacted Mark Hurd of Oracle before ever even discussing the matter with Mr. Dell, which, of course, was a not-so-great way to ingratiate itself with a potential future partner.

And then there’s the ownership stakes. Mr. Dell owns about 15 percent of the equity in Dell. It is almost impossible to believe that Blackstone would put in more equity than Mr. Dell already has in the company. That would leave Blackstone as a smaller equity owner than Mr. Dell himself. Would Blackstone really team up with him and let him have control of the company

All of these questions have no good answers. But for $25 million in reimbursed expenses, maybe they don’t need them.

Mergers Slow to a Snail’s Pace in the Quarter, the Fewest Since 2003

.Deal makers may want to keep the Champagne bottles on ice a while longer.

Despite a particularly fruitful week in February â€" when five deals collectively worth more than $91 billion were announced â€" the business of mergers and acquisitions remains largely stuck in the doldrums.

Only 8,115 deals were announced worldwide in the first quarter of this year, the lowest number since 2003, according to data from Thomson Reuters. And while the combined value of $542.8 billion outpaced last year’s first quarter by about 10 percent, it is still 26 percent below the level for the period in 2011.

Bankers and lawyers have been publicly boasting about a nascent revival in mergers. In March, 97 percent of deal makers surveyed by the Brunswick Group public relations firm said they expected more deals to be announced in North America this year than in last.

But privately, many have conceded that for all of the improvements in the economy and corporate profits, executives still lack the confidence to sign for a big deal.

“The M.& A. market remains uneven,” said Scott Lindsay, the global head of mergers and acquisitions at Credit Suisse. “There’s a little bit of everything going on right now. But you would think there would be more activity than there is.”

Still, as market indexes like the Dow Jones industrial average set highs, the number of mergers â€" which historically tracks closely with stock prices â€" should rise as well, he added. And many advisers caution against judging 2013 by one quarter. Some deals that would otherwise have been announced in the first quarter were moved to fourth quarter 2012 to avoid incurring potentially higher taxes, they said.

By some measures, the merger environment has continued to improve steadily. In the United States, the growth in activity nearly single-handedly lifted overall deal volume, with major deals like Dell’s planned sale to its founder and H. J. Heinz’s takeover by Berkshire Hathaway and 3G Capital. The value of transactions announced in the United States for the first quarter jumped nearly 89 percent from a year ago, to $269.8 billion. Other areas of the world have lagged behind, none more so than Europe. The Continent had just 2,705 deals, worth a total of $125.7 billion, in the quarter, down significantly from the period last year.

Bankers and lawyers regularly recite the litany of factors that should lead to a wellspring of deals: an improving economy; soaring stock markets; and record low interest rates, courtesy of the Federal Reserve, that make borrowing incredibly cheap. But other factors have weighed on executives’ confidence, including concerns about how events like the bailout of Cyprus may affect the European economy and how America’s budget problems might hamper its growth.

Some bankers and lawyers indicate that companies may finally be ready to look beyond the short-term crises, and focus on their specific needs for the long term. “A couple of years ago, something like Greece brought the M.& A. market to a halt,” said Sarkis Jebejian, a partner at Kirkland & Ellis. “I think the trend now is to ask, ‘Does this affect my deal’ ”

In the first quarter, Goldman Sachs narrowly edged out JPMorgan Chase for the lead in Thomson Reuters’s financial league tables, having advised on 83 deals worth a total of $135.9 billion. Goldman’s transactions include advising Dell Inc. in its proposed takeover by Michael S. Dell and Virgin Media in its sale to Liberty Global.

Davis Polk & Wardwell claimed the top spot in the legal adviser rankings, having advised on 33 deals worth a total of nearly $109 billion. The firm’s biggest assignment this year was advising Comcast in buying full control of NBCUniversal from General Electric.

11 Partners Leave Bingham En Masse for Sidley

Eleven partners at the law firm Bingham McCutchen who worked in the firm’s highly regarded securities-enforcement practice resigned on Monday to join Sidley & Austin.

Among those departing Bingham are Susan L. Merrill, the former head of enforcement at the Financial Industry Regulatory Authority, and Neal E. Sullivan, the head of the practice group. The practice represents Wall Street banks and accounting firms in a variety of government investigations and regulatory matters.

Reached late Monday, Claire Papanastasiou, a spokeswoman for Bingham, confirmed the move, and said that the firm wished the lawyers well. Carter Phillips, the co-chair of Sidley’s executive committee, did not immediately return a request for comment.

Lateral moves by partners at large corporate law firms have become commonplace, but 11 partners leaving a firm en masse, especially from such a prominent practice, is unusual.

The departures are a blow to the Boston-based Bingham, a 1,000-lawyer firm known for its securities-enforcement work, representing financial-services firms before a range of government agencies including the Securities and Exchange Commission and the Commodity Futures Trading Commission. Given the ever-changing regulatory landscape in Washington and on Wall Street, it is an especially lucrative practice area.

Bingham still has about 20 partners its securities-enforcement practice, as well as dozens of others in its securities group. They include Christopher Cox, the former S.E.C. chairman, who practices corporate law out of the firm’s office in Costa Mesa, Calif.

The firm made a big splash three years ago when it hired Ms. Merrill, the former enforcement chief of Finra, a private entity that regulates Wall Street. Ms. Merrill, who works out of New York, was previously a partner for a decade at Davis Polk & Wardwell.

“Susan is a recognized leader in the securities field,” Jay S. Zimmerman, chairman at Bingham, said at the time. “Her arrival to Bingham exemplifies our investment and commitment to building the strongest securities team and advising clients in the most complex matters, nationally and globally.”

Also leaving with Ms. Merrill and Mr. Sullivan is Herbert Janick III, a former senior member of the enforcement division at the S.E.C. and general counsel of UBS Financial Services.

The departures come a few months after another senior partner in Bingham’s securities-enforcement practice, Geoffrey F. Aronow, left the firm to become general counsel at the S.E.C.

Mr. Aronow and Ms. Merrill recently handled several of the firm’s more prominent cases in the securities enforcement. That included representing Christine Serwinski, the former chief financial officer of the North American arm of MF Global, the brokerage firm led by Jon Corzine that collapsed in 2011.

After Boom Boom Room, Fresh Tactics to Fight Bias

WHEN lurid sex harassment charges rocked Wall Street in the 1990s, the Chicago law firm Stowell & Friedman fielded a torrent of calls from women who blocked their telephone numbers on caller ID and initially refused to reveal their names out of fear of retribution from their employers.

Over the course of several conversations, women on Wall Street who were subjected to groping, pay disparity and vulgar office jokes eventually opened up to the firm’s lawyers. In the end, 1,900 women joined Martens v. Smith Barney, the class-action lawsuit that became known as the boom-boom room suit. The firm paid $150 million to women who filed claims through a dispute resolution system as part of settlement and agreed to hiring and promotion goals among other reforms.

Fast-forward 17 years, and such landmark cases are not as prevalent. Wall Street’s women are more aware of their rights and are not so timid anymore, says Linda D. Friedman, a partner at Stowell & Friedman. Still, she says her firm does a lot of work these days behind the scenes, assisting women who face discrimination but are reluctant to pursue litigation because of the repercussions it would have on their careers.

Many do not have the option of suing at all, having been required as a condition of employment to agree to industry-run arbitration for job disputes. For women signing so-called mandatory arbitration agreements, discrimination cases are handled in private proceedings run by arbitration panels of the Financial Industry Regulatory Authority, the securities industry’s self-regulatory body. Supervisors or other individuals who lose in Finra discrimination cases are not required to reveal it in their public Finra broker dossiers, which include disciplinary actions.

Civil lawsuits are not completely out of the question over claims of harassment and discrimination though, because not every industry employee is obligated to agree to arbitration before they are hired. One recent case involves Debra S. Hayes, a marketing assistant at a retail office in Erie, Penn., of the brokerage firm Waddell & Reed, who filed a lawsuit in the United States District Court for the Western District of Pennsylvania on Nov. 20. Her suit listed allegations that rivaled those outrages that went on at the Garden City, N.Y., branch of Smith Barney that housed a basement party room known as “the boom-boom room.”

In her complaint, Ms. Hayes describes a supervisor who badgered her for dates, threw staplers at her and pounded on her desk when she refused his advances. Eighteen days after she reported the desk-punching incident, Ms. Hayes says she was fired.

Waddell argued in a motion to dismiss that her complaint did not show that she filed the required forms with the Pennsylvania Human Relations Commission, and that the court didn’t have jurisdiction over her claims. The firm’s spokesman, Roger Hoadley, declined to comment on the case, as did Michael E. Grenert of the New York law firm Liddle & Robinson, who represents Ms. Hayes.

In another pending case, five female former Citigroup employees are seeking class-action status in a lawsuit that says the bank disproportionately fired women in a series of layoffs in 2008 in the public finance department. Although 89 percent of Citi’s managing directors and directors in the department were men in 2008, only 55 percent of the managing directors and directors who were let go were men, according to the suit.

A Citigroup spokeswoman, Danielle Romero-Apsilos, said in an e-mail that the plaintiffs were just five of 70 men and women who lost jobs in the public finance department and that the facts did not support their claims of gender discrimination.

Goldman Sachs has also been accused of discrimination against women in its compensation, promotion and performance evaluation practices in a lawsuit by three former employees who are seeking class-action status. Last month a court ruled that the case of one of the employees must proceed through arbitration; the two other plaintiffs did not sign arbitration agreements and are not affected by the ruling. A Goldman spokesman, David Wells, declined to comment on the case.

Women who sue and win often find out that going public means leaving the industry. Allison K. Schieffelin, a former saleswoman at Morgan Stanley, who received $12 million as part of a settlement with the brokerage in 2004, is now the chief executive of a Connecticut lighting manufacturer. Laura Zubulake, a former saleswoman who won $29 million from UBS in 2005 in a jury trial of her discrimination charges, is an author and lecturer on the use of e-mail in litigation.

Wall Street’s culture is extreme compared with that of other businesses, said Joan C. Williams, a gender expert and law professor at the University of California Hastings College of the Law in San Francisco.

Women in finance are coping with “the kinds of problems that women in most industries experienced in the early 1970s,” said Ms. Williams, who recently completed 127 interviews of high-achieving women across a range of fields for a forthcoming book.

In her research, Ms. Williams said she learned that Wall Street women were operating in an atmosphere where the perception that women were not suited for the job was so acceptable that men often discussed it openly. The Wall Street interviewees “were by far the most apprehensive about talking to me.”

The layoffs on Wall Street have also thinned the ranks of women substantially since the credit crisis of 2008. A report on workplace diversity circulated to members of a trade group, the Securities Industry and Financial Markets Association, said that among its nine largest members, women as a percentage of total staff declined by four percentage points between 2007 and 2011, to 36 percent. Data from the Bureau of Labor Statistics shows an 11 percent decline in the number of women in the finance and insurance category since 2007, compared with a 1.6 percent decline in the number of men.

Pay disparity remains a problem, too. When the Government Accountability Office last evaluated median pay for full-time managers at financial firms in 2007, women were making 58 cents for every dollar that male managers made. It was the worst pay gap of 13 industries examined in the report.

For those cases that move forward, most try to remedy the underlying problems. Banks and firms typically agree to settlements that include clauses that promise better pay and promotion policies for all women, as well as specific goals in hiring women. Historically, such efforts have had mixed results.

Merrill Lynch agreed in a 1976 settlement with the Equal Employment Opportunity Commission that 18 percent of its brokerage employees would be female by 1980.

When it was sued in the class-action lawsuit Cremin v. Merrill Lynch in 1997, it still had not reached that goal. As of 2003, 15 percent of Merrill’s brokers were female. Bank of America, which acquired Merrill in 2008, declined to disclose what portion of Merrill’s brokers were women today.

Elizabeth Grossman, a regional lawyer in the New York district office of the commission, says gender-related complaints against financial firms are down slightly, to 29 percent of new charges filed with the agency last year, from a 10-year peak of 33 percent in 2005.

Most of those cases will settle discreetly, with no trace of evidence in court files or Finra records. But Ms. Grossman saidthe problems persist.

“We are still receiving charges which allege very rampant sex harassment in certain workplaces in the financial services industry,” Ms. Grossman said.

Nasdaq to Buy Electronic Bond Trading Platform for $750 Million

The parent company of the Nasdaq stock exchange said Tuesday that it would buy the electronic bond-trading platform eSpeed for $750 million, amid consolidation in the industry.

The Nasdaq OMX Group, which is acquiring eSpeed from BGC Partners, a spinoff of Cantor Fitzgerald, is moving to diversity and expand its reach. Like other exchange operators, Nasdaq is dealing with a decline in stock trading activity.

Bonds have traditionally been traded in private, over-the-counter transactions. But many analysts expect that more trading will move onto electronic platforms like eSpeed as a result of recent regulatory changes. Big banks use eSpeed primarily to trade Treasury bonds, the largest and most liquid corner of the bond market.

Nasdaq executives said on Monday that trading activity in the Treasury market should naturally increase once the Federal Reserve begins to step back from its bond-buying programs. More broadly, Nasdaq executives said that eSpeed would allow the company to take advantage of the growing appetite for electronic trading in many types of bonds.

“It provides the framework for us to provide services to customers as the demand for electronic trading increases,” said Eric Noll, an executive vice president at Nasdaq.

The companies are hoping to close the deal later this year.

To Meet Norway’s Quotas, a Crash Course in Board Business

OSLO - WHEN Anne-Sofie Risasen joined the Norwegian technology company Evry last year, she already had an impressive résumé. Ms. Risasen, a multilingual computer science graduate, spent years working for the French consulting firm Capgemini before taking a senior role at Microsoft here, where she managed more than 150 workers across Norway.

But Ms. Risasen wanted to raise her game.

So last September, Ms. Risasen, 43 and the mother of two, signed up for an executive boot camp. Over the last seven months, she has taken leadership classes at a local business school, attended networking events and taken a battery of aptitude tests to measure her strengths and weaknesses.

“For me, it was a tactical move,” said Ms. Risasen at Evry’s headquarters in a snow-filled business park on the outskirts of the Norwegian capital. “The main reason to take part was to become a board member.”

Started in 2003, the boot camp, Female Future, aims to train the country’s next generation of directors.

The 16-day program, which runs over 10 months, is part business school, part career coach. In all-day workshops, the women are given crash courses on being a director, including training in corporate governance and leadership. Outside trainers also try to bolster confidence by coaxing the women into sharing stories from their own careers, so they can see the commonality in their experiences.

Since its founding, the Female Future program has helped roughly two-thirds of its 1,300 participants secure senior management positions or board memberships. In December, Ms. Risasen was promoted to run Evry’s public sector unit, overseeing 500 employees. She is hoping the training will also put her in line to join the boards of her company’s subsidiaries when she finishes the course in June.

“Now, Evry’s top management knows I have these skills,” she said.

The program is a core part of the country’s diversity efforts.

In 2003, Norwegian politicians passed a law that requires 40 percent of all publicly listed company boards to be made up of women. Norway now has one of the highest levels of female board participation in the world, roughly 36 percent for public and private companies. That compares with just 14 percent at the largest American companies, according to the research organization GMI Ratings.

“To change people’s habits, you have to do something radical,” said Tove Selnes, 43, an executive vice president at the Norwegian Internet browser company Opera Software who completed the Female Future program in 2007 and now sits on two boards. “Bringing women on boards is good for business. It adds a different perspective to how decisions are made.”

Now, the rest of Europe is following Norway’s lead. Countries like France and Italy have passed similar laws to increase the number of female directors. The European Union announced plans in November to set goals for all publicly listed companies to do the same by the end of the decade, though Germany and Britain have both voiced opposition to the proposed rule.

Legislating for diversity can have its limits.

While the Norwegian law has opened up board positions to more women, Norway still lags behind other Western countries in promoting women to senior executive roles. Around 20 percent of the country’s top corporate jobs are held by women, compared with 31 percent in Germany, according to research from the accounting firm Grant Thornton.

Researchers also have questioned whether adding women to corporate boards leads to better financial performance. Others have raised concerns that a small number of senior Norwegian women â€" derided as the Golden Skirts because they now make a living solely from board memberships â€" have scooped up the majority of the new board seats, leaving many qualified women unable to find positions as directors.

“The Golden Skirts have replaced the old boys network,” said Morten Huse, a professor at the BI Norwegian Business School in Oslo. He added that the number of women who occupy more than three board positions is triple the number of men.

The Female Future program has an unlikely backer.

When the legislation was proposed, the Confederation of Norwegian Enterprise was one of the most vocal opponents of the country’s quota law. The group lobbied against the law, saying companies â€" not the government â€" should have the right to choose their directors.

The trade body still opposes the law, but concedes that the efforts have increased the number of female directors.

The group asks its corporate members to nominate potential candidates for Female Future who show leadership potential. The course draws on the talent pool from both public and private companies, primarily from Oslo. The trade organization pays 60 percent of the $8,500 fee for each woman in the program. The participating companies and the Norwegian government pick up the remaining cost.

“We do not believe in the quota system, but we want to help qualified women find roles on boards,” said Kristina Jullum Hagen, equality and diversity adviser at the Confederation of Norwegian Enterprise, who runs Female Future and is a participant in the current program.

As part of the boardroom boot camp this year, Ms. Risasen of Evry and 25 other participants meet regularly to share experiences from their day jobs. The topics range from how to build the right business network to the best way to ask for a promotion. At the end of the course, the participants must pass a three-day exam on the role of boards in corporate governance.

Despite a successful career in human resources, Ms. Selnes of Opera Software did not have a large number of contacts across the Norwegian business community. Since finishing the program, Ms. Selnes has tapped Female Future graduates for potential job candidates at her company, and landed a board position at the Oslo affiliate of the Confederation of Norwegian Enterprise.

“It’s not about friendship, it’s about networking,” Ms. Selnes said, adding that she still met frequently with her Female Future colleagues.

The program also has fostered previously unknown ambitions.

When Torhild Barlaup joined Female Future in 2008, she did not think she had the skills to be a director. Although she was a senior manager at a Norwegian car importer, Ms. Barlaup, 44, said she lacked the self-confidence to approach her superiors about such opportunities.

Soon after finishing the course, Ms. Barlaup told her managers that she was ready to take on board positions. While she said her bosses were initially surprised, they quickly found roles for her at subsidiaries that faced challenges similar to those that Ms. Barlaup had addressed in her own division.

“Before, I never would have asked for it,” said Ms. Barlaup, who is now the chief executive of the Norwegian division of the Scandinavian auto parts maker Meca. “The program created an interest that I didn’t know I had.”

The Timing of Tesla C.E.O.’s Tweets

Tesla Motors, the electric carmaker, is going to unveil some news on Tuesday that its chief executive, Elon Musk, described as “really exciting.”

When Mr. Musk made that announcement on Twitter on March 25 with almost no other details, Tesla’s stock jumped. But that ascent was dwarfed by the move higher that occurred on Monday after the company made another announcement, this time in an official news release. Tesla revised its forecast for first-quarter profitability, prompting a rally that hoisted its shares by nearly 16 percent on Monday.

(Shanna Hendriks, a company spokeswoman, said in an e-mail that Tesla’s announcement on Monday was not the fulfillment of Mr. Musk’s Twitter message last week. Indeed, he posted another message on Monday to say that Tuesday’s news would be “arguably more important” than Monday’s announcement.)

Tesla is a fascinating young company. It faces a legion of doubters, including many who are betting against the company’s shares because they don’t believe the company can ever sell enough cars to be viable in the longer term. But Tesla has many avid supporters who believe it will be the company that finally makes electric cars desirable, and will therefore enjoy robust, sustainable sales.

Having a C.E.O. who likes to disseminate cryptic messages of 140 characters or fewer only makes the company more fascinating. But as the noise around Tesla builds, it makes sense to look closely at its numbers - and the way it presents them.

Take the announcement on Monday that lit a fire under the stock.

In February, Tesla said it expected to be “slightly profitable” in the first quarter of 2013. But the profits cited in that forecast were not the standard measure of net income, as calculated under generally accepted accounting principles, or GAAP. That’s because it didn’t count expenses related to compensation based on the company’s shares.

On Monday, the company updated that forecast by saying that it now expected “full profitability” in the first quarter under generally accepted accounting principles, counting the stock-based pay. The company said the profit revision was driven by selling more cars than expected - more than 4,750 in the quarter, versus its previous estimate of 4,500. In Monday’s news release, Mr. Musk underscored why GAAP profitability matters, “There have been many car start-ups over the past several decades, but profitability is what makes a company real.”

Here’s what Tesla didn’t say, though: It didn’t quantify the overall size of its order book at the end of the first quarter. There’s pent up demand for its cars right now as enthusiasts line up. As a result, the sales boost most likely came from meeting existing orders more quickly than expected.

However, what’s crucial to the company’s fortunes is how many new orders are coming in each quarter - and that figure wasn’t released on Monday. Nor was the amount of canceled orders, a negative development Tesla potentially faces.

Tesla also didn’t provide estimates of its first-quarter profits, in either dollars or earnings per share, something many publicly traded companies often do in their forecasts. Instead, it just said in the press release that “Tesla is amending its Q1 guidance to full profitability, both GAAP and non-GAAP.”

And being profitable in GAAP terms may not turn out to be a big deal. In theory, to achieve profitability based on generally accepted accounting principles, the company would just have needed to add incremental earnings in the first quarter to cover its stock-based compensation expense. In the fourth quarter, that was $14.4 million.

Interestingly, Tesla did not provide an updated forecast for a metric that investors closely track: the actual amount of actual cash its operations produce. In February, it said it expected its cash flows from operations to be “near breakeven” in the first quarter. When asked if that forecast had changed, Ms. Hendriks, the spokeswoman, said in an e-mail, “We will mention cash flows from operations, and other financial metrics, on our earnings call expected for next month.”

The timing of Tesla’s announcements is intriguing, too. It’s not clear why Tesla didn’t just announce Monday’s earnings update at the same time as whatever comes out on Tuesday. Maybe it has to do with Mr. Musk’s eagerness.

In the first Twitter post on March 25, Mr. Musk wrote, “Really exciting @TeslaMotors announcement coming on Thursday. Am going to put my money where my mouth is in v major way.” Five hours later, he put the brakes on, saying in another post, “Slight change of date to ensure no end of quarter distractions â€" will be Tues next week.”

What could Mr. Musk be referring to when he said he was going to put his money where is mouth is in a very major way One guess could be that he’s upping his stake in the company, from his current 27.5 percent, providing more cash in the process. But a cash infusion might not be viewed as a positive development for Tesla. It would suggest its operations aren’t providing enough.

Little Chance for a Dell Bidding War

A bidding war for Dell just became even less likely. The computer company on Friday laid out, in a novel-length filing, its reasoning for agreeing to a $24.4 billion buyout by founder Michael S. Dell and private equity firm Silver Lake Partners. It’s only the company’s version, but Dell seemingly did what it could to secure the best offer available.

The 275-page document details the who, what, when, where and why of the deal as it unfolded. The account essentially begins in June 2012, when Dell shareholder Southeastern Asset Management contacted Mr. Dell to discuss going private. By this account, that set in motion the process that resulted in the proposed buyout, with the twist that Silver Lake ended up as the founder’s backer with Southeastern squeezed out - and now a critic of the deal.

In reality the story has older roots. Mr. Dell was asked in 2010 if he had ever thought about taking the company private, and he said “yes.” Such narrative niggles aside, Dell’s board appears to have done the right things after learning officially of the founder’s interest in a buyout last August. It established a special committee, hired advisers and excluded the founder from meetings. It also tried to gin up rival interest, and it pushed the Michael Dell-Silver Lake offer from an early conditional minimum of $11.22 a share up to a committed $13.65.

Even after the board agreed to the buyout, 67 possible buyers were contacted during the “go shop” period, with adviser Evercore incentivized to the tune of $30 million to find a superior bid. And in the meantime the board, with help from outside consultants, became less bullish on Dell’s likely financial performance, according to projections laid out in Friday’s filing.

The board’s preference for a buyout over simply borrowing more and paying shareholders a big dividend also appears sound. Directors felt that taking on additional debt could be risky, and there are other drawbacks. Nearly all the company’s share buybacks over the past two years have cost more than the agreed $13.65 per share sale price. While that suggests the board once thought the company was worth more, it also shows how efforts to signal a public market valuation can fail.

Investors are still stuck with the fact that Mr. Dell owns over 15 percent of the company and he can choose whether to roll his equity into any other bid. However above-board the bid process - and however many expensive advisers the board hired â€" that makes him the kingmaker. Still, the board handled the inevitable conflicts appropriately. That means the job of potential rival bidders Blackstone and Carl C. Icahn is now harder.

Robert Cyran is a columnist and Richard Beales is assistant editor at Reuters Breakingviews. For more independent commentary and analysis, visit breakingviews.com.

Great April’s Fools Pranks From Around the Web

It’s April Fool’s Day, and once again, the Web is filled with hilarious pranks.

I want to mention my favorite first, though, because it’s a LIVE prank that may not be on the air if there’s any delay. YouTube’s central prank is a video, here. It reveals that YouTube’s entire existence has been a contest to find the best video ever and that tonight, YouTube will shut down â€" the submission deadline will be over â€" and the winner will be announced.

But the best part: there’s a live ceremony going right now, where the list of nominees is being read aloud by two attractive hosts. With a straight face, they’re reading the descriptions of, apparently, every YouTube video â€" or at least every one with incoherent or inadvertently hilarious write-ups. It’s a live stream. I’ve watched 45 minutes of it so far, and I can’t stop cracking up. You really do worry for the future of humanity.

Google, which owns YouTube, is offering at least five other pranks Monday. One is the astonishing Gmail Blue, featuring a cameo by the Blue Man Group. Another: Google Maps, which now appear as ancient, mottled pirate treasure maps. (In Street View, you can peer through a pirate’s telescope.)

Google Apps now offers a Levity feature that inserts humor into your e-mail and meeting invitations. On Google Plus, the company announced that you can now add emotion thought bubbles to the photos you upload.

And then there’s Google Nose (Beta), the first scent-centric search engine on the Web.

Microsoft, not to be outdone, has Googlized its Bing search engine. (Perform a search for “Google.” Enjoy the “I’m feeling confused” button.)

Twitter announced a new premium service. You can still use the old, free version, but you’ll be limited to consonants only. (It’s now called Twttr.) “We believe that by eliminating vowels, we’ll encourage a more efficient and ‘dense’ form of communication,” says the post.

Vimeo revealed a new service dedicated to cat videos â€" called, of course, Vimeow.

The British edition of Macworld carries on the scent meme by reporting that Apple will soon sell the bottled essence of Steve Jobs. NewEgg.com, meanwhile, is offering a line of electronics that should seem familiar â€" if you were alive in the ’70s. And the cellphone maker Nokia, apparently, is branching out into hideous microwave ovens.

Kodak is offering a wrist-mounted photo-printing kiosk. The pranksters at Improve Everywhere have actually created a prank prank.

Virgin Atlantic says it has launched the first glass-bottomed plane. Samsung has unveiled the Eco-Tree, “a smart, eco-friendly air purifier that runs on solar energy.”

Finally, don’t miss Animalia, Sony’s new line of electronics for pets.

It’s great to see that these big companies are capable of such ruthless self-parody. Now if only they’d put the same amount of effort into their real products….

Lessons on Being a Success on Wall St., and Being a Casualty

SALLIE L. KRAWCHECK, once one of a handful of high-powered women on Wall Street, rose to the top levels â€" only to find herself out of work.

It happened twice.

After running Sanford C. Bernstein & Company, she left for Citigroup in 2002. She led the brokerage division of the bank. She was promoted to chief financial officer.

Then her fortunes seemed to shift. In 2007, she was moved back to run the brokerage unit and another group, seen by some as a demotion.

In that role, she butted heads with other Citigroup senior managers over whether to compensate clients on a money-losing investment. The bank eventually did, but Ms. Krawcheck said her sometimes zealous “advocacy” cost her the job.

In the midst of the financial crisis in 2009, Ms. Krawcheck landed at the wealth management division at Bank of America, which had just acquired Merrill Lynch. Two years later she was let go again, as part of a broader corporate restructuring.

She was not the only senior woman on Wall Street to lose her job in recent years; two others near the pinnacle of the financial world were casualties of the financial meltdown. Zoe Cruz, the one-time co-president of Morgan Stanley, was ousted over a major trading blowup. The chief financial officer of Lehman Brothers, Erin Callan, lost her job just before the investment bank filed for bankruptcy. More recently, Ina Drew, a senior executive at JPMorgan Chase, handed in her resignation after the bank disclosed a multibilion-dollar trading loss last year.

The uncertain fortunes of women at the top of Wall Street may look like those of their male counterparts: victims of boardroom struggles, market tempests, their own  mistakes, at times simple scapegoats.

But as the dust of the financial crisis settles, one thing seems certain to Ms. Krawcheck. The recent tumult, she believes, has been a major setback to the presence of women on Wall Street as male chief executives turned to longtime allies, typically other men, to fill their executive suite.

“Think about it. You’re going through this horrible downturn. You’re a C.E.O. You want people who you worked with for 10 years or 20 years who you can trust,” said Ms. Krawcheck in an interview. “These moves have led to more homogeneous leadership teams.”

With the financial crisis fading from view, Ms. Krawcheck reflected on her tenure on Wall Street, as well as her new role in Washington and on the Web. Ms. Krawcheck, a married mother of two children, discussed her experience with discrimination, the importance of having a sponsor and why she’s so active on social media.

The following is an edited excerpt from the interview.

What grade would you give Wall Street on the treatment and promotion of women

A declining letter grade.

Why

The facts would show that it’s gone backward. If you start to list off senior women on Wall Street, there are fewer today than there were even a few years ago. It’s a shame. We can debate the fairness issue of how many people of different backgrounds should be in a room. But I would actually just discuss the business issue. Research has shown that more diverse teams lead to better returns and lower volatility, meaning women tend to be more client-focused, tend to be more long-term focused, tend to be more risk-averse. When different backgrounds are brought together, you strengthen a management team.

Why do women have trouble getting and hanging onto senior positions on Wall Street

I have never seen a decision made where someone said, “She’s a woman, let’s not give her a job” or “He’s a Hispanic, let’s not give him that job.” That said, we all tend to be more comfortable with people like ourselves. And we tend to put in place review systems and promotion systems that are based on the leadership team that’s already in place. We want to bet on the known as opposed to the unknown.

What is the worst discrimination you have witnessed on Wall Street

There was a project at one of the companies I worked at. One person was not offered a role on the team because she was a young mother, and they didn’t think she wanted to be away from her child. It was completely unfair.

Did they ask her if she could handle the job

No. That was the issue in my opinion. She should have had the opportunity to have that discussion. By the way, I’d also love to see her say, “I can’t raise my hand,” and no one would hold that against her.

What were some of the hardest issues you faced

A Wall Street firm rescinded an offer they had given me because they found out I had a baby at home. Yes, that really happened. So the first work-life challenge was having the “work” part of it at all.

Then it became an issue of finding the right rhythm. Days after my daughter was born, my director of research called. After asking about our health, he began to walk through his thoughts on my latest research project â€" and gave me substantial additional work to do, with a pretty short timeline. I made my husband destroy the pictures he took of me holding my infant daughter while making the changes at the computer. I learned how to set limits pretty quickly.

Why did you leave Citigroup

During the downturn, we sold certain investments to clients that we honestly believed were low risk. We had a market downturn, and the clients lost a lot of money. I took the position that we should share those losses with our clients, and there was a difference of opinion within Citi on that. The discussions went all the way up to the board level, and Citi made the determination to partially reimburse the clients. In my advocacy of that position, it appeared that I really stepped across the line in terms of keeping my job. I’d say I won that client war, but it cost me my job.

You started out on Wall Street as a banker but made your name as a research analyst at Sanford Bernstein. Is stock research a good entry point for women

The reason, in hindsight, that worked so well was because nobody particularly cared if their research analyst was male, female, black, white, yellow, green or blue. What they wanted were insights on their stocks. While you had to work tremendously hard to be successful, it actually tended to be a flexible job. I never had a client tell me that the research report I handed them was unacceptable because it had been written on a Saturday night at my kitchen table rather than a Thursday afternoon at 3 p.m. I had a baby at the time, so there was some flex in the job.

You’ve spent years in wealth management. Are women well served by financial advisers on Wall Street

I think the business can do and should do a much better job with females, both in terms of having more females as financial advisers as well as in serving females as clients. One of the most interesting bits of research we did there was around how advisers interacted with their female clients. If an adviser had a couple as a client, you would watch them interact with the couple. What became obvious is they were talking to the man about 90 percent of the time and then nodding to the woman. Therefore, it was no surprise that when he dies â€" and he typically dies first â€" she stays with her adviser less than half the time.

What advice do you have for women on Wall Street

Sylvia Hewlett at the Center for Talent Innovation has been doing some very interesting work on the importance of sponsorship. For years, we’ve talked about mentors. Responsibilities are different for mentors. A mentor is someone you go to, you have a cup of coffee, you give them advice, you shoot the breeze for a while and away you go.

A sponsor is someone who pulls people along. Very successful people have sponsors. In fact with Sheryl Sandberg, if you look at her, her sponsor was Larry Summers. So there were powerful people in her career, and in my career, who proactively supported and pulled us along.

Who was your sponsor

When I was at Bernstein it was Chuck Cahn, who ran the business and who gave me my first big promotion when I was six months pregnant with my daughter. I actually remember sitting there and thinking, “Does he see this big belly in front of me” There was a period of time when Sandy Weill was as well.

What was the best advice Mr. Weill, your boss at Citigroup, gave you in terms of being a woman on Wall Street

Well, Sandy gave me no advice in terms of being a woman on Wall Street actually, like zero advice. Sandy’s genius was that Sandy would talk to anybody and everybody about anything and everything at any time.

I have a memory of getting into a car with Sandy and everybody pulls out their BlackBerrys. Sandy started talking up a storm with the driver. How’s business What are you seeing What kind of conventions are down here Are there more Are there less

He would do that everywhere. His genius was that he’d be walking down the hall, and he would come over and he’d say, “Hey, I just talked to a financial adviser in Des Moines who’s telling me X, Y, Z about the business.” It would be some minute detail of the money-fund pricing vs. bank deposits in a certain segment of the country.

What you’ve seen in contrast is there are certain C.E.O.’s who surround themselves with their people. To get to them you’ve got to get through their people, and the richness of the inputs therefore becomes much less.

Since leaving Wall Street, you have been spending a lot of time in Washington. You were vetted as a candidate to run the Securities and Exchange Commission, and your name has surfaced for other posts. What are you trying to accomplish

I think of it as a public service for those of us who have the background and the experience to engage in that discussion. So I’ve spent time visiting with some of our elected officials and regulators with an offer to help if they’re looking for help with facts. I can engage in this conversation when I’m not working for a large bank.

You have a big presence on social media. Why have you developed an online brand

I’ve been exploring social media as an alternative to the op-ed or other means of communication. We’re in the midst of a very important national discussion on a variety of topics, one of which is bank regulation. Given my background and all the lessons that I’ve learned â€" many of them the hard way â€" it’s important for me to be a contributor to the discussion.

Apple of Discord in China

The official Chinese media assault on Apple discussed in the previous China Insider column continued throughout the week. CCTV Evening News, watched by tens of millions every night, broadcast reports nearly every night criticizing Apple while the People’s Daily newspaper ran multiple stories attacking the company, including one accusing it of “incomparable arrogance.”

On Monday, Xinhua reported that Apple would “face enhanced legal supervision in China” because of “imparity clauses in its warranty policies” while the China Consumer’s Association has demanded the company “sincerely apologize to Chinese consumers” and “thoroughly correct its problems.” The core, stated issue is that Apple is not in full compliance with Chinese law that requires warranties on computer sales to be at least two years. Interestingly, a European Union official recently said that Apple has a similar problem in the E.U.

The tabloid newspaper The Global Times, not usually known for its restraint, ran an editorial on Friday headlined “For Apple, business must stay business”:

Apple has won respect from Chinese consumers with its perseverance in developing leading technologies and styles. But the company is not impeccable…

Apple should not follow the media speculation and consider itself the target of political persecution…

If the issue developed into a head-on confrontation between Apple and the Chinese authorities, the U.S. company will never be a winner, nor will China necessarily do well. Of course, Apple will suffer the most, as its products are already facing increasing competition in China.

There are many theories as to why official media is attacking Apple, including payback for Huawei’s problems in the United States; a reaction to new U.S. government procurement rules that will limit the purchase of Chinese-made information technology products, and protectionism for domestic handset makers (almost all of whom rely on some variant of Google’s Android to power their phones).

Many Chinese netizens have mocked the state media’s attacks, especially the comments by a People’s University law professor that the missing piece in Apple’s logo may be “responsibility and conscience to Chinese consumers,” but Apple can not win this fight, regardless of the merits or support from some consumers.

Apple looks to have a serious government and public relations problem that will require a much more proactive and forthright response than what the company has done so far; dribbling out a petulant apology akin to its response to the problems with the 2010 iPhone 4 antenna will not work in China.

The standard response by a foreign company in China facing this kind of onslaught is to make public and private apologies, emphasize its commitment and contributions to China and dispatch senior executives from headquarters to make the rounds of the relevant Chinese government entities. Apple may also have to launch a new service for China, one it may also be able to sell to other foreign enterprises. It’s name The iKowtow.

Investors have reason to be concerned. Between this brouhaha, the increased competition from Samsung and other high-end Android phones and the crackdown on corruption that is denting the gifting culture, Apple’s China results for its current quarter may be disappointing, even though this is the first full quarter in which the iPhone 5 has been on sale in China.

There is of course other news in China.

ECONOMIC DATA ON MONDAY was moderately positive, though consumption was light:

It appears that the efforts by the new government to crack down on corruption and to moderate official extravaganza may have started to dampen retail sales.

Beijing, Shanghai and several other cities released details of the new measures to control real estate prices, including strict implementation of a 20 percent capital gains tax. The new rules appear to be weaker than many had feared and there is much skepticism in the market that they will slow rising property prices.

China goes on vacation for several days this week to observe the Tomb Sweeping Festival so it should be a relatively quiet week. The mobile phone revolution has now reached the dead. According to Xinhua, some graveyards now have tombstones affixed with two-dimensional quick response codes that allow you to point your phone at the code and call up a virtual obituary.

So far there is no word on whether anyone has trademarked “iTombs”.

Hess to Sell Russian Subsidiary for $2.1 Billion

NEW YORK--(BUSINESS WIRE)--Hess Corporation announced today it has entered into an agreement with OAO LUKOIL to sell 100 percent of its Russian subsidiary Samara-Nafta for a total consideration of $2.05 billion. Based on its 90 percent interest in Samara-Nafta, total after tax proceeds to Hess are expected to amount to approximately $1.8 billion. Samara-Nafta is currently producing 50,000 barrels of oil equivalent per day in the Volga-Urals region of Russia.

So far in 2013, Hess has announced or completed the sale of its interests in the Beryl field in the U.K. North Sea, the Eagle Ford play in Texas, and the Azeri, Chirag and Guneshli fields in Azerbaijan and the associated pipeline. Including Samara-Nafta, the total after tax proceeds from these sales will amount to approximately $3.4 billion.

John B. Hess, Chairman and CEO, said, “As the sale of Samara-Nafta indicates, we are making excellent progress in executing our asset sales program, which is a central component of our plan to transform Hess into a more focused, higher growth, lower risk pure play exploration and production company. Just as important, by applying the proceeds from these divestitures to reduce debt and strengthen our balance sheet, Hess will have the financial flexibility both to fund its future growth and also to direct most of the proceeds from additional asset sales to returning capital directly to its shareholders.”

Closing of the sale of Samara-Nafta is subject to the customary approval process of the Federal Antimonopoly Service of the Russian Federation. Application for this approval process is expected to be filed within the next week.

Hess Corporation is a leading global independent energy company primarily engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at http://www.hess.com.

Cautionary Statements

This news release contains projections and other forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the company’s current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved, and actual results could differ materially from those projected as a result of certain risk factors. A discussion of these risk factors is included in the company’s periodic reports filed with the Securities and Exchange Commission.

After ‘Dishonorable Discharge,’ Blodget Muses About a Comeback on Wall St.

Henry Blodget is known these days for editing Business Insider, the online news outlet. But he first gained renown as a Wall Street stock analyst who fell from grace after the dot-com boom.

And now, despite a lifetime ban from the securities industry, it seems Mr. Blodget may be thinking about a return some day.

“Ten years ago, I got what amounted to a dishonorable discharge from the industry, and I’ve always been ashamed of that,” Mr. Blodget told The New Yorker’s Ken Auletta by e-mail, according to a profile published on Monday. “At some point, if it seems appropriate, I would like to explore the possibility of being reinstated.”

It is not clear exactly what Mr. Blodget means, and he also says, “I think it’s unlikely that I would ever work on Wall Street again, even if it were just up to me.”

The comment comes at the end of an article on Mr. Blodget’s role at Business Insider, where he writes about the industry he once covered as an analyst. This reinvention as a business journalist has raised eyebrows on Wall Street, Mr. Auletta writes, with one unidentified executive saying he did not trust Mr. Blodget.

His downfall came with the collapse of the Internet bubble. In 2003, after leaving Merrill Lynch, Mr. Blodget agreed to pay $4 million to settle accusations that he privately disparaged companies that he promoted in public. That deal included a lifetime ban from the industry by the Securities and Exchange Commission.

But Mr. Blodget has found success in his new venture, drawing millions of readers to Business Insider’s particular brand of journalism and attracting millions of dollars from venture capitalists.

There is even speculation that a sale might be in the site’s future. “I expect that someday Business Insider will be acquired by someone,” an unidentified board member told Mr. Auletta.

As Mr. Auletta notes, other Wall Streeters have overcome lifetime bans, though it does not happen often.

In 2006, the S.E.C. set aside a lifetime ban for the investment banker Frank P. Quattrone, after a federal appeals court overturned an earlier conviction on obstruction of justice charges. In that case, the S.E.C. said the regulator that imposed the ban had violated its own rules.

American Greetings to Be Taken Private

American Greetings, the greeting card and self-described “social expression” products company, said on Monday that it had agreed to be taken private by its founding family in a deal it valued at $878 million.

The Weiss family includes the company’s chairman, Morry Weiss, as well as his sons, Zev, the chief executive, and Jeffrey, the president and chief operating officer. If the deal to go private is approved by the board, they will pay non-family shareholders $18.20 a share in cash plus a dividend of 15 cents a share. The buyout group is also assuming the company’s 7.37 percent notes due in 2021.

The $18.20 price represents a premium of 13 percent from the price of the company’s class A shares on Thursday and a premium of 27 percent from their price on Sept. 25, when the Weiss family first proposed acquiring the company.

After that overture, the board of American Greetings formed a special committee to examine the proposal and to consider alternatives. The Weiss family did not participate in that review process. The committee “concluded unanimously that the transaction with the Weiss family was fair and in the best interests of the company’s public shareholders (other than the Weiss Family shareholders),” the company said in a statement on Monday.

American Greetings, which is based in Cleveland, has been a public company since 1969. The business traces its roots to Jacob Saperstein, who soon after arriving in the United States from Poland in 1905, began buying post cards from German manufacturers and selling them to local merchants in Cleveland. In the 1940s, Saperstein’s sons changed the family name to Stone. Morry Weiss is the son-in-law of Irving Stone, a former chairman.

The Weiss family will roll their shares into the transaction. In addition, the buyout is being financed by a $240 million non-voting preferred stock investment committed by Koch AG Investment, a subsidiary of the conglomerate Koch Industries. The buyout group also has $600 million in committed debt financing, consisting of a $400 million term loan and a $200 million revolving credit facility, as well as cash on hand.

Peter J. Solomon Company and the law firm Sullivan & Cromwell advised the special committee of the board. The law firm Baker & Hostetler advised American Greetings.

KeyBanc Capital Markets and the law firm Jones Day advised the Weiss family. Latham & Watkins is providing legal counsel to Koch AG Investment.

Taylor Morrison Sets I.P.O. Price at $20 to $22 a Share

Taylor Morrison said on Monday that it planned to raise as much as $602.4 million in its initial public offering as the home builder seeks to take advantage of a nascent revival in the housing markets.

In an amended prospectus, Taylor Morrison said that it expected to price its offering at $20 to $22 a share. At the midpoint of the range, the company would be valued at about $2.6 billion.

The company has benefited from an upswing in new home construction. It reported $430.8 million in net income last year, more than 15 times what it earned in 2011. It closed on 4,014 homes with an average sales price of $364,000.

Taylor Morrison, which filed for an I.P.O. in December, focuses on building houses in Texas, California, Florida, Arizona and Colorado, as well as Ontario, Canada. It operates under its own name, as well as the Darling Homes and Monarch brands.

Since 2011, it has been owned by TPG Capital and Oaktree Capital Management, which bought the home builder from Taylor Wimpey of Britain for $955 million.

Taylor Morrison’s offering is being led by Credit Suisse and Citigroup.

On Wall Street, It’s Good to Be a Director

There is one job on Wall Street for which pay has continued to rise since the financial crisis: board member. Compensation for directors at the nation’s biggest banks has ticked up even as the banks themselves have reined in salaries and bonuses, DealBook’s Susanne Craig reports.

The directors of Goldman Sachs, who are the best compensated of any big bank board members in the United States, made $488,709 on average in 2011, up more than 50 percent from 2008, according to the compensation data firm Equilar. Goldman defends the board’s pay by saying the bulk of compensation is in stock that directors cannot touch until they leave the board, aligning their interests with those of shareholders. “More broadly, banks and compensation experts say, financial firms must now pay a premium to entice and keep qualified directors,” Ms. Craig writes.

But some on Wall Street argue that increased regulation has actually limited what a bank’s board can do. “About the only thing bank directors have more of these days is meetings,” joked one senior Wall Street executive who has frequent interaction with his board. “Regulators have all but stripped boards of the main powers they had before the crisis.”

At Goldman, which is expected to release fresh pay data in the coming weeks, the board’s compensation is likely to rise for 2012 because the firm’s shares rose more than 35 percent last year, Ms. Craig notes. “After Goldman, Morgan Stanley’s director pay is the second highest on Wall Street, with an average of $351,080, roughly the same as it was in 2008 but much higher than the pay at bigger and more complicated rivals like JPMorgan Chase and Citigroup.”

A TOP MANAGER AT SAC IS ARRESTED  |  Michael S. Steinberg was a trusted lieutenant of Steven A. Cohen, having joined Mr. Cohen’s hedge fund, SAC Capital Advisors, when it was still a rising star on Wall Street. He led a charmed life, earning tens of millions of dollars and taking part in philanthropy. But he was arrested on Friday, becoming the most senior SAC employee to be ensnared in the government’s insider trading investigation, DealBook’s Peter Lattman writes.

He is among nine current or former SAC employees to have been linked to insider trading while at SAC. But Mr. Steinberg stands out. In an unusual move, SAC issued a statement in support of the portfolio manager: “Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity.”

Mr. Steinberg, 40, pleaded not guilty on Friday and was freed on $3 million bail. “Michael Steinberg did absolutely nothing wrong,” his lawyer, Barry H. Berke, said in a statement. “Caught in the cross-fire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation.”

WEIGHING ALTERNATIVES FOR DELL  |  A proxy statement filed by Dell on Friday sheds light on the process of fielding interest from a range of possible bidders for the company. “Buried in one of the filing’s exhibits is a presentation that JPMorgan Chase bankers delivered to a special committee of Dell’s board on Jan. 18,” DealBook’s Michael J. de la Merced writes. Bids from the Blackstone Group and Carl C. Icahn would involve leaving a portion of Dell publicly traded, in contrast to the $24.4 billion takeover bid by Michael S. Dell and Silver Lake. But in that presentation, JPMorgan Chase bankers said alternatives to a full take-private could limit the company’s financial flexibility.

Advisers to Dell directors spoke to 71 potential bidders during the company’s 45-day “go shop” period, the filing shows. Among the parties to have circled the computer maker were Kohlberg Kravis Roberts and TPG Capital, Mr. de la Merced reports.

ON THE AGENDA  |  In Britain, the Financial Services Authority is split into separate regulators. The ISM manufacturing index for March is out at 10 a.m. David Tisch, co-founder of TechStars NYC, is on Bloomberg TV at 2 p.m.

WHY BAD DIRECTORS STAY IN PLACE  |  “You really couldn’t have a stronger case for removing directors” than Hewlett-Packard, Michael Garland, executive director for corporate governance in the New York City comptroller’s office, told James B. Stewart, a columnist for The New York Times. And yet, all 11 of H.P.’s directors were re-elected on March 20. Mr. Stewart writes: “H.P. is hardly an isolated case. According to Patrick McGurn, special counsel for one of the major shareholder advisory services, Institutional Shareholder Services, shareholder efforts to remove directors in uncontested elections rarely succeed or come close, even in egregious circumstances.”

PARSONS ENVISIONS A JAZZ REVIVAL  |  Richard Parsons, a former chairman of Citigroup, who is working to reopen Minton’s Playhouse in Harlem, told The New York Times about his early memories of jazz. As a teenager growing up in Bedford-Stuyvesant, Brooklyn, he took his senior prom date to the Hickory House restaurant in Manhattan to hear the Billy Taylor Trio, an evening he remembers as his “first true adolescent experience.”

Mergers & Acquisitions »

A Temporary Leader for Chesapeake  |  Chesapeake Energy named Steven C. Dixon, the chief operating officer, as acting chief executive, and the company set up an office of the chairman as it continued to look for a permanent leader to succeed Aubrey K. McClendon, Bloomberg News reports. BLOOMBERG NEWS

With New Freedom, EADS May Clash With Berlin  |  Shareholders of European Aeronautic Defense & Space recently approved a new board of directors after a failed attempt last year to merge with BAE Systems of Britain. “The board’s new independence is likely to be put to the test quickly, as EADS prepares to disclose a new strategic plan that could put management on a fresh collision course with Berlin,” The New York Times reports. NEW YORK TIMES

As Takeover Targets, Vitamin Makers Look Attractive  |  More takeovers of vitamin makers are expected, “as companies bet baby boomers and rising health care costs will drive demand for products that promise health in a bottle,” The Wall Street Journal reports. WALL STREET JOURNAL

Brazil’s Batista Plays Defense  |  As his holdings have lost money, the Brazilian billionaire Eike Batista has been selling assets as part of an effort to restore confidence, The Wall Street Journal writes. WALL STREET JOURNAL

Glass Lewis Urges MetroPCS Investors to Reject T-Mobile Deal  |  The firm joined its larger rival, Institutional Shareholder Services, in casting aspersions on the transaction, raising pressure on MetroPCS and T-Mobile to sweeten the terms of the merger or risk defeat. DealBook »

INVESTMENT BANKING »

A Disgraced Analyst Muses About a Comeback  |  Henry Blodget, editor of Business Insider, was barred from working in the securities industry after a settlement with the Securities and Exchange Commission. But he tells The New Yorker’s Ken Auletta: “Ten years ago, I got what amounted to a dishonorable discharge from the industry, and I’ve always been ashamed of that. At some point, if it seems appropriate, I would like to explore the possibility of being reinstated.” NEW YORKER

Stock Trading Moves Into the Shadows  |  As stock trading moves from established exchanges to private platforms, “the shift is helping big traders hide what they are doing in the markets, and regulators are worried that the development could obscure the true prices of stocks and scare away ordinary investors,” The New York Times reports. NEW YORK TIMES

Demise of an Investment Fund Offers Cautionary Tale  |  A closed-end fund sponsored by UBS, known as the Willow Fund, experienced big losses after piling into derivatives trades, raising questions “about how assiduously this fund’s independent directors watched over the manager as he ramped up his portfolio’s risk levels,” The New York Times columnist Gretchen Morgenson writes. NEW YORK TIMES

PRIVATE EQUITY »

Cerberus’s Effort to Exit Gun Maker Moves Forward  |  The private equity firm Cerberus Capital Management announced last year that it would shed its controlling stake in the Freedom Group, and it “is expected to kick off a more formal auction process this week to narrow the field of interested parties,” The Financial Times reports. FINANCIAL TIMES

K.K.R. Said to Be in Talks to Buy French Clothing Brands  | 
REUTERS

HEDGE FUNDS »

Former Morgan Stanley Manager Starts Fund Focused on Japanese Stocks  |  Tsukasa Shimoda, founder of Galleyla Investment, is “betting on interest from overseas investors after a recent surge in Tokyo stocks,” Reuters writes. REUTERS

I.P.O./OFFERINGS »

Toys ‘R’ Us Withdraws I.P.O.  |  Nearly three years after filing to go public, the retailer, which is backed by private equity, has decided to pull back from a market debut. DealBook »

How Consumers Let Down Their Guard Online  | 
NEW YORK TIMES

VENTURE CAPITAL »

Box, a Data Storage Company, Looks Overseas  |  Box, the business data storage and management start-up run by Aaron W. Levie, “plans to expand its sales force and team of developers by opening offices in Germany and France in coming months, building on its first overseas foray last summer in Britain,” The New York Times reports. NEW YORK TIMES

Silicon Valley’s Storyteller  |  Jerry Weissman has been helping companies go public for nearly a quarter century. He is not an engineer or a venture capitalist, though; he’s a former theater director, who schools top executives in how to talk to Wall Street. DealBook »

LEGAL/REGULATORY »

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In Libor Ruling, a Big Win for the Banks

Judge Naomi Reice Buchwald of Federal District Court in Manhattan, in a 161-page decision, has given the multinational banks being investigated for manipulating the London interbank offered rate, or Libor, a dose of good news for once.

On Friday, the judge dismissed the bulk of the claims filed against the banks by private plaintiffs, most important the antitrust and Racketeer Influenced and Corrupt Organizations counts that bring with them triple damages and attorneys’ fees for any violation.

The banks can certainly celebrate a major victory in the district court, but they should not get too far ahead of themselves. Like most such decisions, this one is just a way station on the road to the United States Court of Appeals for the Second Circuit for further review, and there is no guarantee that the appellate judges will agree with Judge Buchwald’s analysis.

Given the stakes involved, this could even be the type of case that draws the interest of the Supreme Court. That means the threat to the banks will linger until the appeals process is played out over the next year or two.

Her decision might have seemed surprising given that three banks - Barclays, UBS and Royal Bank of Scotland - have already settled cases with the government that cost them more than $2.5 billion in penalties. Each admitted to submitting false interest-rate information to the British Bankers Association used to establish Libor, a benchmark for loans and securities issued throughout the world.

UBS and Royal Bank of Scotland even had their Japanese brokerage subsidiaries enter a guilty plea in the United States, something unheard-of in bank prosecutions for years. More banks are likely to reach settlements with the government in the coming months, including admissions of wrongdoing, as they seek to put the Libor investigation behind them.

Indeed, the judge acknowledged in her opinion that the dismissal might be “unexpected” in light of the settlements that brought large fines and admissions of wrongdoing. But she made it clear that this seeming incongruity was a result of the “many requirements that private plaintiffs must satisfy, but which government agencies need not.”

Her decision came on a motion to dismiss filed by the banks arguing that the plaintiffs could not prove a violation of the law even if it could be shown that interest-rate manipulation caused them financial harm.

The cases before Judge Buchwald represent a raft of class actions seeking billions of dollars in damages that were consolidated into a single proceeding.

A major focus is on the claim that the banks colluded to artificially depress Libor, costing investors in swaps and issuers of securities billions of dollars because interest rates tied to the benchmark did not reflect the true market. Under the antitrust laws, it is illegal for competitors to take concerted action that affects the price of goods and services for their own benefit.

The key to Judge Buchwald’s decision is her finding that the banks were not acting as competitors but instead were cooperating when submitting interest-rate information to the British Bankers Association, which in turn set Libor based on that data. To prove an antitrust violation, any financial harm suffered by private plaintiffs must be traceable to the negative effect on competition from the collusion. Thus, she concluded, the “injury would have resulted from defendants’ misrepresentation, not from harm to competition.”

This reflects the approach taken by the Justice Department in the settlements reached thus far with the three banks over Libor manipulation. Those cases involved admissions of violating the federal wire fraud statute from the submission of false information designed to manipulate Libor, not a violation of the antitrust laws.

Judge Buchwald also found that Libor did not fall under the antitrust laws because it was designed to be only a point of information reflecting what banks would charge one another for loans, not a product subject to price-fixing. Whether banks colluded in their submissions or acted individually, the effect on investors would be the same so that there was no harm to competition, even if it caused financial losses.

In addition to the antitrust claims, some plaintiffs claimed the Libor manipulation violated the commodities laws and the racketeering statute, commonly known as RICO. Judge Buchwald threw out the RICO action, but did allow a portion of the commodities claims to proceed.

The discount broker Charles Schwab based its claim of a RICO violation on the banks’ having engaged in a pattern of racketeering activity involving mail, wire and bank fraud in manipulating Libor.

The judge dismissed that claim on two grounds: first, because RICO cannot be used in cases involving securities, based on a provision of the Private Securities Litigation Reform Act adopted in 1995 to curb abusive lawsuits.

Second, she concluded that RICO only reached a domestic enterprise affected by the misconduct, not a foreign one. Because the focal point of the manipulation was Libor as set by the British Bankers Association in London, she ruled, the violations fell outside the jurisdiction of a United States court.

The commodities claims were brought by traders in Eurodollar futures contracts who claimed that artificially lowering Libor effectively drove up the cost of their contracts. Judge Buchwald allowed some claims to proceed if the plaintiffs could show that the two-year statute of limitations did not require dismissal.

The claims by investors over some Eurodollar futures contracts will move forward, and the amounts involved in that case could be significant, even if much less than the broad antitrust claims.

Yet the banks face other significant legal challenges. There are lawsuits from the Libor manipulation that were not directly affected by the ruling. For example, Freddie Mac recently filed a lawsuit against them for antitrust violations, breach of contract and fraud. The potential damages are $5 billion. There is no guarantee the judge in that case, which was filed in Virginia, will adopt the view of the antitrust laws taken by Judge Buchwald.

And for those banks that have not yet reached settlements with regulators, there is the prospect of large monetary penalties and perhaps a guilty plea by a foreign subsidiary. As we have seen in the first three settlements, the government usually releases a set of embarrassing e-mails and text messages that put the bank in a rather bad light.

Still, there is no question that a win is a win, and the banks have every reason to be heartened by Judge Buchwald’s decision because it gives the plaintiffs much less leverage in seeking any settlement. There is, however, still a long way to go.

Judge Naomi Reice Buchwald's ruling