SuperValu stock craters, off nearly 50%

Yikes. The rats aren’t just fleeing — they’re stampeding. At Forbes, Abram Brown reports: “Shares of Supervalu lost nearly half their value today, as Wall Street analysts lowered price targets and voiced skepticism about the plan’s feasibility. ‘Supervalu could become the next casualty in the troubled supermarket space, as its fundamentals have finally begun to show real signs of distress after years of steady underperformance,’ says Credit Suisse analyst Edward Kelly. In early afternoon trading, Supervalu sold at $2.85, down 46.1%. It’s hard to muster a great deal of confidence in Supervalu CEO Craig Herkert. Since taking the company’s helm in 2009, shares are off 78%, and in the last year alone, the stock dropped 69%. That’s a great deal of value rotten away.”

At Bloomberg, Krista Giovatto and Michael Amato write: “Supervalu Inc. (SVU), the third-largest U.S. grocery that suspended its dividend, is seeking $2.5 billion in loans to refinance debt. Credit Suisse Group AG, Barclays Plc, Wells Fargo & Co., and US Bank are arranging the financing for the operator of supermarkets and pharmacies, according to a transcript of Supervalu’s earnings call yesterday. The deal for the Eden Prairie, Minnesota-based company will consist of a seven-year $850 million term loan and a $1.65 billion revolving line of credit maturing in five years, the company said.
The banks will host a lender meeting tomorrow at 9:30 a.m. in New York, according to a person with knowledge of the matter, who asked not to be identified because the information is private.”

At The Wall Street Journal, Daniel Benoit says: “A day after an ugly earnings report as sales dropped, the elimination of its dividend and the launching of a strategic review, Supervalu shares were dropping to new 32-year lows. The stock was off 44% to $2.96, and analysts were questioning whether the company’s willingness to sell itself, or parts of itself, could even create a deal. ‘We believe there is a now a very low probability of [Supervalu] being able to sell any of the assets to unlock the fair value, especially in the near term,’ UBS analyst wrote in a research note. ‘Buyers are not incentivized to pay full price when there is a strong possibility that they could buy it cheaper if SVU’s turnaround fails to materialize.’ ”

Public statements of opposition to the GOP’s marriage amendment are on the verge of becoming chic. In a Strib commentary, notable attorneys from several prominent local firms add their names to the opposition: “As leaders of law firms, we write in our individual capacities to express our personal opposition to the Minnesota marriage amendment that will be on the ballot this fall. … As a number of our state’s corporate leaders have noted, the marriage amendment endangers our business climate, signaling that ours is a community that does not welcome members of the LGBT community. This directly impacts Minnesota businesses, including law firms, which are dependent on attracting and retaining the best and brightest talent, regardless of sexual orientation.”

In another Strib commentary, a professor at for-profit Waldorf College defends his type of institution: “When I am together with colleagues from other liberal arts schools, I get a sense that a barrier has gone up between them and me. Many of them, and members of the public, lump my college in with other, less-reputable institutions. The reasons for this are not a complete mystery: I teach at a for-profit college. That’s enough to make me persona non grata in some circles. It’s interesting how some people don’t ever make it past that status to find out more about what I do at this college.
Where does this negative view come from? Partly from what’s really happened at those less-reputable schools, where making profits for investors became a higher priority than a quality education. Because a few institutions have done that, colleges like mine get treated with unfair suspicion, accused of making piles of money by charging students tuition for an education that won’t actually help them improve their lives.”

A couple of positive economic indicators: First, John Welbes at the PiPress writes: “Continuing a two-year trend, bankruptcy filings in Minnesota declined in the first half of 2012, dropping 11.5 percent from the same period last year, according to figures from U.S. Bankruptcy Court. Through June, there were a total of 9,178 bankruptcy filings, both business and personal. A slowly improving economy explains part of the trend. Local bankruptcy attorneys say another key factor is the tighter lending standards banks embraced after the economy tanked starting in 2007. ‘When they stop lending, people don’t get in trouble,’ said Dick Pearson, a shareholder at Prescott & Pearson, a bankruptcy law firm based in New Brighton. And people have been afraid to load up on debt over the last three or four years, he said, as they’ve seen friends lose their jobs.”

Next, his colleague, Julie Forster reports: “In a sign of strength in the housing market, Twin Cities home prices rose by double digits again in June compared with a year ago. In the fourth consecutive month of year-over-year gains, the median home price rose 10.7 percent to $179,500 in the 13-county metro area. Residential real estate continues to show signs of a market recovery. Record low mortgage interest rates and a declining number of foreclosures are helping boost buyers’ interest and prices in the market. A report released Thursday, July 12, by the Minneapolis Area Association of Realtors said closed sales grew 13.8 percent during the month.” Good news is bad news for a certain strain of political candidates.

Nice work by the Plymouth cops. Writes Abby Simons in the Strib: “Plymouth police thought they might be drug traffickers. The couple had several cellphones and energy drinks and seemed too anxious for a routine traffic stop. And then there was the fact that they were California residents driving an SUV rented in Colorado with Florida plates. Instead, a search of the vehicle uncovered tools allegedly used in an elaborate ‘skimming’ scheme designed to steal credit-card numbers of gas station customers who paid at the pump. Now the husband and wife are in jail facing nine felony charges. Sarkis Mkhsyan, 29, and Gohar Yesayan, 28, of Van Nuys, Calif., are each charged with eight counts of identity theft and a single count of financial transaction card fraud.”

So, they’re saying Bob doesn’t know his own guitar? David Bauder of the AP writes: “Bob Dylan and historians at PBS are in a dispute over the whereabouts of an electric guitar that the singer plugged in at the Newport Folk Festival in 1965, quite possibly the most historic single instrument in rock ‘n’ roll. The New Jersey daughter of a pilot who flew Dylan to appearances in the 1960s says she has the guitar, which has spent much of the past 47 years in a family attic. But a lawyer for Dylan claims the singer still has the Fender Stratocaster with the sunburst design that he used during one of the most memorable performances of his career. If the authentic ‘Dylan goes electric’ guitar ever went on the open market, experts say, it could fetch as much as a half million dollars. The guitar is the centerpiece of next Tuesday’s season premiere of PBS’ ‘History Detectives,’ and the show said it stood by its conclusion that Dawn Peterson, the pilot’s daughter who works as a customer relations manager for an energy company, has the right instrument.”

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Comments (13)

  1. Submitted by Bill Schletzer on 07/13/2012 - 06:48 am.

    famous guitars

    Never really thought about Dylan’s Newport guitar. I have a couple other examples of famous ones that I would probably place higher: Hendrix’s guitar that was burned during Wild Thing at Montery or maybe McCartney’s “Beatle Bass” from the first Ed Sullivan appearance. Wouldn’t mind Jimi’s Woodstock Strat either since it would maybe still be in one piece. Les Paul sn000 would probably top them all.

  2. Submitted by Tom Christensen on 07/13/2012 - 09:12 am.

    Romney’s Bain Capital Could Swoop In and Save Supervalue

    Supervalue is Romney’s chance to do what he claims he does. Swoop in and “save companies” and “create jobs”. Think of the title he would earn. “Romney turns Supervalue back into a super value.” All the right pieces are there. Lets see if he acts. I suspect the way Romney would look at it is that the people have minimal value, but he would sell the trucks, buildings, equipment, run with any cash he finds, and do all that very very quietly. Then he would invite the press in when he empties the warehouse, donates the products to food shelves, and becomes a hero. Then he would go home feeling really really good about himself.

    • Submitted by Lee Phillips on 07/13/2012 - 10:36 am.

      Or Obama could swoop in and bail them out, as clearly, they are too big to fail.

      • Submitted by Tom Christensen on 07/13/2012 - 01:06 pm.

        The difference being

        President Obama’s way we all helped save about 1 million jobs. Romney’s way many lose their jobs and only one person is happy, Romney. America didn’t get to be great without working together and compromising. Apparently that is a lesson we have to learn all over again.

  3. Submitted by Neal Krasnoff on 07/13/2012 - 11:44 am.

    If Minnpost is “non-partisan”

    why are you guys appear to be highlighting supporters of leftist positions in your articles?

    • Submitted by Rachel Weisman on 07/13/2012 - 12:21 pm.

      Only the Hard Right

      Only those on the right see anything they disagree with as leftist, or in your case “partisan”. Give it a rest and give us a break. Now would be a good time for the right to stop complaining about biased news coverage.

  4. Submitted by Thomas Swift on 07/13/2012 - 12:47 pm.

    Torturing the facts

    There are 31 states that have marriage protection written into their constitutions, and none report a decline in business activity related in any way to it.

    But hey, we’re talking about lawyers here; obfuscation and hyperbole are their stock in trade.

  5. Submitted by Ann Richards on 07/13/2012 - 08:18 pm.

    Which states are the 31 that have it in their constitution? Or which ones don’t? The issue is over employment rather than business dropping off. So Carolina is already changing their benefit package for state employees. They are drafting the changes to drop partner insurance benefits. If companies are recruiting they want to know they are getting the best but if Mn passes the amendment, how long do you think it will take the Republicans to alter benefits for state employees, how many private companies will follow suit? Another reason to support ACA so that insurance is not tied to employment.

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