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THE WALL STREET JOURNAL CAMPUS EDITION.
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What's News-
In Business and Finance
IPO Activity Picks Up
Spurred by a rebounding stock market and pent-up demand, the IPO dance card is as full as it has been in months.
THE WEEK OF NOVEMBER 12,2001
Nine initial public offerings of stock came to market from Oct. 1, through the end of last week, and 24 more are in the works through December, making this the highest-volume quarter for IPOs this year, data company Thomson Financial said. An IPO is a company's first sale of stock to the public. Only 14 deals were completed in the third quarter, the fewest in a quarter since 1976.
Analysts see the return of the IPO business as a sign of confidence in the stock market's rebound from its mid-September lows. Many companies going public have been waiting in the wings for months, and the fact they are striking now means they don't think recent gains will soon fizzle.
Some long-dormant IPO filings are becoming active again. Verizon Wireless said last week that it hopes to go public in the first half of 2002 in a deal roughly estimated at $5 billion.
in the wake of the Sept. 11 attacks, many companies are putting off spinoffs, product orders, hiring decisions, real-estate projects and other important activities.
Businesses Delay Projects—and Hiring
In early October, more than a quarter of 669 finance chiefs said they were postponing planned capital expenditures as a result of the attacks, according to a survey by Financial Executives International and Duke University's Puqua School of Business. The Las Vegas resort and casino Mandalay Bay pushed back completion of a big expansion by six months to January 2003.
Yahoo Wins Round Against French Order
A U.S. court ruled that Yahoo! Inc. doesn't have to comply with a French court's order that the company block French users from accessing Nazi-related materials on its Web site, a decision seen by many as an important victory for free speech on the Internet.
The French court's ruling had alarmed free-speech groups because the Nazi uniforms and other memorabilia in question were on Yahoo's U.S. auction site, not its French site, which has long banned Nazi paraphralia in deference to French laws that prohibit the sale of racist materials. The French groups that brought the initial case may appeal.
Carl Yankowski, Palm Inc.'s embattled chief executive, resigned from the maker of hand-held computers following a tumultuous year of slowing sales and mounting losses.
Palm Loses CEO Plans New Ads
The once-highflying company has been hit by the tech slowdown and the fumbled introduction of a new product line earlier this year. To revive sales heading into the holiday season, Palm is returning to television this week with an advertising campaign that could make or break its holiday season.
Club Med Closes Some Resorts
Club Med, which was losing ground to rivals even before this fall's travel slump, has closed seven resorts and plans to close eight more for at least several months.
After the Sept. 11 terrorist attacks, winter bookings at Club Med plummeted at various villages from 15% to 50%. The company was already being hurt as competitors
Traffic Patterns
The crash of American Airlines Flight 587 is a new jolt to the airline industry just as passengers were beginning to return to the air. U.S. monthly passenger boardings, in millions 60
Source: Air Transport Association *estimated
built bigger, more opulent resorts,
often right next to Club Med's aging
villages. And cruise lines are offering
similar all-inclusive vacations at sharply discounted rates. Now Club
Med, with 120 resorts, faces perhaps its most severe financial problems since its launch in 1950.
Clear Channel To Sell Music Online
Radio giant Clear Channel Communications Inc. will offer online music subscriptions through its stations' Web sites in five cities, creating what eventually could become a rival to services planned by the major record labels.
Starting as early as January, Clear Channel stations in Chicago, Houston, Los Angeles, Phoenix and Salt Lake City will deliver a service on their Web sites provided by FullAudio Corp., a Chicago-based Internet music firm. Users will be able to download songs for $5 to $15 a month.
The long-term viability of paid online music subscriptions is unclear, given the current prevalence of free song-swapping services. But online services from radio stations could pose a big challenge to those created by labels and Internet firms. Radio stations often have strong local brands and the ability to promote their services directly over the air.
Amtrak May Face
Revamping
An independent oversight commission, concluding that Amtrak won't meet a congressional deadline to operate without federal subsidies by the end of next year, set in motion a possible revamping of the nation's intercity passenger-train system.
The decision, reached Friday by the Amtrak Reform Council in a 6- to 5 vote, said Amtrak as currently structured and funded is "not capable of delivering the improvements in passenger rail service that are needed." The council now has 90 days to file an Amtrak restructuring plan with Congress, which has the final say on what happens to the system. The decision won't affect Amtrak's train service for the foreseeable future, Amtrak said.
In a sign of the limited market for direct online car sales, CarsDirect.com Inc. is launching a service to allow consumers to buy cars through dealers instead of directly from the company...Billionaire Warren Buffett said he and others in the insurance industry made a "huge mistake" by not anticipating the need to collect extra premiums for terrorist acts...Smack Down: World Wrestling Federation Inc.'s president resigned and the company cut 9% of its work force amid declining ratings for most of its shows.
Odds & Ends
By Don Arbour
How to contact us:
Campus Edition@wsj.com
Auto Sales Soar on Mix Of Deals, Patriotism, Seize-the-Day Spirits
Just how are Americans dealing with economic downturn, high unemployment, terrorism and war? They're buiving brand
- Interviews' Tactics Test Candidate Composure Most job interviews don't include a confrontation, 'but sometimes employers behave aggressively and may even ask illegal questions to see how you respond. Here's advice on preparing for such a meeting.
They're buying brand new cars — 1.73 million of them in October, the most ever in a single month. At that rate, one in every 10 Americans would be driving off the lot in one within a year. But take a look at what's selling: While there's been a slight uptick in the economy models that usually do well in a downturn, the biggest sellers have flash, glitz and price tags that seem surprisingly out of step with the times. (Think high-end trucks, gas-guzzling SUVs and cars.) The biggest gainer of all? A convertible—Chrysler's Sebring, whose sales have almost triped since last October.
THIS WEEK AT:
COLLEGEJOURNAL.COM
- tech Firm Offers Workers A Custom M.B.A. Program Intel has teamed up with Babson College to develop an in-house M.B.A. program for employees who want an advanced degree but can't afford time out of the office. Even
Suddenly Mortal
Much of this boom, of course, has been driven by the industry's well-publicized financing plans. But good deals are only part of the picture. Indeed, some of the industry's hot sellers weren't even marked down. Instead, many buyers say they're motivated by everything from confidence that the economy will bounce back, to a patriotic impulse to buy American. And then there's the "seize-the-day" factor, with people suddenly deciding life's too short to hold off on the car of their dreams.
from THE WALL STREET JOURNAL. better, the chip maker is paying tuition for each student.
WSJ.com College Journal
from THE WALL STREET JOURNAL.
- Tailored, Targeted Letters Catch Employers' Attention It's common for job seekers to e-mail resumes to prospective employers, but what kind of cover letter should you send? A resume expert explains how to write an e-mail that gets your credentials noticed.
"Sept. 11 may have made us all feel a little more mortal," says Jay Shoemaker, a San Francisco businessman whose wife is a flight attendant for United. He just traded his five-month-old old Mercedes for a fancier Benz that cost almost $100,000. Oh, and he's also shopping for a used Porsche.
October's Big Movers
Last month's record car and truck sales were driven by a new standalone.
Here are the big winners.
**Chrysler Sebring Convertible**
$23,700 $29,400
3,976
↑ 287%
With room for five, this mid-price ragtop lets you seize the day—and still take the kids along.
**Chevrolet Corvette**
$41,700 $50,400
4,647
↑ 63%
This car never saw rebates or financing deals—until last month.
**Ford F-series pickups**
$19,000 $38,200
102,424
↑ 51%
Dealers in Texas truck country pushed 0% deals, some staying open until midnight.
**Chevrolet Silverado**
$18,200 $38,200
88,881
↑ 79%
No. 2 in overall sales behind the F-series, this pickup is picking up market share.
**Mercury Grand Marquis**
$24,400 $29,400
14,686
↑ 106%
Frequently sighted in retirement communities and government fleets.
**Chevrolet Impala**
$20,600 $24,300
27,661
↑ 117%
The Wonder bread of family sedans, with plenty of room for long family trips.
**Hyundai Sonata**
$16,000 $18,800
7,768
↑ 160%
Hyundai offered big deals in October. But then again, it offers big deals every month.
**Toyota Prius**
$20,500
1,580
↑ 84%
This high-mileage, gas-electric hybrid won't challenge SUV sales anytime soon.
"We're trying to get people back focusing on the benefits of the product rather than the size of the deal," says Chrysler marketing chief James Schroer.
By Wall Street Journal staff reporters Sholin Freeman, Karen Lundegaard, Jonathan Welsh and Daniel Costello.
Detroit's big Three complain that financing deals are draining their bottom lines, and that they'll last only a few more weeks. But Ford and GM both say discounts are likely to continue in a different form. And Chrysler is already offering buyers a free seven-year, or 100,000-mile, warranty that covers the engine and transmission. In touting the warranty, the company has made some not-so-subtle references to Sept. 11, suggesting its plan will give buyers "peace of mind."
But even some cars that weren't discounted sold well. Subaru and Honda, neither of which offered major new deals following Sept. 11, saw double-digit sales gains in October. Some high-priced models were hot as well. Sales of BMW S-series, which goes for about $50,000, were up more than 20%. In fact, sales manager Louis Smith says most BMW buyers at his Midwestern Auto Group in Dublin, Ohio, are not only paying full price, but asking for models loaded with luxury features.
In fact, some buyers are using this as an opportunity to buy cars they never could have afforded otherwise. "We'd always wanted a Suburban," says James Day of Maryland, who just bought one of the $36,000 Chevy SUVs. With cheap financing plus an end-of-the-year sale price, he's spending little more each month for his new Suburban than for the 1999 Pontiac Trans Am he traded it. Still, Mr. Day worries a bit about paying for such an expensive vehicle: His telecommunications company has been laying employees off for three quarters running. Another worry is fuel prices. While gas is relatively cheap now, a period of unrest in the Middle East has never been a comfortable time to own a gas-guzzer.
Ironically, though, that's what's selling more than anything else right now. Remember the mounting SUV backlash? Well, forget it; Sales actually doubled from last October for some popular sport-utility vehicles, while others gained nearly as much. It's easy to see why, with Americans
worried more about safety and security, and also planning more road trips instead of flights.
Loaded for Luxury
Trucks fared even better, particularly in Texas, where Ford dealership pushed the 0% deals especially hard, with some staying open until midnight. The upshot: Ford sold 102,000 F-series pickups in October, the first time a pickup truck has passed the 100,000-a-month mark. The deals were so good, in fact, that Ford's pickups were the biggest-selling vehicle of any kind for the month.
The deals are giving cars like the Chevrolet Corvette a big boost. General Motors rarely discounts this ultra-macho couple, so when the company included it in its new financing deals last month, sales jumped more than 60%. "If you weren't going to buy a Corvette in October," said GM sales analyst Paul Ballew, "I don't know when you were going to buy one."
This is nearly now outspoken haved during past downturns. During the great gas crisis of the mid-1970s, American consumers shifted to fuel-efficient compacts. In the 1991-92 slowdown, they bought fewer cars because of the sluggish economy and war in the Persian Gulf. But this time around, auto makers are hoping to prop up the market just long enough for the economy to regain steam. So they veiled out one of the industry's most extreme sales strategies: 0% financing, a plan that lets buyers pay the vehicle price in installations, with no interest. Industry veterans say they can't remember the last time Detroit offered 0% deals this widely.
Hottest Gear On Campus? Books
BY POOJA BHATIA
ere's a novel audience for the book business: college students.
Gees, the under-25 set is now buying books for leisure reading at three times the rate of the overall market. Young readers—even teens—are flocking to surprisingly hefty titles, from Jane Austen to memoirist Dave Eggers, whose prose some critics have compared to James Joyce's.
After a decade in which reading was considered about as hip as the Bee
Bookstores across the country report jumps of 20% to 75% in young buyers over the past three years. Industry analysts point to a host of new, rather uniliterary marketing tactics, from readings in goth discos to Hollywood tie-ins. Obsessiveness about college admissions has also helped, with kids trying harder to at least appear well-read. But perhaps the biggest change is in the readers themselves: This generation is more earnest, more studious and, well, nerder than its predecessors.
It wasn't so long ago that the MP3 generation could scarcely be bothered to crack a book. Colleges saw a 50% drop in literature majors between 1992 and 1997, as Gen-Xers turned to the Web. But now that so many dot-com fantasies have gone bust, geek chic has had to find new outlets.
"This generation has far more patience, is much more open to art and culture than any I've seen," says Alison Reid, owner of Diesel Bookstore, in Oakland, Calif. Her fastest twenty-something seller this week: "An Invisible Sign of My Own," by Aimee Bender.
Of course, not all the new readers are Susan Sontags-in-training. Many are making a fashion statement of sorts, carrying around tattered copies of "in" books—"not necessarily to read, but to be part of a scene," says Jeremy Ellis, a manager at Austin's Book People.
And in some ways, all of this is changing not just readability levels but the book business itself. Some publishers say that as the book business becomes more glamorous and celebrity-centered, it is starting to look like rock 'n' roll. Last month, Grove/Atlantic signed a 17-year-old to write a novel about a fictionalized designer drug. Says Morgan Entrekin, publisher and president there: "We're all just looking for the newest, freshest voices."
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