Q. What is the difference between "shares" and "diluted shares"? --Larry Banner, vice president, Charlottesville Regional Chamber of Commerce
A. The difference is that diluted shares take into account any stock options or restricted stock granted to executives but not exercised or received. It's considered the better number, but with most companies, these two numbers don't differ unless the company has given out a huge number of stock options. Tech companies would be a good example.
-- Chris Roush, assistant professor, University of North Carolina at Chapel Hill, former business reporter with The Atlanta Journal-Constitution
» Permalink
Q. Could you explain what a hostile takeover actually is? Is it a request from Company A to Company B to purchase Company B? Is Company B always free to reject the offer? --Patrick Garmoe, reporter, Daily Herald (Suburban Chicago)
A. A hostile takeover is when Company A offers to buy Company B without there being an agreement between the two companies or Company B even wanting to be sold.
It's in contrast to a friendly acquisition, when the two companies sit down and negotiate a deal before it is announced.
From Investopedia: Hostile takeovers are usually bad news, as the employee moral of the target firm can quickly turn to animosity against the acquiring firm.
Company B is free to reject the offer, but Company A can go to the shareholders of Company B and put pressure on Company B. It can also offer to buy the stock directly from the shareholders without Company B's consent to try to force Company B's hand.
-- Chris Roush, assistant professor, University of North Carolina at Chapel Hill, former business reporter with The Atlanta Journal-Constitution
» Permalink
Q. Where can you go to find a listing of all public companies within a certain coverage area, especially when it's a smaller community where, for example, the local Chamber of Commerce has no online presence? -Gregg Gethard, Business Reporter, Old Colony Memorial (Plymouth, Mass.)
A. This is something that I'm constantly looking for, especially when I'm prepping for a presentation at a Reynolds seminar because I want to give examples for companies in the reporters' state and area.
I haven't found anything complete though. A good source is to call a local stockbroker. He's probably dealt with all of the local stocks in the area.
The best thing on the Internet that I've found is this:
1. See if a larger newspaper in the state has done a list of the top 100 publicly traded companies. These are typically kept on their Web site for the entire year. For example, here's one from the News & Observer in Raleigh that I frequently refer back to whenever I'm talking to reporters at remote papers in North Carolina.
The Seattle Times has a list that includes Washington, Idaho and Oregon.
2. Find a Bloomberg terminal in your area. Money managers or small hedge funds or stockbrokers typically have these in their offices. You can do a search for all news on companies by state by typing in "NI" and then the state code and then the green GO button. The state codes for a Bloomberg are the same as its ZIP code.
3. This listing is also a good start. It breaks down public companies by state.
-- Chris Roush, assistant professor, University of North Carolina at Chapel Hill, former business reporter with The Atlanta Journal-Constitution
» Permalink
Q. Do you have any suggestions for someone who is the only business reporter on her newspaper's staff? I could use some help structuring my coverage and focusing my energy effectively.-Sydney Leavens, Concord Monitor, Concord, N.H.
A. Being the only business reporter on your staff is obviously a tough challenge, but the good news is that you get to handle all the best business stories -- and that's what I'd advise. I'd decide what the most interesting businesses and business subject beats (meaning local industries) are in your region and focus your energy on those. There will likely be pressure -- sometimes subtle, perhaps more overt -- to write "good" stories about businesses and to focus on "what's good for the local economy" but I would resist this challenge and instead focus on the local businesses that are making interesting products, illustrating important trends in the broader economy (i.e., are they sending manufacturing jobs overseas? are they "offshoring" work to India or Ireland?) and are the engines of economic activity for your region. I'd let the wires handle whatever regional and national economic/business stories they can, and focus your energies on a few well-defined business beats that make sense for your region.
And I'd make alliances with others on the staff -- perhaps a regional reporter with some interesting businesses in that part of your circulation area, the city hall reporter who may come up with interesting biz stories through planning/zoning boards, the courts reporter who regularly checks filings -- who can be your "eyes and ears" for biz stories and pass along tips, as you obviously can't be everywhere. And I'd make it clear to your editors just what your goals are, so they don't have you wasting time and energy focusing on "perennials" that will remove your focus from potentially really good business stories.
--Jodi Schneider, Economics Editor, Congressional Quarterly. She is a former assistant managing editor at U.S. News & World Report, past president of the Society of American Business Editors and Writers, local business editor at The Washington Post and business editor at The Orlando Sentinel.
» Permalink
Q. Stories about startups often discuss the burn rate, or the rate at which a company is spending money, usually per month, sometimes per day. With most of these companies being private, how do you actually figure out the burn rate? My experience has been that most companies wont tell you what it is and neither will their investors. -Bob Brown, Network World
A. As far as the burn rate, it's pretty easy to determine a public company's burn rate by looking on its balance sheet and determining how much cash it has on hand and how much of that cash is being spent on a monthly basis. Let's say a company has $25 million in cash on hand, according to its balance sheet, and is spending an average of $5 million a month. Its burn rate is the $5 million/month or $60 million/year, which tells you that it only has enough money to last enough five months unless it can raise more money from investors or another source.
Finding this information for private companies is more difficult, particularly for the start-up, high-tech and biotech firms where this information is critically important to assessing its prospects. One way that I've found to get that information is when the private company has been funded by a state through an incubator or venture capital fund funded by state money. In many cases, the information about the company's performance is public record because it has been funded by public money.
In other cases, private companies are required to file financial information with state regulators. This is typical for banks, insurance companies and lenders, not high-tech, however.
-- Chris Roush, assistant professor, University of North Carolina at Chapel Hill, former business reporter with The Atlanta Journal-Constitution
» Permalink
Copyright © 2008 Donald W. Reynolds National Center for Business Journalism