Inveslogic.com Daily Blog Report: GM workers walk, NanoSolar scores federal funds, Indian luxury goods are hot

This is a selection of today’s most popular blog articles from Inveslogic.com where you will find the highest-rated stock market and investment blogs, videos and podcasts on the web.


UAW strike affects GM nation-wide


Investment blog Schaeffers Research is reporting that fall-out from the UAW strike at General Motors has already sent their share price down significantly. GM stock started out on a high this morning after a Wall Street Journal article incorrectly reported that a deal between the company and the union was due to be finalized shortly. According to the post, “many traders were hoping for a resolution and a new contract before the 11:00 am Eastern Time deadline set by the UAW.”


Shortly after the deadline, news reports came flooding in that GM workers were walking off the job. This led Schaeffers Research to report that “shares of General Motors are pulling back from their highs of the session following the walkout.” The stock gained almost 4% shortly after the opening bell, but closed down half a percent at the end of the day.


The strike will affect about 73,000 UAW members at GM plants nationwide. The union claims that after 9 days of negotiations, GM’s refusal to “address job security and other mandatory issues of bargaining” have prompted their first strike in almost a decade.


Private equity log-jam in China


Competition is heating up in the volatile world of Chinese private equity. According to a post from the New York Times Dealbook, a blog edited by Andrew Ross Sorkin, several “senior executives from Goldman Sachs and Temasek set up their own China-focused private equity funds” and are basing them entirely within mainland China. This announcement came amidst news that several high-profile American private equity firms are set to move more money into China. However, the post stated that, “even as the likes of the Texas Pacific Group and the Carlyle Group rush into China, they are likely to find more competition — from local private equity firms.”


Dealbook states that many hard-line nationalists are active in the world of Chinese finance and are notoriously wary of offshore firms looking to cash in by acquiring Chinese companies. According to the post, the Goldman Sachs and Temasek executives have positioned themselves properly by setting up local subsidiaries using Chinese currency as their main denomination. Dealbook quoted the Financial Times saying that, “buyout firms denominated in yuan are poised for greater success… they can soak up domestic liquidity, while offering hard-line nationalists relief that local companies are in the hunt for local assets.”


However, the post also noted that the increasing Chinese focus of many private equity firms will drive up prices due to the fact that “too much money may be chasing too few assets, pushing prices up.”


LVMH to invest $600 million in India


A recent post by VC Circle, a blog chronicling the venture capital industry in India, is reporting that Louis Vuitton Moet Hennessy (LVMH) is set to launch a “private equity fund in India to invest in Indian brands and retail chains.” This move comes as no surprise to the author of the post who stated that “LVMH’s confidence stems from the fact that India has a rising consumer class who have a thirst for high value luxury products.” The focus is expected to be on high-end spas and entertainment. The company is also in talks with real estate developers such as DLF.


LVMH owns well-known luxury brands such as Christian Dior, Fendi, TAG Heuer and Dom Perignon.

The post quotes Ravi Thakran, LVMH President of South, South-East and West Asia operations as saying “We are planning to make private equity investments of $500-600 million in Indian retail chains and brands.” Thakran also explained that the fund would be launched by L Capital Partners, an LVMH arm, within the next 12 months.


DOE awards NanoSolar $20 million


A recent post from VentureBeat, a business blog focused on venture capital, is revealing that NanoSolar has been awarded $20 million in financing from the U.S Department of Energy. According to the post, “the award was part of the Solar America Initiative, which provides financing to companies to further solar power.” VentureBeat also stated that the Palo Alto-based company “is using a new material called CIGS to make lower-cost and more flexible solar cells.”


Additionally, several other companies were awarded funds from the Department of Energy. “They include larger, more established companies, such as SunPower, First Solar and General Electric.” However, Marshall noted that NanoSolar received the largest amount.


The timing of the award was very convenient for NanoSolar as they have just entered the “critical phase” of building plants for the production of its new solar cells- which has been a thorn in the side of many solar firms. Matt Marshall, the author of the post, observed that “many of them are well funded, but are suffering setbacks as the production phase of the technology proves more difficult than they’d realized”


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