Star Silicon Valley analyst felled by Facebook IPO fallout

SAN FRANCISCO (Reuters) - The firing of Citigroup stock analyst Mark Mahaney on Friday in the regulatory fallout from Facebook Inc's initial public offering was greeted with shock and dismay in Silicon Valley, where Mahaney was a well-known and well-liked figure.

"Pretty shocked," was the reaction of Jacob Funds Chief Executive Ryan Jacob, who described Mahaney as one of the most respected financial analysts covering the Internet industry.

"I'd put him at the top. If not at the top, then near the top," said Jacob. "He really knew what to look for."

In addition to firing Mahaney, Citigroup paid a $2 million fine to Massachusetts regulators to settle charges that the bank improperly disclosed research on Facebook ahead of its $16 billion IPO in May.

The settlement agreement said Mahaney failed to supervise a junior analyst who improperly shared Facebook research with the TechCrunch news website. (Settlement agreement: http://r.reuters.com/pyj63t)

The settlement agreement also outlined an incident in which Mahaney failed to get approval before responding to a journalist's questions about Google Inc -- and told a Citigroup compliance staffer that the conversation had not occurred -- even after being warned about unauthorized conversations with the media.

Mahaney declined to comment.

Mahaney got his start in the late 1990s, during the first dot-com boom where he worked at Morgan Stanley for Mary Meeker, one of the star analysts of the time. He went on to work at hedge fund Galleon Group before moving to Citigroup in 2005. Unlike most of his New York-based peers in the analyst world, Mahaney worked in San Francisco's financial district, close to the companies and personalities at the heart of the tech industry.

Earlier this month, Mahaney was named the top Internet analyst for the fifth straight year by Institutional Investor. The review cited fans of Mahaney who praised a "systematic" investment approach that allows him to avoid the "waffling" often evidenced by other analysts.

Mahaney's Buy rating on IAC/InteractiveCorp in April 2011, when the stock traded at $33.32, allowed investors to lock in a 51 percent gain before he downgraded the stock to a Hold at $50.31 a few months later, according to Institutional Investor.

But it wasn't only his stock picks that put him in good stead. He earned kudos for simply being a nice guy.

"He's a kind and thoughtful person and that's evident in the way he deals with people," said Jason Jones of Internet investment firm HighStep Capital. "He's very well liked on Wall Street because of that."

A CAUTIOUS VIEW ON FACEBOOK

Mahaney was only indirectly involved in the incident involving the Facebook research, according to the settlement agreement by Massachusetts regulators released on Friday. But the actions of the junior analyst who worked for him provide an unusual glimpse into the type of behind-the-scenes information trading that regulators are attempting to rein in.

While the Massachusetts regulators did not identify any of the individuals by name, Reuters has learned that the incident involved TechCrunch reporters Josh Constine and Kim-Mai Cutler as well as Citi junior analyst Eric Jacobs.

Jacobs, Constine and Cutler all did not respond to requests for comments.

In early May, shortly before Facebook's IPO, Jacobs sent an email to Cutler and Constine. Constine attended Stanford University at the same time as Jacobs.

Constine, who studied social networks such as Facebook and Twitter for his 2009 Master's degree in cybersociology at Stanford, had a close friendship with Jacobs, according to the settlement agreement.

"I am ramping up coverage on FB and thought you guys might like to see how the street is thinking about it (and our estimates)," Jacobs wrote in the email. The email included an "outline" that Jacobs said would eventually become the firm's 30-40 page initiation report on Facebook.

He also included a "Facebook One Pager" document, which contained confidential, non-public information that Citigroup obtained in order to help begin covering Facebook after the IPO.

Asked by Constine if the information could be published and attributed to an anonymous source, Jacobs responded that "my boss would eat me alive," the agreement said.

A spokeswoman for AOL Inc, which owns TechCrunch, declined to answer questions on the matter, saying only that "We are looking into the matter and have no comment at this time."

Ironically, Mahaney was one of a small group of analysts at the many banks underwriting Facebook's IPO who had cautious views of the richly valued offering. Mahaney initiated coverage of the company with a neutral rating.

Analysts at the top three underwriters on Facebook's IPO - Morgan Stanley, Goldman Sachs and J.P. Morgan - started the stock with overweight or buy recommendations.

Earlier this year, Reuters reported that Facebook had pre-briefed analysts for its underwriters ahead of its IPO, advising them to reduce their profit and revenue forecasts.

Facebook, whose stock was priced at $38 a share in the IPO, closed Friday's regular session at $21.94 and has traded as low as $17.55.

"There were tens of billions of dollars in losses based on hyping the name, a lack of skeptical information and misunderstanding the company," said Max Wolff, chief economist and senior analyst at research firm GreenCrest Capital.

"It's highly unfortunate and darkly ironic that one of the signature regulatory actions from this IPO so far involves punishing analysts for disseminating cautious information about Facebook," he added.

(Editing by Jonathan Weber, Mary Milliken and Lisa Shumaker)

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German composer Hans Werner Henze dies at 86

BERLIN (AP) — German composer Hans Werner Henze, whose prolific and wide-ranging work included a wealth of operas and 10 symphonies, died Saturday, his publisher said. He was 86.

Henze died in the eastern German city of Dresden, longstanding publisher Schott Music said in a statement, calling him “one of the most important and influential composers of our time.” It didn’t disclose the cause of death.

Henze’s work over the decades straddled musical genres. He composed stage works, symphonies, concertos, chamber works and a requiem, and once said that “many things wander from the concert hall to the stage and vice versa.”

His operas ranged from the 1950s “Ein Landarzt” (“A Country Doctor”), based on a story by Franz Kafka, to “L’Upupa,” written in 2002 and the only opera for which Henze wrote his own libretto. Other works included the musical dramas “Elegy for Young Lovers” and “The Bassarids,” and the oratorio “The Raft of the Medusa” — dedicated to the Cuban revolutionary Che Guevara.

The Semperoper opera house in Dresden recently kicked off a tribute to Henze with a performance of his antiwar drama “We come to the River,” produced in collaboration with writer Edward Bond and first performed in London in 1976.

Henze was born July 1, 1926 in Guetersloh in western Germany and grew up as the Nazis tightened their grip on the country. After studying and starting his career in music and theater in West Germany, he left the country in 1953 and went to live in Italy.

Alongside his operas, Henze was known for his symphonies, among them “Sinfonia N. 9,” finished in 1997 — a choral symphony based on Anna Seghers’ novel “The Seventh Cross” that reflected his anti-fascist convictions.

His final symphony, “Sinfonia No. 10,” completed in 2000, was premiered by Sir Simon Rattle with the City of Birmingham Symphony Orchestra.

As well as composing, Henze took teaching assignments in Austria, the U.S., Cuba and Germany. He served as composer-in-residence at the Berkshire Music Center in Tanglewood, Massachusetts, and at the Berlin Philharmonic, Schott Music said.

Henze founded the Cantiere Internazionale d’Arte festival and summer school in Montepulciano, Italy, in 1976.

Information on survivors and funeral arrangements was not immediately available.

Entertainment News Headlines – Yahoo! News

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Breast Cancer Stories: Me, My Mom and Flo

To mark Breast Cancer Awareness Month, Yahoo News asked women who have had breast cancer or are going through treatment to write about the people in their lives who stood by them and cared for them. Here’s one story.

FIRST PERSON | Before I had breast cancer, I was a massage therapist at Mills Health Center in San Mateo, Calif. Many of our clients came from the community. One of my regular clients was Flo, who sought treatment regularly to keep her shoulders loose and manage her stress.

One day, when I went to greet her for her regular session, she told me she had been diagnosed with breast cancer. She would receive aggressive treatment — massage once a week for the duration of her treatments.

I was there through it all. She got through it and got back to her life, and I saw her less frequently. But I was so grateful to have been able to make a difference for her.

The day I got the dreaded call from the radiologist confirming that I had cancer, I ran into Flo. We were driving side by side on El Camino Real, a busy thoroughfare in San Mateo, of all places.

I rolled down the window and shouted the bad news.

She shouted back, “Call me! I’m your buddy!”

She was. I had inflammatory breast cancer. My treatment was aggressive. I started dose-dense chemotherapy on March 3, 2007, 10 days after my ultrasound clued in my radiologist that I “very probably” had cancer. I had eight infusions, two weeks apart. I had all the same drugs Flo had received, plus Herceptin. She took me to my appointments. She brought me Jamba Juice on chemo days and let my call her up and cry. She knew what to say when I told her my veins felt like they were full of Drano. She reassured me that the rotten way I felt was normal, and told me how long it would last and what would help me. Her husband Don also jumped in. They came and took out my daughter and son, ages 7 and 9, so I could rest. Whenever I was on the phone with Flo, Don would shout, “Tell her to remember, this is TEMP-O-RA-RY!”

Flo’s partner in crime was my mom, Anne. They conferred together on the phone, about everything from my prognosis (scary, but they didn’t tell me) to my boyfriend (wouldn’t last; it didn’t.). Mom was in Seattle. She relied on Flo to know how I was doing, and when Mom came to help when I had surgery, she and Flo were already fast friends.

Flo and I drifted back into our own very different lives after the journey, as she told me we would. We drop each other a line every so often. My gratitude to her is beyond words. I couldn’t have done it without her.

Diseases/Conditions News Headlines – Yahoo! News

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Obama, Romney campaign with eye on storm forecast

WASHINGTON (AP) — With an eye on the weather forecast, President Barack Obama and Republican Mitt Romney are starting a 10-day sprint to the finish line in a contest increasingly about momentum versus math.

"Let's win this," Romney emailed supporters Saturday as he hopped a plane from one important state to another — Ohio to Florida.

"We're defying odds and holding strong," he told his backers, and urged them to contribute more money to help Republicans keep up the fight.

His running mate, Paul Ryan, was out early in rainy, chilly Ohio to visit a factory in New Philadelphia, where he told voters, "You know it's you. You know what you have in front of you. You know your responsibility."

A huge storm barreling toward the East Coast and some battleground states had both campaigns adjusting travel schedules and canceling events. Even at this late date in the campaign, neither side wanted to risk the appearance of putting politics ahead of public safety.

The president was pressing on with a campaign trip Saturday to New Hampshire.

But an email announcing that Vice President Joe Biden's Saturday rally in coastal Virginia Beach, Va., was off stated that the change was "being taken out of an abundance of caution to ensure that all local law enforcement and emergency management resources can stay focused on ensuring the safety of people who might be impacted by the storm."

Romney canceled a rally in Virginia Beach that was planned for Sunday, and aides said they were also considering scrapping two other events elsewhere in the state. None of Obama's campaign stops had been canceled, but he did adjust his travel schedule slightly. The campaign moved up his planned Monday departure for Florida to Sunday night to beat the storm.

With the Nov. 6 election fast approaching, Obama and Romney are tied nationally. But the president still appears to have more pathways to reaching the required 270 electoral votes.

The Obama campaign released a new TV ad Saturday urging Americans when they go into the voting booth to consider Romney's plans to roll back Wall Street reforms, transform Medicare into a voucher-like system and reduce spending on education while at the same time cutting taxes for the rich. The spot will air in Florida, Iowa, Ohio and Virginia, all key battleground states.

The Republican nominee is trying to seize the momentum mantle and turn a wave of GOP enthusiasm into an electoral victory.

Obama's campaign pressed forward with a get-out-the-vote effort that aides said had them leading or tied in every competitive state. The president was eschewing the lofty rhetoric of his 2008 run in favor of warning supporters that skipping out on voting could cost him the election.

"In 2000, Gore vs. Bush, 537 votes changed the direction of history in a profound way and the same thing could happen," Obama said in an interview Friday with MTV.

Romney was switching his attention to Florida on Saturday after spending much of the week focused on shoring up support in Ohio. While the Midwestern swing state could be crucial to Romney's re-election prospects, he also faces tremendous pressure to carry Florida, which offers 29 Electoral College votes, the most of any swing state.

Obama carried Florida by just 3 percentage points in 2008 and polls show the candidates tied.

The former Massachusetts governor was scheduled to attend three rallies, the first in Pensacola along the state's conservative Panhandle. He then moves to suburban Orlando before finishing his day with an evening rally just outside of Tampa, the site of the Republican National Convention. Romney was to be joined at all three events by Florida Sen. Marco Rubio.

Ryan had his family in tow for the factory visit in New Philadelphia, and his 7-, 9- and 10-year-olds scampered between parts bins and heavy chains.

Nine-year-old Charlie waved the peace sign and mugged for cameras, prompting his mother, Janna Ryan, to shake her head and declare, "I don't know where he gets it. It's kind of crazy."

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Associated Press writers Philip Elliott in New Philadelphia, Ohio, Steve Peoples in North Canton, Ohio, contributed to this report.

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Follow Julie Pace at http://twitter.com/jpaceDC

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