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Tom Taulli
California - http://taulli.com

Tom Taulli is the author of various books on finance, including The Complete M&A Handbook (Random House) and Investing in IPO's (Bloomberg Press). In addition to his writing, Mr. Taulli has appeared on high-profile television venues such as CNN, CNBC and Bloomberg TV, and has been quoted in the various print media sources such as the Wall Street Journal, USA Today and LA Times.

When getting the pulse on the credit markets, the private equity firms have a good sense of things. Credit is the lifeblood of the business. And, of course, the credit freeze has essentially stopped private equity activity.

But, according to some veteran private equity dealmakers, it does look like things are stabilizing. For example, the Blackstone Group LP's (NYSE: BX) CEO, Stephen Schwarzman, is optimistic that the environment is improving. The main reason: the massive government interventions.

And, this week we also got KKR's chief, Henry Kravis, to chime in. However, his sentiments are somewhat qualified. After all, he thinks that the real economy is in a fragile state and that investor confidence is still a big problem. What's more, he believes that it will take awhile for growth to comeback.

In the meantime, Kravis predicts a surge in consolidation in the financial services industry. Interestingly enough, some of the leaders in this trend could be operators like Blackstone and KKR, which don't have leveraged balance sheets.

Emphasizing this point is another private equity bigwig, the Carlyle Group's David Rubenstein. According to him, there's a huge opportunity for private equity firms to provide capital to the ailing financial services industry. In fact, the Federal government has recently relaxed some of the investment rules for such deals, which should make returns even more lucrative and give dealmakers more incentive to get transactions done.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market He is also the founder of BizEquity, a valuation website

In late 2005, Apollo Management Group agreed to pay $1.3 billion for Linens 'n Things, taking the company private. It proved to be horrible timing, as the housing market began its dramatic decline.

And the credit markets eventually crumbled, making the investment unworkable. In fact, the company had to file for bankruptcy in May.

Linens 'n Things tried to sell itself. Unfortunately, there were no bidders willing to take on the risks. So, this week the company will undergo a liquidation process.

No doubt, this is a big fall. Last year, Linens 'n Things posted revenues of $2.8 billion and had 589 stores across 47 states. There will also be a real impact on the employee base – which was 17,500 last year – as well as the 1,000 suppliers.

At the same time, expect some bargain-basement prices at local Linens 'n Things stores over the next few weeks.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market He is also the founder of BizEquity, a valuation website

Despite having lots of cash – and little debt – shares of Blackstone Group LP (NYSE: BX) have collapsed along with the other financials. Over the past year, the stock price has plunged from $29.38 to a recent low of $6.88.

But the firm's uber dealmaker, Stephen Schwarzman, is getting optimistic. At the Super Return Middle East conference, he gave a presentation that extolled the benefits of the US's ambitious – and expensive – plan to get things back on track. Yes, he thinks it's a good idea for the Feds to become equity holders in some of the top US banks.

So, why is this die-hard capitalist turning into a government supporter? Well, I guess the globalization of finance requires new approaches. In fact, Schwarzman mentioned that it was critical that the recent interventions have involved a variety of governments.

What's more, by having a strong government backstop, institutions will have a comfort level with counterparty risks. In other words, it's a good bet that we'll start seeing some risk taking again. And, for Schwarzman, it should also mean a re-emergence of buyout activity, which has been virtually frozen over the past few months..

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

According to a piece in the Wall Street Journal [a paid publication], a variety of top-flight hedge fund managers have been going aggressively to cash. Some of the names include Paul Tudor Jones, Israel Englander, John Paulson, David Slager and Steven Cohen. In fact, it looks like Cohen is 50% cash and Paulson is about 75% cash.

These actions may reflect some technical factors. After all, hedge funds are likely to receive an avalanche of redemptions. Something else: the recent changes in short-selling rules have made things much more complicated (hey, when might the SEC decide again to ban the practice?)

Yet, these hedge fund managers have stellar long-term track records and have weathered the recent declines fairly well.

Besides, we have seen a recurring theme of a plunge/surge cycle-which is far from normal. If anything, it's a sign of irrationality. And if this is the case, how can you really make solid investment decisions?

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

The credit crunch has made it nearly impossible for private equity firms to pull off multi-billion dollar deals. As a result, a variety of strategic buyers have capitalized on the situation.

But, even this trend may falter. Just look at Waste Management Inc.'s (NYSE: WMI) $6.73 billion buyout bid for rival Republic Services Inc. (NYSE: RGS) Well, today Waste Management said it is going to drop the deal.

Why? Of course, it's about the "market conditions."

But, even top companies are having difficulties getting financing. Besides, a big financial commitment could put pressure on Waste Management's credit rating.

Then again, the good news for Waste Management is that the core business continues to be strong. The company forecasts Q3 earning at $0.62 to $0.63 per share. In fact, the recent decline in fuel costs should be a nice boost.

So far in today's trading, the shares of Waste Management are up 6% to $27.29. Republic's shares are up 3.47% to $3.47%.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

One of the most powerful ways to market your company is through search engine optimization (SEO). This refers to what happens when users enter certain queries into online search engines. The idea is to ensure that your website gets high placement in the results, ideally being on the first page of results.

So what are some strategies for effective SEO?

Well, let's use an example. Suppose you operate a retail store based in Newport Beach, California, which sells chocolate. But when you search for "chocolate" on Google (NASDAQ: GOOG), you see that major companies rank high on that word. It will probably be impossible to get any traction on such a generic term.

"When selecting your main keywords," said Don Deveau, the SEO Team Lead at Register.com, "It's usually better to start with more specific ones. You will have much less competition."

As a result, you might want to look for keywords like "handmade chocolate." Or, you might be more specific by listing your store's location ("Newport Beach chocolate").

It actually takes quite a bit of brainstorming to come up with keywords. And yes, there are some online tools to help things out, including Wordtracker, which helps identify optimal keywords.

Next, you want to place the keywords into your website content. For example, it's a good idea to have each page focus on one or two keywords. Thus, if you have a page on handmade chocolate, then you should mention this a number of times in the descriptions. This helps search engines find and rank the pages.

Back in the summer of 2007, Apollo Management LP struck a typical private equity buyout. The deal called for paying $6.5 billion for Huntsman (NYSE: HUN), a chemicals company. In fact, the deal provided lots of synergy since Apollo already controlled a variety of similar businesses (through an entity called Hexion).

Well, of course, this was the peak of the private equity boom – and the credit markets began to unwind fairly quickly. What's more, the fundamentals of Huntsman started to weaken.

As a result, Apollo tried to extricate itself from the deal. And this meant a tough litigation fight.

Of course, this can be pretty a dicey thing. That is, the Delaware court ruled against Apollo and there was an order to get the deal done.

Yet again, this was bad news for Apollo (which has other faltering deals, such as Linens 'N Things). Actually, some of the top private equity firms have been taking some major hits lately, such as the TPG Group with its Washington Mutual (NYSE: WM) disaster.

So, to deal with the court ruling, Apollo has agreed to pony up $540 million to close the Huntsman transaction. Interestingly enough, Apollo has also agreed to give up its lucrative fees (amounting to $100 million or so).

This means that Huntsman should be on firm footing (especially in terms of its solvency). And, something else: the banks on the deal – which include Credit Suisse and Deutsche Bank – will have to raise the necessary funding, which will likely mean losing several billion on the transaction.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

With virtually no IPOs, tech companies have little choice but to sell out. Just take a look at MessageLabs, which has agreed to a $695 million deal from Symantec (NASDAQ: SYMC).

The main focus of MessageLabs is on securing email and messaging. OK, this is not particularly exciting – or groundbreaking. However, the company had the foresight to build a web-based platform, which is certainly attractive to customers.

Symantec has been trying to build its own web-based systems but this has proven difficult. So, why not buy up some operators in the space?

Over the past year, MessageLabs has generated $145 million in revenues, which is a 20% growth rate. Thus, the transaction comes to 4.8X trailing revenues. Compared to just a year ago, this is a fairly cheap deal. For example, Google (NASDAQ: GOOG) paid 9X revenues for Postini (a leading messaging security company).

In other words, it looks like the global slowdown is taking a toll on scrappy tech companies and providing some nice opportunities for bigger players.

According to Paul Roberts, who is a senior analyst of the enterprise security practice at the 451 Group:

"As Symantec points out, software sales are growing in the single digits, appliance sales in the teens and services in the range of 20% or more. Shelling out for MessageLabs shows that Symantec is in a hurry to tap into that higher growth for services, but has doubts about its ability to get there with SPN, Brightmail, IMLogic and whatever else it has in-house. Consider this: Symantec's SPN is hosted from a single datacenter in the US; MessageLabs has 14 located worldwide. Sure, Symantec's still playing catch-up, but its huge channel and sales force, coupled with the failure of players like Google to execute within the enterprise space, gives it the opportunity to jump to the head of the pack in security SaaS all the same."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Over the past few years, the software industry has undergone substantial consolidation. So far, it has worked to keep margins strong.

But the strategy is not fool-proof, especially with a likely global recession on the horizon.

Well, this is now the concern of major software players like SAP (NYSE: SAP). In fact, this week the company's shares plunged 13% to $39.68 on a gloomy earnings warning.

Going into Q3, SAP forecasts software revenues to come in at a range of $2.66 billion to $2.67 billion, up about 13% over the past year. However, in July the company thought the growth rate would be 24% to 27%.

Simply put, customers are skittish – and are also having difficulties getting financing or paying on existing contracts. Even if they want software to improve productivity, there is likely not enough juice to launch new projects.

With rumors of bankruptcy swirling, the shares of Hartford Financial Services Group Inc (NYSE: HIG) have plunged over the past few weeks. Hey, if AIG (NYSE: AIG) can implode, why not the others?

Well, the death of Hartford has been greatly exaggerated. Today, the company announced that it received a $2.5 billion capital infusion from Allianz, a mega German financial firm. Despite today's huge drops in the markets, Hartford's shares spiked 16% to $31.88.

The deal is certainly beneficial to Allianz, which gets preferred stock (that converts to common shares at $31 a piece) as well as junior subordinated debentures (there are also warrants to buy $1.75 billion of Hartford at $25.32). Yet, it's still a nice boost for Hartford.

Essentially, Hartford has an extensive portfolio of investments, which have suffered declines (it looks like the recent carnage in hedge funds was a big contributor). In fact, the company believes that there will be a Q3 loss of $8.50 to $8.80 per share.

But, with the capital infusion, Hartford should weather the storm – as well as be positioned to deal with possible credit downgrades (there will be $3.5 billion in excess capital). What's more, there may be opportunities to capitalize on the wreckage. After all, AIG is preparing to sell a large number of assets.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

According to a report from the 451 Group, the third quarter was horrible for tech M&A. With the financial crisis, it's tough to get buyers interested in deals.

But, today we got some relief; that is, eBay (NASDAQ: EBAY) agreed to shell out $820 million in cash for Bill Me Later. In fact, the company also paid $390 million for bilbasen.dk, which is a leading classifieds operator in Denmark.

At the same time, eBay plans to slash 10% of the workforce (amounting to about 1,000 employees). With an impending global recession, the environment is likely to be pretty bad for consumer platforms.

Thus, with the Bill Me Later transaction, there may be some traction -- especially with the PayPal business. But again, eBay will need to demonstrate skill with integration (which can be particularly tough in the tech world). Besides, eBay's M&A track record has been spotty, specially since its Skype deal.

Bill Me Later will certainly be costly. While the company is growing quickly, its revenue is only $150 million. Besides, the deal will dilute eBay's 2009 earnings by 6 cents to 13 cents per share. Also, might the credit crunch result in some problems for Bill Me Later?

More importantly, eBay announced that revenue will be at the low end of its forecast for Q3. In other words, the company realizes it needs to make some big moves to keep up the momentum.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

While the credit crunch is making it difficult for businesses to get credit, there may be other reasons you've had trouble getting the line of credit you need. For one thing, you may not be taking steps to build a credit history for your business.

By establishing business credit, you may be able to get larger loan amounts and better rates. What's more, it could be easier to find good suppliers and vendors – as well as to snag customers.

So how do you establish business credit:? Well, here are some steps:

Create a credit profile: Perhaps the top credit agency for small businesses is Dun & Bradstreet (NYSE: DNB). Basically, you complete a credit profile with them through service called the CreditBuilder; you then get a DUNS number, which is what third-parties will request when they do a credit check. All in all, the process is pretty easy.

Keep in mind that it's important to periodically update the file. An incomplete file is often a red flag.

The third quarter was an absolute nightmare for many hedge fund managers. In fact, they have the tough job of writing letters to shareholders explaining the chaos in the financial markets.

Perhaps one of the most interesting missives comes from the chief of TPG-Axon Capital Management LP, Dinakar Singh. He was a former big-shot trader at Goldman Sachs (NYSE: GS).

Since starting his fund in 2005, he has racked up market-beating returns. However, September was downright horrible. In fact, for 2008, TPG-Axon is down 20%, which Singh calls "unacceptable."

According to him, the global financial system is undergoing an inflection point as the U.S.'s dominance wanes. But, many investors have had the misconception that the U.S. and world economies had been decoupled.

Instead, the global financial system is highly interconnected. Moreover, there is the disproportionate impact from high-velocity investors (basically, hedge funds). As the market turned quickly, there was a massive unwinding of positions, which has exacerbated the situation and damaged the U.S. financial system. Unfortunately, it's going to take awhile to heal things.

Yet, Singh is optimistic and thinks there are some compelling investment opportunities. While he did not name any companies, he did provide some key themes. For example, he likes valuations in China and Japan. Furthermore, he likes quality financials as well as U.S. manufacturing and heavy goods companies.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.