Money world

Britain requires further monetary easing to aid the economy and Chancellor of the Exchequer George Osborne should prepare for temporary tax cuts, the International Monetary Fund said.

With the economy mired in its first double-dip recession since the 1970s, the Bank of England and the Treasury should introduce policies to underpin demand and unclog the financial system, the Washington-based lender said in its annual review of the U.K. published today. The central bank needs to inject further stimulus through bond purchases or by cutting interest rates, with tax cuts following as soon as the fall, it said.

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There are plenty of reasons to "like" Facebook, but Internet IPOs are better known for their epic flops than wild successes.

Of the 31 Internet IPOs held since the beginning of 2011, 22 are currently trading below their closing price on the day they went public. Here’s an even scarier stat: 16 are trading below their offer price.

After popping by a collective 34% on IPO day, those 31 stocks are now trading at an average of just 8% above their offer prices. Excluding LinkedIn () and Zillow (), which are trading at more than double their offering prices, the rest of the Internet IPO list is collectively up by just 2%.

Generalizing across more than two dozen Internet companies is tricky, because they all have different business models, but the trend has been quite consistent: Internet IPOs get a nice bounce on day one of public trading, then slide off in subsequent days and weeks.

That’s the environment in which Facebook () is offering its shares to the public. The social network will sell about a fifth of its shares on Thursday. Those early buyers can begin reselling their shares on the Nasdaq exchange on Friday.

"It’s hard to say exactly what’s going to happen with Facebook, but from what we’re hearing on the demand side of things, I wouldn’t expect Facebook to do anything out of the ordinary in terms of beating this trend," says Nathan Drona, analyst at ABR Investment Strategy. "There will be an initial bump, but then the time to exit is at the strength of that rise."

Facebook priced its IPO at $38 and Drona expects shares to surge as high as $50 before eventually falling back to a range of $31 to $33.

Related story: 10 big dot.com flops

The bump-and-slide trend is caused by investors’ initial enthusiasm during IPOs — which eventually gets replaced by an examination of the companies’ business fundamentals.

Wall Street analysts remain concerned about Facebook’s slowing growth, weak ad sales-per-user numbers and lack of monetization of its mobile products.

Stephan Paternot, founder of 1990’s dot-com poster child theGlobe.com, knows a little about what Facebook is getting itself into.

TheGlobe Business Card Holders.com was a pioneering Internet community, and its November 1998 IPO generated an investor frenzy. On its first day of trading, the stock had one of the biggest IPO surges in history, soaring by 606%.

The never-profitable company never again traded as high, and was out of business within five years.

"Unfortunately, our run-up on IPO day meant we left $200 million to $300 million on table and raised only $30 million," Paternot told CNNMoney this week. That’s a problem underwriters are supposed to guard against: Because companies get cash only for the shares they sell directly, they don’t profit when IPO buyers resell their shares for huge gains.

"The positive side was it created a branding event — by the end of the day, everyone had heard of theGlobe," Paternot recalls. "But when every institutional investor flipped it the next day, the stock went down, and everyone thought there was something wrong with us."

The current Internet IPO trend is starting to echo the 1990’s dot-com bubble.

The most famous example from go-go days is VA Linux, a PC company whose shares jumped 698% in its first day of trading — still a U.S. record, according to Dealogic. That stock also never traded higher than on its IPO day, falling from $239 all the way down to $8.47 a year later.

Though their fall hasn’t been nearly as epic, two of last year’s super-hyped IPOs — Groupon () and LinkedIn — have also never yet returned to the highs they reached on their IPO days.

The companies received bullish headlines when their IPOs popped: Groupon rose 31% and LinkedIn shot up 109% on their first days of trading. But the sentiment turned sour once their shares started slipping.

Though he believes Facebook’s long-term potential is strong, in the near-term, Paternot thinks the bump-and-slide serves as a harbinger of things to come for Facebook.

"Facebook is as over-hyped and inflated as a company going public can be," he says. "All that company can do is slide down in the next six to nine months." 

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Avon says it’s considering a sweetened buyout offer of almost $10.7 billion from Coty Inc.

Avon says that it expects to respond to the new offer within a week. The offer was made in a letter on May 9.

Coty sweetened its 2-month-old offer by about 6.5 percent to $24.75 per share and demanded a response from Avon by Monday.

Coty indicated that Avon has said it wouldn’t review any bid until its brand new CEO, Sherilyn McCoy, finishes reviewing all of Avon’s operations instant payday loan.

Coty’s financing sources include Warren Buffett’s Berkshire Hathaway Inc., German holding company Joh. A. Benckiser GmbH, which controls Coty, and BOT Capital Partners.

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In late June, after three years of planning, the Helix Center will open, providing lab space and offices to start-up technology, life and plant sciences companies.

The development of the $7.5 million business incubator was shepherded by Beth Noonan, of the St. Louis County Economic Council, who will also oversee operations after the center opens its doors. With low-rent shared labs and flexible office space, the center could be home to as many as 30 fledgling companies. Its proximity to the Donald Danforth Plant Science Center, where very early-stage research is done, and the Bio-Research & Development Growth (BRDG) Park, where more established enterprises find homes, is by design. The center is the latest addition to the region’s bioscience belt and the fifth incubator developed by the council.

How did the project begin and where do things stand now?

The genesis came about when we were approached by some folks from the Danforth Center and Nidus (an entrepreneur network based next door). Their focus was changing. We have the research and the science at the Danforth Center, and BRDG is a post-incubator space, so there emerged this gap in terms of affordable space for companies in the county. We were a natural fit because we run an incubator program. This is just a specialized version. The construction is not quite completed, but we should be done in June. We’ll have 8,000 square feet of office space, 7,800 of lab space.

What’s the objective?

The bottom-line goal of any incubator is to really provide that first commercial space for early-stage companies at an affordable price, and to provide them with shared resources and amenities, and access to other entrepreneurs. They all function in the same way. But in terms of the Helix Center it provides specialized lab space and specialized equipment that early-stage technologies wouldn’t have access to. I think what’s unique about Helix is the close proximity to the specialized resources nearby.

What kind of company do you see finding a home at the Helix Center?

The kind of tenants we’re looking for are folks who are in the bioscience space, which is broadly defined: plant science, life science, clean technology. We’d like to have some nexus to the biosciences. It’s not necessarily something that finds the next drug for cancer, but a support company. A contract research company or doing something with medical records related to biosciences.

How do you go about finding these companies?

We’re doing quite a few things. We’re going to places where start-up companies gather to inform them of the space. We’re getting close to finishing our web site. I’ve been doing speaking engagements. A lot. Our goal is to provide space to companies that are growing in St. Louis. The most likely source of our tenants will be St. Louis.

What ensures that they stay here after they “graduate?”

Of course, we can’t force people to stay in St. Louis. But I think what we’re trying to do with Helix and what a lot of folks in the region are doing, is help continue strengthening the environment for entrepreneurs and making sure people have access to resources. We have early-stage companies here all the way up to Fortune 500 companies. We can help them make those connections. We have other resources to help them as we grow.

BETH NOONAN

Title • Vice President bio-sciences and technology, business development division, St. Louis County Economic Council.

Education • BA in Linguistics, Brown University, masters degrees in social work and jurisprudence, Washington University

Family • Husband, Frank Pfau; two children, Emily, 12, and Michael, 9.

Hometown • Chesterfield

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A disgruntled Yahoo shareholder questioned the qualifications and integrity of recently hired CEO Scott Thompson after exposing a misrepresentation about the executive’s education.

The fabrication confirmed Thursday by Yahoo Inc. gives New York hedge fund manager Daniel Loeb more artillery as he tries to topple a board of directors favored by Thompson, who became CEO of the troubled Internet company four months ago.

Loeb, whose fund Third Point owns a 5.8 percent stake in Yahoo, gained more leverage when he discovered Thompson doesn’t have a bachelor’s degree in computer science from a small college in Easton, Mass., as Yahoo stated in a regulatory filing last week.

Thompson only has an accounting degree from Stonehill College, an accomplishment that Yahoo also listed in the filing. The accounting degree was the only one listed in Thompson’s resume last year by eBay Inc. when he was still running that company’s PayPal payment service. He graduated in 1979, according to Stonehill’s website.

Yahoo confirmed Thompson’s credentials had been exaggerated in the recent filing with the Securities and Exchange Commission. The company, which is based in Sunnyvale, Calif., brushed off the distortion as an “inadvertent error.”

But Loeb pounced on the misinformation as a violation of Yahoo’s code of ethics and called for an independent investigation to determine whether Thompson had misled the company’s board about his technology credentials. He also cited the mix-up as an example of Yahoo’s poor corporate governance.

“If Mr. Thompson embellished his academic credentials we think that it 1) undermines his credibility as a technology expert and 2) reflects poorly on the character of the CEO who has been tasked with leading Yahoo at this critical juncture,” Loeb wrote in a letter to Yahoo’s board on Thursday. “Now more than ever Yahoo investors need a trustworthy CEO.”

In the past, other companies have suspended or fired executives who were caught lying on their resumes.

Yahoo hired Thompson to reverse years of financial lethargy that set in at the company even as more advertising shifted to the Internet. The funk has weighed on Yahoo’s stock, which has been hovering between $10 and $20 for most of the last three years. Yahoo shares fell 27 cents to close at $15.40 on Thursday. That’s well below the $33 per share that stockholders could have gotten in May 2008 if the board had accepted a takeover offer from Microsoft Corp.

The company stood behind Thompson in its statement payday loan. “This in no way alters that fact that Mr. Thompson is a highly qualified executive with a successful track record leading large consumer technology companies,” Yahoo said. “Under Mr. Thompson’s leadership, Yahoo is moving forward to grow the company and drive shareholder value.”

Tensions between Loeb and Thompson escalated since late March when Yahoo appointed three new directors to its board. In doing so, Yahoo snubbed Loeb, who had been lobbying for a board seat along with three allies who he believes have the skills necessary to help Yahoo rebound from its long-running struggles. At the time, Thompson made it clear that he and the Yahoo committee overseeing the search for new directors had concluded Loeb wasn’t the best candidate.

Loeb is waging a campaign to persuade Yahoo’s shareholders to elect him and his allies to the board at the company’s annual meeting. The date of that meeting still hasn’t been set.

Besides ripping Thompson, Loeb also sought to discredit Patti Hart, one of the Yahoo directors he wants bounced from the board. Hart led the committee that recommended Yahoo’s new appointments to the board.

In his letter, Loeb noted that Yahoo’s recent SEC filing says Hart holds a bachelor’s degree in marketing and economics from Illinois State University. In its response, Yahoo clarified Hart received a bachelor’s degree in business administration with specialties in marketing and economics.

Thompson, 54, has mostly cut costs to boost profits since taking over as Yahoo’s CEO. Last month, he laid off about 2,000 employees, or 14 percent of the workforce, in the biggest payroll purge in Yahoo’s 17-year history. He also disclosed plans to close about 50 Yahoo services that haven’t been attracting enough users or generating enough revenue.

He has made modest progress on other financial fronts. Yahoo registered its first year-over-year increase in quarterly net revenue since 2008 during the three months ending in March.

Even though he doesn’t have a computer science degree, Thompson has a background in technology. He served as PayPal’s chief technology officer for three years before being promoted to the payment service’s president in 2008. He also previously worked as chief technology officer at credit- and debit-card processor Visa USA.

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Stocks opened lower on Wall Street Monday on news that Spain’s economy entered another recession.

The Dow Jones industrial average slipped 34 points to 13,193 in the first half-hour of trading. The Standard & Poor’s 500 index fell eight points to 1,395 and the Nasdaq composite fell 21 points to 3,048.

Stocks were also being held back by a report from the Commerce Department that consumer spending growth slowed in the U.S. last month. That added to worries that the U.S. economy recovery is slowing down.

The losses were broad. Nine of the ten industry groups in the S&P 500 fell, led by materials. Only health care stocks rose. The dollar rose against the euro and the prices of U.S. Treasury bonds increased as investors parked money in low-risk assets.

European markets were mainly lower over growing concerns about Spain. Stocks were off nearly 1.3 percent in Spain and France.

The Spanish government said that country’s economy shrank 0.3 percent in the first three months of the year, the second straight three-month period of contraction. It’s the second time in three years that Spain has been in a recession.

Ratings agency Standard & Poor’s downgraded Spain’s government debt to just three notches above junk Friday. On Monday S&P lowered its rating for 11 Spanish banks, which are loaded with bad debt from a collapsed housing market. Spain is the fourth-largest economy among the 17 countries that use the euro online payday advance. Investors worry that Europe’s bailout funds won’t be big enough to rescue Spain if it needs help.

Stocks to watch include Barnes & Noble, which is teaming up with Microsoft to create a unit to house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said they may separate those businesses entirely. That could mean a stock offering, sale, or some other kind of deal.

Barnes & Noble jumped 62 percent to $22.26 in early trading. Microsoft was flat.

Health insurer Humana fell 6 percent to $82.44 after reporting a 21 percent drop in first-quarter profit as the company paid out more in claims, falling short of Wall Street expectations.

NYSE Euronext, owner of the New York Stock Exchange, fell 4 percent to $25.95 after reporting that its income plunged 44 percent in the first three months of the because of weaker trading business and the collapse of its proposed merger with the European exchange operator Deutsche Boerse.

Sunoco jumped 21 percent to $49.30, the most of any stock in the S&P 500, on news that the company agreed to be bought by Energy Transfer Partners, a natural gas pipeline company, for $5.3 billion.

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Advocates for ex-offenders are hailing an Equal Employment Opportunity Commission report they hope will improve job opportunities for individuals often turned away because of criminal histories.

The EEOC, in an “enforcement guidance” issued last week, ruled that  undue emphasis on an ex-offender’s background in some some instances violates federal statutes governing employment discrimination. 

The EEOC said the specter of discrimination becomes even more pronounced when hiring managers factor race or ethnicity into employment decisions.

Citing studies reflecting a felony conviction rate of African American men that tops 25 percent, the National Employment Law Project welcomed the new guidelines as an antidote to what it termed “especially severe” discrimination against ex-offenders of color.

Michael Holmes, executive director of the St. Louis Agency on Training and Employment (SLATE), says the obstacles encountered by individuals with a criminal backgrounds cuts across racial lines.

“We have a major public institutions that discriminate against both white and black people because they have a criminal record,” said Holmes. “Now they can’t use that as a way to eliminate (an ex-offender) with the skills they are looking for.”

The ruling could give a boost to thousands – by some estimates up to 18,000 - ex-offenders in the St. Louis region who are currently-out-of-work and searching for employment.

“Some businesses do have a blanket policy about not hiring ex-offenders,” said David Kessel, chief operating officer of the Employment Connection, a St. Louis non-profit that helps ex-offenders overcome job barriers. “(The EEOC) guidance gives employers clarification on what they should be doing to make better hiring decisions.”

Kessel believes the unemployment rate for ex-offenders in the St. Louis area runs as high as 75 percent.

The EEOC guidelines were not universally acclaimed.

The National Retail Federation criticized a recommendation that employers eliminate queries about criminal and arrest records on application forms.

A ban on the “box” that alerts a company of an an applicant’s brushes with the law will restrict an “employers’ ability to ensure the safety of their workers and customers,”  Senior Vice President for Government Relations David French said in a statement.

A 2011 NRF survey revealed that 87 percent of its members turn to criminal background checks prior to hiring bad credit personal loan lenders.

Les Johnson, the vice president for grant and management services for ARCHS, an advocate that sponsors programs that support at-risk populations including ex-offenders, praised the EEOC initiative.

But he cautioned the hiring process will continue to require discretion and common sense on the part of applicants with criminal records.

A paroled bank robber, for instance, needs to make a better choice than seeking employment with a financial institution. Just as a convicted drug offender may want to steer clear of opportunities at a pharmacy.

“We’ve always said that a criminal record should not be the sole qualification for an (ex-offender) applying for a job as fork lift driver at a warehouse producing pallets,” Johnson said. “But we also ask ex-offenders to take responsibility on the front end, explain to the employer what the offense (entailed), that time has been served, amends have been made and that they are now trying to earn a decent wage.”

The EEOC report also points employers to the difference between a conviction and arrest.

“The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with business necessity,” the EEOC said.

Holmes questioned why ex-offenders have a particularly difficult time landing job offers from governmental institutions.

He understands why a local or state government office would want to avoid public backlash over tax-payer supported salaries going to people with criminal records.

But points out that many of those same institutions welcome state and federal funds for job training.

“You’re taking training money, but not hiring ex-offenders? That’s crazy,” Holmes said.

Companies that stiff-arm ex-offenders, he added, need to take responsibility for contributing to a vicious cycle.

“In prison, they get three meals a day, healthcare and a roof over their head and when they get out they don’t have any money. If they can’t provide for themselves, they’re going do what they know in order to survive and go back to crime rather than starve to death,” Holmes said. “If you do your time, and you’re qualified for a job, then you should be given another chance.”

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Egypt is facing daunting challenges, a leading candidate for president said Sunday, presenting his decades as a senior government official as a prime reason to vote for him and not an Islamist.

Amr Moussa said Egypt is going through an economic and social crisis that requires the talents of an experienced statesman, not a president who learns on the job.

Egyptians pick a new president to replace deposed Hosni Mubarak in a process that begins May 23-24. It is unclear how much power the new president will have, as the process for writing a new constitution is snagged over disagreements about makeup of the body that will write the new document.

Moussa served as Egypt’s foreign minister under Mubarak and in 2001 moved over to head the Arab League. He resigned that post last year to run for president.

At a news conference Sunday in Cairo, he disagreed with the goals of Islamist parties, which have won clear majorities in parliamentary elections running on a platform of Islamic principles.

“I believe that Egypt has been injured, Egypt has been mismanaged and that Egypt should not get into an experiment that has not been tried before,” he said when asked about his top Islamist opponent, a member of Egypt’s powerful Muslim Brotherhood.

Such an experiment, he said, could enter Egypt “into a period of confusion.”

Critics charge that Moussa’s record as a top official under Mubarak could mean his election would mark a return to the ways of the former regime, characterized by corruption, inefficiency and nepotism.

Egypt’s economy has been hard hit in the aftermath of the popular uprising. Tourism and investment rates have plummeted, foreign currency reserves have dipped dangerously and the national budget reels under the burden of heavy subsidies on fuel and basic food products.

Thirteen candidates are running to replace Mubarak. Since he resigned after a popular uprising, Egypt’s military has been running the country.

Facing Moussa are candidates from the Muslim Brotherhood and other Islamist factions, as well as another Mubarak-era official, Ahmed Shafiq, his last prime minister instant personal loans guaranteed.

In a last minute decision, the Brotherhood decided to field a candidate in the race, after it had promised it would not. This led many to accuse the Brotherhood of being power hungry, aiming to lead Egypt toward into a religion-based system of government. The Brotherhood says it would have Islam as its reference for governing.

The group’s candidate, Mohamed Morsi, said Saturday if he wins, he will be president of all Egyptians, but it is now time to put into practice the group’s slogan, “Islam is the solution.”

The Brotherhood’s main candidate was among 10 disqualified this month by Egypt’s election commission, along with another leading Islamist and Mubarak’s former intelligence chief, boosting Moussa’s chances. Morsi replaced the group’s first choice.

Moussa pointed to his credentials as a longtime government official with deep knowledge of the system.

“I believe I can start from minute one as president with my knowledge of the government, the administration, the management and also the connection with the world and the Arab world and the African world, and Europe,” he said. “The country is in a major crisis. A major crisis doesn’t justify at all a president who will ask around, what should I do at this point or that point and gaining experience as he goes.”

The Brotherhood was outlawed for decades before Mubarak was overthrown in February 2011, so its leaders have never held high office.

Moussa, 76, is popular among Egyptians who see in him a seasoned and outspoken diplomat, particularly voicing criticism of Israeli policies.

On the other hand, he has been harshly criticized in recent protest rallies for his association with the Mubarak regime, and many protesters say that he, like other former regime officials, should not be allowed to run in the first post-Mubarak elections.

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Biotech firm Human Genome Sciences announced Thursday that it had rejected a takeover bid from pharmaceutical giant GlaxoSmithKline that valued it at just over 80% of its closing price Wednesday.

HGS () said the offer — at $13 per share, or $2.6 billion — "does not reflect the value inherent" in the company. It added, however, that it was reviewing "strategic alternatives" including the possible sale of the company, and that Glaxo () had been invited to participate in the process.

HGS shares jumped on the news, opening at $14.21, nearly double Wednesday’s closing price of $7.17.

Glaxo CEO Andrew Witty said in a statement that his firm was "disappointed that Human Genome Sciences has rejected our offer without discussion and are confident that our offer is in the best interest of shareholders of both companies."

Hostile takeovers are back

The two firms, Witty noted, have collaborated for nearly 20 years, including on the lupus drug Benlysta, a joint venture.

HGS shares traded around $30 just a year ago, but have dropped sharply since then as the company has reported heavy losses. In February, HGS reported a net loss for 2011 of $381 million.

The announcement comes a day after Swiss pharmaceutical company Roche () announced that it was abandoning its bid for U.S. biotech firm Illumina ().

HGS has attracted controversy in the past with its attempts to patent genetic sequences, which have raised questions about whether such information can be subject to intellectual property laws. 

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France’s foreign minister says an array of international sanctions targeting Syria’s repressive regime have depleted its financial reserves by half _ and Damascus is actively trying to evade them.

Alain Juppe called Tuesday for a solid international response to such “maneuvers” as he opened a Paris meeting of 57 countries to tighten sanctions against President Bashar Assad.

The actual size of Syria’s financial reserves isn’t known, but it was believed to be around $17 billion at the start of the uprising in March 2011. Juppe didn’t specify how much of Syria’s finances were impacted by sanctions, but said “our information” is that they have been cut in half.

Diplomats and finance ministry officials from the Arab world, the West and elsewhere were meeting in Paris to coordinate sanction measures against Assad’s repressive regime.

The Arab League and the European Union are among more than 50 participants who want to keep up pressure on Assad.

Juppe was set to kick off Tuesday’s closed-door talks in Paris under the “Friends of Syria” banner. But two Arab League nations _ Syrian neighbors Iraq and Lebanon _ were not attending.

Diplomats say a string of EU, U.S. and other sanctions are affecting Assad by curbing Syria’s ability to export oil.

Speaking at a separate meeting in Moscow, Syrian opposition members say they have sensed a shift in Russia’s stance on the conflict in their homeland and voiced hope Tuesday that Moscow will crank up pressure on Assad’s regime.

On a visit to Moscow, Haytham Manna, spokesman for the Arab Commission for Human Rights, said Russia has voiced support for democratic changes in Syria and believes the Syrians themselves should determine the country’s future.

“The representatives of the Russian government aren’t inclined to support the idea of preservation of the dictatorial regime,” Manna told a news conference. “They are talking about the need for continuing democratic changes, and it’s very important for us.”

Abdul-Aziz al-Kheir, a spokesman for the National Coordination Body for Democratic Change in Syria, said Russia’s position has been changing over the past two months and “particularly fast over the past two weeks payday loan.”

Members of the Syrian opposition said they hoped Russia will apply its power to persuade Assad to observe U.N. and Arab league envoy Kofi Annan’s cease-fire plan to end 13 months of violence in Syria.

“Russia has all the necessary levers to apply pressure on Assad’s government and help Annan’s mission,” Manna said.

Hassan Abdul-Azim, the head of the National Coordination Body for Democratic Change who is leading the delegation, said Moscow’s support is essential for the success of Annan’s mission.

“That is the last chance to end the fratricidal massacre and create preconditions for the transfer to a democratic form of government,” he said.

Manna said that while the opposition was encouraged by the talks in Moscow, differences remain. Russia continues to be strongly critical of Assad opponents using force, Manna said, while the opposition views it as a legitimate response to the violence on the part of the regime.

He said that the opposition delegation also sought to assuage Russia’s concerns about the rise of Islamism in Syria and prospects of continuing violence in the country in case of regime change.

The opposition delegation is expected to meet with Russian Foreign Minister Sergey Lavrov later Tuesday.

Lavrov has recently criticized Assad for dragging his feet on reforms and using excessive force. He and other Russian officials have strongly urged their old ally to observe Annan’s plan.

Russia, along with China, has twice shielded Assad’s regime from U.N. sanctions over its deadly crackdown on a popular uprising. But Moscow has strongly supported Annan’s cease-fire plan to end 13 months of violence and begin talks on Syria’s political future.

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