Question: If 2 black holes get near each other, can they then gravitationally pull matter out of the other black hole & back into “normal” space?

The short answer is no.

A black hole (in the traditional sense) is defined as an object that has collapsed so that its radius is equal to, or less than, the Schwarzschild of the object.

What does this mean?

Every object has a Schwarzschild radius; this is the point at which an object’s mass is so compressed that the gravitational influence overpowers the other forces of nature and it collapses to a singularity.

Of course, not every object is massive enough to collapse to its Schwarzschild radius. The Earth’s Schwarzschild radius, for example, is about the diameter of a small marble. If you were to apply enough energy to the Earth and compress its mass to that size, it would collapse to form a black hole. The same is true for humans, except I’d need to compress you to a point some 10-million times smaller than a marble in order to turn you into a black hole.

So, what is special about the Schwarzschild radius? This is the point at which the escape velocity for the object is equal to the speed of light. Obviously, since you can’t travel ,or faster than, the speed of light you can’t get out of a black hole neither can another black hole pull you out.

It’s important to realize that, outside of the Schwarzschild radius (also known as the event horizon), spacetime is normal. You can interact with a black hole in the same ways you interact with any other object of mass.

Image credit: NASA/CXC/A.Hobart

Article: From Quarks to Quasars

Warren Buffett’s Involvement Protects Burger King Inversion Deal With Tim Hortons


An inversion deal of epic proportions such as the merger of Tim Hortons Inc. (TSX, NYSE: THI) and Burger King Worldwide Inc. (NYSE: BKW) to create a $23 billion behemoth based in Canada should have been enough to get the protectionists screaming bloody murder.

But the reaction to Burger King becoming a Canadian company has been muted, as compared to the outrage expressed when Walgreen and Pfizer and other such large companies tried their own inversions.

This could be because it’s just a hop north to Canada instead of a long swim across the Atlantic to Europe. There’s also the fact that this merger is not just about saving taxes by merging with a smaller company.

It’s more of a marriage of equals, since the new merged entity with 18,000 restaurants in 100 countries enhances the reach of both parties to the merger and allows them to continue growing their unique brands while leveraging each others’ strengths in the international market.

Secondly, Burger King isn’t going to save billions in taxes by paying $11 billion for coffee and doughnuts and changing their on-paper corporate headquarters to Canada.

In fact, both companies have an effective tax rate of around 27 percent, and the merger isn’t going to make that big a difference in taxes to either of them.

3G Capital, the Brazilian investment company which owns Burger King, will continue to hold a 51 percent majority stake in the merged entity.

The Tim Hortons headquarters in Oakville, Ontario will continue to be the global home of the Tim Hortons business even after it becomes a part of Burger King. And Burger King’s headquarters in Miami, FL will in effect continue to be the operational global home of the Burger King side of the business.

But all the anger towards corporations ditching America can’t be forgotten just because this deal is happening close to home in Canada and it seems more sensible than some of the other recent merger proposals that were purely tax inversions.   

One of the main reasons for the muted criticism is the involvement of Warren Buffett. Berkshire Hathaway is reportedly putting up $3 billion to help finance the merger through preferred shares.

These large corporate mergers usually send the stock of the acquired firm soaring, while the buyer’s share price drops a bit because of concern over the huge outflow of capital and additional debt.

However, in this case, shares of both Burger King and Tim Hortons soared over 20 percent. Some of the credit for investors’ unusual confidence in the value of the deal can be attributed to Buffett’s involvement.

More importantly, Buffett is looked upon as an investor who cares about the American economy more than profits, and if he’s got no problems supporting the Burger King-Tim Hortons deal, then well…this poutine can’t be that bad a whopper.

Photo credit – scazon/flickr

Comcast + Time Warner Cable = Disaster

Comcast just announced that it’s buying Time Warner Cable. If approved, this outrageous deal would create a television and Internet colossus like no other.

Comcast is the country’s #1 cable and Internet company and Time Warner Cable is #2. Put them together and you get a single giant controlling a massive share of our nation’s TV and Internet-access markets.

No one woke up this morning wishing their cable company was bigger or had more control over what they watch and how they get online. But that is the reality we’ll face unless the Justice Department and the Federal Communications Commission do their jobs and block this merger.

Stopping this kind of deal is exactly why we have antitrust laws. After a year of sustained organizing, we convinced the DoJ and the FCC to stop AT&T from gobbling up T-Mobile.

This merger would put more than a third of all cable-TV subscribers in Comcast’s hands and give it control over more than half of the “triple-play” services that combine TV, phone and Internet service. Don’t forget, Comcast already owns NBC, MSNBC, Universal Studios and tons of cable channels. That means that for most of America, Comcast could control even more of what you see and how you see it.

Putting this much power in the hands of one company is dangerous. This deal would lead to less consumer choice, less diversity and much higher cable bills. 

Tell the FCC and the DoJ to stop this merger today. This is a fight we can win.

The power of vertical integration

I find it somewhat puzzling that horizontal M&As greatly outnumber vertical M&As. Assuming a 25% takeover premium, it’s not hard to see why most acquisitions fail to add value to the acquirer. There simply isn’t often 25% in value from rationalising shared costs.

The equation is significantly different for vertical integrations. Firstly, in addition to the costs benefits made possible through the rationalisation of both Admin and sales costs, there is the added benefit of improved ‘supplier’ relations and the ability to better utilise existing infrastructure.

Perhaps the best example of a successful vertically integrated company is Samsung. While they are now a leader in consumer electronics, they started off as an electronic component supplier. Through using their own components, they can now make great value TVs and smartphones with good margins.

Take an example of a wholesaler acquiring a retailer. Let’s say that both the retailer and wholesaler operate on 30% margins and that the existing cost to the wholesaler for distributing goods is 15%. Because of improved economies of scale and the ability to better utilise existing infrastructure, the additional cost of distributing goods to the newly acquired retailer is likely to be between 5% and 10%. If the retailer were to use the wholesaler as a cost centre, the effective margin on the products it buys will be 5% to 10%, not 30%.

Depending on the percentage of products the retailer can reasonably buy without harming turnover of the retail business, the effective margin for the retailer will increase from 30% to over 40%. As operating costs for the retailer will largely remain the same, the overall profit from the retailer will almost double (assuming the retailer’s cost of distributing goods is 15%).In this simplistic example, it is clear that the acquisition will increase value by substantially more than 25%.

To bring this all back to reality, the example used assumed that the retailer didn’t buy any existing goods from the wholesaler and that making the wholesaler the preferred supplier wouldn’t cause any disruption to the business. This is obviously not always the case. For this very reason, vertical integrations will work best is highly commoditised industries where goods or services can be readily substituted. Where this is the case, vertical acquisitions should be highly profitable

Exelon-Constellation merger gets PJM monitor OK

NEW YORK Oct 11 (Reuters) - Exelon and Constellation Energy on Tuesday moved their planned merger another step forward following a settlement with the PJM grid operator’s market monitor that includes the divestiture of three power plants in Maryland.The market monitor, Joseph Bowring of Monitoring Analytics, said, “The market monitor has engaged in discussions with the Applicants (Constellation and Exelon) regarding various structural and behavioral remedies that, when combined with the asset divestiture proposal … would satisfy the market monitor’s concerns regarding the merger.”Chicago-based Exelon agreed to buy Baltimore-based Constellation for $7.9 billion in April.The U.S. Federal Energy Regulatory Commission (FERC) and the Maryland Public Service Commission (PSC) must also approve of the merger.Bowring said in a letter to FERC and the Maryland PSC that the PJM market monitor would not object to the merger so long as it contains the terms of conditions contained in this settlement.As previously announced, Exelon and Constellation agreed to divest three of Constellation’s power plants in Maryland - the 1,286-megawatt Brandon Shores coal-fired plant, the 399-MW CP Crane coal/oil-fired plant and the 996-MW HA Wagner coal/gas/oil-fired plant.The settlement prohibits the sale of the power plants to several already large generators in the region, including American Electric Power , FirstEnergy , GenOn , Edison International , Dominion , Public Service Enterprise , Calpine and PPL .In addition, the settlement included numerous behavioral commitments for the Exelon and Constellation, including power capacity offers, plant uprates, unit retirements and the scheduling of Exelon’s 507-MW Conowingo hydropower project in Maryland, among other things.Monitoring Analytics is the independent market monitor responsible for promoting a competitive electric power market in PJM.PJM, the biggest power grid in the United States, oversees the power system and electric market in 13 Mid-Atlantic and Midwest states and the District of Columbia.A spokesman at PJM said Tuesday the grid operator does not have a decision making role in the merger. PJM’s role is to provide information to the regulators to help them make their decisions.

A merger, and then a split



For most starving students, secondary brands like DKNY, Marc by Marc Jacobs, and Miu Miu are really like gateway drugs into fashion.  The announcement that D&G is shutting down after this final collection isn’t good news. But there are plenty of other reasons that this move may not be good news.

The industry says that the $400 million(399 euros) a year line has been confusing consumers, and even cannibalizing the main label’s sales at lower retail prices. The fiscal year ended 2010 shows Dolce & Gabbana had revenues of 1,028.5 million euros, almost 40% of which came from D&G. In the short term, how many old D&G customers and new consumers will flock to the main label when it becomes more flashy as promised remains uncertain. How soon can the lost revenue be recovered or even exceeded should be the other concern. The good news may be that the growing numbers of luxury consumers in Asia will be happy to know items will never be made in their home countries and the Italian dress they are showing off has a even larger price tag. Overall, the scarves from the goodbye collection were very celebratory, but the numbers don’t look so bright. 

In a completely different cannibalization scenario, Netflix’s split of its DVD service into a separate company called Qwikster looks even more unpromising.  Here is a comical illustration

Microsoft Officially Welcomes Skype Into The Fold

Five months & eight and a half BILLION dollars later, Microsoft welcomes internet telephony giant Skype into the fold.  After getting approval of the merger by the EU today, Microsoft makes it official. Oddly enough (or really not surprisingly!) the Google Toolbar option has been removed from Skype. Press Release after the break

REDMOND, Wash., and LUXEMBOURG — Oct. 13, 2011 — Microsoft Corp. (Nasdaq “MSFT”) has closed its acquisition of Skype Global S.à r.l. Negotiations of the definitive agreement under which Microsoft would acquire Skype, an Internet communications company, for $8.5 billion were led by investor group Silver Lake and the transaction was originally announced on May 10, 2011. Boards of directors of both Microsoft and Skype previously approved the acquisition. 

Microsoft and Skype will remain focused on their shared goal of connecting all people across all devices and accelerating both companies’ efforts to transform real-time communications for consumers and enterprise customers. The completion of the acquisition also marks the official introduction of Skype as a new business division within Microsoft.

“Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world,” said Microsoft CEO Steve Ballmer. “We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues — anytime, anywhere.”

Skype CEO Tony Bates will assume the title of president of the Skype Division of Microsoft immediately, reporting directly to Ballmer. The Skype division will continue to offer its current products to millions of users globally. Longer term, Skype will also be integrated across an array of Microsoft products to broaden Skype’s reach and accelerate its growth as a fundamental way people communicate online. Skype employees will continue to be located around the world in offices including Estonia, the Czech Republic, Russia, Sweden, the United Kingdom, Luxembourg, Japan, Singapore, Hong Kong, and the United States.

“By bringing together the best of Microsoft and the best of Skype, we are committed to empowering consumers and businesses around the globe to connect in new ways,” Bates said. “Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily,” Bates said.

Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype has made impressive progress, developing new products and revenue streams, strategic acquisitions, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.