Filed under: Raising money, Public or private?

Deutsche Bahn AG is closer to coming public. A report out of FT has noted that the German rail operator has already prepared the guts of its prospectus for its the planned initial public offering. It is also stated that an advance report to be published Wednesday.

Past reports have shown that a 25% to 25% stake would be sold, and this looks like a call for about 24.9% of the company would be listed under the name “DB Mobility &
Logistics.”

The German railway company plans to acquire several logistics firms within the next weeks in places such as in Italy and the U.K., according to the report. On a dollar-adjusted basis, you could anticipate a sale for the public float of some $4.8 billion to $7.9 billion.

If there’s a privatization that has been in the works for an eternity, it is this one.

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Filed under: World wide web, Web services, Social Software, web 2.0

Looking for a quick way to conduct a poll? Online polling service PollDaddy has added a new Twitter feature that lets you ask a group of people what you should have for lunch, who you should vote for, or anything in between.

Users can set up a poll in a matter of seconds. Just visit the internet site, type a short question, and select a few possible answers. You’ll need to enter your Twitter login information in order to send out the poll. PollDaddy will automatically shorten the URL and send out a tweet under your name.

We’re guessing that most users will either see your poll the moment you post it or they won’t see it at all, so this service will be great for Twitter users with a huge number of followers who need to get some information swiftly. But you can also post links to your poll on a web page or pretty much anywhere else, so you could theoretically use PollDaddy’s Twitter feature to gather information over time as well.

[via WebWare]

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Filed under: College, Cards, Debt, Children and Money

An undergraduate friend recently shared his financial woes with me. He’s about $8 thousand in credit card debt and has fallen behind on his payments. His parents have suggested that he take out a student loan and use it to pay off the debt over a longer period of time at a lower interest rate.

In theory, this makes sense. Paying a lower interest rate is always nice, and replacing delinquent revolving debt with a loan will help out his FICO score. To make this an even more lopsided decision, interest on student loans is often tax deductible.

Even so, I don’t think consolidating the debt with a student loan is the right move, even if it’s a good idea on paper.

The problem is that people who consolidate delinquent credit card debt and find themselves once again able to rack up massive balances tend to do just that. Instead of being $8 thousand in debt, they up $16 thousand in debt. $8 thousand seems like a lot of money but if he spends the summer working 60 hours per week at $9 per hour, he’ll earn $540 per week. If he scrimps and saves, he’ll be able to make a big dent in the credit card debt. Of course he could consolidate it and do the same thing, but I somehow doubt that that would end up happening.

Taking out a student loans seems like a cop out to me, and a way to avoid dealing with the actual problem: owing a lot of money. Eventually my friend, who I hope isn’t reading this, will have to grow up and take responsibility for his financial life. A student loan in the situation is essentially a shovel to dig a deeper hole, unless there’s a real change in behavior accompanying it. But if he was really committed to turning the situation around, he could work a ton of hours and spend less money.

As for the tax benefits, a student loan in this context does not appear to be tax deductible, as the IRS states that the loan can only be deducted if used for the “total costs of attending an eligible educational institution,” which include “tuition and fees, room and board, books, supplies, and equipment, and other necessary expenses (such as transportation).”

I don’t see anything in there about paying off credit card racked up buying clothing, cigarettes, and pizza. Of course you could probably deduct it and nothing would happen, but it’s not kosher.

Unless he’s ready to make serious changes in his life, taking out a student loan is a terrible idea. He should be looking to fix the problem, not thinking up creative ways to prolong it.

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