Daily Archives: March 16, 2007

Comcast Out To Hang Google

Comcast (CMCSA)  runs one of the largest web portals on the internet. Currently, it refers search traffic to Google (GOOG). The deal is apparently worth $70 million a year to Comcast. They want more.

Enter Microsoft, which is beginning to make serious on its threat to take search share from Google and Yahoo! (YHOO).

Google may be on another collision course with a large company with which it has conflicting goals. Microsoft would like to be there to pick up the pieces. If it is serious about increasing it portion of the search market, it will put a good deal more on the table than $70 million a year. A few deals of this size, and Microsoft may actually emerge as a threat in search.

Douglas A. McIntyre

Posted on: March 16, 2007 – 11:20 pm in Internet

Cramer’s Playbook for Next Week

On CNBC’s MAD MONEY Cramer has a gameplan for next week. 

Cramer noted that the success of the movie "300" is not big enough to help the Time Warner (TWX) parent.  But Cramer thinks National Cinemedia (NCMI) could be a winner in the space.  This one makes money off adds in theaters (and live telematic events).  It stalled since the IPO, but a boutique brokerage started coverage with a buy before the brokers that underwrote it can start coverage. 

The multi-billion government phone contract coming in the next 12 days and Cramer has a group:  Verizon (VZ) and AT&T (T) are to big and he thinks Sprint (S) is up only on takeover rumors. Qwest (Q) is the one that Cramer thinks could win the government telecom contract and he thinks it has lots of upside and only $2.00 downside.

Cramer also has a pick for you regardless of if you do homework.  AAR (AIR) reports (refurbishes aircraft) because he thinks it can be bought on weakness.  He also likes General Mills (GIS) that reports next week, but he’d only buy on weakness. 

Cramer said Goldman Sachs (GS) is the one you buy hand over fist next week and the buyback should start next Tuesday and can be bought on Monday.

Have a great weekend, and watch out for those green drinks.

Jon C. Ogg
March 16, 2007

Posted on: March 16, 2007 – 5:50 pm in Cramer

Cramer Talks Nastech

On tonight’s MAD MONEY on CNBC, Jim Cramer discussed Regenron (REGN) as one where he had interviewed the CEo of the company back when he started doing MAD MONEY.  This went fom $5 to $24 even though it still doesn’t have a product on the market.  He wanted to review it now that it has gone back down close to $18.00.  One that he likes in the sector just as much as REGN back when is Nastech Pharma (NSTK).  NSTK loses money and it lost Merck on the obesity study and for a while it only issued press releases.  The stock is thought of as a joke, but now you must own it if you are a biotech speculator.  He reviewed teh company for 5 days before reviewing it.  It has $90M cash and has compounds for RNA Interference tests, obesity, osteoporosis, and others.  None of the products are commercial yet but it has plenty of cash.  When it got crushed they left the street with no reason to own the stock.  At the end of the year it styopped issuing press releases and now the main seller has finally cleaned out of the stock.  Cramer thinks the compounds may actually work and Wall Street doesn’t know it. They have also hired a great industry person to help it work on compounds.

Jon C. Ogg
March 16, 2007

Posted on: March 16, 2007 – 5:24 pm in Cramer

Cramer on a Cat’s Meow

On tonight’s MAD MONEY on CNBC, Jim Cramer said that Carerpillar (CAT) is being kept down too low.  Cramer think sthe Chinese are back into buying commodities and the companu is leveraged to commodities more than to Housing.  The subprime meltdown is not a worry for it.  Cramer thinks the commodities going back up is much more important to it.  The Yen strengthening os also actually good for the company in that the Japanese can buy our products for cheaper.  He thinks CAT has the best dealer network out there, but the stock is still sleeping.  If it doesn’t run. you have a $7.5 Billion buyback plan and a director just bought some.

Jon C. Ogg
March 16, 2007

Posted on: March 16, 2007 – 5:09 pm in Cramer

The Week of Cramer (MAR 16, 2007)

Very soon we’ll have another evening of Cramer’s MAD MONEY.  Tonight we should get another one of his speculative plays in medical or elsewhere, assuming that the weak market did not take the wind out of his sales.  Here is what else he has covered so far this week:

On Friday’s Stop Trading segment on CNBC, Cramer came out with his picks he likes in each commodity sector.

He also panned many newspaper stocks and this will one was powerful enough that it would make anyone wonder why private equity firms are interested in them even after a drop.  These names took a beating.

On Thursday evening Cramer named off a dozen or so names for his special Thursday SELL BLOCK, although he was still positive on some of these.

He also juiced a couple of small cap non-pharma healthcare stocks.

Here was he thought Cigna (CI) was worth a look at the current levels.

Cramer also oputlined why he thinks that you can profit from older rumors now that Alcoa (AA) and Dow Chemical (DOW) have fallen off so much.

Goldman Sachs remains a favorite of his, but he thinks it’s going to $250.00 fast.

Elsewhere in thh financial stocks, Cramer said he is replacing Bank of America (BAC) with Citigroup (C) as his favorite banking stock.  It isn’t why you think though.  He wants Chuck Prince out, and so do we at 24/7 Wall St.

One sort of funny piece was his DIRTY DOZEN where he gave a bunch of stocks that short sellers were targeting.  He did give the premise that these are not really his picks per se, but ironically many of these posed some positive moves.

Cramer thinks Viacom (VIA) suing Google (GOOG) in the manner they are pursuing is just plain dumb. He still thinks VIA is going higher though.

He also thinks that Hansen Medical (HNSN) could perform like the next Intuitive Surgical (ISRG), and here’s why.

He’s even got 5 of his top oil-related names in the oil patch sector.

Jon C. Ogg
March 16, 2007

Posted on: March 16, 2007 – 3:38 pm in Cramer

What’s Ahead Next Week (MAR 19 to 23, 2007)

Next week is a farily light calendar, but we should at least get some more confessions from companies who are going to fall short of guidance as this will mark two weeks from the end of the quarter.  Companies often know of cancelled or order pushouts by then.  Of course some may also have already made their quarter as well and issue upside guidance.  Any of these dates can change without notice and there will be a more detailed release over the weekend for the events ahead.

MONDAY MARCH 19
Earnings: Movie Gallery (MOVI) $0.25e, PetroChina (PTR)
Conference/Presentation: Boeing (BA) aircraft updates

TUESDAY MARCH 20
FEB Housing Starts & Building Permits
Earnings: Adobe (ADBE) $0.29e, Oracle (ORCL) $0.23e; YAMANA Gold (AUY) $0.03e

WEDNESDAY MARCH 21
215 PM EST FOMC STATEMENT ON RATES
Earnings: ChinaMobile (CHL), Darden (DRI), FedEx (FDX), Mobile Telesystems (MBT), Morgan Stanley (MS).

THURSDAY MARCH 22
Leading Economic Indicators (FEB)
Weekly Jobless Claims
Earnings: 3COM (COMS) $0.01e, Borders (BGP) $1.68e, Cost Plus (CPWM) $0.85e, General Mills (GIS) $0.70e, Jabil $0.36e, KB Home (KBH) $0.27e, Nike (NKE) $1.33e, Palm (PALM) $0.12e, William-Sonoma (WSM) $1.03e

FRIDAY MARCH 23
Existing Home Sales (FEB)

As a reminder, Monday is looking like a slow day and that may be a good thing since St. Patrick’d Day is this weekend.  As of the 2000 Census, there were 34 million Americans that claim Irish heritage; but on St. Patrick’s Day there are probably about 134 million either pretending to be Irish or who at least make sure their liver is Irish.

Posted on: March 16, 2007 – 2:13 pm in Uncategorized

Cramer Talks the Drop & Commodities

On today’s STOP TRADING segment on CNBC, Jim Cramer addressed the drop today potentially being a rough day because of options expiration and with so many people having left the trading desks for the day.  He thinks it would be easy to drive down the market today in a thin market.  On commodities, Cramer said a lot of people have walked away from there worrying about Subprime lows.  The markets in commodities are run by Chinese demand so unless there are subprime blowups not discovered tying commodities to subprime woes is a bad call.

Freeport (FCX-NYSE) is one he likes after a deal.
CVRD (RIO-NYSE) is his best play for nickel.
BHP Billiton (BHP-NYSE) is one he thinks has bottomed.
On deep water drilling, the GlobalSataFe (GSF) and Transocean (RIG) are the best there.

Cramer did stress these are the ones he likes, but he thinks today will be an easy day to drive prices down.

Jon C. Ogg
March 16, 2007

Posted on: March 16, 2007 – 1:50 pm in Cramer

LEND: Accredited Lives to Fight Another Battle

By William Trent, CFA of Stock Market Beat

Subprime lender Accredited in deal to sell loans – Yahoo! News

U.S. subprime mortgage lender Accredited Home Lenders Holding Co. (LEND) said it reached an agreement to sell $2.7 billion of loans at a substantial discount to alleviate pressures from margin calls.

The story surely goes much deeper than was reported in the story link above, and might even make a great book on corporate crisis management. We don’t claim to know the whole story, but earlier this week the company appeared headed to bankruptcy. Instead the announcement that it is taking a $150 million hit on its portfolio, delaying required regulatory filings and seeking a cash infusion was treated like fantastic news.

Much like the Long Term Capital Management meltdown (which only required intervention from the Federal Reserve because the managers were unwilling to take Warren Buffett’s offer) the incident shows that our markets are deep. There is a price at which any risk will be accepted, and that is a good thing. It gives the willing buyer an opportunity for large profits, and it gives Accredited the chance to fight another day. And those are good things.

http://stockmarketbeat.com/blog1/

Posted on: March 16, 2007 – 12:52 pm in Financial Stocks

Semi Equipment Orders Starting to Drop

By William Trent, CFA of Stock Market Beat

According to Reuters:

North American suppliers of equipment for making microchips saw orders slip slightly in February, a U.S. trade group said on Thursday.Bookings in February were $1.65 billion, down 1 percent from the previous month but up nearly 28 percent from a year earlier. Bookings increased sequentially in each of the previous two months.

This, however, doesn’t begin to tell the whole story. For example, orders were down 1 percent from January’s revised bookings of $1.675 billion but were down more than 3 percent from the $1.71 billion originally reported for January. What happened to the other $33 million of equipment orders? They were pushed out – which means that at best they will prevent $33 million from being ordered later this year, and at worst they will be canceled completely.

semiequipmentorders.jpg

The good thing about the downward revision, and also the decline in February, is that it restores some balance to at least the trend in equipment orders relative to end demand for semiconductors. Although supply (chip equipment orders) is still growing much faster than the roughly 10% growth in semiconductor demand, at least the rate at which the capacity is growing is starting to slow down again. Furthermore, the billings (which represent what is actually installed rather than orders, which may prove too optimistic) have been running at a slower rate than orders. The 22% growth of installed equipment is still well higher than what is needed, but has less far to fall.

http://stockmarketbeat.com/blog1/

Posted on: March 16, 2007 – 12:49 pm in Semiconductor

Comments From The Stock Masters 3/16/2007

New 52-week lows for two of our favorite companies we have slammed in the past – Atari Inc. (ATAR) and Bally Total Fitness (BFT). Bally’s has been on a terrible decline ever since control of the company went over to hedge funds – Pardus Capital Management and the Liberation Investment Group LLC who combined own 26% of Bally’s stock. Funny thing about Bally’s is the relationship to Steven Seagal’s weight gain and the downfall of his career as it relates to Bally’s stock price decline.
Coincidence? I think not, ever since Exit Wounds, both Bally’s and Seagal have been turning our poor performance. Nothing makes a better movie when you combine a washed-up action star with an Rapper/Actor (the Oscar Academy goes nuts for these films).
Fat Factor meets BFT Share Price Bally Fitness is down an incredible 61% today, Atari is down 6%. Great job corporate America!!

Stock Tips Well, plenty of time to get in on Imax Corp. (IMAX). Instead of reporting earnings today they announced that they are delaying the filing of their 2006 financials while they evaluate "certain accounting errors."
Imax’s genius management and audit committee are looking at an estimated $2.5M in errors that took place between 2001 and 2006. The errors relate to certain expenses that were incorrectly accounted for as capital costs.
This comes as little surprise and just goes to show you that way back in August, the Masters were on the money when we wrote: IMAX: How to ruin a great company. Can IMAX return from the dead, do they have something promising to say? The public will have to wait until some time before March 30th, which is when they plan to file their 2006 results with the Securities and Exchange Commission. If only our jobs were that simple…
"Hey Boss, I didn’t finish my work today and I’m thinking, how about I get my stuff done by March 30th?"
"That sounds fine Peter, here’s $10,000."
"Thanks Skip!"

http://www.thestockmasters.com/index.asp

Posted on: March 16, 2007 – 12:47 pm in Research

Sector Performance Leading Up to the Start of Bear Markets

From Ticker Sense

As the major equity indices have made significant declines in recent weeks, some have speculated that we are in the early stages of a bear market. Historical precedent however, would refute that view.  We recently released this report to subscribers of our Mini Institutional service which highlights the performance of the ten major sectors leading up to the start of bear markets.  The table below provides the average 1, 3 and 6 month performance of each sector prior to the start of all bear markets of the S&P 500 going back to 1962.  Based on page two of our report, the period which compares closest to the current market is the months leading up to the 1966 bear market, while the months prior to the 1987 bear market have the least resemblance to today.

Bearmark

http://www.tickersense.typepad.com/

Posted on: March 16, 2007 – 12:45 pm in Research

S&P 500 Stock Extremes

From Ticker Sense

Below we highlight the S&P 500 stocks that are trading furthest above and below their 50- and 200-day moving averages.  GT, BIG and RSH have remained strong throughout the S&P 500’s recent declines, while AMD and CC continue to drift lower.

Spxabovebelow

http://www.tickersense.typepad.com/

Posted on: March 16, 2007 – 12:43 pm in Research

Inflation on the Come Back?

From Ticker Sense

Over the last year and a half we have found that the ISM Commodities Survey has been an effective barometer of future inflation.  When the number of commodities rising in price has risen, year over year CPI tends to follow in the coming months.  Likewise, when the number of commodities rising in price declines, inflation has tailed off in the ensuing months.

Currently, the ISM commodities survey has indicated that the number of commodities rising in price rose from the prior reading in three out of the last four months.  The last time we saw this was in December 2005, which was followed by an up-tick in inflation last Spring that sent global markets reeling.  While it is not necessarily pertinent to today’s report, investors should keep this on their radar in the months ahead given the indicator’s past reliability. Longer term, the ISM Commodities Survey still remains below its downtrend from the peak readings in 2004.

Commodities_survey_2

http://www.tickersense.typepad.com/

Posted on: March 16, 2007 – 12:42 pm in Economy

Largest $ Movers of Note – StreetInsider.com – 03/16/2007

UPWARD MOVERS:
Imperial Tobacco Group plc (NYSE: ITY) +$5.45; Stock jumps for second straight session. Yesterday, the company announced a $15.2 billion bid to acquire rival Altadis.

The Manitowoc Company (NYSE: MTW) +$4.38; Company expects to exceed its current estimate for fiscal 2007 earnings per share. The company is raising its most recent earnings per share guidance of $3.85 to $4.00 to a new range of $4.20 to $4.30. (Consensus is $4.02). In addition, the company anticipates that reported earnings per share for the first quarter of 2007 will exceed the average of published Wall Street estimates by approximately 10%.

OMI Corp. (NYSE: OMM) +$3.12; Board of Directors has decided to evaluate a range of strategic alternatives to further enhance shareholder value. Company has retained Perella Weinberg Partners and Fearnley Fonds ASA as financial advisors.

AnnTaylor (NYSE: ANN) +$3.07; Reports Q4 earnings of $0.31 per share, 2 cents better than estimates. Revenues came in at $610.5 million versus the consensus of $610.8 million. Sees FY08 EPS of $2.15-$2.25 versus the consensus of $2.15 million.

Accredited Home Lenders (Nasdaq: LEND) +$2.49; Company reached an agreement to sell substantially all of its loans held for sale that are currently funded out of its warehouse and repurchase credit facilities, asset-backed commercial paper facility, and its equity. The $2.7 billion of loans held for sale will be sold at a substantial discount in order to alleviate recent pressures from margin calls.

DOWNWARD MOVERS:
Google Inc. (Nasdaq: GOOG) -$4.45; Stock moving lower with no specific news releases.

CBOT Holding (NYSE: BOT) -$4.45; Deutsche Bank downgrades CBOT Holding (NYSE: BOT) from Buy to Hold with a $195 price target, following surge related to InterContinental Exchange (NYSE: ICE) takeover offer. The firm said, "While we do believe that CME (NYSE: CME) needs to own BOT, especially when one considers the potential loss of nearly $100 million in 2008 revenues as a result of its clearing agreement with the BOT,we don’t believe it would materially bid much higher than BOT’s closing price of $195."

Franklin Resources Inc. (NYSE: BEN) -$3.35; Goldman Sachs downgrades Franklin Resources from Buy to Neutral

Trimeris (Nasdaq: TRMS) -$2.62; Reports Q4 earnings, Amends research agreement with Roche and announces management changes.

Accuray Incorporated (Nasdaq: ARAY) -$1.65; Company reported a Q2 loss of $0.45. Total net revenues were $26.3 million for the quarter ended December 30, 2006, as compared to $11.3 million for the quarter ended December 31, 2005, an increase of 133 percent.

http://www.streetinsider.com

Posted on: March 16, 2007 – 12:40 pm in Research

RLR Capital Raises Hypercom (HYC) Stake to 5.1%, Wants Repurchase, Curtail of Acquisition Plans and Possible Sale

In a 13D filing on Hypercom Corporation (NYSE: HYC), RLR Capital Partners disclosed a 5.1% stake (2.7 million shares) in the company. This is up from the 539K share stake the firm disclosed for the quarter ended December 31, 2006.

The firm also disclosed a letter to the company urging the company to repurchase up to 18 million of its outstanding Shares, curtail acquisition plans until improvements are seen in the core business and, if operational improvements fail to show progress in 2007, commence a review of strategic alternatives, including a possible sale.

Read More »

Posted on: March 16, 2007 – 12:39 pm in SEC

Barington Suggests Spin-Off or Sale of Griffon (GFF) Telephonics Subsidiary and Buyback

From 13D Tracker

In an amended 13D filing on Griffon Corporation (NYSE: GFF), 5.24% holder Barington Capital disclosed a letter sent to the company’s Chairman and CEO Harvey R. Blau outlining a number of measures that Barington believes will improve shareholder value for the benefit of all of the Company’s stockholders. Barington said it sent the letter because Mr. Blau has not returned their phone calls.

In the letter the firm said, "We believe that Griffon’s current stock price does not reflect the intrinsic value of the Company’s operating divisions. In particular, it is our belief that the market has been undervaluing the Company’s Telephonics subsidiary as well as what we view to be Griffon’s core businesses – Garage Doors and Specialty Plastic Films."

Barington said, "we believe that the Company’s Telephonics subsidiary should be valued at 9-12 times its Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA), or approximately $400 – $550 million." Barington suggested a initial public offering, a tax-free spin-off or an outright sale ofthe subsidiary.

Barington also encouraged the Company to incur additional indebtedness and use the proceeds to repurchase stock, saying the company is under leveraged. The company said with debt and excess cash they could repurchase 15-20% of the Company’s outstanding shares.

Barington also recommended cost reduction initiatives, divestiture of installation services and improved corporate governance.

Read More »

Posted on: March 16, 2007 – 12:37 pm in SEC

Viacom’s Redstone Just Hedging Google/YouTube Bets?

From Internet Oursider

RedstoneOne massive old media conglomerate, Viacom, is so outraged about Google’s "willful copyright infringement" that it is suing Google for $1 billion.  Another massive old media conglomerate, CBS, finds Google so easy and fair to deal with that it has struck a major clip-distribution deal.  Is this strange?  Only because both conglomerates are run by the same man.

Possible interpretations:

  1. Sumner Redstone really has gotten absent-minded in his later years.
  2. Les Moonves actually does run CBS.
  3. Phillippe Dauman actually does run Viacom.
  4. Sumner Redstone still is a clever fellow…one who wants to continue to gather as much information as possible while he decides what to do about YouTube.

Interpretation 1 is possible, but unlikely.  Interpretations 2 and 3 are inconceivable.  So my money’s on No. 4.

Posted by Henry Blodget on March 16

http://www.internetoutsider.com/

Posted on: March 16, 2007 – 12:35 pm in Media

Vidmeter: Big Media Clips Not So Popular

From Internet Outsider

3dlogo Following up on yesterday’s post about Vidmeter’s "Top 200" video rankings, a reader suggested I look at "daily" numbers instead of "all-time" numbers, because most of the Big Media clips might show up in the latter.  So I scanned the daily numbers.  And I didn’t seen any Viacom stuff there, either.

Again, the goal here is to try to get a sense of how popular Viacom (and other Big Media) content is on YouTube, and, thereby, determine who has the upper hand in the Google-Viacom negotiations.  The consensus is that Viacom’s content–Jon Stewart, Colbert, etc.–accounts for a huge percentage of YouTube’s total views.  As I described yesterday, however, I have seen no evidence that supports this. 

When I scanned Vidmeter’s Top 200 "all-time" most popular videos, for example, I did not find a single clip that was obviously Viacom’s (see yesterday’s post for details and caveats).  This morning, I did the same scan of the Top 200 clips from March 16th, and, again, I didn’t see any that I knew to be Viacom’s.

Now, this may just be because Viacom’s clips aren’t available anywhere but on the Viacom site–which Vidmeter doesn’t track.  (And unfortunately, the Vidmeter rankings don’t go far enough back to easily check the pre- and post- YouTube removal.)  Viacom’s fans will no doubt favor this latter interpretation.  Working against it, however, is the fact that the Vidmeter listings don’t include many clips from other Big Media players, either–even ones that GooTube has licensing deals with (there are a couple from the BBC, for example, but not dozens).  In short, if Big Media content dominated online video views, I would expect to see some evidence of this in the Vidmeter listings–and I don’t. 

 

Posted by Henry Blodget on March 16, 2007

http://www.internetoutsider.com/

Posted on: March 16, 2007 – 12:33 pm in Internet

Cramer Pans Newspapers

On today’s WALL STREET CONFIDENTIAL video on TheStreet.com, Cramer talked Gannett’s (GCI) story about advertising not being that great.  Cramer noted the circulation is actually not going down that much, but the advertising money is not staying the same in papers because advertisers are not reaching the target audience in papers that they want.  Newspapers are not the means that people get their information anymore.  This is not a growth business anymore and Cramer said it is "not a business" by his definition.  He thinks they could fire everyone.  NYT has a $500M newsroom and maybe they could make it a $100 million newsroon, and you can hear what Cramer calls their journalism.  Cramer said it can all be done on the web now.  He wants out of Gannett (GCI) and New York Times (NYT).  If you look at NYT they are not down as much because they do have more online presence and more online efforts than most other newspaper operators.

As far as Blackstone going public, Cramer said this is their ability to gouge and this is the maximum Bamboozling of this.  He congratulates it.

Many other newspaper companies are down as well, even though they weren’t mentioned:
Tribune (TRB) -2%, McClatchy (MNI) -2.8%, Belo (BLC) -1%, and Lee Enterprises (LEE) -1.3%.

 

Jon C. Ogg
March 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: March 16, 2007 – 11:59 am in Cramer, Media, Old Media

Wal-Mart the Ex-Banker; They Still Don’t Get It

Wal-Mart (WMT) has withdrawn its Industrial loan charter application, in what is an obvious throwing in of the towel.  This will generate a sigh of relief among community bankers and regional finance and banking operations. 

What is odd is that if you read through the comments and quotes you will see that this company has not learned what the public and the media are trying to tech it: humility and a better personality.  I have personally noted that Lee Scott is not doing the right job of leading the company and not helping out investors.  He needs to go for sure, and his recent pay package "bonus" is one that went above and beyond what investors would consider an alignment with shareholders.  The company needs a new face, and if the rest of the board and the Walton heirs would get their act together and replace Scott with a better face person it would generate a better feel from Wall Street. 

After reading this woman’s comments below it may even be evident that the company need an entire Spring cleaning.  Wal-Mart Financial Services President Jane Thompson released the following statement today (condensed from original version):

"We notified the FDIC today that Wal-Mart has withdrawn the application we made in July 2005 for an Industrial Loan Company (ILC) charter.  This action follows January’s FDIC decision to extend the moratorium on a number of pending ILC applications.  Unlike dozens of prior ILC applications, Wal-Mart’s has been surrounded by manufactured controversy since it was submitted nearly two years ago. At no stage did we intend to use the ILC to establish branch banking operations as critics have suggested — we simply sought to reduce credit and debit card transaction costs.  Wal-Mart’s financial services already save customers over $245 million a year so they can live better. Since the approval process is now likely to take years rather than months, we decided to withdraw our application to better focus on other ways to serve customers. We fully intend to continue to introduce new products and services that champion those who deserve convenient, lower priced financial services."

This reads just like the normal belligerent Wal-Mart of late.  The company tried coming out with a new commercial campaign that showed a better, kinder, and more generous Wal-Mart.  It just made a huge deal in China that investors should frankly be ecstatic about because it was an instant doubling of its presence in China for what seemed like a bargain.  But this company needs to learn to smile and show a better face.  I will be the first to admit that there are always going to be anti-Wal-Mart activists regardless of what the company does, but the company can make certain attempts that it is not making.  For heaven’s sake, stop whining.  Some critics can never be pleased, but that doesn’t mean keeping the same strategy is the right move.  The company needs to find a spokesperson and face man like a Will Rogers that knows Wall Street and Main Street. 

Will Rogers probably never met Lee Scott.  Lee Scott is the head of the company and he should not let any spokesperson issue a whining statement like this.  He just got a $22 million bonus because of some internal sales targets, and that is after a $5.23 million salary and a total package that amounted to roughly $15.7 million.  It is amazing that shareholders haven’t picketed the headquarters when the consumer activist groups are the ones on the offensive. 

The tides were against the company ever launching a banking unit because of how Wal-Mart has dominated the retail sector.  The company should be thankful if you think about it, even if they claim to only want to save on their internal processing fees.  Sure, and we are all swim suit models.  There was so much talk that Wal-Mart was going to get in the mortgage business, and now the company at least doesn’t have to worry about getting caught up in the Sub-Prime Slime that has been the prevailing theme of the last two weeks.  Anyhow, enough about this for now.  This was about as obvious 2+2=4 and the company just needs to learn to act better. 

"Always Low Prices" may be the company slogan, but shareholders don’t want it to pertain to the price of their stock.

Jon C. Ogg
March 16, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: March 16, 2007 – 10:40 am in Banking, Consumer Goods, Financial Stocks, Retail