Daily Archives: April 14, 2007

The Week of Buyout Picks (April 9-13, 2007)

Stock Tickers: GOOG, AQNT, VCLK, TFSM, MSFT, YHOO, TWX, SLM, NNI, FMD, MEDI,HAL, WHT, MEH, AAI, COT, IPS, PALM, DELL, NFI, BCE, AA, DOW, WYN, NDAQ,GFI, KR, ABN, BNI, DCX

This week was a huge week for the all of the buyout investors and speculators.  There were more ongoing discussions being reported in the media than you could imagine.  In a world of private equity gone wild, its hard to not be a bit cynical on the raw number of these.  This is also after Google (GOOG) announced it would pay $3.1 Billion to acquire the master online advertising company DoubleClick.

Since the Google buyout of DoubleClick you might as well go ahead and throw these three into the hat: aQuantive (AQNT), ValueClick (VCLK), and 24/7 Real Media (TFSM).  We addressed these back pre-market on April 2 when the DoubleClick buyout was starting to surface.  Microsoft (MSFT), Yahoo! (YHOO), and even Time Warner’s (TWX) AOL unit may have to all look after these companies now that they let Google takeover DoubleClick.

Sallie Mae (SLM)….media saying it could go to private equity, of course.  This even has Nelnet(NNI) and First Marblehead (FMD) up in hopes that if one student loancompany gets gobbled it means the others could too (or at least maybethe worst could be behind)…. who knows.

MedImmune (MEDI) exploring alternatives…."put itself up for sale."

Halliburton (HAL) for Weatherford (WFT)….WFT up 3% today as a result.

Midwest Air (MEH) snubbing Airtran (AAI) again, Airtran says the bid is high enough.  Do you believe them?

Cott (COT) in talks with private equity firms on a Cadbury Beverage combination…..stock up 28%…."Welcome Back Cot….."

IPSCO (IPS)….up $20 since earlier in the week, company confirmed "talks that could lead to a sale," but not with whom…..

Palm (PALM) re-rumored as potential bait for Dell (DELL), these rumors just won’t die.

Novastar Financial (NFI) exploring options….a Takeunder for subprime slime?

Bell Canada (BCE) now under potential takeouts by the Ontario Teachers Pension Fund, so to speak.

Alcoa (AA) survived its earnings after a crummy history…..many think this one still gets gobbled…..

Dow Chemical (DOW) rumors of a private equity buyout just won’t die,even if they deny the rumor and fire 2 executives for "holdingunauthorized talks" with outside parties.

Wyndham Worldwide (WYN) could be the next buyout for its valueaccording to Cramer, as the only Cendant piece that hasn’t made thegrade.

Kroger (KR) denied it is interested in going private…..maybe WallStreet recalls that grocery store margins are low.  The good news isthat you can now get a huge portion of the items you can at WholeFoods, without the "Whole Paycheck" price.

NASDAQ (NDAQ) held talks with the Oslo Stock Exchange.  Supposedly nodeal is imminent, but right now if you are an exchange you arebasically takeover bait (hence, our BAIT SHOP).

ABN AMRO (ABN) still on deck…..who, what, when, where????? Barclays (BCS)?

Gold Fields Ltd. (GFI) went up on what may have been a fake "buyout rumor or interest" from a Mr. Pastorini…..can you say "Weird?"

Interest in rails after Warren Buffett disclosed stake in BurlingtonNorthern Santa Fe Corp (BNI)….looks like Buffett feels differentlyabout rail companies than airline companies.

Magna International confirmed its role in ongoing Chrysler talks, part of DaimlerChrysler (DCX).

Jon C. Ogg
April 14, 2007

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

Posted on: April 14, 2007 – 7:55 am in Bait Shop, Mergers and Buy Outs, , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Unusual Options Activity (APR 14, 2007)

Stock Tickers: EDS, ESRX, SLM, WFT, HAL, IPS, YHOO, MER, MEDI, MEDX, DNDN, AAPL

Friday saw some strange options activity, but perhaps not as strange as in previous weeks. 

EDS (EDS) saw 11,675 contracts of the JUN07 $30 PUTS, which is highly unusual activity since its open interest was a mere 165 contracts.

Express Scripts (ESRX) saw 1,761 contracts of its JAN08 $85.00 CALLS.  Is someone hoping for a big action between now and then? With the mergers in the sector, anything is possible.

SLM, Sallie Mae, (SLM) traded 32,884 of the APR07 $45.00 PUTS.  There were also 8,314 contracts in the JUL07 $45.00 CALLS.  With the SLM buyout interest out there anything is possible.  SLM also has some fairly significant open interest in its call options of various months and various strike prices.

Weatherford (WFT) saw 3804 contracts of the MAY07 $55.00 CALLS.  That is no shock, considering there are rumors that Halliburton may try to buy the company.  It also saw its APR07 $50 CALLS trade 14,303 contracts, which means that this trading is betting on a deal happening before next Friday.

IPSCO (IPS) saw 2,646 contracts in the JUN07 $125 PUTS and the open interest was only 298 contracts.  Maybe someone doesn’t believe its "merger talks" are really going to materialize.

Yahoo! (YHOO) saw more than 50,000 contracts trade in each of its JUL07 $20 and $25 CALLS trade, so this must some options play on a way of owning the stock for less risk with way in the money calls going into earnings.

Merrill Lynch (MER) saw 34,223 of its APR07 $95 PUTS, but those are pretty well into the money.

MedImmune (MEDI) also saw more activity now that it has all but advertised a selling out price.

Medarex (MEDX) still has some enormous open interest in all of its surrounding strike prices out to JAN08, and this is one we sent out the options alert about because it looked like traders were trying to look for a volatility trade (playing PUTS & CALLS) like in Dendreon (DNDN).

Dendreon (DNDN) is one that actually still has a large open interest for this month because of the pop and its May open interest is huge May options as the contracts expire 3-days after the FDA "due date" of the approval verdict from FDA on Provenge.

Apple (AAPL) would be odd if it wasn’t any other day than the day after they delayed their Leopard OS launch date to accommodate the iPhone: it saw 22,123 of the APR07 $90 PUTS trade.

Jon C. Ogg
April 14, 2007

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

Posted on: April 14, 2007 – 7:30 am in Options

Barron’s Keynotes (April 14, 2007)

This weekend’s edition of Barron’s hit on some key names.

The cover story is on Adobe (ADBE-NASDAQ) with the prediction that the shares are set to go higher.  The video and photo editing and the new products launching are giving this one what they feel is a double-digit top-line and bottom-line growth for years into the future.  I have to admit, that purchase of Macromedia in the past for its Flashlets and video compression has paid off incredibly well for it and established a franchise that will go on until the next "next thing" like web video compression.

Barron’s also noted that Office Depot (ODP) is cheaper than rival Staples (SPLS).

K-Swiss (KSWS) is also a name that was discussed as a turnaround play.  It was noted that the stock is down 25% from highs and could even be acquired down the road.

Jon C. Ogg
April 14, 2007

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

Posted on: April 14, 2007 – 6:01 am in Press Digest