Daily Archives: June 20, 2007

Coley Pharmaceutical (COLY): Another Biopharma Collapse

Coley Pharmaceuticals (COLY) is yet another small-cap biopharma one-trick pony that fell apart like a cheap clock. Pfizer (PFE) had been conducting trials of a lung cancer drug licensed from Coley, and a review committee says test have been ineffective.

Trials will be discontinued. Coley lost $35 million last year on revenue of $20 million, and the bottom line has been that way for three years.

It is a miracle of sorts that the company’s shares hit $13.90 late last year. They have not traded below $8 over the last 52-week period. But, today they fell to $2.99, which is the only part of the entire affair that makes any sense.

Douglas A. McIntyre

Posted on: June 20, 2007 – 7:39 pm in Uncategorized, ,

Dow Jones (DJ) Board Lets Itself Off The Hook

The board at Dow Jones (DJ) has had a problem since the first moment that Rupert Murdoch decided to offer to buy the company. As fiduciaries they were bound to act for all shareholders. But, they backed away from that obligation because they knew that the Bancroft family had voting control of Dow Jones. They acted as if they had no power to act, and, in many ways they did not.

But, the board has made a clever decision. It will now take the lead in negotiations with Mr. Murdoch and any other buyers. It can bring a deal to final terms. It can recommend a deal. It can vote in favor of a deal. If the Bancroft family wants to exercise it ability to veto all of this, then sobeit. The board will have carried out its duty to the best of its ability.

In some ways it is a surprise that the Dow Jones board has taken so long. Their duty began when the offer was made. Perhaps it was a courtesy to the family that has kept watch over the business for so long, even if they have not always done a perfect job. But, they should not have waited at all.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: June 20, 2007 – 7:21 pm in Uncategorized,

Cramer Calls Brookfield Asset Mgmt. the Next Berkshire Hathaway (BAM, BRK/A)

On tonight’s MAD MONEY on CNBC, Jim Cramer came out with perhaps the best endorsement a diversified company could get: he called Brookfield Asset Management (BAM-NYSE) the next Berkshire Hathaway (BRK-A) but on more of an international and infrastructure basis.  This stock has risen 744% since 1997 and 54% in the last 12 months. 

The company manages $70 Billion in property, infrastructure, land, and specialty funds.  Cramer really likes the CEO J. Bruce Flatt.  They own and manage independent power production as well.  The market cap is $22.25 Billion and has a P/E ratio of 19.9.  Shares rose 3% in after-hours trading to $39.41 and the 52-week trading range is $25.70 to $43.82.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 5:32 pm in Buffett, Conglomerates, Cramer, ,

Cramer Sticks With Tobacco & Sin Stocks (MO, RAI, VGR, UST, BUD)

Stock Tickers: MO, RAI, VGR, UST, BUD

On tonight’s MAD MONEY on CNBC, Jim Cramer came out very positive on Vector Group Ltd. (VGR-NYSE).  He noted that Carl Icahn is a big backer of the company and noted hat it has a monster yield and has hiked its dividends almost yearly.  In call-ins he also noted Altria (MO-NYSE) and Reynolds (RAI-NYSE) in regular tobacco, and even UST (UST-NYSE) in smokeless tobacco all as undervalued stocks.  As far as another sin name, he also noted Anheuser Busch (BUD-NYSE) positively in a call-in during the segment.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 5:20 pm in Cramer, Tobacco, , , , ,

Obama & Clinton Criticize Bush Stem Cell Veto (STEM, GERN, ASTM)

Stock Tickers: STEM, GERN, ASTM

Senator Obama has issued a statement regarding President Bush’s veto of the Embryonic Stem Cell Bill:

Senator Obama noted:  "By vetoing funding for stem cell research once again, the President is deferring the hopes of millions of Americans who do not have the time to keep waiting for the cure that may save or extend their lives. The promise that stem cells hold does not come from any particular ideology, it is the judgment of science, and we deserve a President who will put that judgment first and make this promise real for the American people."

Hillary Clinton noted (condensed): "You know, later today, apparently, the president will veto a bill passed by Congress to support stem cell research……Now, this is research that…holds such promise for devastating diseases. Yesterday, I met with a group of children suffering from juvenile diabetes. I co-chair the Alzheimer’s caucus in the Senate. I’ve worked on helping to boost funding for research to look for cures and a way to prevent so many devastating diseases. And we know that stem cell research holds the key to our understanding more about what we can do. So let me be very clear: When I am president, I will lift the ban on stem cell research…. This is just one example of how the President puts ideology before science, politics before the needs of our families, just one more example of how out of touch with reality he and his party have become. And it’s just one more example as to why we’re going to send them packing in January 2009, and return progressive leadership to the White House."

Stem cell investing is an issue that is frankly more politically igniting than perhaps any other issue for investors.  The key stem cell stocks that investors place bets on with the rise and fall of stem cell issues are StemCells Inc. (STEM-NASDAQ), Geron (GERN-NASDAQ), and Aastrom Biosciences (ASTM-NASDAQ).  It is always interesting which politicians and which candidates are pro or con on political issues that have implications for individual stock sectors.  If stem cell investing is yor primary focus, Obama is one of your friends. If not, well that answer is obvious too.

StemCells (STEM) closed down 2.3% at $2.48; Geron (GERN) closed down 3.1% at $7.39; and Aastrom (ASTM) closed down 2.1% at$1.39.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 5:10 pm in Biotech, , ,

Biotech Implosion: Coley Pharmaceutical Group (COLY)

Shares of microcap biotech Coley Pharmaceutical Group (COLY-NASDAQ) saw shares get pounded late on Wednesday afternoon.  Right before 2:00 PM EST, the company announced that its partner Pfizer (PFE-NYSE) had discontinued and exited its pact with Coley in the development of lung cancer investigational compound PF-3512676 as a combination with cytotoxic chemotherapy. This also included two Phase 3 clinical trials and two Phase 2 clinical trials.  Ouch.  The independent data safety monitoring committee determined there was no additional clinical efficacy over that of chemotherapy alone.  "No efficacy" is one of those snippets that is worse for biotechs than "abnormal events" or even "Severe side-effects." 

Robert L. Bratzler, Ph.D., President & CEO of Coley: "This news is surprising based on the signs of clinical activity observed with PF-3512676 in Coley’s Phase II randomized clinical trial and we are disappointed with this setback in the program.  We remain focused on advancing our portfolio of TLR Therapeutic candidates for the treatment of cancer, allergy and asthma, lupus and rheumatoid arthritis, and as a vaccine adjuvant, including novel small molecules and RNA- based drugs targeting TLRs7, 8 and 9."

Coley closed out the day down 59%, or $5.03, down to $3.46 on the day.  The 52-week trading range had been $8.00 to $13.90.  Intraday lazard cut this from Buy to Hold.  The company now only has a $91 million market cap.  At the end of last quarter the company ended with more than $97 million in cash, but total liabilities carried on the books were listed as $48 million.  This will essentially drop the company to even less in revenues, although it does still have partnerships and collaborations on other candidates with Sanofi-Aventis (SNY-NYSE/ADR), GlaxoSmithkline (GSK-NYSE/ADR), Novartis (NVS-NYSE/ADR), and the U.S. Government.

So far, Coley’s conference call has failed to generate any real support for the stock.  This hasn’t gone into the mode of a biotech zombie yet, but this is a pretty severe blow considering this was Coley’s lead candidate.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 4:37 pm in Biotech, , , , ,

MySpace Founder Makes An Offer for Dow Jones; Board Takes Over Negotiations

The entire process to buy Dow Jones (DJ) has been strange one.  In fact, it has been more than strange and just got even stranger.  The reports are that the board of directors is taking over the buyout negotiations from the controlling Bankcroft family.  The founder of MySpace’s parent Intermix Media, Brad Greenspan, has apparently made a rival $60.00 offer yesterday for the Dow Jones (DJ) company.

News Corp. bought MySpace via the Intermix acquisition in a deal that was a head scratcher at first that become one of the best Internet buys ever.  Interestingly enough, Greenspan had sued (and lost) News Corp. after the buyout over censorship and anti-competitive behavior. 

In a statement out of the company, the Board of Directors and representatives of the Bancroft family will conduct further discussions with News Corp. relating to the proposal and will oversee the exploration of strategic alternatives. Representatives of the Bancroft family, which owns shares representing a majority of the Company’s voting power, reiterated that any transaction must include appropriate provisions with respect to journalistic and editorial independence and integrity. Any acquisition will require the approval of the Board of Directors and shareholders owning a majority of the Company’s voting power.

Shares of Dow Jones closed up 3.2% on the day at $60.65.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 3:55 pm in Corporate Governance, Media, Mergers and Buy Outs, Shareholder Issues, ,

Massive List of 52-Week Lows (June 20, 2007)

Stock Tickers: AVR, BCRX, CACH, CHCI, COLY, CTIC, FSII, HOV, HR, INFS, LEG, MTH, PEIX, RSYS, SCSS, SEPR, SNY, STAA, USBE, UTSI, VSE, YSI

Once again, many many more losers…..This list is larger than most of recent note.  There is just about any given day where there are fresh 52-week lows:

Aventine Renewable (AVR)…-3.9% to $14.09; $14.60 prior low.  Watch the renewable energy names as they are plentiful on 52-week lows.

BioCryst Pharma (BCRX)…-3.3% at $6.92; prior 52-week low $7.13; follow-on weakness from Peramivir Monday.

Cache (CACH)…-2.7% to $13.92; not lowest intraday but low close.

Comstock Homebuilders (CHCI)…-4.4% to $2.83; another stinking homebuilder.

Coley Pharma (COLY)….-59% to $3.46; $8.00 prior lows; intra-day implosion as Pfizer ditches its cancer drug.

Cell Therapeutics (CTIC)…-9.4% to $3.09; prior 52-week low was $3.38.

FSI International (FSII)….-13% to $3.43; $3.91 was prior low; weak guidance; hedge fund pressures CEo.

Hovnanian Enterprises (HOV)…-3% to $19.08; prior 52-week low $19.53; another stinking homebuilder.

Healthcare Realty (HR) -2.2% to $28.34; prior 52-week low was $28.57; this one goes lower and lower each week it feels like.

InFocus (INFS) -4% to $2.33; follow-on weakness after CFO quit; stock imploding….

Leggett & Platt (LEG)…-0.7% to $21.92; not tru 52-week low but low close; continued weakness after estimates cut from housing.

Meritage Homes (MTH)..-1.5% to $28.75; another stinking homebuilder.

Pacific Ethanol (PEIX)…-2.35 to $12.35; lowest close of late; and we thought ethanol was king…..

Radisys (RSYS)…-3.8% to $12.80; not true low but low close and hit intraday lows; no news today.

Select Comfort (SCSS)…-2.1% to $16.03; prior low $16.09; weak housing must mean weak bed sales; maybe hamocs are the new rage?

Sepracor (SEPR)…-2.5% to $43.67; prior 52-week low $43.84; insiders exercising stock options this week; P/E ratio drifting lower and lower; now down 33% from highs.

Sanofi-Aventis (SNY)…-1.8% to $40.84; prior low $41.09; drug woes continue; worries they’ll dilute to buy Bristol-Myers.

Staar Surgical (STAA)…-2.85% to $4.09; $4.14 prior 52-week lows; no news, but not a ’staar’ after all.

US Bioenergy (USBE)…-2.6% to $10.67; $10.78 prior low; busted IPO looks like worse getting even worse.

UTSarcom (UTSI)…-3.8% to $5.28; $5.43 was prior 52-week low; down more than 50% in last year; the beatings will continue until leadership improves AND until they actually report and open the books.

VeraSun (VSE)…-4.7% to $13.08; $13.69 was prior 52-week low; ethanol slide continues.

u_Store-It Trust (YSI)…-2.9% to $16.97; $17.05 was prior intra-day low; no news, but they obviously aren’t storing enough.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 3:38 pm in HI/LOW, , , , , , , , , , , , , , , , , , , , , ,

Did Congress’ Letter to FCC Hurt XM & SIRIUS Merger Chances? (XMSR, SIRI)

Yesterday was a bit of an odd piece of news on the XM Satellite Radio (XMSR-NASDAQ) and the SIRIUS Satellite Radio (SIRI-NASDAQ) merger.  A group of more than 70 US Congressmen (72 members according to public news reports) signed a formal letter in opposition of the merger.  Sure, the National Association of Broadcasters, which is vehemently against the merger, probably backs many of these congressmen.  But the truth is that it isn’t just rare for a large group in Congress to sign a letter against a merger.  Sure, there are oversight committees and interest groups that speak for or against such issues, but this is different.

M & A Researcher (www.maresearch.com) has maintained a one in three chance that the merger succeeds, although it notes recent political involvement tends to push the odds down slightly and that it is too early to suggest that opposition can not be overcome.

Yesterday’s news of Volkswagen carrying SIRIUS satellite radios in 80% of its models mattered very little because of the opposition.

What is very interesting is that the National Association of Broadcasters has been very much against this merger and they are in my opinion the ones ultimately behind yesterday’s push.  The reason for opposing this is simple: Follow the money, like I’ve always maintained.  If they can block this merger, it may implode one or both of these as a viable and financially healthy operation.  SIRIUS did get financing already that will help carry it if needed, but it will potentially put the creditors in control of the company if the worst case scenario occurs.  XM can do the same, and has already made a creative financing pact by selling off satellite nodes that basically created a real estate value to a satellite in orbit.

This is a long ways from over.  What else is certain is that the satellite radio companies need and want the merger to get approved and to go through more than the opposition wants it blocked.  Terrestrial radio has been under fire in a manner that you would think they are a newspaper association, although satellite radio has yet to crush it.  There is room for both, and it is obvious the terrestrial radio operators are trying to kill the competition.  If satellite radio was a critical infrastructure operation the blockage attempts would make sense in that it would be a true monopoly.  But the monopoly here that would be created is truly just a monopoly on an alternative system that is purely opt-in and comparably one that costs money versus what is free.

SIRIUS shares are down another 1% today at $2.86 and XM shares are down 1.6% at $10.77.  As noted, this one is a long way from over. 

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 12:35 pm in Mergers and Buy Outs, Regulation, Satellite, Wireless, ,

JetBlue (JBLU) Gets No Lift

JetBlue (JBLU) in a filing with the SEC, said that its operating margins in Q2 would be 9% to 11%, which was higher than previously forecast. But, the stock managed to go nowhere, up about 1% to $10.98 against a 52-week high/low of $17.02/$9.15.

Granted, most airline stocks are down due to rising fuel costs and discounting, especially on US routes. JetBlue has not recovered from its customer services disaster during snow storms in February, but some good news should help the shares.

Wall St. may be coming to the conclusion that JetBlue is just too small. Revived airlines like Delta (DAL) and long-time operators like American (AMR) have the advantage of scale and and the ability to offer service to hundreds of cities. JetBlue’s claim to fame was that it was a nice company to fly with.

Now that its reputation is gone, an improvement in operating margin just fails to impress.

Douglas A. McIntyre

Posted on: June 20, 2007 – 10:27 am in Uncategorized, , ,

Nintendo Close to Overtaking Sony’s Size

Stock Tickers: NTDOY, SNE, AAPL

There is an interesting take out of Reuters in Japan today, showing that Nintendo (NTDOY-OTC) is catching up to Sony (SNE-NYSE/ADR) in market value (market cap in U.S.).  The report says that Nintendo has overtaken Matsushita today and is now closing on Sony.  Nintendo’s market cap of 6.3 trillion Yen is equivalent to almost $51 Billion today, compared to 6.23 trillion Yen for matsushita and 6.64 trillion for Sony.  Nintendo shares have risen nearly four-fold compared to a more than 70% gain out of Sony.

Last month’s NPD data put Nintendo’s Wii gaming system outselling the PlayStation 3 console by 3-1 in Japan and 2-1 in the U.S.  The Nintendo DS handheld gaming system is also chugging far more in market share than the Sony PSP. 

Reuters gave some basic data observation here, but there are many things to consider far outside of the article.  Nintendo has found a way to reinvent itself while Sony has found a way to marginalize itself.  From a U.S. standpoint, Sony is rapidly becoming a company that has more expensive plasma and LCD TV’s and has a gaming system that costs too much.  The good news is that they have other electronics, cool digital cameras, and a movie/entertainment studio that buyers don’t shy away from.  Nintendo is all-gaming and has been knocking the socks off Sony.  Sony is also the one that stupidly wasn’t able to take the Walkman to the next level, which allowed Apple’s (AAPL-NASDAQ) iPod to takeover the world.  Nintendo spent roughly a decade in the backseat after the Sony PlayStation took the world by force, and now it looks like it is getting some payback.

The law of big numbers will probably come into play at some point, but right now it is hard to find a true-believer in Sony.  Sony may even have to further consider some serious strategic alternatives sooner rather than later.  Last week we noted that Nintendo needs to adopt a better ADR program rather than its OTC-quoted stock, and that still seems like a good idea.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 10:20 am in ADR, Video Games, , ,

Communists Give Google (GOOG) Content License

You have to love the communists. In China, to be a news distributor, a company must be approved by the country’s Ministry of Information and Industry. Google (GOOG) got this approval recently, and that will give it the opportunity to mount a bigger challenge against Chinese search leader Baidu (BIDU).

One analyst quoted by Reuters said: "The license to provide content to audiences is critical to attract big advertisers, and also helps them try to have more content."

Although reliable figures are hard to come by, Baidu’s share of the search market in China appears to be about 60% to 25% for Google. Yahoo! (YHOO) is a distant third.

The Chinese obviously like their search home grown. It may be that due to the complexities of the language Baidu will be able to maintain its lead despite the money that Google can pour into a market that now has the second largest number of internet users after the US.

If there is some magic to being a news source in China, perhaps Google will get a break.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: June 20, 2007 – 9:53 am in Uncategorized, , ,

DRAM Prices Rise, Partly on Anti-Smuggling Fight in China (MU, TSM, STX, WDC)

Stock Tickers: MU, TSM, STX, WDC

DRAM chip prices have almost always had a trend…Lower prices.  That isn’t always the case but over the long-term that has been the case.  Earlier this month we noted some calls for higher DRAM chip prices later in the year, and it looks like ‘later’ was sooner rather than later.   Interestingly enough, a report out of DRAMeXchange is saying that smuggle-fighting in southern China has forced some channel distributors in Shenzen to pre-stock inventories and that has driven up prices.  Apparently China is willing to fight smuggling if it is coming into their country because it gets to impose a 17% VAT on imported goods.  It appears the recent crackdown efforts have forced distributors to buy legitimately on the spot market because of increased penalties.

DRAMeXchange has also said that a prolonged production cycle when transitioning to 70 nanameter production has also boosted chip prices.  Taiwan saw chip production cuts in Taiwan that lowered supply, although that is expected to smoothen in July and August.

Here is a quote for ahead: Projecting DRAM contract price in 2HJun, DRAMeXchange sees room for growth along with obvious demand pick-up. Contract price for DDR2 667MHz 512MB should stay in the range of US$15-16, similar to that of 1HJun’s. In light of the upcoming PC seasonality in 2H07, some PC OEMs who ink long-term contracts with chipmakers, also helped holding prices firm. If the DRAM spot prices sustain its upward trend throughout June, we anticipate that DRAM contract price to see persistent upward trend in July as well.

Hard disk drive makers are indeed getting some competition from solid-state drives.  Higher-end notebook PC’s are hinting that SSD is indeed coming into production because of power saving efficiency, strong shock resistance and faster boot-up time.  It’s too soon to write of HDD makers like Seagate (STX-NYSE) and Western Digital (WDC-NYSE) because these high-end SSD notebooks can easily be more than double the cost of standard HDD notebooks.  Some outside reports I have seen do not out SSD will make a large dent until 2009 and beyond.

Share of US-chip leader Micron Tech (MU-NYSE) are up more than 3% today and the even larger chip player Taiwan Semiconductor (TSM-NYSE) is seeing shares up 1% on the day.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 9:00 am in Research, Semiconductor, , , ,

Why Would Anyone Watch YouTube On An iPhone?

Apple (AAPL) has announced that it will offer 10,000 clips from Google’s (GOOG) YouTube that will play with on its iPhone when the device launches.

Apple will put the video into a different format that YouTube does to improve quality and save battery life.

But, a look at the video selections on YouTube makes any sane person wonder why a consumer would want to watch pet tricks and laughing babies on a small screen.

The iPhone has enough launch advantages. It does not need another that debases the device.

Douglas A. McIntyre

Posted on: June 20, 2007 – 8:37 am in Uncategorized, ,

MGM MIRAGE, No Tracinda Buyout (MGM)

MGM MIRAGE (MGM-NYSE) is seeing shares down over 10% in pre-market activity after the company has confirmed that Kirk Korkorian’s has changed his mind about the major shareholder Tracinda Corp pursuing an acquisition of the company.  Kerkorian had expressed an interest in some of the key Vegas properties last month.   Tracinda Corporation advised the Company’s board of directors at yesterday’s regularly scheduled meeting that it had determined not to pursue a possible acquisition of the Bellagio and CityCenter properties in Las Vegas.  Pursuant to this withdrawn interest, the board of directors terminated the ‘transactions committee" that had been formed to consider any proposal that Tracinda might choose to make.

Instead of this potential merger, MGM MIRAGE has signed a multi-billion dollar Las Vegas development pact with Kerzner International in a 50/50 joint venture for a behemoth resort property on the las Vegas Strip.  The resort will be designed for 40 to 78 acres of land owned by MGM MIRAGE at the corner of Las Vegas Blvd. and Sahara Avenue.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 8:10 am in Casinos, Mergers and Buy Outs,

Pre-Market Stock News (June 20, 2007)

(ACI) Arch Coal divest Central Appalachian mining complex to Alpha Natural Resources.
(ALDN) Aladdin Knowledge announced a 410M share buyback plan.
(CC) Circuit City posted wider loss and withdrew guidance.
(FDX) FedEx $1.96 EPS vs $1.96e.
(HD) Home Depot announced a $22 Billion total share buyback after confirming the supply unit sale for more than $10 Billion.
(JNC) Nuveen Investments going private for $65.00 per share.
(KMX) CarMax $0.30 EPS vs $0.30e.
(LGF) Lion’s Gate President signed a long-term contract.
(LOGI) Logitech announced new buyback plan that allows up to $250 million total for share buybacks.
(MNI) McClatchy said may ad revenues fell 11.5% and total revenues were -10.4%.
(MS) Morgan Stanley $2.45 EPS vs $1.98e.
(MTSX) Metal Storm has asked for stock to be halted because of request for proposal on potential Navy contract.
(PGS) Petroleum Geo-Services acquired MTEM LTD. For $275 million.
(SFG) StanCorp CFO is leaving the company.
(TDSC) 3D Systems raised $20.5 million in private placement.
(TXT) Textron booked more than $1 Billion in Cessna orders from NetJets.
(WMT) Wal-Mart confirmed it would open 1,000 Wal-Mart money centers by end of 2008; will unveil Wal-Mart money card.
(YHOO) Yahoo! may have News Corp seeking a stake in the company.  Yahoo! has also signed 6 mobile deals with operators in Asia Pacific to reach nearly 100 million users.

Jon C. Ogg
June 20, 2007

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

Posted on: June 20, 2007 – 7:27 am in Pre-Market Activity

MySpace Gets Into Instant Message Business

Google (GOOG), Yahoo! (YHOO), MSN, and AOL are already in the instant messaging business, so it would seem that there is not any room left there. But News Corp’s (NWS) does not seem to care. They are launching their own IM service for MySpace, and perhaps the big social networking site as a large enough user base to make it work.

AOL already has 50 million users for its IM service followed by MSN with over 24 million and Yahoo! with 22 million.

Because social network websites have not developed a robust revenue model, MySpace is trying everything from adding video and photo sharing to its new IM project. None of it is likely to help. Social network audiences are hard to segment and many people who use the sites are unlikely to take a shine to advertising. The web properties are like Hoovervilles for those surfing the web with nothing to do.

Instant messaging for MySpace is not likely to be much of a success.

Douglas A. McIntyre

Posted on: June 20, 2007 – 7:24 am in Uncategorized, , ,

The Ugliness The is Circuit City (CC)

Circuit City (CC) added to its disappoint run with a net sales decline of 4% to $2.486 billion for the quarter ending May 31.

Income from continuing operations was even worse. The company lost $83 million compared to a profit of $8 million in the period a year ago.

The company said it had cut out about $185 million per annum in costs, and the firm sales it expected "continuing volatility" in financial results. In English, the means they will not be very good. "Combined with an uncertain macroeconomic environment, for the time being, it is difficult to project sales and earnings performance for the balance of the fiscal year. As a result, we are withdrawing financial guidance at this time," the CEO whimpered.

CC shares were off 2% in the pre-market to $15.78 near their 52-week low.

Douglas A. McIntyre

Posted on: June 20, 2007 – 7:09 am in Uncategorized,

Pre-Market Analyst Calls (June 20, 2007)

APL raised to Outperform at Credit Suisse.
ARG raised to Buy at BB&T.
ASVI started as Buy at Oppenheimer.
BABY started as Buy at Oppenheimer.
BIOD started as Buy at B of A.
CEO raised to Outperform at Credit Suisse.
DRIV  raised to Buy at Jefferies.
FWRD raised to Peer Perform at Bear Stearns.
KOP cut to Neutral at UBS.
MXWL cut to Mkt Perform at JMP.
NOVA started as Hold at Jefferies.
NYX raised to Market Perform at Piper Jaffray.
OXY cut to Hold at Deutsche Bank.
PINN started as Sector Perform at RBC.
SLB cut to Neutral at Calyon (boutique).
SLH started as Hold at Citigroup.
SPNC started as Outperform at Piper Jaffray.
TWC raised to Outperform at Bear Stearns.
TWC started as Outperform at Wachovia.
UA started as Buy at UBS.

Jon C. Ogg
June 20, 2007

Posted on: June 20, 2007 – 7:09 am in Analyst Calls

Morgan Stanley’s (MS) Mega-Quarter

Morgan Stanley’s (MS) earnings from continuing operations were actually up 41% to $2.6 billion on a 32% rise in net revenue to $11.5 billion.

Underwriting, advisory service, and fixed income sales were up 39% to $7.4 billion, and that was the engine of the big financial firm’s growth. Pre-tax income in that group rose 55% to $3 billion. Wealth management, asset management and the Discover card businesses did fine, but could not match the pace of the company’s largest operating division.

It has to end some day as the private equity, hedge fund and equity markets continue to rocket upward. But, that day is not today.

Shares are up 2% in the pre-market to $89.60, just shy of the company’s 52-week high.

Douglas A. McIntyre

Posted on: June 20, 2007 – 7:00 am in Uncategorized,