Daily Archives: June 23, 2007

Major Financial Websites For May 2007

Looking at the May numbers for major financial websites points out the fairly significant differences between the numbers issued by NetRatings and ComScore.

The NetRatings figures show the following unique visitor numbers:

Yahoo! Finance (YHOO)                    14.7 million unique visitors

MSN Money (MSFT)                         13.1 million

AOL Money (TWX)                            10.6 million

Dow Jones Online (DJ)                       8.7 million

CNNMoney                                       7.1 million

Forbes                                              6.5 million

Reuters (RTRSY)                               6.1 million

Fool.com                                          3.4 million

TheStreet.com (TSCM)                      2.9 million

BusinessWeek                                 2.3 million

USA Today Money                           1.9 million

FT.com                                           1.4 million

The ComScore numbers, a different picture:

MSN Money                                     12.1 million unique visitors

Yahoo! Finance                                 11.4 million

AOL Money                                      10.3 million

Forbes                                              5.5 million

CNNMoney                                       5.2 million

Dow Jones                                        5.2 million

Reuters                                            3.3 million

BusinessWeek                                 1.9 million

TheStreet.com                                  1.7 million

Fool.com                                         1.6 million

The ComScore numbers show a year-over-year increase for

Yahoo, and fall-offs for Dow Jones, Reuters, and BusinessWeek.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com.

Posted on: June 23, 2007 – 6:49 pm in Uncategorized, , , , ,

GM (GM) At $40?

GM (GM) has not traded above $40 since late 2004. But, that could change.

Former GM parts operation Delphi, which entered Chapter 11 after its had become an independent company, apparently has a deal with the UAW. This agreement would allow the company to exit bankruptcy and would define GM’s obligations to the union for covering pay cuts.

The peace with the UAW would benefit GM in two other ways. It would prevent a strike at Dephi, which could easily shut GM down, and it will lower GM’s parts costs. Delphi’s operating costs will be down sharply with it plant closings and exporting of jobs. GM should be the beneficiary as Delphi can offer lower prices and still keep positive margins.

If GM’s own UAW negotiations this year go well, the company may only be a few steps away from being profitable in North America again.

Douglas A. McIntyre

Posted on: June 23, 2007 – 5:28 pm in Uncategorized

London Stock Exchange Buy Italian Peer

The London Stock Exchange is buying the Borsa Italiana, the big exchange in that country. The price is $2.2 billion. The goal is to become "the world’s capital market", according to Reuters.

Not likely.

The Nasdaq (NDAQ) still owns a large chunck of the LSE. And the NYSE (NYX) wanted to buy Borsa Italiana. The merger of the two Europe exchanges is simple going to up the bidding from the US. The arms raced between the two big US exchanges should soon line more pockets in Europe.

The LSE is now a more attractive property. Reuters writes "that together they accounted for 48 percent of the FTSE Eurofirst 100 index of companies by market value." It is a large enough operation so that it will not stay independent for long.

It would be a mistake to think that the only bidding for the newly combined European exchanges will come from America. Dubai International Financial Centre has already been mentioned as a possible buyer of LSE. With the new Chinese appetite for buying into things overseas like Blackstone, it is certainly possible that, with government backing, either the Shanghai or Hong Kong exchanges would look at a bid.

Too many buyers and only one exchange for sale?

Douglas A. McIntyre

Posted on: June 23, 2007 – 2:49 pm in Uncategorized, ,

Barron’s Blackstone IPO Cover Story: Crystal Ball or Tabloid? (BX, GOOG, GS, AAPL)

It’s no shock that Barron’s decided to make its cover story that of the Stephen Schwarzman picture from the Blackstone Group (BX-NYSE) IPO that closed on Friday. 

The article upfront points to not expect a Google (GOOG-NASDAQ) type of return, and noted an opinion that this was the most important IPO since Google.  It notes the shares are not likely to quintuple, but do they really think those that made this seven to ten times oversubscribed are thinking they will see a 5-bagger?  Investors are buying this for steady returns and to own a piece of the biggest craze since the Internet, but they certainly are not looking for quintuple returns.  With a $38 Billion market cap this 5X multiple would imply $190 Billion value down the road, roughly double the size of Goldman Sachs’ (GS-NYSE) current value of $96.7 Billion.

Barron’s says the true winners are Stephen Schwarzman and his partners, and since this is roughly a 10% stake in a Limited partner structure it may be hard to argue this.  Of course it also asks if this is the top of the buyout boon we have witnessed from private equity. 

Andrew Bary has made many great stories as a writer at Barron’s and it is hard to think that he is merely trying to knock what is present and a trend.  We have alluded to the media circus that has been going around pre-IPO about Schwarzman and Blackstone turning into a near tabloid sort of coverage.  This feels no different.  Of course, we’ll know in a few months or a year out after more hedge funds and private equity firms have come public AND after we know if the buyout craze ended. 

We all know many of these companies will have to re-IPO at some point down the road for the recapture of capital to mark gains to these funds.  That is the crystal ball issue, and it is always around a WHEN rather than IF.  It would just be nice if the media would cover this objectively, rather than like a tabloid or a circus.

What are the odds that Barron’s next weekend grandiose cover story has the picture of a just-released hot phone called the iPhone  from Forrest Gump’s friut company named Apple (AAPL-NASDAQ)?  Probably pretty high.

Jon C. Ogg
June 23, 2007

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

Posted on: June 23, 2007 – 2:28 pm in IPOs, Media, Mergers and Buy Outs, Private Equity, , , ,

An EBay (EBAY) Alliance With Yahoo! (YHOO)

When Ebay (EBAY) pulled all of its advertising from Google (GOOG), it took the risk of losing traffic and new customers. But, the auction site said "no", we actually did quite well. After the advertising was taken down, Ebay saw no drop in traffic.

Ebay ended up turning to TimeWarner’s (TWX) AOL, Yahoo! (YHOO) and Microsoft’s (MSFT) MSN to bring in new customers. Apparently, that worked.

Google had the hubris to plan a promotion of its online payment service, CheckOut, during a national meeting of Ebay’s competing system, PayPal. That made the folks at Ebay understandably upset.

Ebay has put some of its advertising back on Google. No one knows why, if alternatives worked so well. Maybe it was a head fake.

But, Ebay must have discovered that Yahoo!’s new Panama system was good enough to get customers, and that using it and other search services were fine replacements. Which leads to the question of whether two of Google’s natural enemies will do substantially more business together.

Yahoo! would probably give Ebay a preferred rate to get more Ebay text advertising. It would give the portal a premier customer to help market the new Panama technology. And, Ebay could avoid doing business with a rival that wants to damage its highly profitable PayPal operation.

It would be a marriage made in Hell. Yahoo! and Ebay’s stocks have been in the tank for the last year, but the vanquished make strange bedfellows.

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

Posted on: June 23, 2007 – 2:27 pm in Uncategorized, , , , ,

IPO Filing Alert: SandRidge Energy, Inc. (SD)

After Friday’s close, an energy drilling company called SandRidge Energy, Inc. filed to come public via an Initial Public Offering under the ticker "SD" on NYSE.  It may be worth a note that the company had a filing from early 2006 that was recently withdrawn, but the June 22, 2007 date is the new effective filing date.

SandRidge has not set terms yet, but the proposed maximum aggregate filing is for up to $690 million.  As far as underwriters it lists Lehman Brothers, Goldman Sachs, and Banc of America.

SandRidge is an independent natural gas and oil company concentrating in exploration, development and production in West Texas in a spot known as West Texas Overthrust, or “WTO,” a natural gas prone region where it has operated since 1986.  This includes the Piñon Field and its South Sabino and Big Canyon prospects.  SandRidge intends to add to its existing reserve and production base by increasing development drilling activities and exploration program in other prospects identified. As a result of 2006 acquisitions, it doubled net acreage positions in the WTO since January 2006 to become what it believes as the largest operator and producer in the WTO.  SadRidge also operates significant interests in the Cotton Valley Trend in East Texas, the Gulf Coast area, the Gulf of Mexico and the Piceance Basin of Colorado.  It owns and operates an extensive natural gas and oil property base with over 3,800 potential drilling locations (over 2,600 are in the WTO). As of December 31, 2006, it claims proved reserves were 1,001.8 Bcfe, of which 84.9% were natural gas and 99% were independently engineered; had 1,281 gross (916 net) producing wells. As of March 31, 2007, it had interests in over 1,093,852 gross (541,787 net) natural gas and oil leased acres and expects to have 30 rigs drilling in the WTO by the end of Q2 2007.

Tom L. Ward, the co-founder and former President & COO of Chesapeake Energy Corporation, purchased a significant ownership interest in June 2006 and joined as CEO and Chairman of the Board.  Since Mr. Ward joined the company it added eight new executive officers, substantially all of whom have experience at public exploration and production companies; and it added key professionals in exploration, operations, land, accounting and finance.  Its acquisitions have helped it grow rapidly with 2005 revenues at $287.6 million, 2006 revenues at $388.2 million, and Q1 2007 revenues $149 million (up from $85.9 million in Q1 2006).

Jon C. Ogg
June 23, 2007

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

Posted on: June 23, 2007 – 1:58 pm in IPOs, Oil & Gas,

Orexigen Therapeutics: Tricking the Mind Out of Being Fat (OREX)

Orexigen Therapeutics, Inc. (OREX-NASDAQ), a biopharmaceutical with an initial focus on obesity, has announced that data presented today at the American Diabetes Association 67th Scientific Sessions in Chicago from a sub-study of its Phase IIb multi- center clinical trial of Contrave(TM) demonstrated significant improvements in both visceral fat and insulin resistance.

Contrave is a proprietary fixed dose combination of bupropion sustained release and Orexigen’s novel formulation of naltrexone SR in a single tri-layer tablet. Contrave is designed to act on neurons in the brain with the goal of achieving appetite suppression, decreased food craving, and sustained weight loss.

Across the three Contrave arms, the mean reduction in visceral fat ranged from 13.7% to 16.7% after 24 weeks of treatment compared to a mean 4.6% reduction among the placebo group and the effect of Contrave was substantially larger than that seen with either of Contrave’s individual components when given alone.  Additional findings from this sub-study of 107 obese subjects revealed that Contrave improved measures of insulin resistance and demonstrated a positive impact on a number of other risk factors including triglycerides, cholesterol, and blood sugar.

The size of trial sample could be an issue, but this could be one more treatment option for the growing problems of obesity and diabetes.  Orexigen (OREX) closed down 9% at $14.29 on Friday after pre-releasing some of this data on Thursday.  It has traded in a range of $12.55 to $19.15 since coming public at the end of April.  Its market cap is $384 milllion and the two analysts cover it are positive: J.P.Morgan has an "Overweight" rating (no pun intended) and JMP Securities has a "Market Outperform" rating.

Jon C. Ogg
June 23, 2007

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

Posted on: June 23, 2007 – 11:45 am in Biotech,

Boston Scientific (BSX) Raises White Flag As Stent Problems Worsen

Boston Scientific’s (BSX) problem with its huge drug-coated stent business have become so severe that the company is looking at selling some of its assets. The stent have been blamed for clotting and heart problems in a number of patients. When BSX bought Guidant and took on $27 billion in debt, the company probably assumed that cash flow would handle debt load.

But, the stent business has continued to deteriorate. According to Reuters, the company may sell its shares in Aspect Medical (ASPM) and Cyberonics (CYBX). Aspect and BSX has already ended a joint venture to create brain monitors. ASPM shares are already at a 52-week low below $15, down from a high of $21.35. The Boston Scientific sale could send those shares down further.

CYBX shares are also near their 52-week low, trading at between $16 and $17. BSX may sell its 15% share in the company.

Boston Scientific’s other option for raising capital is to spin-off its endosurgery business.

JP Morgan has suggested that BSX could also get rid of several other businesses: "Those include the Meadox vascular graft business, which booked 2006 sales of around $100 million; Guidant’s cardiac surgery business, which recorded 2006 sales of $200 million; the Namic fluid-management business, which recorded 2006 sales of $80 million and the EP Technologies Cardiac Pathways catheter ablation business, with 2006 sales of $140 million."

But, bottom line, if the coated-stent business keeps moving down, so will BSX shares.

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

Posted on: June 23, 2007 – 8:06 am in Uncategorized