Daily Archives: July 15, 2007

Nasdaq (NDAQ): The Gang That Couldn’t Shot Straight?

Nasdaq (NDAQ) did not have much success buying the London Stock Exchange, so it settled for picking up Nordic stock market group OMX. The price tag was about $3.7 billion.

But, according to the Telegraph, the The Dubai International Financial Centre is preparing a bid which is about 20%. OMX shares have been trading slightly above the NDAQ offer, perhaps in anticipation of a counter bid.

NDAQ shareholders have not been enthusiastic about the exchanges prospects. Until a recent run, the stock was up only a little over 10% over the last year, running behind shares in NYSE Euronext (NYX).

Another embarrassment is hardly what Nasdaq needs now.

Douglas A. McIntyre

Posted on: July 15, 2007 – 5:28 pm in Uncategorized, ,

Would Ford (F) Sell Volvo?

Ford (F) has Jaguar and Rover on the block, but a late story from Reuters says that the big US car company may consider selling Volvo as well.

Ford may not get much money for any of the brands. A report in early July said that Ford hoped to get $6 billion for Jag and Rover. But, analysts who had seen the numbers pegged the figure at closer to $2 billion. Industry experts have said the DaimlerChrysler (DCX) will actually be out of pocket over time as it sells its Chrysler unit to hedge fund Cerberus. Car company do not seem to fetch much these days.

A better way to look at selling some of Ford’s overseas operations is not what they will do for the balance sheet, but the benefit it might have to focusing Ford management. With its domestic car business under siege, it could use all able hands.

Douglas A. McIntyre

Posted on: July 15, 2007 – 5:19 pm in Uncategorized, ,

BHP Billiton (BHP) Looks At Alcoa

According to MarketWatch, BHP Billiton (BHP) is looking at a possible deal to buy Alcoa. Both companies missed out on getting married when Rio Tinto (RTP) locked up a bid for Alcan (AL).

With Alcan’s shares up 100%+ over the last year and Alcoa up only 60%, even a premium offer would appear to be a good deal. BHP has a market cap of $144 billion to Alcoa’s $48 billion, so by relative size the buy-out would make sense.

At the end of all the dancing, there may just be one huge aluminum company left.

Douglas A. McIntyre

Posted on: July 15, 2007 – 5:12 pm in Uncategorized, , , ,

Motorola (MOT) and Research In Motion (RIMM): Same Market Cap

Business 2.0 points out that Motorola (MOT) and Research In Motion (RIMM) have about the same market cap at around $42 billion. The may tell Wall St. more about RIMM being overvalued than Motorola being trashed by investors. RIMM has revenue of $3 billion to Motorola’s $43 billion.

RIMM’a stock price is up 250% over the last year. Granted, in the last quarter, its revenue rise 76% to over $1 billion. Operating income rose the same amount.

The problem with RIMM’s valuation is the most of its sales are still hardware. In the last quarter, that was 76% of revenue. And revenue-per-device is falling. During the period, device revenue was up 90%, but the number of devices shipped rose 99%.

Services and software revenue, which should have higher margins, grew much more slowly. 48% and 29% respectively.

Motorola’s stock is a mess. It is down 5% over the last year. So, it could be argued that, given the company’s huge problems, it should be down more.

But, RIMM trades at 10x revenue. At a little over 5x, Apple (AAPL) is not even close, and its dominance in the portable media player industry is much greater than RIMM’s is in smart phones.

RIMM is expensive by any reasonable measurement.

Douglas A. McIntyre

Posted on: July 15, 2007 – 8:11 am in Uncategorized, , ,