Daily Archives: September 18, 2007

The Week of Share Buybacks (9/18/07) (MVSN, BRC, MOVE, LCRY, ZVUE, CHINA, AHO, BCO)

Macrovision Corp. (NASDAQ:MVSN) completed its $100 Million Share Repurchase; Board Authorizes Additional $60 Million Share Repurchase.

Brady Corporation (NYSE:BRC) announced that its Board of Directors authorized a share buyback program for up to 1 million shares of the Company’s common stock.

MONDAY 9/17/2007

Move, Inc. (NASDAQ:MOVE) announced that its board of directors authorized the repurchase of up to $50 million of its common stock.

LeCroy Corporation (NASDAQ: LCRY) announced that as part of its currently authorized share repurchase program, that this week it intends to commence open-market share repurchases under its share repurchase plan. In May 2006, LeCroy’s Board of Directors approved the adoption of a share repurchase plan authorizing the Company to purchase up to two million shares of its common stock. To date, LeCroy has purchased approximately one million shares under the plan. LeCroy has not purchased any shares since October 2006 when it acquired 850,000 Company shares in connection with the issuance of $72 million 4% convertible notes.

HandHeld Entertainment, Inc. (NASDAQ:ZVUE) announced that its Board of Directors authorized the repurchase of up to 1 million shares of HandHeld’s common stock, or approximately 6% of shares currently outstanding, over the following six months.

Rocket City Enterprises, Inc. (Pink Sheets:RCTY) announced that will be initiating a stock purchase program beginning immediately. The purchases will occur from time to time at the Company’s discretion.  No shares were noted as the amount, so congratulations.

CDC Corporation (NASDAQ: CHINA) said that since September 7, 2007, the date the company re-opened its trading window, the company and its subsidiaries have repurchased approximately 916,000 common shares at an average price of U.S.$7.42 per share. Since the beginning of the share repurchase program on May 2, 2006, the company has spent an aggregate of U.S.$46.8 million in connection with repurchases of the total U.S.$60 million authorized. In addition, company insiders have purchased approximately 200,000 shares, at a total value of more than U.S. $1.4 million, since September 7.

Ahold (NYSE:AHO) has repurchased 11,702,830 of its own common shares in the period from September 10, 2007 up to and including September 14, 2007. Shares were repurchased at an average price of EUR 10.1821 per share for a total amount of EUR 119.2 million. These repurchases were made as part of the EUR 1 billion share buyback program announced on August 30, 2007.  The total number of shares repurchased under this program to date is 22,258,162 common shares for a total consideration of EUR 225.7 million.

Last Friday, September 14, 2007, Brinks Co. (NYSE:BCO) capitulated.  It announced a new $100 million share buyback program, which represents just under 2 million shares at the current prices.  We feel this is the first of many possibilities that will reinvigorate shareholder values.  As such, this progressed from a watch list to an active stock in our "SPECIAL SITUATION INVESTING NEWSLETTER" which can be applied for in a trial on the link.  We offered what we feel is a more than satisfactory price target with upside, gave the reason and logic behind the call, and even went as far as offering a hedging solution with appropriate stock options for added downside protection.

If you enjoy reading about share buybacks, tune in daily around 6:00 to 7:00 PM EST as we update share buybacks every second or third day.

Jon C. Ogg produces the 24/7 Wall St., LLC Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: September 18, 2007 – 9:55 pm in Stock Buybacks, , , , , , , , , ,

Cramer Calls It Open Buying Season

On tonight’s MAD MONEY, Jim Cramer said he was taking away his "they know nothing!" button from his rant about the FOMC.  Now Cramer is saying the Fed has finally acted and now they can’t really be criticised because they now know.  He thinks this may avert a larger crisis.  Cramer said he wants you to tune out the people that say this rate cut didn’t matter, because this will be the first of many cuts.

He thinks you can buy almost everything now because almost everything will work now.  The sellers are basically done selling now.  If you want some of his idea lists, here are some:

  1. Here is his list of Top 9 Picks for 2007
  2. Here is his "New Four Horsemen of Tech"
  3. Here is his Mortgage Madness Portfolio
  4. Here are his numerous picks from the fantasy football stocks…
  1. Here are his Top China Picks
  2. Here are 10 of his Warren Buffet Stock Reviews, and a second group of them.

By the way, Cramer won a huge score with his "Mortgage Madness Portfolio" that performed so well today.

Jon C. Ogg
September 18, 2007

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

Posted on: September 18, 2007 – 5:23 pm in Cramer, ,

Is AMD Falling Further Behind Intel?

Intel (INTC) introduced several new products today. According to The Associated Press "the company’s next cycle of microprocessors, code-named Penryn, will begin shipping Nov. 12." These chips have a 20% improvement in performance coupled with a more energy efficient design.

AMD (AMD) will not have a similar product to market until the middle of 2008. As part of Intel’s announcements today, it showed the prototype of the product that will be the generation beyond what the company is shipping this year. "Those chips won’t be made for the mass market until 2009, but Intel’s first public unveiling of the technology further highlights its manufacturing lead over AMD"

AMD’s shares are down over 55% in the last year. If Intel continues to push its tech lead, that could get worse.

Douglas A. McIntyre.

Posted on: September 18, 2007 – 4:46 pm in Technology Companies, ,

For HALO 3, GameStop Aims To Out-Dork All Dorks (GME, MSFT, BBY)

We have covered the launch of HALO 3 for Microsoft’s (NASDAQ:MSFT) Xbox 360 as one of the musts for gamers, and even covered how this would impact other gaming companies.  This will be a win for GameStop Corp. (NYSE:GME) and even for Best Buy (NYSE:BBY), although GameStop sounds like it is going to be out-dorking the dorks. 

GameStop will host “Finish the Fight” midnight events on Monday, September 24, 2007, at over 3,700 of its U.S. GameStop and EB Games stores for the long and highly-awaited launch of HALO 3.  This will include Halo trivia contests and Halo 2 challenges that will lead up to the first sale of the game at 12:01a.m. If a Halo trivia contest isn’t dorky, then what on earth is?  This sure sounds dorky to this 30-something dork.  Halo fans can also check out GameStop’s “Halo Store.”  Most participating GameStop and EB Games locations will begin their countdown to launch at 9:00 p.m. local time; however, customers are encouraged to contact their local store to confirm the exact time of the event.

Schools and tech support departments around the country are probably going to have very light attendance next Tuesday and Wednesday.  NPD showed a good grab in the August sales for Xbox.

Jon C. Ogg
September 18, 2007

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

Posted on: September 18, 2007 – 4:38 pm in Video Games, , , , , ,

Comcast (CMCSA) COO Burke At Goldman: Notes

From Silicon Alley Insider

Goldman analyst Anthony Noto chats with Comcast (CMCSA) COO Stephen B. Burke:

Competition with Verizon and AT&T? Verizon has spent a lot of money to get where they are. Getting better results than AT&T. We have always questioned if they are going to get fair return for shareholders. Whether sustainable or getting kind of return they need, will leave that up to them. (VZ CEO Ivan Seidenberg presents tomorrow at 11:10 a.m.) Seems like most VZ Fios data customers are just upgrading from VZ DSL….continued

Posted on: September 18, 2007 – 4:15 pm in Uncategorized

CMGI Launches New European Solutions; Aims For More Regional Offerings (CMGI)

CMGI, Inc.’s (NASDAQ:CMGI) main unit, ModusLink Corporation has just announced its new Gateway to Europe Solution.  This is supposed to be the first solution to be unveiled in a series of regionally optimized Gateway-to-Market Solutions designed to help technology manufacturers more rapidly establish a high-performing supply chain infrastructure in key geographic markets.  The goal is to lower capital investment and risk to the companies.

The Gateway to Europe Solution combines ModusLink’s local and global market knowledge, integrated operations and extensive global footprint, with a complete range of regionally optimized and integrated services.  This will help in meeting the needs of customers in multiple countries with multiple language requirements to effectively managing variable regulatory compliance, VAT taxation, sourcing constraints and customs clearance.  For whatever this is worth, this issue here is one of the most complex issues currently in international transportation.

The Gateway to Europe Solution is a bundled offering that enables sourcing and supply-base management, materials and content management, light manufacturing and optimized configuration, fulfillment and e-Business; and complete aftermarket services.

ModusLink anticipates that additional Gateway-to-Market solutions will be forthcoming and will focus on the delivery of regionally optimized solutions for key economic regions throughout the world.

There is a catch here, and it boils down to compliance and how user-friendly the system will be.  The truth is that this has all of the key buzzwords that would make this more attractive.  The question is whether or not ModusLink can deliver upon the claims.  We should be getting some data from outside independent supply chain evaluators, so stay tuned.

Jon C. Ogg
September 18, 2007

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

Posted on: September 18, 2007 – 4:00 pm in Uncategorized, , ,

The Business Day In Global Warming (ASTI, NHY, AES, CLNE, EFOI, WMT, AMSC, BSRC)

Ascent Solar Technologies, Inc. (NASDAQ:ASTI) and Hydro Building Systems, a division of Norsk Hydro (NYSE: NHY), today announced plans for the development of a new Brise Soleil product line incorporating thin film flexible solar modules manufactured by Ascent Solar.

Newly released sales figures from R.L. Polk reveal that an increased number of alternative fuel automobiles were sold in the second quarter of 2007. Between April and June of this year, nearly 490,000 AFA’s were sold nationwide, an increase of 27 percent over the same period last year, bringing the total number of AFAs to nearly 11.5 million on American roads.  For more information about Alternative Fuel Automobiles, visit www.DiscoverAlternatives.com.

AES Corporation (NYSE:AES) today announced plans to begin construction of Buffalo Gap 3, a 170 MW expansion of its Buffalo Gap wind farm near Abilene, Texas. Once completed, the project will increase capacity at Buffalo Gap to 524 MW, making it one of the largest operating wind farms in the United States. Commercial operations are expected to begin mid-2008.

Clean Energy (Nasdaq:CLNE) has entered a five-year agreement to supply the Metropolitan Transit District in Santa Cruz, California with clean-burning liquefied natural gas fuel for its growing fleet of natural gas powered buses. Santa Cruz Metro plans, by mid-2008, to operate 63 CNG buses, including 10 currently in service and by replacing 53 older diesel-fueled buses with new or re-powered natural gas models.

Energy Focus, Inc. (NASDAQ: EFOI),formerly Fiberstars, Inc., a player in energy-efficient lighting technologies has received orders from Wal-Mart for installations of Energy Focus’s EFO(R) downlight system in a Wal-Mart Super Center and a Sam’s Club in Cabo San Lucas, Mexico.

American Superconductor Corp. (NASDAQ: AMSC) announced at the HUSUMwind 2007 trade show in Germany that it has received a follow-on order for approximately $20 million in wind turbine electrical systems from Beijing-based Sinovel Wind Corporation Limited. The order follows a $70 million order received from Sinovel Wind in July 2007.

BioSolar Inc. (OTCBB: BSRC) has been rated “Speculative Buy” with a target price of $.84 by Beacon Equity Research Analyst, Victor Sula, PhD.  The full report is available at http://www.BeaconEquityResearch.com, but be advised that reports of this sort often not exactly what they seem.

Jon C. Ogg
September 18, 2007 

As a reminder, whether you prefer the term "Global Warming" or "Climate Change" is not the issue as far as 24/7 Wall St. covers it.  Green business has become big business, and this affects many public companies today.

Posted on: September 18, 2007 – 3:45 pm in Alternative Energy, , , , , , , , , , , , , , ,

Mortgage Madness Stocks Win The Day’s Top Performers (MTG, CFC, C, BSC, KBH, CTX, C, GS, BX, MBI, TMA, BZH, WM, LEH, HOV)

We reviewed our different portfolios of key stocks to see which ones performed the best today, and it wasn’t just the financials as a general class.  At the end of the day, Jim Cramer’s old list of stocks from his "Mortgage Madness Portfolio" took the cake. 

This is the list: MGIC Investment (MTG), Countrywide (CFC), Bear Stearns (BSC), KB Home (KBH), Centex (CTX), Citigroup (C), Goldman Sachs (GS), Blackstone (BX), MBIA (MBI), Thornburg (TMA), Beazer (BZH), and Washington Mutual (WM).

We ran the screen right before the close, but take a look at how this portfolio did after the 50/50 dual rate cut from the FOMC today (Ticker; Price; Changes ($,%); 52-week range):

MTG $33.55 +$2.75  (+8.93%) $21.00-70.10
CFC $19.91 +$0.64  (+3.32%) $15.00-45.26
BSC $119.87 +$4.49 (+3.89%) $99.75-$172.61
KBH $29.27 +$1.15 (+4.09%)  $25.95-$56.08
CTX $29.22 +$1.38 (+4.96%)  $25.59-58.42
C   $48.33 +$2.30 (+5.00%)  $44.66-57.00
GS  $200.53 +$12.92 (+6.89%) $157.38 – 233.97
BX  $24.36 +$0.71 (+3.01%)  $21.30 – 38.00
MBI $61.95 +$4.47 (+7.78%)  $48.95 – 76.02
TMA $13.50 +$0.30 (+2.27%)  $7.49 – 28.40
BZH $11.37 +$1.90 (20.06%)  $8.10 – 48.60
WM  $37.70 +$1.74 (4.84%)   $31.27 – 46.38

If you added in Hovnanian (HOV) for it saving itself with a homebuilder firesale last weekend and add in Lehman  Brothers(LEH) because of its better than expected (and far less bad) earnings from this morning, then this entire portfolio would be the hottest smoking portfolio.

This blew past the tech stocks from Cramer’s old "NEW FOUR HORSEMEN OF TECH" and it blew well past our list of defensive stocks we gave for crummy markets.

Jon C. Ogg
September 18, 2007

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

Posted on: September 18, 2007 – 3:16 pm in Financial Stocks, , , , , , , , , , , , , ,

The 52-Week Low Club

Enterra Energy (ENT) Second big daily drop after suspending dividend. Down to $1.63 from 52-week high of $10.30.

Bearingpoint (BE) Management consultants. Not doing a very good job of it. Drops to $4.51 from 52-week high of $9.00.

Navigant Consulting (NCI) Financial and regulatory consultancy company to do reorganization, may hit financial statement. Consulting must not be a very good business. Down to $12.55 from 52-week high of $22.63.

Animal Health (AHII) Distributor of animal health products posts earnings and Wall St. is not happy. Falls to $8.78 from 52-week high of $15.74.

Syntax Brillian (BRLC) LCD TV maker still dropping after weak numbers. Down to $3.58 from 52-week high of $11.70.

Knight Capital (NITE) Wall St. unhappy that NITE owns a hedge fund. Shares keep moving down. Hit $11.73 from 52-week high of $21.78.

Douglas A. McIntyre

Posted on: September 18, 2007 – 3:11 pm in HI/LOW, , , , ,

Is Boeing (BA) 787 Dreamliner Unsafe?

Boeing (BA) may have a PR problem. At the very least.

Journalist Dan Rather will report "the new plane, which is mostly made from brittle carbon compounds rather than flexible aluminum, is more likely to shatter on impact and may emit poisonous chemicals when ignited," according to Reuters. Rather interviewed a former Boeing engineer and industry experts.

The report Rather is the latest edition of "Dan Rather Reports," broadcast on HDNet, a subscription-only television channel that about 4 million Americans are able to view. Rather has been living in the shadow lands since leaving CBS News.

Douglas A. McIntyre

Posted on: September 18, 2007 – 2:45 pm in Uncategorized,

FOMC Delivers With 50/50 (September 18, 2007)

Today was the planned FOMC decision on interest rates and it seems there was a split between those looking for 25 or 50 basis points.  We were in the latter group, or at least that is what we think it will take to smooth things out with added measures down the road (perhaps not in fed funds ahead though).

We got on the 50 basis point cut to 4.75% on FED FUNDS and got a 50 basis point cut to 5.25% on the DISCOUNT RATE.  The markets have initially reacted in favor when you compare NOW to 2:10 PM EST.  The DJIA is now up some 200 points, although we won’t speculate where these end up.

Here is the STATEMENT from the FOMC.

If you’d like to compare how this looks in comparison to the minutes of the August 7 meeting (released August 28), you can link to that here.

Here is a snapshot of where the markets were at 2:10 PM EST a few minutes ahead of the decision:
DJIA          13,478.86; +75.44 (+0.56%)
S&P500    1,485.77; +9.12 (+0.62%)
NASDAQ    2,591.06; +9.40 (+0.36%)
10YR-Bond 4.501% (+0.031%)

This follows today’s PPI release today that was great for the inflation hawk worries, although I have heard more people questioning the data than there are believers.  We also had the weakest homebuilder sentiment reading supposedly in about 20 years.

Jon C. Ogg
September 18, 2007

Posted on: September 18, 2007 – 1:23 pm in Economy, , , ,

Aventine Stands Alone In Ethanol on 52-Week Lows (AVR, PEIX, VSE, USBE)

Aventine Renewable Energy Holdings, Inc (NYSE:AVR) is one of the names that seems to show up on the list of 52-week lows more often than it doesn’t.  Today is a repeat of that instance.  Aventine shares were downgraded at Soleil today pre-market from "Buy" to "Hold" and shares are down almost 4% today at $10.85,  The trading range today is $10.61 to $11.25 and the trading range over the last 52-weeks is $11.20 to $26.49.

The company is one of the fuel-grade ethanol producers in the U.S., and it shows up on the 52-week lows list as frequently as Pacific Ethanol Inc. (NASDAQ:PEIX).  The key difference is Aventine would fit the bill of many value screens based on its P/E ratio.  Pacific Ethanol would not because its profitability is so much lower.  But Aventine is expected to have a decline in earnings in 2008, so its "value term" may be somewhat voided out.

Soleil also downgraded VeraSun (NYSE:VSE) and US BioEnergy Corp. (NASDAQ:USBE) to "Sell" from "Hold" pre-market, but those shares are actually up on the day along with Pacific Ethanol.

While legislation is expected that may boost prices, ethanol is quite apolitical situation right now and man are on both sides of the argumentif ethanol as an industry in its state in the U.S. right now is profitable without a government subsidy and even if it is environmentally sound or helping in dependence on foreign oil.  With 2008 being an election year and with Iowa out of the way early on, ethanol (and the stocks that live off it) may see even more volatility in 2008.

Jon C. Ogg is a partner in 24/7 Wall St.; he does not own securities in the companies he covers.

Posted on: September 18, 2007 – 12:45 pm in Alternative Energy, , , , , , ,

August Website Numbers: Big Month For Facebook, Advertising.com Keep Lead

The comScore internet audience numbers show Yahoo! (YHOO) still in the top spot with US unique visitors of 135.3 million. Facebook is now No.14 among all web properties with 33.8 million uniques.

Among advertising networks, Advertising.com reached 89% of all US internet users with 161 million unique visitors.

Douglas A. McIntyre

Posted on: September 18, 2007 – 12:43 pm in Internet,

IPO Filing: Turner Investments Inc. (TNR)

Turner Investments Inc. has filed to come public via an IPO.  For filing purposes it listed $150 million as the amount up to which it will securities, although this is nominal and usually changes.  Turner will list on the NYSE under the stock ticker "TNR" and it names Goldman Sachs as the sole underwriter of the IPO.

Turner is an asset management company that managed $25.2 Billion in assets under management.  The company was founded in 1990 and it provides investment management services to institutions, intermediaries and individuals.  The company has a compounded assets under management growth rate of 27.3% over the last 5-years.

As of June 30, 2007, 59 of its clients had been clients for 5 years or more and 24 clients had been clients for 10 years or more, representing approximately 35.8% and 10.9%, respectively, of its assets under management.  10 of the principal products are growth-oriented and that is 88.4% of its assets under management.  It lists 3 products with 10.4% of assets under management as Core & Value, and lists 3 more Quantitative products that comprise 1.2% of assets under management.

While the company’s business is straight forward and easy to understand, this is actually purchasing units in the parent and has a complicated structure that we won’t break down until this IPO is closer.

Jon C. Ogg is a partner in 24/7 Wall St.; he does not own securities in the companies he covers.

Posted on: September 18, 2007 – 12:18 pm in Financial Stocks, IPOs, ,

WSJ.com For Free

Rupert Murdoch, head of News Corp (NWS) said it again today. He is leaning hard toward making the online edition of The Wall Street Journal free, according to CNN Money. 

Depending on which measurement service one looks at, WSJ.com has something along the lines of 2.5 unique visitors. Dow Jones estimates put that number much higher. If the site were free, it is easy to see that number racing past NYTimes.com at about 13 million. NYT says all of its online editions will do close to $400 million this year.

What WSJ.com would give up is 983,000 paid subscribers, most paying about $80 a year.

That is a lot to give up, but Murdoch seems more than game.

Douglas A. McIntyre

Posted on: September 18, 2007 – 10:13 am in Media, ,

GE’s Pretty Good Economy Is Actually Reaffirming Earnings Guidance (GE)

General Electric (NYSE:GE), at its GE Security Analyst Meeting this morning, has signaled that it is averting an earnings warning.  The prior guidance remained.  GE showed its Q3 2007 outlook, although it is much the same it gave with its Q2 earnings presentation. 

Back then it showed projections of $0.54 to $0.56 EPS on total revenues of approximately $42 Billion, with net earnings of $5.5 to $5.7 Billion.  There appears to be no change to its Q3 reported earnings and total year guidance.  This new slide shows the same $0.54 to $0.56 EPS guidance, up 15% to 19%.  It is also offering $2.18 to $2.23 for Fiscal 2007.  We backed out the charges for restructuring and divested operations. 

As far as how this compares to estimates, these numbers are mostly in-line.  First Call has $0.55 EPS and $42.69 Billion in revenues.  As far as total fiscal 2007, First Call lists $2.21 as the EPS target and an implied $171.75 Billion revenues.

This should come as a relief at a time when investors are trimming risk and when companies are facing a rougher time.  After speaking with several investors and several counterparts out there, we all had a feeling that maybe GE’s infrastructure business might not be quite to offset some of that weakness tied to housing in its appliances and in financing out there.  If the overall economy isn’t going to deteriorate much further, that worry appears to be alleviated. 

If GE shares can hold this 1.3% gain at $40.70, this will be within a hair of its $40.82 highest close of the last 52-weeks. The intraday high this year is $40.98.  If this tone remains in individual unit presentations, then it would seem likely that analysts will reaffirm or maintain their ratings and that average $44.00 price target.

Read More »

Posted on: September 18, 2007 – 10:08 am in Conglomerates, , , ,

GM: Wall St. Starts To Focus On Top Line

GM (GM) suffered an analyst downgrade today. Goldman Sachs moved the shares from "buy" to "neutral". In a way, it is a surprise that it did not happen sooner.

On September 10, GM traded at $29.10. Yesterday, the stock got as high as $35.47.

The stock has rocketed on assumptions that negotiations with the UAW would go well, allowing GM to drop its North American production costs lower, on a per vehicle basis, to near where they are at Toyota (TM) or Honda (HMC). But, the union cannot afford to see GM fail, so some significant level of concession was always in the cards.

Since the beginning of the labor talks housing defaults have spiked sharply, auto sales have fallen, consumer credit has risen, and oil has moved to $81.

Wall St. wants to know who GM is going to sell cars to all of those poor, homeless people.

Douglas A. McIntyre

Posted on: September 18, 2007 – 8:23 am in Autos, , ,

Boeing Ups China Numbers: Read The Fine Print

Boeing (BA) has upped it figure for how much the Chinese aviation business will spend on airplanes over the next 20 years. According to MarketWatch, it now puts that number at $340 billion, about 3,400 planes.

That number only applies if there is no a military coup, a ban on US products, or a massive downturn in the Chinese economy.

All of that must be in the fine print.

Douglas A. McIntyre

Douglas A. McIntyre

Posted on: September 18, 2007 – 8:11 am in Airlines,

AMD Wants Better PC Performance

AMD (AMD) thinks that there is a gap between dual-core chips that run on most PCs and the newer quad-core superchips that the company and its rival Intel (INTC) build for high-end servers.

PC companies can make quad-core models, but they are tremendously expensive for the typical buyers.

AMD is going to split the difference and offer "triple core" chips to help PC users get better performance without having to spend what they would to buy a nice used car.

That should catch them up to Intel.

Douglas A. McIntyre

Posted on: September 18, 2007 – 8:05 am in Semiconductor, ,

SEC Looks For Insider Trading At Hedge Funds

The SEC will beging to step up its examination of insider trading at hedge funds. According to Bloomberg "SEC officials told hedge funds to list clients and workers who serve as officers or directors of publicly traded companies, along with the names of any relatives who hold such posts, according to a 27-page letter to industry executives."

Hedge funds often have early information on buy-outs and often are involved in financing them. A number of funds also invest in public company private financing deals where a company sells stock to a fund with the shares being registered at a future date. There has been concerns that funds may short shares in these companies before those shares can be freely traded.

SEC inspectors conducted about 2,400 reviews of investment advisers and brokers during the fiscal year ended September 2006, according to the agency’s annual report. And, it would appear that the number is going to rise.

Douglas A. McIntyre

Posted on: September 18, 2007 – 7:58 am in SEC