Daily Archives: January 20, 2008

Merck (MRK) Losing Out On OTC?

If a company like Merck (MRK) is going to overcome problems with a lot its drugs going "off patent" it is going to have to come up with some new ways to make money. One is to offer its drugs over-the-counter, which should boost sales.

According to The Associated Press "the government is questioning if too many of the wrong people will take cholesterol-lowering Mevacor if it’s sold without a prescription, days before Merck & Co. makes its third try to move the drug over the counter."

Surveys of potential patients show that many are not sure when and how to use the drug. That is probably a good reason to keep doctors as the gate-keepers for Mevacor.

Douglas A. McIntyre

Posted on: January 20, 2008 – 1:15 pm in Pharmaceuticals,

Apple (AAPL) iPhone Sales Slow In UK

Apple’s iPhone only sold 190,000 units through exclusive UK reseller O2 according to the FT.

Gartner had estimated sales might be 350,000 to 400,000. The handset went on sale November 9.

Douglas A. McIntyre

Posted on: January 20, 2008 – 10:20 am in Wireless,

Tip: Yahoo May Cut 1,500-2,500 Jobs Within 2 Weeks

From Silicon Alley Insider

A tipster believes Yahoo has created a list of 1,500-2,500 jobs that may be eliminated in the next two weeks. CEO Jerry Yang will reportedly make the decision to go forward with these layoffs–or not–next week. Jerry reportedly wants to announce the cuts with or before earnings (January 29th), but may not make them if the stock price recovers.  continued here…

Posted on: January 20, 2008 – 10:16 am in Internet

Why China Economy And Markets May Falter (BIDU)(SNP)

China is admitting a recession in the US would be a significant enough drag to badly damage its exports and undermine its GDP growth. "If U.S. consumption really comes down, that’s bad news for us. That will have a pretty severe impact on our exports," Zhang Tao, deputy head of the international department of the People’s Bank of China told a group including Reuters.

Any slowdown will hit the Chinese stock markets hard. Despite a recent pullback, the Hang Seng Index is up over 60% in the last two years while the S&P has barely risen. The Shanghai Composite is up over 300% during that period.

Downward pressure on China shares could affect many stocks listed in the US. Among the most vulnerable are probably those which have risen the fastest. That would include Baidu (NASDAQ:BIDU), which is up about 130% in the last year and China Petroleum (SNP), which is up 50%.

If the US economy has a major slowdown, the Chinese markets may have posted tops which they will not see again for years..

Posted on: January 20, 2008 – 6:57 am in China, ,

Rio Tinto (RTP) Hints BHP Billiton (BHP) Bid Could Work

Rio Tinto (NYSE:RTP) could take a sweetened  bid from miner BHP Billiton (NYSE:BHP). Up until now, RTP have told investors that a deal is not possible.

Rio Tinto’s shareholders are probably exerting some pressure on management. After rising to $484 on BHP’s initial bid, RTP shares have dropped as low as $341 in the few trading days. Billions of dollars in market cap have dissolved. Management at Rio Tinto says it can improve returns at the company to get its share price up, but it could seem Wall St. does not believe that.

According to Reuters "Rio Tinto Chief Executive Tom Albanese on Sunday left the door open to a sweetened takeover offer from BHP.

A merger of the two companies may be a poor deal. Even with its recent dip, Rio Tinto’s shares have moved from a 52-week low of $200 to $367. If a premium offer is made to seal a deal, the price could be well over $400 a share. Commodities prices would have to continue to rise to justify such a high price for the miner, and a global slowdown could actually cause prices to retreat.

RTP’s shares are also up more than BHP’s in the last year, so, if the buy-out is mostly done in stock, the buyer it is paying a very rich price.

It is a merger that may look extremely bad a year or two from now.

Douglas A. McIntrye

Posted on: January 20, 2008 – 6:51 am in Mergers and Buy Outs, ,