13 – June – 2008 – 24/7 Wall St.

Daily Archives: June 13, 2008

Cramer’s Oil & Gas Wildcatting Week (HK, REXX, BZP, RRC, RAME)

This week on CNBC’s "MAD MONEY," Jim Cramer had another one of those "one pick per night" features. This week’s special feature wasn’t just oil, it was wildcatting. Yep, drill a hole in the ground and see what happens. In his version of the wildcatting climate, it is now highly profitable because oil prices are incredibly high and the costs are easy to recoup. Here are his picks in the sector chronologically, and the "gain" posted here is on the "day after move" rather than for the week:

Monday… Petrohawk Energy Corp. (NYSE: HK) -4.1%
Tuesday… Rex Energy Corp. (NASDAQ: REXX) +6.2%
Wednesday… BPZ Resources, Inc. (NYSE: BZP) +7.4%
Thursday… Range Resources Corp. (NYSE: RRC) -1.1%
Friday… RAM Energy Resources, Inc. (NASDAQ: RAME) +10% (in after-hours trading on Friday after he touted it)

Enjoy your weekend, and if there used to be an oil well that was drilled dry or if there have been any oil discoveries within about 20 or 30 miles of your property it might be worth calling one of these companies……

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 5:23 pm in Cramer, Oil & Gas, BZP, HK, RAME, REXX, RRC

CVR Partners Cancels Its Fertilizer IPO (CVI)

CVR Energy, Inc. (NYSE: CVI) announced Friday evening that the managing general partner of CVR Partners has decided to postpone the IPO of its CVR Partners indefinitely.

The company noted that its review of public offering alternatives for CVR Partners, the
managing general partner has determined that current MLP (master limited partnership) market conditions do not currently support a solid IPO. This was aimed at maximizing the value of CVR’s fertilizer business.

The company now believes maintaining the fertilizer business within the parent CVR Energy will offer a greater value for its shareholders.

We reviewed this one for our SPECIAL SITUATION NEWSLETTER and included it in our picks about two months ago as a "bonus issue." Because it was still too close to the IPO date at the time, we did not create any formal recommendations as it was not able to be hedged with stock options at the time. That report is now off of embargo as our first target for the main culprit of the report was hit, so here is the actual report that we sent to subscribers.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 5:18 pm in Agriculture, IPOs, Oil & Gas, CVR

Dispelling Some Current Chatter & Myths About GE (GE)

If you have been watching the movement in General Electric Co. (NYSE: GE) for this last week, you won’t be surprised to hear that this is due to intense "market chatter" out in the marketplace. We do not want to contribute any at all to what is starting to look, sound and feel like intense rumor mongering.

What is interesting and sad at the same time is that right now Wall Street is not even taking a wait and see attitude because of the credibility issues of so many financial companies. The long and short is that traders shoot first and ask questions later.

Much of the market chatter I have personally been asked about and have heard doesn’t add up, but that is a matter of opinion and the ticker tape painted a different picture this week. The "market chatter" has pointed GE needing to make a capital infusion into its GE Capital unit, some chatter on its prized "Triple-A" debt rating potentially being under review, and even that excessive losses from UK-based mortgages were all "developing situations."

Here is the good news: Shares have recovered sharply off of today’s lows and the stock is no longer on 52-week lows. Shares closed up 0.4% at $29.17 (unofficial close), and that is after an intra-day low of $28.49 was put in. The prior 52-week low was $28.89.

I put in a call to Russell Wilkerson at GE Corporate, who communicates regularly with the media. His quote was as follows: "We don’t comment on market rumors. On May 21, Jeff (Immelt) made it very clear that we are not raising external capital and have no need to. Our Triple-A credit rating is secure, self funded and recently reaffirmed by the rating agencies. Nothing has changed."

The interesting part is that after a brief conversation, there is an obvious sense of frustration over the actions seen this week. Shares were just at $30.50 Tuesday. The long and short of the matter is that you never know if market rumors are fake or if they have been in the fire because of what is developing inside a unit of a company or what is developing externally.

If you want to see how frantic the trading has been, GE traded 114 million shares today after seeing 95 million shares trade yesterday. These have been the two most active days since the company’s warning back in April.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 3:27 pm in Conglomerates, Rumors, GE

The 52-Week Low Club (WB) (GHS) (FITB)

Wachovia (WB) Sitll concerns about faltering balance sheet. Down to $18.22.

Gatehouse Media (GHS) Another newspaper industry victim. Down to $2.98.

Fifth Third Bancorp (FITB) Announces it will raise money. Down to$12.97.

Douglas A. McIntyre

Posted on: June 13, 2008 – 3:01 pm in HI/LOW, FITB, GHS, WB

BLANK CHECK IPO FILING: STACCATO ACQUISITION CORP. (MWRK, CHUX, RPSD)

It’s been a while since we have seen many blank check or special purpose acquisition company (SPAC’s) file to come public. We just saw a filing for an IPO from Staccato Acquisition Corp., although it is rather small with a $49 million offering planned. The company also plans to trade on the OTC Bulletin Board.

It has filed to sell 6.125 million units with an $8.00 per unit price. Each unit will consist of one share of common stock and one warrant with a $6.00 strike price.

EarlyBirdCapital, Inc. is the lead underwriter, and co-managers are listed as Morgan Joseph and as Pali Capital, Inc. EarlyBirdCapital, Inc., the representative of the underwriters, has been granted a 45-day option to purchase up to 918,750 units to cover over-allotments.

This is a newly formed blank check company organized for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with operating businesses or assets that derives more than 50% of its revenues from any one or more segments of the construction, engineering, water, design, environmental, energy, recycling, waste management, logistics or related industries.

The company lists several companies under its "conflicts of interest" where management or deal seekers with the company will have to present possible deals to these companies before they present them to Staccato, although the sectors these are in and the small size may keep these from mattering:

Mothers Work Inc. (NASDAQ: MWRK)
O’Charley’s Inc. (NASDAQ: CHUX)
Rhapsody Acquisition Corp. (NASDAQ: RPSD)

Jon Ogg
June 13, 2008

Posted on: June 13, 2008 – 2:20 pm in IPOs, CHUX, MWRK, RPSD

Major Buybacks This Week (CCOI, FOSL, HIG, KALU, OSG, URI, UTX)

As we have pointed out over and over, it appears that buyback announcements are on the decline in a serious way as far as "new buyback plans" being announced. Ultimately we believe that the buyback paces coming to a crawl is for several factors, with the main issues being the need of cash and the embedded insurance policy this gives companies who want to shore up their capital during a weak economy. We did not count the smaller buyback announcements, but these are the larger ones we saw this week (alphabetically rather than chronologically):

Cogent Communication (NASDAQ: CCOI) completed its prior plan and added another $50 million to its buyback machine. The market cap is about $682 million.

Fossil Inc. (NASDAQ: FOSL) announced that it would repurchase some 2 million shares, or roughly 3% of its shares outstanding.

Hartford Financial Services (NYSE: HIG) added $1 Billion to its prior plan, and its market cap is nearly $23 Billion.

Kaiser Aluminum Corp. (NASDAQ: KALU) is one of the old ones that would be easy to overlook or forget about. But the company raised its dividend and announced a $75 million share repurchase program. This is only about 1.1 to 1.2 million shares, but when you compare it to the $1.3 Billion market cap and the 390,000 share average daily volume it large on a percentage basis.

Overseas Shipholding (NYSE: OSG) replaced its prior buyback plan with a $250 million stock buyback announcement, and it raised its dividend too. This represents more than 3 million shares at current prices and compares to about a $2.4 Billion market cap.

The big kahuna buyback came from United Rentals, Inc. (NYSE: URI) announced it was doing a swap and buyback of some 27.16 million shares. This represents close to 31% of its entire outstanding share count.

United Technologies (NYSE: UTX) was perhaps the largest buyback from the largest company this week. The company announced it would buy back up to 60 million shares as a replacement to its prior plan. Based on a near-$70 price, this implies a sum of up to $4.2 Billion if prices remained static. This has roughly 973 million shares outstanding.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 12:02 pm in Stock Buybacks, The Week, CCOI, FOSL, HIG, KALU, OSG, URI, UTX

Rydex Launches 8 ETF’s (REA, REC, RFL, RFN, RHM, RHO, RTG, RTW)

RYDEX INVESTMENTS has now launched eight new ETF’s on the American Stock Exchange this week. These eight new RYDEX ETF products will offer investors inverse and leveraged inverse exposure to the energy, financial, health care and technology sectors.

A listing of these is as follows:

Rydex 2x S&P Select Sector Energy ETF (Amex: REA) seeks to track a benchmark of 200% of the performance of the Energy Select Sector Index.
Rydex Inverse 2x S&P Select Sector Energy ETF (Amex: REC) seeks to track a benchmark of 200% of the inverse performance of the Energy Select Sector Index.
Rydex 2x S&P Select Sector Financial ETF (Amex: RFL) seeks to track a benchmark of 200% of the performance of the Financial Select Sector Index.
Rydex Inverse 2x S&P Select Sector Financial ETF (Amex: RFN) seeks to track a benchmark of 200% of the inverse performance of the Financial Select Sector Index.
Rydex 2x S&P Select Sector Health Care ETF (Amex: RHM) seeks to track a benchmark of 200% of the performance of the Health Care Select Sector Index.
Rydex Inverse 2x S&P Select Sector Health Care ETF (Amex: RHO) seeks to to track a benchmark of 200% of the inverse performance of the Health Care Select Sector Index.
Rydex 2x S&P Select Sector Technology ETF (Amex: RTG) seeks to track a benchmark of 200% of the performance of the Technology Select Sector Index.
Rydex Inverse 2x S&P Select Sector Technology ETF (Amex: RTW) seeks to track a benchmark of 200% of the inverse performance of the Technology Select Sector Index.

Goldman Sachs Execution & Clearing, LP will act as the specialist for REA, REC, RFL and RFN; and Kellogg Capital Group, LLC will act as the specialist for RHM, RHO, RTG and RTW.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 11:23 am in ETF, Index, REA, REC, RFL, RFN, RHM, RHO, RTG, RTW

Fifth Third: How Bad Are Things? (FITB)

Fifth Third Bancorp (NASDAQ: FITB) is seeing a floodgate opened with sellers thrashing shares. The culprit for this is a downgrade out of BMO Capital, where the brokerage firm downgraded the stock to a Market Perform rating.

The brokerage firm believes that Fifth Third is going to have to pursue a capital raise and believes a 50% haircut to its dividend may be coming sooner rather than later. because of charge-offs and marked assets, the firm also slashed its earnings projections for the banking firm. It lowered its fiscal 2008 projections from $1.93 down to $1.62 and lowered its 2009 projections down from $2.27 EPS down to $1.95.

First call has estimates of $1.87 EPS for 2008 and $2.20 for 2009. The lowest estimate we have seen in this for 2008 is $1.00 and for 2009 the lowest estimate is $1.65.

Unfortunately for Fifth Third, BMO noted that it will also trade at a discount to its book value on its capital ratios being under levels that they should.

The question to ask is if you can stomach the value versus a potential value trap. Shares are down 14% at $12.58 today. This isn’t just a 52-week low, it is a low which hasn’t been seen since the mid-1990’s. If we took the new BMO EPS targets and then took the lowest EPS targets from Wall Street for forward estimates we get the following for future P/E ratios based upon a $12.50 level:

BMO forward P/E is 7.7 for 2008 and 6.4 for 2009;
Lowest estimates forward P/E is 12.5 for 2008 and about 7.5 for 2009.

On the surface it sounds cheap, and the market cap has slid down to $6.6 Billion now. The 52-week high is $43.20. The problem is that if the company has to go in and raise cash to shore up capital, which it has said it didn’t need to raise in the near-term before, then all bets are off because you have no way to know at what price they have to give they keys to the castle away.

We have reviewed Fifth Third and some of the other super-regionals or smaller money center banks for possible additions to likely takeover targets for our SPECIAL SITUATION investing newsletter in recent weeks and recent months, but unfortunately the problems here are just too deep and catching the knives can just come with too large of a price tag.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 10:59 am in Analyst Calls, Banking, FITB

Is Saks In Play? (SKS)

A report out of Citigroup this morning is sending shares of Saks Inc. (NYSE: SKS) higher this morning. The broker reiterated its BUY rating on the stock and its $20.00 target notes that the high-end retailer may be in-play as a merger target. Citi noted that Baugur’s filing earlier this week shows forward contracts to buy more shares.

If this sounds at all familiar, that is because this one has been a buyout rumor on many occasions in the past two years. A year ago, this was noted by Jim Cramer positively on this chance and Dana Cohen gave this a 50/50 chance of being a $21.00 buyout. This was also one of our recent "top US brands that could disappear" as US-owned companies because foreign buyers can take advantage of the weak dollar to buy vanity and non-key companies.

Shares are up almost 5% at $12.55 so far this morning and the 52-week trading range is $11.04 to $23.05.

You can join our open email distribution list to hear about other mergers, IPO’s, secondary offerings, private financings, activist investors, and more.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 9:13 am in Analyst Calls, Mergers and Buy Outs, Retail, SKS

As Recession Fears Hit Consumer Electronics, Sirius (SIRI) Hits 52-Week Low

For almost two years, the focus on Sirius (SIRI) and XM Satellite (XMSR) has been on whether they would craft a merger and then whether it would be approved. The FCC has effectively dragged its feet long enough so that it may not matter.

Neither company has ever posted a profit and each has over $1 billion in debt, so every day the attention about share price moves more to whether they can continue the rapid growth of their subscriber bases.

Concerns about consumer spending now have to be front and center for both firms. A large percentage of the satellite radios sold in the US are through new car dealers. With that industry in deep trouble, satellite radio is going to be hurt, almost without doubt.

The other question is whether sales though consumer electronics outlets will drop. In theory, they should. The average citizen has nothing but lint in his pocket. Buying a new radio is probably not on the list.

Douglas A. McIntyre

Posted on: June 13, 2008 – 8:58 am in Satellite, SIRI, XMSR

Another Blow To Newspaper Stocks (GHS)(MNI)(GCI)(NYT)

The newspaper industry was hit with another downgrade today, astonishing because almost all of the stocks in the sector are at 52-week lows.

Wachovia cut its ratings on several chains including Gatehouse (GHS), McClatchy (MNI), Gannett (GCI), Lee (LEE), and The New York Times Company (NYT). According to the AP, "Analyst John Janedis expects total ad revenue to fall 10.4 percent in 2008 and 6.5 percent next year."

That kind of fall-off in revenue could be enough to undermine the ability of several of the debt-laden companies in the group to make interest payments.

It is now very likely that several of the companies in the sector will have to begin selling off properties by the end of the year. The firms may not be able to raise enough money to cover the entire amounts they have borrowed. That will leave their lenders hold the bags.

Douglas A. McIntyre

Posted on: June 13, 2008 – 8:11 am in Old Media, GCI, GHS, LEE, MNI, NYT

Capstone Turbine’s Huge Backlog Appears Understated (CPST)

We have already covered Capstone Turbine Corporation (NASDAQ: CPST) on the raw earnings news last night along with its huge backlog being more important than earnings. Shares slid off a tad in after-hours last night but shares are actually trading up this morning. This is on the heels of a 200% rise in the last 7 months or so.

Despite this being our own top pick for our alternative energy stock in our "10 Stocks Under $10" weekly subscriber newsletter, analyst Sanjay Shrestha at Lazard Capital is out with a key call this morning that shows the company’s huge backlog was not only stellar. That backlog may actually be understated as far as the analyst is concerned.

Shrestha noted, "The company posted stellar backlog of $27.9 million (428 units), reflecting a 113% increase sequentially and 458% year/year. The reported backlog number does not include the services and components backlog, which adds about $10 million…. We are raising our FY09 revenue estimates again, to $58 million from $50 million, reflecting the current backlog trend."

We noted that last night’s reported backlog is actually more than all of 2007 revenues combined, but this new data may actually make that prior huge number seem tiny. So far we have seen more than 224,000 shares trade hands in pre-market trading with just over an hour to go before the market opens. Shares closed at $3.41 last night and the last trade seen was at $3.69.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 7:29 am in Alternative Energy, CPST

Implications of ExxonMobil Dumping Gas Stations (XOM, COP, CVX, VLO)

Reuters is reporting that ExxonMobil Corp. (NYSE:XOM) plans to sell the 1,400 retail outlets it owns and the 820 it operates over the next several years. The company doesn’t want to fool around any more with this low-margin business. One analyst quoted in the Reuters story estimated that Exxon’s profit margin from retail was 10%-15%, about a third of the company’s margin from its production business.

In December 2006, ConocoPhillips (NYSE:COP) announced that it planned to divest 830 retail outlets it owned and operated. Since 2003, Chevron Corp. (NYSE:CVX) has sold about 3,300 retail outlets, mostly in Europe and Asia. The company still controls more than 15,000 outlets outside the US. Chevron owns/operates about 550 gas stations in the US. Interestingly enough, this also comes at a time where Valero Energy Corp. (NYSE: VLO) has been acquiring more units and increasing its retail gas station footprint.

The point is that Exxon’s announcement isn’t particularly big news and will have virtually no impact on the company’s continuing operations or cash flow. In fact, as Big Oil dumps retail operations, the companies further position themselves to put the squeeze on the hapless station owners because the oil companies do retain their wholesale distribution business. The wholesalers’ interest in keeping gasoline prices affordable for consumers doesn’t exist. That’s no longer their problem.

And remember, retail sales of gasoline continue to fall as consumers drive less and hybrid and other technologies begin to gain traction in the market. The major oil companies want little part of the pressure that exists where the rubber meets the road.

Paul Ausick
June 13, 2008

Posted on: June 13, 2008 – 7:16 am in Oil & Gas, COP, CVX, VLO, XOM

Top 10 Pre-Market Analyst Calls (AFL, AW, CPB, MWV, NYX, ODFL, PDLI, PCZ, SPIL, WDFC)

There are other calls out there, but these are ten of the early morning analyst calls that we are focused on this Friday 13th:

Aflac (NYSE: AFL) Started as Buy at SunTrust Robinson Humphrey.
Allied Waste (NYSE: AW) Raised To Buy From Neutral at Goldman Sachs.
Campbell Soup (NYSE: CPB) Raised To Overweight from Equalweight at Lehman.
MeadWestvaco (NYSE: MWV) Raised to Buy from Hold at Citigroup.
NYSE Euronext (NYSE: NYX) Started as Neutral at Credit Suisse.
Old Dominion Freight Line (NASDAQ: ODFL) Raised to Outperform from Neutral at Baird.
PDL Biopharma (NASDAQ: PDLI) Cut to Neutral from Outperform at Credit Suisse.
Petro-Canada (NYSE: PCZ) raised to Buy at Banc of America.
Siliconware Precision (NASDAQ: SPIL) Raised to Neutral from Sell at UBS.
WD-40 (NASDAQ: WDFC) Cut to Underweight from Neutral at JPMorgan.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 6:51 am in Analyst Calls, AFL, AW, CPB, MWV, NYX, ODFL, PCZ, PDLI, SPIL, WDFC

As Foreclosures Rise 50%, Turnaround Moves Beyond Horizon

US home foreclosures moved up 49% in May, compared with the same month a year ago.

Figures from RealtyTrac show that "One in every 483 U.S. households received a foreclosure filing in May," according to the AP.

Lyndon Johnson’s "Domino Theory" may not have worked in Southeast Asia in the 1960s, but it is at work in the US economy now.

The recovery of consumer spending is based to a large extent on some stability in housing prices. A person who feels poorer every month is rarely a big spender. Foreclosures, by their nature, push the prices of the homes around them down.

A turnaround in the financial sector also relies on a better mortgage and housing environment. Banks stuck with bad loans rarely do well. The share prices of Wachovia (WB) and Wells Fargo (WFC) attest to that. At large investment banks, mortgage-backed paper can continue to lose value if the home lending market continues to fail. The harm spreads to Fannie Mae (FNM) and Freddiie Mac (FRE) quickly. With such pervasive trouble, the disease in the system remains unchecked and untreated.

Foreclosures may be the single best indicator of where the economy is heading.

If so, it is going to hell.

Douglas A. McIntyre

Posted on: June 13, 2008 – 5:36 am in Economy, FNM, FRE, WB, WFC

Ford (F) Asks Uncle Sam To Build An Electric Car

Ford (F) wants the Feds to help it build and market an electric car. The vehicle manufacturer argues that if Congress does not give incentives to citizens who want to buy the expensive motor cars, they will go unsold. A car with a battery is more costly than the current generation of gas cars. But, if everyone had one, the Arctic ice ledge would stop melting.

The odd thing about this is that Toyota (TM) and Honda (HMC) plan to launch battery cars of their own. They have not been around to see anyone in Washington about getting a special deal for their customers. Or, if they have done it, the meetings have been kept from the public eye.

Detroit has evolved to the point where it does not want to really be in the car business, using the normal economics of profit and loss. It wants to be in the business of having part of its support from the government and part from its customers. Rebates are a way to drive revenue just as certainly as getting a check is.

Does the electric car have a future? It may, if it is left in the hands of the Japanese. They have made money selling tiny cars when the profits on SUVs and pick-ups were better. They have made money on hybrids, which cost more than comparable gas models.They make money because they make more efficient use of capital and their manufacturing facilities.

Congress may help Detroit with the marketing of the electric car, but the legislative body ought to get a commission.

Douglas A. McIntyre

Posted on: June 13, 2008 – 5:13 am in Autos, F, HMC, TM

The US Air (LLC) Cuts: Airlines Run Out Of Runway

US Air (LCC) became the latest airline to cut a lot of people and routes in the hope of cutting enough costs to stay afloat. It is a valiant move, but will probably not save the carrier.

The market is wise, and most airline stocks dropped 10% to 15% yesterday, hitting new lows. Taking out capacity and people is not nearly enough. The government numbers showed the volume of people flying in March dropped.

Each of the largest airlines is faced with fuel bills that may be close to $2 billion higher over the next year than they were for the year just ended. If every employee at every carrier worked for $1 a year, the gas bills might be offset.

The airlines have only one chance, and it is a long one, to keep out of Chapter 11. So far, they have been making only modest increases to ticket prices and baggage handling costs. That is not nearly radical enough.

Will the people who need to fly still fly if ticket prices rise 20%? Companies like AMR and Continental (CAL) may not have any other avenue out of their current set of problems. They may have to gamble that the remaining population of fliers is mostly made up of those who will get on a plane even if the ticket cost is substantially higher.

The chance that raising fares can save airlines is a 100 to 1 shot, but the odds that the airlines can stay out of Chapter 11 may not be any better.

Make the customer pay. He already hate the airlines. Why go out with a whimper when a bang is more fun?

Douglas A. McIntyre

Posted on: June 13, 2008 – 4:56 am in Airlines, AMR, LCC

Jerry Yang And August Busch IV: Founder’s Day (YHOO)(BUD)

Two thousand years from now, when archaeologists dig up the bones of present-day CEOs, they will find that those who were in any way related to their company’s founders had a mutated gene in the DNA which kept them from accepting generous offers for their companies.

Perhaps it is nothing more than the need to save their pride. Yesterday, Yahoo! (YHOO) finally rejected a bid from Microsoft (MSFT). The shares now trade about $10 below the offer from Redmond. The stock had not been above $35 since early 2006 and is not likely to get back there anytime soon. Miserable earnings will see to that.

Over at the beer company, Anheuser-Busch (BUD) has an offer of $65 from InBev. The stock has never traded that high. It appears that BUD is trying to cut an M&A deal with Grupo Modelo that would make the combined Mexican/US company too expensive for InBev to buy.

In is very likely that the shares in both companies will drop by a quarter to a third because the "founding families" do not want to give up their jobs.

It might be worthwhile to check with a therapist to see what is going on, but interpreting the actions may not be that complex.

The Busch family, now four generations away from the life of their founder, and Jerry Yang, a founder in full, are already rich and the premium they would get for their shares is not useful. They already have the four homes and private jets. The extra cash does them no good.

But, being the head of a big company is not a set of circumstances that can be replaced. The numbers of CEOs at really large US companies measures in the hundreds. Rich people are a dime a dozen.

Yang and Busch have likely arranged to keep their jobs. The shareholder will not get their yachts.

Giving up a right due to an obligation does not seem to be part of the make-up of these people. If they went away, it would cut down on the number of people who are both rich and powerful. That would be a shame.

Douglas A. McIntyre

Posted on: June 13, 2008 – 4:40 am in Mergers and Buy Outs, BUD, MSFT, YHOO

Media Digest 6/13/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Pfizer (PFE) may make a counter-bid for Ranbaxy Laboratories, the generic drug-maker.

Reuters reports that deal talks between Yahoo! (YHOO) and Microsoft (MSFT) are dead. Yahoo! will do an advertising deal with Google (GOOG).

Reuters writes that Anheuser-Busch (BUD) and Modelo are in merger talks.

Reuters reports that Exxon (XOM) will get out of the US gas retail business.

Reuters reports that China Investment Corp is turning its back on countries that are suspicious of sovereign wealth funds.

Reuters reports that US Air (LCC) will cut 1,700 jobs and some of its flight capacity.

The Wall Street Journal writes that AIG’s (AIG) financial-products business has become the focus of government probes.

The Wall Street Journal reports that Lehman (LEH) pushed out its CFO and COO.

The Wall Street Journal writes that government tax rebates helped retail sales.

The Wall Street Journal writes that Qualcomm (QCOM) has raised it forecasts.

The New York Times writes that companies which can’t get loans from banks are turning to hedge funds.

The New York Times writes that the FCC has put together a plan to stop high fees consumers face for cancelling cell phone plans.

The FT writes that InBev has promised to keep the Anheuser-Busch brands in St. Louis if it takes over the company.

The FT writes that Ford (F) has called for US help in building electric cars.

Bloomberg writes that European cars sales fell almost 8% last month with Toyota (TM) and Ford off sharply.

Douglas A. McIntyre

Posted on: June 13, 2008 – 4:14 am in Press Digest, AIG, BUD, F, GOOG, LCC, Leh, MSFT, PFE, QCOM, XOM, YHOO