Lehman (LEH) Dead or alive. Off to $3.79 from 52-week high of $67.73.
Washington Mutual (WM) Will the bank make it? Plunges to $1.75 from 52-week high of $39.25.
Merrill Lynch (MER) dragged down by peers. Off to $18.50 from 52-week high of $78.66.
Douglas A. McIntyre
With the trends seen lately in communications equipment and data providers because of telecom spending dropping, it is no huge surprise that the short selling has been increasing in some of the stocks in the sector. Some companies showed declines in short selling, but these are some of the larger companies that showed increases in short sales from mid-August to late in August:
Alternative Energy Aug 29 Aug 15 Change
Ciena Corp. (CIEN) 10,613,944 10,213,947 3.92%
Cisco Systems (CSCO) 61,385,846 60,078,726 2.18%
Level 3 Communications (LVLT) 249,148,929 247,414,113 0.70%
JDS Uniphase Corp. (JDSU) 24,646,634 22,891,958 7.67%
Juniper Networks (JNPR) 29,631,812 26,574,049 11.51%
Jon C. Ogg
September 11, 2008
Many traders and short sellers have loved targeting solar power and other alternative energy stocks. What is interesting is that the bets against these companies did not show a larger increase since many of them have been under pressure from falling energy and commodities prices..
Alternative Energy Aug 29 Aug 15 Change
Canadian Solar Inc. (CSIQ) 4,792,383 4,105,862 16.72%
Capstone Turbine Corp. (CPST) 26,868,541 27,148,261 -1.03%
Clean Energy Fuels Corp. (CLNE) 3,157,778 3,370,936 -6.32%
Evergreen Solar, Inc. (ESLR) 29,577,222 28,600,712 3.41%
First Solar, Inc. (FSLR) 4,118,065 3,932,851 4.71%
Fuel Tech, Inc. (FTEK) 8,967,558 9,409,720 -4.70%
FuelCell Energy (FCEL) 13,231,020 13,547,382 -2.34%
Hoku Scientific (HOKU) 3,408,545 3,264,070 4.43%
LDK Solar Co. Inc. (LDK) 12,810,785 14,263,002 -10.18%
SunPower Corporation (SPWR) 18,696,656 18,939,191 -1.28%
Jon C. Ogg
September 11, 2008
There was a very mixed bag in short selling in the semiconductor sector. What was interesting was the huge increase in the bets against NVIDIA because it was so far after the drop. Most semiconductor short interest changes were single digit changes, but there were some like Intel (INTC), Broadcom (BRCM), and Marvell (MRVL) which saw double-digit declines in the short selling.
Semiconductors Aug 29 Aug 15 Change
Advanced Micro Devices (AMD) 96,448,009 93,448,833 3.21%
Altera Corporation (ALTR) 24,489,350 27,131,688 -9.74%
Applied Materials (AMAT) 35,667,917 38,882,398 -8.27%
Broadcom Corporation (BRCM) 18,665,240 21,124,120 -11.64%
Intel Corporation (INTC) 68,683,066 82,558,529 -16.81%
Marvell Technology (MRVL) 27,344,321 34,936,078 -21.73%
NVIDIA Corporation (NVDA) 47,152,516 22,476,738 109.78%
ON Semiconductor (ONNN) 45,366,451 46,383,159 -2.19%
QUALCOMM Inc. (QCOM) 28,468,030 27,539,572 3.37%
RF Micro Devices (RFMD) 25,883,073 26,620,564 -2.77%
SanDisk Corporation (SNDK) 28,764,413 27,813,854 3.42%
Texas Instruments (TXN) 24,653,691 26,440,098 -6.76%
Jon C. Ogg
September 11, 2008
Unfortunately there is no real clear trend in the Internet sector stocks in the short selling from mid-August to late August as you will see below.
Internet Aug 29 Aug 15 Change
Amazon.com (AMZN) 27,684,633 28,183,474 -1.77%
eBay Inc. (EBAY) 34,620,483 33,432,230 3.55%
Google Inc. (GOOG) 5,802,455 5,565,930 4.25%
United Online (UNTD) 9,459,533 11,923,542 -20.67%
ValueClick (VCLK) 10,404,439 11,421,716 -8.91%
Yahoo! (YHOO) 41,153,923 37,879,991 8.64%
Jon C. Ogg
September 11, 2008
The market’s disdain for Big Band Networks (BBND) is long-standing and deep. The company went public nearly two years ago. Since then the maker of technology to improve the flow of data over the internet has fallen from $21 to $3.61. It is higher by 20% today after an upgrade from
Avondale Partners analyst Blair King issued an "Outperform" rating on the company.
Bristol-Myers Squibb (NYSE: BMY) has sent a letter to Imclone Systems (NASDAQ: IMCL) in response to yesterday’s rejection of its buyout offer. It said it is disappointed that the $60.00 bid was passed up for a highly conditional higher offer subject to due diligence. Bristol’s offer is not subject to due diligence. Bristol-Myers also said it will not make any alterations to its exclusive marketing rights for ERBITUX and the related compounds (including IMC-11F8).
In the next day or two, the financial markets could hit their tipping point. It is certainly not beyond the realm of the possible that Lehman (LEH) and Washington Mutual (WM) could fail. Merrill Lynch (MER) is also trading off sharply.
Looking into what is now a nearly bottomless well, a failure of several firms could cut the implied value of mortgage-back securities and other consumer debt instruments by 20% or 30% more than their nominal value a few weeks ago.This is not a measured failure of inherent value. It is an annihilation. Value of existing derivatives, which have not been valued by trading in the open market could face a catastrophic failure.
CSX Corp. (NYSE: CSX) is trading higher after the rail
road operator increased its 2008 and long-term financial guidance. It sees Fiscal-2008 earnings of $3.65 to $3.75 per share, which is above its prior $3.40 to $3.60 range and above the consensus of $3.57. The railroad is also increasing its 2008 capital spending to approximately $1.75 billion and expects free cash flow before dividends of about $1 billion.
Today may well be the day that Lehman (LEH) fails. No one should be surprised if the company goes into Chapter 11 today or if the government steps in to sell off pieces and guarantee the firm’s real estate portfolio to find a buyer.
It may only take one really big client walking out the door.
Before the market open, LEH is off 42% to $4.15 which makes its market cap a mere $3 billion. By many estimates, Neuberger Berman, the firm’s money management is worth three times that. Lehman also has valuable trading and investment banking operations.
Wall St. is giving the "bad bank" part of Lehman a value of negative $10 billion. And, that may be the best case.
Douglas A. McIntyre
Shares of Lululemon Athletica (NASDAQ: LULU) are being hit this morning on what seemed to be good earnings data on the surface. But when you dig down it seems that the growth is slowing . The maker of yoga and active lifestyle apparel posted earnings of $0.18 versus the First Call consensus estimate of $0.13. Its revenue rose 47% to $85.5 million versus estimates of $88.2 million, and this is part of the concern affecting shares today. Lululemon has also reaffirmed guidance for Fiscal-2009 of $0.68 to $0.71 on revenues of $380 to $385 million, while First Call has estimates at $0.71 and $404.9 million respectively.
These are some of the early bird analyst upgrades and positive calls we are seeing this Thursday morning with more than two hours to the open:
Jon C. Ogg
September 11, 2008
These are some of the early bird analyst downgrades and negative calls we are seeing this Thursday morning with more than two hours to the open:
Jon C. Ogg
September 11, 2008
With Bear Stearns, Fannie Mae (FNM), and Freddie Mac (FNM) fundamentally gone as independent institutions, the Treasury and Fed have turned their attention to Lehman (LEH) and Washington Mutual (WM). Nothing to that effect has been said in public, but the depth of the troubles at the two firms assures that they are getting scrutiny.
As the situation at a number of banks and brokerages worsens the government still has not discovered a basic program to salvage the system.
Saudi Arabia walked out on OPEC yesterday. It said it would not honor the cartel’s production cut. It was tired of rants from Hugo Chavez of Venezuela and the well-dressed oil minister from Iran.
As the world’s largest crude exporter, the kingdom in the desert took its ball and went home.
Global investors have become gun shy about owning bonds and equities in firms based in emerging markets. What was once considered a part of the world’s markets where a strong return was nearly a lock, the so-called Second and Third World have lost their luster.
The economy in China is slowing. Russia is not longer a "friend" to the US. Several large companies in India have warned that their growth rates have fallen off sharply.
The second richest man in the world has acquired a stake in The New York Times Co. (NYT), but there’s a good chance you’ve never heard of him.
Carlos Slim, the Mexican telecom mogul whose net worth is estimated at $60 billion by Forbes, filed a 13-G with the SEC, disclosing a 6.4% stake in the company. Given that there are several activist investors circling the company, the fact that it’s a 13-G is interesting: by disclosing the stake that way, instead of with a 13-D, Mr. Slim is indicating that the investment is passive and that he does not intend to take an active role in shaping the company’s strategy.
Short interest in a number of financial stocks moved up very sharply for the period ending August 29. Shares short in Washington Mutual (WM) rose 12% to 383 million. Short interest in Fannie Mae (FNM) was up 29% to 183 million shares. Shares short in Ambac (ABK) were up 9% to 91 million. Short interest in AIG (AIG) was also up 9% to 86 million. shares.
Shares short in Wells Fargo (WFC) moved up 6% to 176 million.
The short interest in most tech shares fell. Share short in Intel (INTC) fell 17% to 69 million. Short interest in Microsoft (MSFT) fell 11% to 45 million. Shares short in Sun (JAVA) fell 18% to 37 million. Shares short in Marvel dropped 22% to 27 million.
Other notable moves included an increase of shares short in Nvidia (NVDA) of 110% to 47 million and an increase of 10% of shares sold short in Sirius XM (SIRI) to 232 million
Data from NYSE and Nasdaq
Douglas A. McIntyre
According to Reuters, Washington Mutual (WM) fell 30% to a 17-year low.
Reuters reports that billionaire Carlos Slim has bought 6% of The New York Times (NYT).
Reuters writes that Northrop Grumman (NOC) may get a $5 billion deal to build an aircraft carrier for the US Navy.
Chrysler will introduce seven new models by 2010, according to Reuters.
Asia markets fell sharply
The Nikkei was off 2% to 12,103. Mitsubishi UFJ Financial fell sharply as did Canon.
The Hang Seng fell 3.5% to 19,304. China Mobile (CHL) was off nearly 6%. China Life (LFC) was off more than 4%.
The Shanghai Composite fell 3.3% to 2,079.
Data from Reuters
Douglas A. McIntyre
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