Daily Archives: September 24, 2008

With Financial Stocks Off Limites, Shorts Move To Tech (AAPL)(DELL)(ORCL)(INTC)(AMD)(TXN)

AngrybearThe cut-off for the last short interest data was September 15, before a number of financial stocks got protection from the SEC. Before the ban, short sellers were already moving out of some bank and brokerage shares. Fannie Mae (FNM), Freddie Mac (FRE), Citigroup (C), and Bank of America (BAC) all had big drops in total shares sold short. The only large spike up in the group was Washington Mutual where the short interest spiked 12% to 429 million shares.

Short sellers moved their money elsewhere with the primary target being technology shares.

Read More »

Posted on: September 24, 2008 – 7:11 pm in Short Interest, , , , , , , , , , , , , , , ,

Big Tobacco Goes On The Offensive (MO)

Altria_logoPhilip Morris USA, part of Altria Group Inc. (NYSE: MO), has filed a rather interesting lawsuit which could act to set the precedent for case law for years ahead. Big Tobacco asked a federal court to overturn a San Francisco ordinance which would effectively ban the sale of tobacco products in convenience drug stores.

Read More »

Posted on: September 24, 2008 – 6:25 pm in Law, Tobacco,

Biotech Bonanza: Ligand Takes out Pharmacopeia (LGND, PCOP)

This might not be the biggest of biotech mergers out there, but deals are continuing in the bio-space.  Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) has entered into a definitive merger agreement to acquire Pharmacopeia (NASDAQ: PCOP) in a deal valued up to $70 million.

Read More »

Posted on: September 24, 2008 – 5:52 pm in Biotech, Mergers and Buy Outs, ,

Presidential Candidates Taking A Time-Out

Mccain_image_2Obama_imageAs media reports started commenting today, it looks like both Presidential candidates are going to stop campaigning and go back to Washington D.C. to deal with this government bailout issue.  John McCain is heading back to Washington to deal with this crucial issue and it looks like Obama is as well.  The only real difference is whether or not the first debate on Friday evening should take place, which Obama has said he wants to continue as planned and McCain’s camp noted a potential delay.  President Bush will speaking on the issue tonight.  After what has felt like a multi-year Presidential campaign, most of us are probably wishing it didn’t take a financial crisis to interrupt this never-ending campaign trail.

Jon C. Ogg
September 24, 2008

Posted on: September 24, 2008 – 4:06 pm in Economy, Politics, , , ,

Nike, Just Did It (NKE)

Nike_logoNIKE, Inc. (NYSE: NKE) reported quarterly revenue rose 17% to $5.4 billion, although currency changes increased growth by 7%. Net income fell 10% to $510.5 million, as earnings per shareh fell 8% to $1.03.  Net income and earnings per share would have actually increased 10% and 12% respectively if it were not for a tax credit in 2007. First Call had estimates earnings estimates of $0.92 on $5.19 billion in revenue.

Read More »

Posted on: September 24, 2008 – 3:33 pm in Apparel, Earnings,

Red Hat Continues Deferred Revenue Growth (RHT)

Red_hat_logo_2Red Hat, Inc. (NYSE: RHT), the largest seller of Linux operating systems and office suites, today reported that quarterly revenue soared 29% revenue to $164.4 million. It posted non-GAAP earnings of $0.20 per share.  First Call had estimates at $0.18 for earnings and $163.6 million for revenue.

Read More »

Posted on: September 24, 2008 – 3:17 pm in Earnings, Software, , , ,

The 52-Week Low Club 9/24/2008 (PPC)(MRX)(ENTG)(CPLA)

Sad_clownPilgrim’s Pride (PPC) Company says it will have lay-offs. Drops to $6.06 from 52-week high of $35.98.

Medicis Pharmaceutical (MRX) Firm says it will restate financials. Falls to $14 from 52-week high of $32.18.

Entegris (ENTG) No new news. Sells down to $4.71 from 52-week high of $9.49.

Capella Education (CPLA) No special news, Falls to $42.16 from 52-week high of $75.38.

Douglas A. McIntyre

Posted on: September 24, 2008 – 2:51 pm in HI/LOW, , , ,

Meredith Whitney Weighs In On Goldman Sachs Dilution (GS)

Goldman_sachs_logo_2Oppenheimer’s star banking analyst Meredith Whitney is already keying in on Goldman Sachs Group’s (NYSE: GS) plans to raise cashs and shore-up its liquidity.  She has noted that the $5 billion public stock offering seems "exorbitantly expensive" at $123.00 per share.  When you add up the preferred financing and the warrants, Whitney estimates a total dilution in the vicinity of 16% to previous shareholders.

Read More »

Posted on: September 24, 2008 – 1:45 pm in Analyst Calls, Banking, Brokerage Firms, Financial Stocks,

GM (GM) Shares Should Drop 50% By Year-End

Gm20jpeg20imageBetween the credit markets and consumer spending, GM (GM) is caught in a vise. The car company needs more money and Congress seems less inclined with each passing day to want to hand out more taxpayer cash.

Because GM’s sales may not recover for two years and its access to credit is limited, the shares could easily move below $5 before the end of the year. They trade at $10.60 now.

GM recently drew down $3.5 billion on one of its lines of credit. The company’s treasurer said that would bolster liquidity "at a time when capital markets have become more challenging." In other words, GM’s access to the credit markets is all but gone.

Read More »

Posted on: September 24, 2008 – 12:52 pm in Autos,

Day Trader Alert: SiRF Technology (SIRF)

Sirf_logoSiRF Technology Holdings Inc. (NASDAQ: SIRF) has just made a mid-day mystery move on essentially no news.  It seems that traders are tying it to the G1 phone launch from Google based upon an old press release.  Unfortunately, even under the best case scenario this is already known. It was our understanding that the phone is being built by HTC with a Qualcomm baseband.  This stock is frequently passed around in trader chat rooms, and that may be the biggest thing going for it today.  Unfortunately, some of these low market cap stocks make mystery stock moves and sometimes on exaggerated or even old information.  So far, that’s all this appears to be.  When you add in that this was a former high-flier that crashed and burned, it doesn’t take much money to move the stock around.  Even after a 10% rise today to $1.92, its 52-week trading range is $1.51 to $30.61.  Shares briefly traded north of $2.00 on the sudden spike, and we haven’t been able to find anything new from the company itself to account for the move. As of 1:07 PM this has already traded 20% more than its full average daily trading volume.

Jon C. Ogg
September 24, 2008

Posted on: September 24, 2008 – 12:11 pm in Semiconductor,

Chrysler Soon Fully Under Cerberus? (DAI)

Chrysler_logo Daimler AG has confirmed that it is in talks with Cerberus over the possible redemption of the 19.9% stake it still has in Chrysler LLC.  That would put Chrysler back entirely in US hands, but would still keep it private (for now).  If Cerberus wants the rest of the automaker, there is one scheming and possibly self-serving question: Is this an endorsement of the future of the US auto industry?  Stay tuned.

Jon C. Ogg
September 24, 2008

Posted on: September 24, 2008 – 11:49 am in Autos, Mergers and Buy Outs, Private Equity, , ,

Hanesbrands: Hecho en Asia (HBI)

Hanes_logo_2Apparently labor costs throughout Latin America are getting too pricey, if you can believe it.  Hanesbrands Inc. (NYSE: HBI) is updating its "consolidation and globalization cost-reduction strategy."  While this includes increasing production in Asia, it is ditching many Latin American facilities and workers.  The company plans to have closed nine plants in five countries by the end of Summer in 2009.  Approximately 8,100 jobs will be lost.

Read More »

Posted on: September 24, 2008 – 11:16 am in Apparel, Labor & Unions,

Bernanke Changes Tone On Bailout Terms, Hints On Rate Policy

Bernanke_imageFed Chairman Ben Bernanke sounded more confident today in his presentation to the Joint Economic Committee in Washington D.C.  It seems as though he did not want to repeat the mistakes he made yesterday today.  Today, Bernanke is trying to convey the message that the government should not consider the $700 billion bailout and rescue package as a purchase rather than as an expense. In short, he wants the senators and congressmen to think of it as an investment rather than a loss.  He is also stating that the government won’t overpay for distressed assets.  That is a marked difference over concerns about what Treasury Secretary Hank Paulson was discussing. 

Read More »

Posted on: September 24, 2008 – 10:30 am in Economy, Law

CONSOL Guidance, A Canary In The Coal Sector (CNX, MEE, FCL, ACI, BTU, JRCC)

Coal_imageCONSOL Energy (NYSE:CNX) announced a dramatic change in its guidance for the third quarter. Production is expected reach just 15 million tons, well below even the low estimate of 16.4 million tons in previous guidance. Operating costs are also expected to rise 8%-10% from second quarter levels of $41.60/ton. Essentially, the company attributed lower production to poor execution and more frequent safety inspections. CONSOL did reaffirm production guidance for the fourth quarter of 17.8-19.8 million tons.

Just over a month ago, we noted the declines in coal stocks, and the situation has not improved. The biggest loser since then has been Massey (NYSE:MEE), down 40%, followed by Foundation Coal (NYSE:FCL), off 37%. Arch Coal (NYSE:ACI), Peabody (NYSE:BTU), James River (NASDAQ:JRCC), and CONSOL are down 22%-28%.

Read More »

Posted on: September 24, 2008 – 9:25 am in Commodities, Earnings Warning, , , , , ,

Government Wakes Up & Endorses Solar Tax Credits (FSLR, SPWR, STP, ESLR, ENER, SOLR)

Solar_panel_pic_2For months we have been under the potential disaster scenario where solar tax credits were going to expire and end at the end of 2008.  Despite the calls for energy independence and a move away from foreign oil, many believed that Congress would not renew the tax credits that are helping to foster domestic use of solar power.  It seems that Congress may have realized how silly this expiration would have been and how much answering they might have had to come up with if it happened. The Senate has passed a bill that provides more than $17 billion in renewable tax incentives. Under the bill, the incentives would go through 2016.  Below are the stocks showing major gains as a result:

Read More »

Posted on: September 24, 2008 – 9:08 am in Alternative Energy, Law, Regulation, Utilities, , , , , ,

Level 3 Registers Shares For Merrill Lynch (LVLT, MER)

Level_3_logoLevel 3 Communications Inc. (NASDAQ: LVLT) has registered shares for sale by affiliates of Merrill Lynch (NYSE: MER).  This relates to potential offers and sales by Merrill Lynch International of as many as 23 million shares of common stock.  Specifically, this is in connection with the early unwind of the bond hedge and warrant Transactions that it entered in December 2004.

Read More »

Posted on: September 24, 2008 – 8:04 am in Internet, Secondary Offering, ,

Buffett’s Ambition In Goldman Sachs (BRK-A, GS)

Buffett_imageGoldman_sachs_logoBillionaire and esteemed investor Warren Buffett has made a major move.  Berkshire Hathaway Inc. (NYSE: BRK-A) is investing some $5 billion in Goldman Sachs Group Inc. (NYSE: GS).  His stake is in preferred stock rather than in common stock, but he is also getting a warrant to buy $5 billion worth of common stock.  In addition, Goldman Sachs announced yesterday that it would raise another $2.5 billion in a public stock offering.

Read More »

Posted on: September 24, 2008 – 7:20 am in Brokerage Firms, Buffett, Conglomerates, Financial Stocks, Secondary Offering, ,

Early Bird Analyst Upgrades (ALVR, ABV, ABC, NITE, MSSR, NDAQ, PCX, TRMB)

These are some of the analyst upgrades and positive calls coming from Wall Street this Wednesday morning with more than two hours to the open:

  • Alvarion (ALVR) Started as Buy at Deutsche Bank.
  • AmBev (ABV) Raised to Outperform at Credit Suisse.
  • AmerisourceBergen (ABC) Raised To Buy at Merrill Lynch.
  • Knight Capital (NITE) Raised to Buy at Goldman Sachs.
  • McCormick & Schmick’s (MSSR) Started as Buy at Jefferies.
  • Nasdaq OMX (NDAQ) Raised To Buy at Goldman Sachs.
  • Patriot Coal (PCX) Started as Buy at UBS.
  • Trimble Navigation (TRMB) Started as Buy at Deutsche Bank.

Jon C. Ogg
September 24, 2008

Posted on: September 24, 2008 – 6:23 am in Analyst Calls, , , , , , , ,

Early Bird Analyst Downgrades (BBT, CB, TRAK, FFIV, HTZ, JNPR, NYB, NYX, SVVS, PCU)

These are some of the analyst downgrades and negative calls coming from Wall Street this Wednesday morning:

  • BB&T (BBT) Cut to Underperform at FBR.
  • Chubb (CB) Cut to Underweight at JPMorgan.
  • DealerTrack (TRAK) Cut To Hold at Deutsche Bank.
  • F5 Networks (FFIV) Cut to Underperform at Merrill Lynch.
  • Hertz (HTZ) Cut to Neutral at Goldman Sachs.
  • Juniper Networks (JNPR) Cut to Underperform at Merrill Lynch.
  • New York Community Bancorp (NYB) Cut to Underperform at FBR.
  • NYSE Euronext (NYX) Cut to Neutral at Goldman Sachs.
  • SAVVIS (SVVS) Cut to Hold at Jefferies.
  • Southern Copper (PCU) Cut to Underperform at Merrill Lynch.

Jon C. Ogg
September 24, 2008

Posted on: September 24, 2008 – 6:21 am in Analyst Calls, , , , , , , , , ,

VirnetX Holding Corporation Files To Raise Cash (VHC)

VirnetX Holding Corporation (AMEX: VHC) has filed to sell up to $30 million worth of common stock in a secondary offering.  Cowen and Company, LLC is the lead placement agent and Craig-Hallum Capital Group LLC is the co-placement agent.

Read More »

Posted on: September 24, 2008 – 5:50 am in IPOs, Internet,