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It isn’t even Michigan. At least with the car companies about to go under there would be some excuse.
California says it will run out of money on Monday.
Daily Archives: December 10, 2008
California Out Of Cash
Will Auto Co. Credit Default Swaps Get Swamped? (GM)(F)
It may be old school but for every action their is an equal and opposite reaction.
Take the auto bailout. It turns out that creating a car czar with special powers over The Big Three could trigger payments under credit default swaps cover debt in the companies.
Is Another Shoe Dropping on Baidu.com? (BIDU)
Baidu.com, Inc. (NASDAQ: BIDU) looks like a stock in trouble. Again. The Chinese search leader was hitting new 52-week lows before the market recovered late in the day. The exacerbated move is on the heels of last month’s reporting in China showing that many search results had been manipulated to favor advertisers.
A 200% Buyout Premium From Private Equity (ANL)
American Land Lease Inc. (NYSE: ANL) is perhaps one of the more unusual plays seen yet in private equity acquisitions. Despite a 200% premium, the more odd part of "for how much" is the "why"….. American Land Lease Inc. stock closed at $3.90 yesterday, yet it has signed an agreement to be acquired by affiliates of Green Courte Partners for $14.20 per share.
AIG Tries To Address ‘$10 Billion Claim’ (AIG)
American International Group, Inc. (NYSE: AIG) is trying to correct or refute the article that appeared today in The Wall Street Journal saying it still has some $10 billion in undisclosed counterparty obligations. The problems here go above and beyond fuzzy verbiage.
Autos: Bailout To Lock-Out? (GM, F)
Earlier reports had the $15 bailout framework as being reached as a conceptual agreement between the House of Representatives and the White House. In other words, in theory. But now fresh reports show Republican senators threatening to block the bill.
Short Sellers, No Direction in Biotech (AMGN, BIIB, CELG, GENZ, GILD)
It seems that short sellers have no real direction in the major NASDAQ biotech stocks from mid-November to late-November. Generally you see a pattern. This month the only pattern seems to be one of no conviction either way. Here are the short seller reports in the short interest:
Stock (Ticker) NOV. 28 NOV. 14 CHANGE
Amgen Inc. (AMGN) 23,033,081 24,169,278 -4.70%
Celgene Corporation (CELG) 8,298,820 8,040,642 +3.21%
Biogen Idec Inc. (BIIB) 8,027,848 7,938,637 +1.12%
Genzyme Corporation (GENZ) 6,569,181 6,797,501 -3.36%
Gilead Sciences (GILD) 29,055,791 30,213,915 -3.83%
Jon C. Ogg
December 10, 2008
Short Seller Surprise, Alternative Energy Mixed Bag (CSIQ, CPST, CLNE, ENER, ESLR, FSLR, FCEL, SOLR, HOKU, JASO, SFUN, SPWRA, SPWRB)
With oil tanking, many alternative energy stocks and solar stocks have been paying for it. They were the leveraged winners when oil was running up and now they are paying the price on the way down. You will see some major increases in the short selling in some of the key stocks, but it is amazing just how mixed the bets are with some seeing real drops in the short interest. Maybe the notion is out that with suddenly super-low P/E ratios and with many off 75% or more that the worst is behind:
Stock (Ticker) NOV. 28 NOV. 14 CHANGE
Canadian Solar Inc. (CSIQ) 2,427,370 3,368,857 -27.95%
Capstone Turbine Corp. (CPST) 17,560,127 18,493,021 -5.04%
Clean Energy Fuels Corp. (CLNE) 3,410,178 3,278,222 +4.03%
Energy Conversion Devices (ENER) 12,318,601 11,092,675 +11.05%
Evergreen Solar, Inc. (ESLR) 24,902,180 25,732,337 -3.23%
First Solar, Inc. (FSLR) 9,307,012 7,074,475 +31.56%
FuelCell Energy, Inc. (FCEL) 9,091,358 9,447,180 -3.77%
GT Solar International (SOLR) 2,614,025 2,092,142 +24.94%
Hoku Scientific, Inc. (HOKU) 2,040,200 2,442,894 -16.48%
JA Solar Holdings, Co. (JASO) 18,283,207 16,661,472 +9.73%
Solarfun Power Holdings Co. (SFUN) 5,003,987 5,249,784 -4.68%
SunPower Corp. (A) (SPWRA) 11,114,809 12,210,305 -8.97%
SunPower Corp. (B) (SPWRB) 3,230,046 1,990,460 +62.28%
Jon C. Ogg
December 10, 2008
Encore: Change Partners and Dance (EAC, ENP)
Yesterday, we reported on a deal involving a master limited partnership buying a property from the owner of its general partner. Last night, Encore Energy Partners (NYSE:ENP) announced that it bought about 1,800 producing and royalty interest properties from Encore Acquistion Company (NYSE:EAC) for $49 million. The properties currently produce about 500 barrels of oil equivalent daily, most of which is natural gas. The properties are expected to produce for another 15 years or so.
Wanted: Investors in Russian Energy (XOM, RDS.A, BP)
Falling crude oil prices have hit Russia particularly hard. The country needs a crude price of about $70/b to cover production costs and to fund the government. So, what do they do when the price falls into the $40s?
According to Platts, a vice-president of Gazprom Neft, the giant natural gas company’s oil division, held a press conference and announces that now is a "good time" for foreign oil companies to invest in Russia’s oil and gas sector. The question now is whether or not Big Oil will line up to come to Russia’s rescue.
Shorts Gang Up on Top NASDAQ 100 Tech Stocks (AMZN, AAPL, CSCO, DELL, GOOG, INTC, MSFT, ORCL, RIMM, YHOO)
As you will see, most of the top technology stocks from the NASDAQ 100 saw an increase in the number of shares being sold short from mid-November to late November. With the last 9 of 12 days being up days, it is hard to gather much insight from this new short interest report, but here are the changes:
Stock (Ticker) NOV. 28 NOV. 14 CHANGE
Amazon.com, Inc. (AMZN) 36,327,496 35,641,880 +1.92%
Apple Inc. (AAPL) 21,921,767 26,757,152 -18.07
Cisco Systems, Inc. (CSCO) 47,991,497 47,370,952 +1.31%
Dell Inc. (DELL) 44,201,119 45,245,350 -2.31%
Google Inc. (GOOG) 6,469,418 6,533,382 -0.98%
Intel Corporation (INTC) 93,321,145 84,986,069 +9.81%
Microsoft Corporation (MSFT) 73,991,139 71,614,082 +3.32%
Oracle Corporation (ORCL) 57,646,941 48,286,277 +19.39%
Research In Motion (RIMM) 15,897,208 17,603,723 -9.69
Yahoo! Inc. (YHOO) 44,495,373 35,689,747 +24.67%
Jon C. Ogg
December 10, 2008
If Bank Analyst Is Right About Bank Of America (BAC) And Wells Fargo (WFC) No One Seems To Care
A leading bank analyst is certain that Wells Fargo (WFC) and Bank of America (BAC) are going to have to raise more money. No one seems to be listening. Both stocks are flat to up today.
Suppose that Richard Staite of Atlantic Equities is right.
Cowen Throws In The Towel on MasterCard (MA) and Visa (V)
Analysts at Cowen & Co are throwing in the towel on the recent high-flying credit card processors MasterCard (MA) and Visa (V), downgrading both from outperform to underperform, citing deteriorating fundamentals. Cowen completely bypassed a neutral rating on the two. Many have thought that both these companies would be shielded from the credit mess, since they don’t take on credit risks. But, according to Cowen, they cannot escape the slowing economy.
Cowen said recent data from both MasterCard and Visa indicated deteriorating credit and debit purchase volume growth for the past 3 months, with a significant drop in October’s metrics.
Eastman Kodak Proves Silver Can Rust (EK)
Eastman Kodak Co. (NYSE: EK) has been trying to turn a corner for quite some time. This morning the company turned a corner, and walked right into Thor’s Hammer. The film maker has withdrawn all guidance for the second half of the year and for all of 2008.
Top Pre-Market Analyst Upgrades (ALU, ASR, BMY, DD, FORR, HE, QCOM)
There are few positive calls this morning from Wall Street analysts, but these are the ones we have caught this morning:
- Alcatel-Lucent (ALU) Raised to Sector Perform at RBC.
- ASUR (ASR) Raised to Buy at Deutsche Bank.
- Bristol-Myers Squibb (BMY) Raised to Buy at Citigroup.
- DuPont (DD) Started as Buy at Jefferies.
- Forrester Research (FORR) Raised to Outperform at William Blair.
- Hawaiian Electric (HE) Raised to Outperform at R.W. Baird.
- Qualcomm (QCOM) Started as Outperform at William Blair.
Jon C. Ogg
December 10, 2008
Top Pre-Market Analyst Downgrades (AXP, AXYS, BJ, CAVM, ERTS, ERIC, FLIR, FTI, GE, HTLD, KNX, NKE, SINA)
These are the top downgrades or negative calls we have seen this Wednesday morning from Wall Street analysts:
- American Express (AXP) Started as Sell at Banc of America; Started as Sell at Citigroup.
- Axsys Technologies (AXYS) Cut to Underweight at JPMorgan.
- BJ’s Wholesale (BJ) Cut to Neutral at JPMorgan.
- Cavium Networks (CAVM) Cut to Market Weight at Thomas Weisel.
- Electronic Arts (ERTS) was downgraded at Citigroup, Banc of America, and piper Jaffray.
- Ericsson (ERIC) Cut to Hold at Citigroup.
- FLIR Systems (FLIR) Cut to Neutral at JPMorgan.
- FMC Tech (FTI) Cut to Sell at UBS.
- General Electric (GE) Cut to Neutral at UBS.
- Heartlan Express (HTLD) Cut to Sell at UBS.
- Knight Transportation (KNX) Cut to Sell at UBS.
- Nike (NKE) Cut to Neutral at Banc of America.
- Sina (SINA) Cut to Hold at Citigroup.
Jon C. Ogg
December 10, 2008
More Good News From Forecasters, S&P At 400
James Tobin won the Nobel prize for economics in 1969. By his measurement of the stock market, the S&P has a very long way to drop. Keep in mind that there are nuts everywhere making predictions.
According to Bloomberg, Tobin’s Q ratio, which compares the market value of companies to the cost of their constituent parts, indicates the Standard & Poor’s 500 Index is still too expensive relative to the cost of replacing assets. While the 39 percent drop in the S&P this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in. The S&P may plunge another 55 percent to a trough of 400 by 2014.
Douglas A. McIntyre
The Global Recession Gets Official: China Exports Fall
If there has been one constant in the global economy since the beginning of the decade it is that China’s GDP and exports have kept moving up. There has been an almost endless demand for the inexpensive goods made in the world’s most populous country. For exports to move down sharply would mean that worldwide consumer consumption and confidence has fallen into a deep hole.
Shorts Attack The Banks Again, But Flee Bailout Targets And Retailers
No matter how far down bank stocks go and how hard regulators try to keep short sellers out of financial shares, some of the smart money is willing to gamble that the fortunes of the sector will get worse.
As of the end of November, short piled into Citigroup (C) driving up shares short by 44% to 182.5 million. In Bank of America (BAC) short interest rose 20% to 110 million shares. Short interest in Ambac (ABK) moved up 26% to 60.8 million. Shares sold short in US Bancorp (USB) and Colonial (CNB) were both up over 20%. The short interest in Morgan Stanley (MS) was also up almost 20%.
Nortel’s (NT) woes spell trouble for Alcatel-Lucent (ALU) and Motorola (MOT)
Nortel Networks Corp. (NT), which until recently was Canada’s largest company, is has hired bankruptcy attorneys to advise it in the event that its restructuring plan fails, according to The Wall Street Journal. Odds are fairly good of that happening which spells trouble for Alcatel-Lucent (ALU) and Motorola Corp. (MOT), which are struggling on their own.
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