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Level 3 Communications, Inc. (NASDAQ: LVLT) has just filed a mixed securities shelf registration with the SEC that will allow the sale of securities. This filing pertains more to security holders of the company rather than the company itself.
Daily Archives: January 13, 2009
Level 3 Files Mixed Shelf, For Holders (LVLT)
Citigroup (C) Brokerage Partnership With Morgan Stanley (MS) Is Done
Citigroup (C) and Morgan Stanley (MS) have agreed to combine Morgan Stanley’s Global Wealth Management Group and Citi’s Smith Barney, Quilter in the UK, and Smith Barney Australia into a new joint venture to be called Morgan Stanley Smith Barney.
According to the companies, "Under the terms of the agreement, Citi will exchange 100 percent of its Smith Barney, Smith Barney Australia and Quilter units for a 49 percent stake in the joint venture and an upfront cash payment of $2.7 billion. Morgan Stanley will exchange 100 percent of its Global Wealth Management business for a 51 percent stake in the joint venture. After year three, Morgan Stanley and Citi will have various purchase and sale rights for the joint venture, but Citi will continue to own a significant stake in the joint venture at least through year five. "
"At closing, Citi will recognize a pre-tax gain of approximately $9.5 billion, or approximately $5.8 billion on an after-tax basis, and will create approximately $6.5 billion of tangible common equity".
Why did the deal happen? Citigroup needed the money. It is not more complex than that.
Douglas A. McIntyre
Yahoo! Confirms Bartz As CEO, With A Twist (YHOO, ADSK, CSCO, INTC, NTAP)
Yahoo! Inc. (NASDAQ: YHOO) has now confirmed reports that the former head of Autodesk (NASDAQ: ADSK) Carol Bartz will become CEO of the troubled search and online media company. But this is also coming with a twist as a top Yahoo executive who was considered for the job also is resigning.
The 52-Week Low Club (UNG)(AM)(BNI)(CPHD)
United States Natl Gas Fund (UNG) Falling gas prices. That’s all. Drops to $21.37 from 52-week high of $63.89.
American Greetings (AM) New share buy-back does not seem to be helping. Down to $5.35 from 52-week high of $21.81.
Burlington Northern (BNI) Rival CSX posts weak figures. Sell off to $66.55 from 52-week high of $114.58.
Cepheid (CPHD) Posts poor financial outlook. Moves down to $6.66 from 52-week high of $33.36.
Douglas A. McIntyre
Will Huntington Bancshares Raise Cash? (HBAN, HBANP)
Huntington Bancshares Incorporated (NASDAQ: HBAN) has filed a mixed-securities shelf registration with the SEC which will allow the company to sell securities and raise capital if it chooses. The company asked to sell an unspecified amount of mixed securities with no terms given nor any underwriters named.
Yahoo!’s (YHOO) Best Chance
It is picking low-hanging fruit to say that Yahoo!’s (YHOO) new CEO, Carol Bartz, can’t fix the portal company. Yahoo!’s shares are down about 3% on the news of the selection. Bartz had a good reputation at the other firm she ran, Autodesk. But, Yahoo! is an Internet company and Bartz is not an Internet executive.
The fight over the future of Yahoo!, which has run from its struggle with a takeover offer from Microsoft (MSFT) to its falling earnings to its management changes, masks that great foundation the company still possesses.
Alternative Energy Short Selling Decreases (CSIQ, CPST, CLNE, ENER, ESLR, FSLR, FCEL, SOLR, HOKU, JASO, SFUN, SPWRA, SPWRB)
Short selling is not always just used as a bet against a stock, but that is what Wall Street evaluates short interest for. We did note a drop in short selling on NASDAQ from mid-December to December 31. But it is odd that short selling in alternative energy stocks has come down too. this is despite how weak some of the alternative energy stocks have been and how the industry is being gutted by sudden cheap energy prices again.
Stock (Ticker) Dec. 31 Dec. 15 Change
Canadian Solar Inc. (CSIQ) 2,221,041 2,535,153 -12.39%
Capstone Turbine Corp. (CPST) 15,238,501 15,982,879 -4.66%
Clean Energy Fuels Corp. (CLNE) 3,766,746 3,363,349 +11.99%
Energy Conversion Devices (ENER) 10,903,594 11,784,508 -7.48%
Evergreen Solar, Inc. (ESLR) 23,030,783 24,041,949 -4.21%
First Solar, Inc. (FSLR) 7,586,475 7,725,457 -1.80%
FuelCell Energy, Inc. (FCEL) 5,844,014 6,821,520 -14.33%
GT Solar International (SOLR) 2,588,190 2,585,455 +0.11%
Hoku Scientific, Inc. (HOKU) 1,912,737 2,012,192 -4.94%
JA Solar Holdings, Co. (JASO) 14,182,231 15,976,615 -11.23%
Solarfun Power Holdings Co. (SFUN) 3,027,631 3,948,622 -23.32%
SunPower Corp. (A) (SPWRA) 9,418,472 9,619,152 -2.09%
SunPower Corp. (B) (SPWRB) 2,521,597 2,618,116 -3.69%
Jon C. Ogg
January 13, 2009
Drillers Report Operations Blues (BAS, RIG)
Oil field services company Basic Energy Services, Inc. (NYSE:BAS) reported this morning that December 2008 operations were even lower than expected. Drilling rig utilization reached just 66% in December, down from 83% in November and down 88% from December 2007. The company had projected quarterly declines of 4-6% in revenues for the fourth quarter, but is now expecting a revenue shortfall of 11% for the quarter. Basic is lowering its rates and reducing capital spending, choosing to focus "controlling expenses and preserving liquidity." Basic may have trouble finding customers, but Transocean, Inc. (NYSE:RIG) is firing its customers.
When Oil & Gas Hedging Pays Off (EAC)
Encore Acquisition Company (NYSE:EAC) announced this morning that it would cut its capital spending budget for 2009 by $150 million to $210 million. The company primarily buys and operates long-lived, slowly declining assets that offer continuing profits at low cost. Encore couples that with an aggressive commodity hedging strategy.
Fitch Ratings Predicts Lower Oil Reserves Valuations
Low commodity prices are likely to have a "significantly negative impact" on 2008 proved oil & gas reserves, according to Fitch Ratings. Wonder how long it took the analysts to figure that out.
Analyst Cooling on GE Ahead of Earnings (GE)
General Electric Co. (NYSE: GE) gave us a trader and volume spike alert earlier this morning. The weakness today is being tied to a Barclays research note predicting that GE 4Q earnings will likely be at the low end of its EPS $0.36 to $0.42 EPS guidance. What is more important is the additional breakdown of what is expects from the earnings rather than just the numbers.
Citi Fesses Up On Smith Barney & Morgan Stanley Reports (C, MS)
Citigroup Inc. (NYSE: C) has issued a statement regarding the many news reports on the possible combination of Smith Barney with Morgan Stanley (NYSE: MS).
NVIDIA Visits The Gallows (NVDA)
Things have been bad for NVIDIA Corporation (NASDAQ: NVDA) for some time. Unfortunately, they are not looking any better. The company did not just lower its guidance. Its guidance is so bad that it looked like a blind man in the batter’s box.
In an amended 13D filing, Bill Ackman increased his holdings in General Growth Properties (NYSE: GGP)
On December 5th, 2008, Pershing Square owned 20,080,690 shares or 7.5% of General Growth Properties. As of January 9th, 2009, Ackman’s Pershing Square now owns 22,901,194 shares or 7.4% of GGP.
Pershing purchased 2.82 million shares or $4,822,035 worth of General Growth Properties shares.
Gordon Brown’s VAT folly should be a sharp lesson to Barack Obama
by Rob Arnott & John Tamny
Back in the dark economic days of the late 1970s and early 1980s, truly revolutionary change on taxation improved the economic outlook in both Great Britain and the United States.
With demand-driven Keynesian thinking having proved ineffective as an economic stimulant, classical thinkers possessing a greater affinity for the works of Adam Smith and John Stuart Mill successfully filled the gaping policy void
First Solar Takes Another Downgrade (FSLR)
Shares of First Solar, Inc. (NASDAQ: FSLR) were already hit hard yesterday. They are under pressure again this morning. It isn’t just lower and lower energy prices and a slower and slower economy taking a toll on the stock. This is due to an analyst downgrade. It’s actually a pretty big one.
Bernanke Admits Banks Still Troubled
Ben Bernanke today addressed a number of issues still plaguing the economy. He said that no one could predict how long an economic recovery would take. He acknowledged that the Obama stimulus plan might work .He said that the Fed could go back to its old role once the catastrophe had passed.
Perhaps his most telling comments were about the banking system and banks. Bernanke made it clear that there was more the Fed could do to buy up troubled securities and try to free up the credit markets.
Early Bird Analyst Upgrades (ATML, ELN, FDP, ICLR, SLW, SMA)
These are some of the top pre-market analyst upgrades from Wall Street which we have seen this Tuesday morning with more than two hours until the open:
- Atmel (NASDAQ: ATML) Started as Buy at Goldman Sachs.
- Elan (NYSE: ELN) Raised to Buy at Canaccord.
- Fresh Del Monte (NYSE: FDP) Started as Buy at Jefferies.
- Icon (NASDAQ: ICLR) Raised to Buy at Goldman Sachs.
- Silver Wheaton (NYSE: SLW) Raised to Buy at UBS.
- Symmetry Medical (NYSE: SMA) Raised to Market Perform at Wachovia.
Jon C. Ogg
January 13, 2009
Early Bird Analyst Downgrades (ADBE, BLKB, GLW, DE, ERIC, PCG, PPDI, PLD)
These are some of the analyst downgrades we have seen from Wall Street this Tuesday morning with more than two hours until the open:
- Adobe Systems (NASDAQ: ADBE) Cut to Underperform at FBR.
- Blackbaud (NASDAQ: BLKB) Started as Sell at Maxim Group.
- Corning (NYSE: GLW) Cut to Market Weight at Thomas Weisel.
- Deere & Co. (NYSE: DE) Cut to Neutral at JPMorgan.
- Ericsson (NASDAQ: ERIC) Cut to Sell at UBS.
- PG&E (NYSE: PCG) Cut to Neutral at Goldman Sachs.
- Pharmaceutical Product Development (NASDAQ: PPDI) Cut to Neutral at Goldman Sachs.
- ProLogis (NYSE: PLD) Cut to Underweight at JPMorgan.
Jon C. Ogg
January 13, 2009
Chaos Theory Takes Hold Of Corporate Earnings
If a world where corporate earnings are completely predictable is a "10" and a world where they cannot be predicted at all is a "1", most of the last several years have been in the "7" or "8" range. That has changed so much in the last two quarters that predictions have become hard to make and going into this earnings season the job may become impossible.
Chaos theory says that behavior that appears to be random is not. The future dynamics of chaotic systems are always defined by their initial conditions. Even the most unruly process cannot defy prediction. That may work for people who have PhDs in math but for the balance of investors chaos is chaos, plain and simple.
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