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It has been a while since we had an IPO filing and the IPO market has been a ghost town with only a handful of deals since last summer. Changyou.com, a Chinese MMORPG video game operator, apparently has ambitions of an Initial public offering in the U.S. The company developed the game Tian Long Ba Bu, or TLBB, which was launched in May 2007.
Daily Archives: March 17, 2009
IPO FILING: Changyou.com, Chinese MMORPG (CYOU)
Oil ETF’s & The Return of $50 Oil (OIL, USO, OIH, DXO, DIG)
Oil flirted with the $50.00 handle today, which would be close to a 4-month high. This also marked the end of the April contract expiration, so now we roll over to May. April delivery for light sweet crude had its the highest close since the start of December for the current front month contract. As you will see, the ETF’s all tracked pretty much in-line today.
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The 52-Week Low Club (SHS)(CHTR)(ENER)
Sauer-Danfoss (SHS) Loses money. Suspends dividend. Drops to $3.03 from 52-week high of $37.93.
Chartered Semiconductor (CHRT) No major news. Down to $.65 from 52-week high of $7.05.
Energy Conversion Devices (ENER) Solar energy company pulls its forecasts. Sells off to $12.85 from 52-week high of $83.33
Douglas A. McIntyre
AIG (AIG) Bonuses: Who’s To Say They Did Not Earn Them?
In a letter from NYS Attorney General Andrew Cuomo to Rep Barney Frank, the AG’s office disclosed the results of its investigation of the amount of money paid to certain AIG (AIG) employees as bonuses.
One executive made $6.4 million. The top seven in terms of compensation received $4 million or more each, and seventy-three earned over $1 million.
What the letter does not say is what the criteria for the bonuses was and whether those criteria were in any way reasonable. It also does not disclose who signed the bonus agreements or approved the payouts. Documents the AG reviewed do show that those that were paid the incentives were promised at least 100% of the bonuses they got in 2007.
In other words, Cuomo’s disclosures are close to useless in terms of revealing the reasons the contracts were written the way that they were and who was responsible for them.
Douglas A. McIntyre
DuPont Ignores Solar Market Woes (DD)
DuPont, or EI DuPont de Nemours & Co. (NYSE: DD), has announced an initiative today that would have been cheered by investors a few months ago. The company is continuing to expand its solar operations. The problem is that the company is doing this just about every solar company in the world has discussed slowing orders and other players are reducing capacity. DuPont anticipates that the photovoltaic market will grow by double digits over the next several years.
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Discovery Says Amazon Kindle Infringes Its Patent (DISCA, DISCB, DISCK, AMZN)
Discovery Communications, Inc. (Nasdaq: DISCA, DISCB, DISCK) has filed a patent infringement suit against Amazon.com, Inc. (NASDAQ: AMZN) regarding the Amazon Kindle e-book reader.
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ADM Pursuing Brazilian Ethanol? (ADM)
A Brazilian newspaper reports this morning that Archer Daniels Midland Company (NYSE: ADM) may purchase the Brazilian ethanol group Unialco, together with a mill belonging to Da Mata. According to the news report, a Unialco shareholder stated that ADM has signed a memorandum of understanding with the Brazilian company but there has been no comment from ADM.
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Car Companies Face Rapidly Deteriorating Dealer Financials (GM)(TM)(F)(HMC)
For over a year, analysts have said that one of the largest problems car companies face is dealers who go bankrupt. It is actually a double-edged sword. If under-performing franchises fold, it can help other dealers in the network. If large dealers fold, a car company could be left without a sales and service outlet in a big city.
Dealer profits fell t0 $349 per employee last year, according to data from SageWorks. Read More
Meredith Whitney’s Replacement at Oppenheimer Far Less Negative (GS, MS, BAC, C, JPM)
Meredith Whitney is and was one of the most influential banking analysts on Wall Street.
She was negative on the banking and investment banking sector for roughly two years and has been credited as the one analyst who had it right as the sector crumbled. But she recently left Oppenheimer to form her own firm and all of the banks and brokerages she covered were vacant in coverage by Oppenheimer in name rather than in fact. In a report from last night, Chris Kotowski has started the money center banks and investment banking firms. While his notes are cautionary in nature, they are actually far less negative and even outright optimistic compared with Whitney.
Kotowski initiated coverage of Goldman Sachs Group Inc. (NYSE: GS), Morgan Stanley (NYSE: MS), Citigroup Inc. (NYSE: C), Bank of America Corp. (NYSE: BAC), and JPMorgan Chase & Co. (NYSE: JPM).
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Canadian Solar Dims (CSIQ)
The sorry news just keeps rolling in from solar companies. This morning Canadian Solar Inc. (NASDAQ: CSIQ) reported an EPS loss of $-1.42, way below analysts expectations of a loss of -$0.31. In the same period last year, Canadian Solar earned $0.31. Revenue fell to $73 million, falling sequentially from $252.4 million and from $127.5 million a year ago. Although it was awful, revenue did beat analysts expectations of $69.12 million.
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Plains Pipeline Offers Common Units (PAA)
Plains All American Pipeline, L.P. (NYSE: PAA) announced an offering to sell approximately 5 million common units at an offering price of $36.90/unit. Joint book-runners include UBS, Citi, JP Morgan, Merrill Lynch & Co., and Wachovia Securities. The underwriters were granted an 30-day overallotment option of 750,000 units. The common units are being offered and sold through a shelf registration already on file with the SEC.
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Natural Gas Price to Consumers Drops Off the Table (NST)
Natural gas prices to some consumers in Massachusetts could fall 70% this summer. NSTAR (NYSE: NST) has filed a proposal with the Massachusetts public utilities regulator to reduce its summer rates from last summer’s $1.30/therm to a summer 2009 rate of $0.38/therm.
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Rio Tinto’s Chinese Investment Getting Some Pushback (RTP, BHP, CEO)
When China’s government-owned aluminum company Chinalco agreed to pay $19.5 billion for an additional 9% of Rio Tinto plc (NYSE:RTP), the deal already faced a couple of problems. The biggest was the Australian government’s limit on foreign ownership of 15%. Chinalco’s share of Rio Tinto will jump from 9% to 18%.
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Wynn Resorts Raises Cash (WYNN)
Wynn Resorts, Limited (Nasdaq: WYNN) has priced a public secondary offering 9,600,000 shares, down from the 7 million shares originally planned. The secondary offering was priced at $19.00 per share. Wynn Resorts intends to use the proceeds for general corporate purposes, including repayment of debt. These shares were also sold under an existing shelf registration.
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Cisco, Goldman Sachs, Conviction Buy (CSCO)
Cisco Systems, Inc. (NASDAQ: CSCO) is trading up 2% at $15.78 in active pre-market trading this morning. It seems that Goldman Sachs decided it likes this new unified computing system push announced yesterday. Goldman has added the technology giant to its prized CONVICTION BUY LIST with an $18.00 target. We have the 52-week trading range as being $13.61 to $27.72. In the last 5 trading days this one has rallied more than 10%.
JON C. OGG
Dreaded ‘Going Concern’ Notes Head To Alternative Energy (AVR, BCON, EPG, VRNM)
If there is one phrase that a company does not want to see in its annual report, it is “GOING CONCERN.” This hinges on a company’s ability to operate financially as a viable business. March is the month where we see many “going concern” notes from auditors, but what makes this interesting is that we are seeing this phrase applied to alternative energy companies. They are supposed to be the thing of the future.
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Meredith Whitney Opines On Banks & The Credit Markets
Meredith Whitney is appearing as a guest host on Squawk Box this morning and below are some of Meredith’s thoughts on the banks and credit markets.
We need solutions now and worry about regulatory changes later.
Whitney said smaller banks have to grow their originations.
Meredith said mark-to-market won’t solve the problem.
Banks will start to assets sell off, bringing asset values down, but less bad stuff will be left on banks’ balance sheets.
Whitney doesn’t think this year will be any different than last year.
February PPI Tamer
We just got the Labor Department data on producer prices as a measurement of wholesale inflation. PPI came +0.1% on the nominal PPI and +0.2% on the core PPI reading of an ex-food and ex-energy basis. PPI was expected to be +0.4% nominally and expected to be +0.1% for the core reading on an ex-food and ex-energy basis.
Intermediate goods and raw materials prices both came down again down for a seven month consecutive decline. The good news is that these numbers are still very low. They are also not deflationary on the producer level as many have worried about.
JON C. OGG
Banks & Brokers Covering Each Other (BAC, C, JPM, GS, MS, HBC)
As you will see below, there are many new calls in the banking and brokerage sector this Tuesday morning:
Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) Started as Outperform at Oppenheimer. Bank of America (NYSE: BAC), Citigroup (NYSE: C), and JPMorgan (NYSE: JPM) were started as “Perform” at Oppenheimer.
Goldman Sachs (NYSE: GS) Cut to Market Perform at KBW.
HSBC (NYSE: HBC) Raised to Neutral at Goldman Sachs.
JON C. OGG
Top Analyst Calls (ABB, ABX, BBY, COST, HD, KSS, LOW, PAAS, UNH)
These are some of the broad upgrades and positive research calls from Wall Street analysts that we have seen this Tuesday morning:
- ABB (ABB) Raised to Buy at Deutsche Bank.
- Barrick Gold (ABX) Raised to Outperform at CIBC.
- Best Buy (BBY) Raised to Buy at Jefferies.
- Costco (COST) Raised to Buy at Jefferies.
- Home Depot (HD) Raised to Buy at Jefferies.
- Kohl’s (KSS) Raised to Buy at Jefferies.
- Lowe’s (LOW) Raised to Buy at Jefferies.
- Pan American (PAAS) Raised to Outperform at CIBC.
- UnitedHealth (UNH) Raised to Outperform at Bernstein.
JON C. OGG
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Today’s top tickerspy Indexes Domestic Telecom ... +2.6% Stem Cell Stocks +2.3% Pain Management S... +2.1% Ethanol and Biofu... +1.9% Savings and Loan ... +1.8% 
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