Daily Archives: April 8, 2009

Buffett & Berkshire: Downgraded By Their Own Kin (BRK-A, MCO)

buffett-imageburning-money-pic12Berkshire Hathaway Inc. (NYSE: BRK-A) and its subsidiaries had already been on credit watch elsewhere, but there is a very interesting credit ratings downgrade that just took place.  Moody’s has stripped Warren Buffett’s Berkshire Hathaway of its Triple-A (Aaa) rating.  The new rating is ‘Aa2.’  The National Indemnity Company was cut to ‘Aa1′ from ‘Aaa.’   So why is this a more interesting downgrade?  Berkshire Hathaway is the largest shareholder of Moody’s Corp. (NYSE: MCO).
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Posted on: April 8, 2009 – 4:27 pm in Analyst Calls, Buffett, Conglomerates, Financial Stocks, ,

Nortel Unit Interest: Adding Insult To Injury (NTRLQ, NOK, SI)

burning-money-pic11Nortel Networks Corp. (OTC: NRTLQ) may be adding some insult to serious injury.  Shares surged today, by a huge percentage basis on merely a few cents move, after the WSJ reported yesterday that a Nokia Corp. (NYSE: NOK) and Siemens AG (NYSE: SI) joint venture may be interested in acquiring some of Nortel’s assets.  Recent reports show that the company’s carrier network and its wireless research units are being auctioned.  That is also after rumors of its business communications units getting interest from potential buyers in recent weeks.

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Posted on: April 8, 2009 – 4:00 pm in Law, Management Change, Mergers and Buy Outs, Shareholder Issues, Technology Companies, Telecom, Turnarounds, , ,

AsiaInfo Keeps CITIC & PacificInfo Shares Off Market (ASIA)

money-stack-image18AsiaInfo Holdings, Inc. (NASDAQ: ASIA) filed to withdraw a filing that would have allowed two large insider holders to sell  shares.  It is a bit complicated, but the long and short of it is that this will keep the float much smaller.  At least for now.
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Posted on: April 8, 2009 – 2:37 pm in ADR, China, Insider Activity, Internet, Secondary Offering,

Bank Of America (BAC) Fights Oppenheimer Over Need For Money

bank11Bank of America (BAC) CEO Ken Lewis has based what is left of his reputation on the fact that the firm does not need another dime in government money. As a matter of fact, he regrets taking as much TARP cash as he did.

Oppenheimer believes that the bank will need $36.6 billion. In this environment, that money is not going to come from the private sector. The only entity with the stones to put it up is the US government. Read More »

Posted on: April 8, 2009 – 2:10 pm in Banking, Research,

FOMC Minutes, Mostly Spin Material

burning-money-pic10The minutes of the FOMC’ March 17 to March 18 meeting are out, and the long and short of the matter is that the FOMC’s decision to add massive liquidity was based upon a growing weakness and a low threat of inflation.  Some stabilizing was seen in economic numbers, but not at any levels close to positive.
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Posted on: April 8, 2009 – 1:14 pm in Economy

Does Micron Really Need Cash? (MU)

burning-money-pic9Micron Technology, Inc. (NYSE: MU) is trading lower ahead of a proposed secondary offering to raise cash.  Last night, the company announced that it intends to offer common stock and convertible senior notes for a combined total of roughly $450 million.  It looks like this will be some 55,300,000 common shares, plus the possibility of an additional 8,295,000 shares as an over-allotment option for underwriters.  This would represent roughly $250 million based on recent prices.  It also intends to sell some $200 million in convertible senior notes due October 15, 2013 in simultaneous or concurrent offering, along with the possibility of an additional $30 million as an over-allotment option for underwriters.

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Posted on: April 8, 2009 – 11:21 am in Secondary Offering, Semiconductor,

Exxon/Russia: Approving Sakhalin Budget (XOM)

money-stack-image17Exxon Mobil Corporation (NYSE:XOM) has reportedly received approval from the Russian government for its proposed budget for the Sakhalin-I project. Exxon owns 30% of the joint venture that is developing the oil and gas project, and is the project’s operator.
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Posted on: April 8, 2009 – 10:23 am in Emerging Markets, Oil & Gas, Politics,

MLB Network Hits a Home Run

How baseball learned from football’s mistake and pulled off the biggest cable launch ever.

By Paul Smalera for The Big Money

For the past couple of weeks, Comcast (CMCSA) cable customers have been receiving a message on their TV sets from the ghost in the machine known as the cable executive. The message tells them that the NFL Network will disappear from their service starting May 1. Nothing unusual about that: Every few months, most cable companies go through a refresh; channels move, marginal ones are dropped, and some lineup additions are made. So why is Comcast breaking out the trumpets for the dropping of a single-sport channel during the offseason? In a word, baseball.

For four years, the league-owned network has been battling to get into the living rooms of an America increasingly enamored with its bone-rattling game. But the network is continually forced to guard its flank from cable companies who hate carrying the pricey network. Rather than clamor for the channel, (which is, after all, dedicated to America’s most popular sport), every major cable network has balked, playing a game the NFL isn’t used to: hardball.

Read more….

Posted on: April 8, 2009 – 9:57 am in Uncategorized

A Silver Lining in Lower Wholesale Inventories

money-stack-image16February’s Wholesale Inventory data from the U.S. Commerce Department shows a continued trend of wholesale product inventories being pruned yet again.   The reading came in at -1.5% for February, compared to estimates of  only -0.6%.  Seasonally adjusted, this was $419.3 billion.  This might be the biggest drop yet.  We also saw a revision for January to -0.9%,  rather than the -0.7% originally reported.
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Posted on: April 8, 2009 – 9:16 am in Consumer Goods, Economy

Atlas Lightens its Load (APL, SEP, WMB)

money-stack-image15Atlas Pipeline Partners, L.P. (NYSE:APL) will sell its NOARK natural gas gathering and interstate transport system to Spectra Energy Partners, LP (NYSE:SEP) for $300 million in cash. The company’s president and CEO said that the cash from this sale, plus the cash from an earlier transaction with the Williams Companies, Inc. (NYSE:WMB), will be used to reduce the company’s debt by $400 million. Atlas had about $1.5 billion in long-term debt at the end of December 2008.
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Posted on: April 8, 2009 – 8:59 am in Mergers and Buy Outs, Oil & Gas, , ,

Looking for Next Homebuilder Merger? (DHI, TOL, NVR, MDC, LEN, KBH, RYL, MTH, HOV, MHO, SPF, XHB, ITB, PKB)

We won’t bother telling you about the homebuilder merger this morning, because we already covered it once.  But in a down and out sector, you will see that traders are looking to see if there will be other mergers in the battered group.  As you will also see, the lower market cap stocks are the ones where traders are guessing as to which will be the next take-out candidate.  Our cut off was a $100 million market cap as of yesterday and every stock in the sector that we track in the U.S. is higher.

DR Horton Inc. (DHI)….. $3.5B; +5.8% at $10.78
Toll Brothers Inc. (TOL). $3.1B; +4.5% at $18.86
NVR Inc. (NVR)……….. $2.6B; +4% at $6.86
MDC Holdings Inc. (MDC).. $1.5B; +4.5% at $30.95
Lennar Corp. (LEN)……. $1.2B; +11% at $7.98
KB Home (KBH)………… $1.1B; +6% at $14.30
Ryland Group Inc. (RYL).. $728.8M; +6% at $16.80
Meritage Homes Corp(MTH). $401.3M; +7.3% at $12.99
Hovnanian (HOV)………. $125.0M; +11% at $1.72
M/I Homes, Inc. (MHO)…. $121.7M; +2.2% at $8.72
Standard Pacific (SPF)… $100.6M; +11% at $1.00

Oddly enough, the SPDR S&P Homebuilders (NYSE: XHB) ETF is only up almost 4% at $11.37.  The other ETF, the iShares Dow Jones US Home Construction (NYSE: ITB) is up 3.5% at $9.25.  This is a slightly different ETF, but the PowerShares Dynamic Building & Construct (NYSE: PKB) is up 1.3% at $9.65 on very thin volume.

JON C. OGG

Posted on: April 8, 2009 – 8:46 am in ETF, Housing, Mergers and Buy Outs, Trading Alert, , , , , , , , , , , , , ,

Citi Initiates Coverage on Barrick Gold (ABX) with a Buy

Citi initiates coverage on Barrick Gold (NYSE: <a href=”http://finance.aol.com/quotes/barrick-gold-corporation/abx/nys” title=”Real-time quotes and company profile for ABX” target=”_blank”>ABX</a>) with a Buy. Price target $40.

Citi analyst says, “We rate Barrick a Buy despite concerns on the gold price given a low valuation. In the short term we favor Barrick over Newmont for three reasons: (1) Barrick’s gold hedges will somewhat cushion it from a lower gold price, (2) Barrick trades at lower multiples of gold reserves…

Read more….

Posted on: April 8, 2009 – 8:42 am in Uncategorized,

ProLogis Scores On Financing and Secondary (PLD)

money-stack-image14ProLogis (NYSE: PLD) has successfully raised the cash it was seeking.  And then some.  The warehouse and office park owner and operator REIT had originally planned to sell 115 million shares of common stock to bolster its balance sheet, but it looks like the offering was priced rather strongly at 152 million shares at a price of $6.60 per share, a discount of about 3% to yesterday’s close.
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Posted on: April 8, 2009 – 7:55 am in Business Services, REIT, Secondary Offering,

Capstone Squeezing Blood from a Turbine (CPST, AMAT)

burning-money-pic8Microturbine maker Capstone Turbine Corporation (NASDAQ:CPST) has announced that it will eliminate an additional 22 professional positions as it continues to reduce expenses. Capstone fired 19 employees in February and canceled 16 open positions. The company said it will now employ 212 people, compared with 216 one year ago. Capstone’s microturbines are used in the construction of combined heat and power generation plants and hybrid electric vehicles.
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Posted on: April 8, 2009 – 7:41 am in Alternative Energy, Cult Stock, Green Biz, Labor & Unions, ,

LDK Lands Huge J-V with Q Cells (LDK)

solar-panel-pic2LDK Solar Co., Ltd. (NYSE: LDK) is seeing some small gains this morning on word that the company has formed a joint venture with Q Cells SE.  The venture will focus on photovoltaic systems and market development in Europe and China.  The joint venture is already in discussions with potential buyers of the first turn-key project in Europe, and is in the planning stages for future projects in China.
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Posted on: April 8, 2009 – 7:16 am in Alternative Energy, Green Biz,

Google CEO Eric Schmidt: Good Or Just Lucky? (GOOG)

Joe Weisenthal of The Business Insider

In the eight years since Eric Schmidt got hired to run a hot private company called Google (GOOG) in 2001, the company has become one of the fastest growing and profitable companies the world has ever seen.

This growth has propelled Eric from his prior status as a little-known CEO of a technology also-ran (Novell) to one of the world’s most powerful and richest men.  He is also now widely regarded as one of the world’s most talented chief executives.

Read more….

Posted on: April 8, 2009 – 6:46 am in Uncategorized,

Top Technology Analyst Calls (BBND, CSC, ELX, GRMN, QCOM, STX, WBSN, WDC)

We have seen several influential analyst upgrades, downgrades, and initiation calls in the technology sector from Wall Street early this Wednesday morning.  These are the key tech calls we have seen with about two hours until the open:

  • BigBand Networks (NASDAQ: BBND) Cut to Underperform at Jefferies.
  • Computer Sciences Corp. (NYSE: CSC) Started as Sell at Citigroup.
  • Emulex (NYSE: ELX) Cut to Underweight at JPMorgan.
  • Garmin Ltd. (NASDAQ: GRMN) Cut to Neutral at Baird.
  • Qualcomm (NASDAQ: QCOM) Started as Outperform at FBR.
  • Seagate Tech (NASDAQ: STX) Cut to Neutral at JPMorgan.
  • Websense (NASDAQ: WBSN) Raised to Outperform at FBR.
  • Western Digital (NYSE: WDC) Raised to Neutral at JPMorgan.

JON C. OGG

Posted on: April 8, 2009 – 6:41 am in Analyst Calls, Technology Companies, , , , , , , ,

Early Bird Analyst Upgrades & Downgrades (AZ, CEO, DAI, BEN, GRMN, SE, TEF)

These are the early bird analyst calls from Wall Street that we have seen early this Wednesday morning with about 3 hours until the market opens:

  • Allianz (NYSE: AZ) Cut to Neutral at JPMorgan.
  • CNOOC (NYSE: CEO) Cut to Sell at UBS.
  • Daimler (NYSE: DAI) Raised to Buy at Goldman Sachs.
  • Franklin Resources (NYSE: BEN) Cut to Market Perform at KBW.
  • Garmin (NASDAQ: GRMN) Cut to Neutral at Baird.
  • Spectra Energy (NYSE: SE) Cut to Market Perform at Wachovia.
  • Telefonica (NYSE: TEF) Cut to Hold at Deutsche Bank.

JON C. OGG

Posted on: April 8, 2009 – 5:54 am in Analyst Calls, , , , , , ,

Pulte-Centex Create Major Homebuilder Merger (PHM, CTX, XHB)

money-stack-image12Pulte Homes, Inc. (NYSE: PHM) is acquiring Centex Corporation (NYSE: CTX) in a stock-for-stock transaction valued at $3.1 billion, including $1.8 billion of net debt.  The deal has been unanimously approved by both boards of directors.  This is a deal which came out of nowhere, at least as far as the speculation game would have indicated.  Centex common holders will receive 0.975 shares of Pulte common stock for each share, and as April 7, 2009 the transaction has a value of $10.50 per Centex share. This represents a pre-dilution premium of 32.6% to the 20-day volume weighted average trading price of Centex’s shares.
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Posted on: April 8, 2009 – 5:16 am in Housing, Mergers and Buy Outs, , ,

Intel (INTC) Says Stimulus May Not Help When Chips Are Down (VMW)(AMD)(INTC)(MSFT)

winter3The CEO of Intel (INTC) is not sure that the government stimulus package will do him or his industry any good. According to Reuters, the firm’s CEO Craig Barrett said stimulus packages being rolled out by governments around the globe would probably have an impact on demand over the next six to 18 months.

But, Barrett may be dreaming, even though his dream is somewhat pessimistic. Read More »

Posted on: April 8, 2009 – 5:15 am in PC Companies, Technology Companies, , , ,