14 – April – 2009 – 24/7 Wall St.

Daily Archives: April 14, 2009

Another Legal Medical Marijuana Company Now Public (GFON, CVIV)

Cannabis Science, Inc. (OTCBB: GFON), or Gulf Onshore, Inc. (GFON), is yet another public stock company which is going after the field of legalized medical marijuana. Just last week the company was called Gulf Onshore and it just changed its name to Cannabis Science, Inc. after acquiring the assets of Cannex Therapeutics LLC about 10 days ago. Last week the company also announced that it had selected its first pharmaceutical cannabis product for FDA testing. It was not even two weeks ago that a company called Medical Marijuana, Inc. (OTC: CVIV) had pursued a similar strategy in coming public after formerly being called Club Vivanet.

Posted on: April 14, 2009 – 6:10 pm in Biotech, Commodities, Consumer Goods, Cult Stock, Drug companies, Entertainment, FDA, IPOs, Medical, OTC, Pharmaceuticals, Politics, Regulation, Tobacco, CVIV, GFON

eBay To Jettison Skype, IPO Rather Than Sale (EBAY)

eBay Inc. (NASDAQ: EBAY) is finally going to jettison its Skype VoIP service. That is the good news. The bad news is that this is not the separation we were looking for. eBay is going to unload the company beginning with an initial public offering. That sounds great, except that this won’t be expected to be completed until the first half of 2010. It also noted the timing would be subject to market conditions, so there is no way to know what it is thinking about the strategy.

Posted on: April 14, 2009 – 3:56 pm in IPOs, Internet, Telecom, EBAY

SIRIUS XM Scores Debt Rating Upgrade (SIRI, LCAPA)

SIRIUS XM Radio Inc. (NASDAQ: SIRI) might not exactly seem like the most stable or improving company by any financial statement analysis on the surface. If that is really the case, then why has Standard & Poor’s just come out and upgraded the debt ratings of the company? That is what has happened. Straight from the “you would not have guessed it” department.

Posted on: April 14, 2009 – 3:45 pm in Analyst Calls, Entertainment, Media, Satellite, LCAPA, SIRI

Intel, Shoddy But Less Gloomy (INTC)

Intel Corporation (NASDAQ: INTC) has reported its earnings. This is far from pretty, but not nearly as bad as many were braced for a few weeks ago. The chip and processor giant posted $0.11 non-GAAP EPS ( a drop of over 50%) and $7.14 billion in revenues (a drop of 26%). First Call had estimates at $0.02 EPS and $6.98 billion in revenues. The company also posted gross margins 45.6% rather than estimates of 43% in the mid-range for gross margins.

Posted on: April 14, 2009 – 3:21 pm in Earnings, Semiconductor, Technology Companies, INTC

Somali Pirates Are Getting Rich: A Look At The Profit Margins

Errol Flynn never had it this good in “Captain Blood”

Being a Somali pirate looks like a profitable business from the outside and it is. The margins are as attractive as those in the software industry. Microsoft still makes 60% or better margins on its core Windows, business, and server operations. With the risks that the pirates take, they ought to do as well as that.

The New York Times did a piece last year in which it estimated that the pirates would bring in $50 million in 2008. That number will be higher this year, by as much as four times. Read More »

Posted on: April 14, 2009 – 2:05 pm in Uncategorized

Dell Steps Slowly Into More Services (DELL, HPQ, IBM, PER)

Dell Inc. (NASDAQ: DELL) has been branching out further into IT and web-based services in an effort to supplement and to get away from a model that is almost solely-dependent upon PC sales and peripheral sales. It has not taken as aggressive of a path as Hewlett-Packard Company (NYSE: HPQ) via the EDS purchase, and neither company anywhere as dedicated as International Business Machines Corp. (NYSE: IBM) in services. But by the looks of things the company has started to migrate into this direction. While we feel the answer to this is “It’s about time!” there is actually an answer as to why this migration has been slower and strategic rather than swift and broad.

Posted on: April 14, 2009 – 2:03 pm in PC Companies, Technology Companies, DELL, HPQ, IBM, PER

Bernanke Vs. Retail Sales

The new retail sales report indicates that the economy is not pulling out of it nose dive. According to the Commerce Department, U.S. retail sales dropped a seasonally adjusted 1.1% in March. Economists thought the number would be up .2%.

According to MarketWatch, “This looks like something of a reality check after a run of upside data surprises,” wrote Ian Shepherdson, chief U.S. economist for High Frequency Economics.

Fed chief Ben Bernanke seems to see things differently, certainly more positively. Read More »

Posted on: April 14, 2009 – 12:27 pm in Economy, Retail

236 Years of Hating Taxes

How we’ve created and resisted taxation since the nation was born.

By Natalie Matthews and Sara Behunek of The Big Money

As we gnash our teeth, fumble with forms, and curse the IRS, it’s instructive to remember that hating and cheating the tax man have rich histories in America. From the Boston Tea Party to Tom Daschle’s conspicuous 1040 omissions, here’s a look back at how we’ve been almost as creative in resisting taxes as governments have been in establishing them.

See the slide show…

Posted on: April 14, 2009 – 12:19 pm in Uncategorized

Sterling Bancshares Files To Raise Cash… Adios TARP? (SBIB, SBIBN)

Sterling Bancshares Inc. (NASDAQ: SBIB) has just filed with the SEC to sell up to $150 million in a mixed securities shelf filing. The bank listed that it will sell any combination of preferred stock, common stock, and warrants. The interesting notion here is that the securities shelf registration states that these may be sold by the company and/or by one or more selling security holders to be identified in the future. The company’s preferred shares trade as “SBIBN” on NASDAQ.

Posted on: April 14, 2009 – 10:17 am in Banking, Financial Stocks, Politics, Secondary Offering, SBIB, SBIBN

If Citigroup Gets Back Over $5.00….

Citigroup, Inc. (NYSE: C) was believed by many to be on the verge of death just six short weeks ago. But alas, the shorting and the selling doesn’t go on forever even if some feel this latest move is not going to hold. There had been an ongoing question at one point earlier this year and even in November 2008 about what would happen if Citi shares fell under the $5.00 threshold based upon the marginability of the stock and the ability for many large mutual funds to hold the stock at that point. Citi even got as low as $0.97. But now we have a monster rally in the financial stocks, and suddenly there is a completely different question… What happens if and when Citi breaks over $5.00?

Posted on: April 14, 2009 – 9:47 am in Banking, Financial Stocks, Mutual Funds, Technical Analysis, Trading Alert, C

Just How Bad is the News on Drilling? (BHI, BAS)

We’ve been tracking the rig count from Baker Hughes Inc. (NYSE:BHI) for a long time, and the bad news on North American drilling has finally tapered off. Now, Basic Energy Services (NYSE:BAS) has issued an interim report on its operating data for March 2009, and this is what the company has to say: “Drilling rig days for the month of March 2009 were 70 producing a rig utilization of 25%, an increase from 22% in February 2009 and a decrease from 93% in March 2008.” Read More »

Posted on: April 14, 2009 – 9:11 am in Oil & Gas, BAS, BHI

Acadia Realty Joins REITs Raising Cash (AKR)

Acadia Realty Trust (NYSE: AKR) has joined the wave of REIT entities selling stock to raise cash. The company priced its public secondary offering of 5 million common shares at $11.95 per share. That is before any overallotments of 750,000 shares, but the size of the offering was raised in the deal from 4.5 million shares.
Read More »

Posted on: April 14, 2009 – 8:58 am in REIT, Secondary Offering, AKR

Sunoco Logistics Ups Offering (SXL)

Sunoco Logistics Partners L.P. (NYSE:SXL), a pipeline master limited partnership, has increased an already-announced offering of common units from 2 million to 2.2 million, and priced the offering at $50.60/common unit. That’s a discount of about 4% to the stock’s closing price yesterday.

Joint book-runners are Citi, Barclays, and UBS, and they have been offered an option to purchase 330,000 common units. The offering was made under the company’s existing shelf registration, and Sunoco Logistics plans to use the cash to “reduce the indebtedness outstanding under the $400 million revolving credit facility of its wholly-owned subsidiary, Sunoco Logistics Partners Operations L.P., and for general partner purposes Read More »

Posted on: April 14, 2009 – 8:51 am in Oil & Gas, SXL

Benchmark Capital Starts Google (GOOG) At Buy

Benchmark Capital initiates coverage on Google (Nasdaq: GOOG) with a Buy rating and $430 price target. The firm said, while the recession has reduced industry growth to roughly zero and hindered Google’s expansion, the company is well-positioned and its recent operating performance indicates sustained strength relative to peers.

Benchmark highlighted the following positives for Google:

The World Needs Currency Leadership

By John Tamny of RealClearMarkets
“I have lost money in sterling. I have lost money in dollars. I have never lost money by holding gold.” – A Scandinavian bank president, Economics and the Public Welfare, p. 254

Now that the dollar has risen from modern lows against most major foreign currencies, many commentators have begun to suggest it is fulfilling its historic role as the world’s reserve currency. Due to greatly heightened uncertainties in the financial world, the dollar is said to be reasserting its strength.

It would be more realistic to say that the dollar’s weakness is presently being masked by what H.C. Wainwright’s David Ranson and Penny Russell once referred to as “another classic run on paper currencies.” The dollar is only strong right now insofar as other currencies are very weak.

Goldman Sachs Prices Its Own Secondary (GS)

The Goldman Sachs Group, Inc. (NYSE: GS) has announced the pricing of its highly anticipated secondary offering of 40,650,407 shares of its common stock. The pricing went off at $123.00 per share in the underwriting, and the company said it will have raised total gross proceeds of roughly $5 billion.

The company is acting as its sole underwriter, and the firm listed that it has an option to purchase up to an additional 6,097,561 shares of common stock to the extent that it sells more than 40,650,407 shares. An over-allotment option, for itself.

Goldman Sachs closed yesterday at $130.15, and shares right at the open are trading at $123.50 in active trading. As the company plans to pay back the TARP funds, you can imagine that the other healthy banks and brokers will be paying close attention to this trading today.

JON C. OGG

Posted on: April 14, 2009 – 8:33 am in Banking, Brokerage Firms, Financial Stocks, Secondary Offering, GS

Marathon Previews First Quarter Results (MRO)

Marathon Oil Corporation (NYSE:MRO) has issued its interim update for the first quarter of 2009. The company’s E&P results came in higher than expected, 429,000 barrels of oil equivalent per day available for sale, compared with estimates of 400,000 barrels to 415,000 barrels.
Read More »

Posted on: April 14, 2009 – 8:18 am in Earnings, Oil & Gas

Dendreon Set To Re-File PROVENGE (DNDN)

Dendreon Corporation (NASDAQ: DNDN) has announced that its pivotal Phase 3 IMPACT study of PROVENGE in men with advanced prostate cancer data. While the data is incomplete, Dendreon said that the IMPACT study met its primary endpoint of improving overall survival compared to a placebo control. Dendreon intends to file an amendment to its existing Biologic License Application (BLA) in the fourth quarter of this year to gain licensure of PROVENGE.

PROVENGE is Dendreon’s candidate for men with advanced prostate cancer and may represent the first in a new class of active cellular immunotherapies specifically designed to engage the patient’s own immune system against cancer.
Read More »

Posted on: April 14, 2009 – 8:01 am in Biotech, FDA

What Hyper-Inflation?

If you were worried about all this new money that has been coming into the system and its effects on inflation, you have at least another month (or much longer) before the worries will set in. At least that is if you trust what the Labor Department said about March’s Producer Price Index. The reading for PPI came in at -1.2% on the nominal PPI, and came in 0.0% on the core reading of an ex-food and ex-energy basis. Consensus estimates from economists were only -0.2% on the nominal PPI and +0.1% on the core PPI.

On a year-over-year basis, we saw a reading of -3.5% on the nominal basis and -3.8% on teh core basis of ex-food and ex-energy.

February’s PPI came in at +0.1%, an unrevised level.

Jon C. Ogg

Posted on: April 14, 2009 – 7:35 am in Economy

Top Analyst Upgrades (ARUN, CTV, DPS, ESRX, GENZ, ISRG, LRCX, MXIM, NUAN)

These are some of the top analyst upgrades and positive research calls we have seen this Tuesday morning from Wall Street:

Aruba Networks (ARUN) Raised to Neutral at JPMorgan.
CommScope (CTV) Raised to Overweight at JPMorgan.
Dr Pepper Snapple (DPS) Raised to Neutral at JPMorgan.
Express Scripts (ESRX) Raised to Buy at UBS.
Genzyme (GENZ) Started as Buy at Collins Stewart.
Intuitive Surgical (ISRG) Raised to Buy at Lazard.
Lam Research (LRCX) Raised to Outperform at Oppenheimer.
Maxim (MXIM) Raised to Buy at Canaccord.
Nuance Communications (NUAN) Started as Buy at Canaccord.