Amylin Pharmaceuticals, Inc. (NASDAQ: AMLN) did not release an FDA decision on Friday on its site nor via any of the wires that we read reporting on one.  This was over its data for Byetta,  the first ‘once weekly’ diabetes treatment for Type II diabetes.  Partners Eli Lilly & Co. (NYSE: LLY) and Alkermes, Inc. (NASDAQ: ALKS) are also in.  Lilly’s Alkermes is the delivery technology that allows for a delivery over the course of a week.

Barron’s has a piece out over the weekend cautioning the investor world about the big risks in solar companies which may be very vulnerable to supply/ demand issues.  Eric Savitz in Technology Trader singled out Evergreen Solar (NASDAQ: ESLR) and the Uni-Solar division of Energy Conversion Devices (NASDAQ: ENER) as being vulnerable. It is hard to imagine that these won’t be hit on Monday morning.

AthenaHealth, Inc. (NASDAQ: ATHN) is on deck for earnings on Monday after the closing bell.  Be advised that we have not confirmed this release due to its recent earnings delay along with its annual report delay.  Thomson Reuters has estimates at $0.17 EPS on just over $55 million.  At $38 and change, shares have held up rather well considering its delayed 10-K and it telegraphing that earnings restatements were likely.  Its 52-week trading range is $23.15 to $47.82.  Due to the recent changes, this one is going to be a wait and see for many traders and investors.  For whatever it is worth, the open interest here is leaning toward the PUTS over CALLS by more than 2 to 1.

Sequenom In.c (NASDAQ: SQNM) is also on deck for earnings after the close on Monday.  While this one is down over the last five sessions, Sequenom has exhibited a stellar return from its lows with gains of 200% or more.  We are not looking at estimates here because the withdrawn Down’s Syndrom test has marked that largely irrelevant.  The company’s last cash balance with securities included was over $65 million.  The company may have some of its woes behind it, but calling the ball here may be alchemy rather than science.

Both parties are required to give a filing to the Ministry of Commerce under the Anti-Monopoly Law, which both did in December and that was formally accepted on December 28, 2009 to start the 30-day Phase I review.  The interesting point is that the Chinese body notified the parties yesterday it would not complete its review by January 27, 2010, the end of the Phase I review period, and that a Phase II review would be initiated. The initial Phase II review period is up to 90 days and can be extended by up to an additional 60 days.  3Com’s filing shows that it and H-P continue to target completion of the merger by the end of April 2010.

Unless China decides that H-P will be a much more formidable threat to Huawei and somehow that it would upset the world of Cisco if China even cares, then this is probably a done deal and just a formality.  If that is not the case, we have not been told anything of any credible merger risks here.  Perhaps the only other issue is if China wants to get even or flex its strength after the Google-China issue.  That merger spread is still wide enough that it is worth a look, although the reality is that this merger has no real antitrust issues considering the size of the companies and considering how troubled 3Com has been on its own.

Today’s filing shows that this merger is closer to happening but it is still under review.  The $7.90 cash buyout price compares to a $7.55 price today.

JON C. OGG

As far as becoming a one-stop IT shop, Chambers noted that Cisco is almost always successful when it enters new markets.  Keeping managers and talent of former acquisitions is key to success there for Cisco.  While this is a definite gradual approach to getting into the backyard of Hewlett-Packard Co. (NYSE: HPQ), the fresh partnership with EMC Corp. (NYSE: EMC) and VMWare Inc. (NYSE: VMW) has been one where it hit the ground running.

The company is about to move on to the presentation with Ned Hooper, SVP & Chief Strategy Officer from 12:15 PM EST to 2:15 PM EST.  The most interesting notes ahead will come from 4:00 PM EST with Rob Lloyd, EVP Of worldwide operations for the “Global Sales Opportunity” and then at 4:45 PM EST with CFO Frank Calderoni discussing “Delivering Profitable Growth.”

We’ll be on later with key updates if anything earth shattering comes on.  As far as how Cisco will be going into the H-P space with its new giant tech venture, all you have to do is look at the implications of the 3Com Corporation (NASDAQ: COMS) acquisition.  Cisco is jumping into H-P’s space with servers and with EMC in storage, so H-P is jumping more into switching and routing.

On a personal note, getting this sort of growth year in and year out will not be an easy goal as the law of large numbers and a maxing out in economies of scale come into play.

Jon C. Ogg
December 8, 2009

The company generated $3.4 billion in cash flow from operations and exited with $13.4 billion in gross cash.

Shares closed up almost 2% at $51.02 today and the 52-week trading range is $25.39 to $51.43.  Shares are down at $50.77 in the after-hours session.  When you compare the company’s take to that of Dell Inc. (NASDAQ: DELL), it is easy to see who is executing better today.

JON C. OGG

Advanced Micro Devices Inc. (NYSE: AMD) rose over 20% to a yearly high of $6.73 after the announcement that the company would receive $1.25 billion from Intel Corp. (NASDAQ: INTC) under an agreement that ends a legal dispute between the two companies over patents and antitrust accusations.  

Playboy Enterprises Inc. (NYSE: PLA) rose over 60% to a yearly high of $4.75 because the magazine is in talks to sell itself to Iconix Brand Group (NASDAQ: ICON).

Sotheby’s (NYSE: BID) rose as high as 11% to a yearly high of $19.50 after the action house raised $117 million at a sale yesterday.  

Garrett W. McIntyre

The giant cash balances are held by Microsoft Corporation (NASDAQ: MSFT), Cisco Systems Inc. (NASDAQ: CSCO), Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), and Oracle Corp. (NASDAQ: ORCL), assuming nothing happens with Sun Microsystems Inc. (NASDAQ: JAVA).  But players like QUALCOMM Inc. (NASDAQ: QCOM), EMC Corporation (NYSE: EMC), International Business Machines (NYSE: IBM), Dell Inc. (NASDAQ: DELL), Yahoo! Inc. (NASDAQ: YHOO), Amazon.com Inc. (NASDAQ: AMZN), and eBay Inc. (NASDAQ: EBAY) are either all sitting with large amounts of cash or will be very soon.

We have broken out these technology, IT, software, and Internet companies by the cash amount they hold or what they have in a soon-to-be cash balance.  Of course only a fraction of this cash will be used for mergers.  But there is also a ton of room here for dividends and of course the share buybacks.

Microsoft Corporation (NASDAQ: MSFT) is the #2 on the Real-Time 500 by market cap with close to a $260 billion market cap. It ended the quarter with $36.7 billion in cash and short-term investments, but it also ended with equity and other investments of roughly $6 billion.  We water down the non-cash investments in our analysis to account for dilution and selling pressure, but a one-third off the value would give the software giant some $40 billion.  That could be over $4.00 per share that could be paid out as another huge dividend.  In any deals it makes there is always the concern that antitrust issues will arise, but that has not been the case in the search pact with Yahoo! so far.

Cisco Systems Inc. (NASDAQ: CSCO) has some $35.4 billion in cash and equivalents.  It also just raised $5 billion in a senior unsecured note offering this week, which effectively offsets the $2.5 billion for the Starent Networks Corp. (NASDAQ: STAR) and the $3.1 billion for the Tandberg deal if that gets resolved and completed.  We are not counting Tandberg because it has had trouble and is considered an at-risk deal, which would give a total figure of about $37.9 billion today.  With a $136 billion market cap, Cisco could pay close to a $6 dividend and start over building its cash if it wanted to.

Apple Inc. (NASDAQ: AAPL) is the perpetual mystery over what it can or will do with its cash mountain.  The company now sitting with a market cap of $184 billion now that it has a price over $200.00 per share. Buying back its own stock would be expensive and maybe just silly and integrating an outside company into Apple might be far from easy.  It holds close to $34 billion in cash if you include its long-term investments.  Apple could pay out a special of over $37.00 today if it wanted to zero out the cash and start building that all over again.  Or perhaps it could go make a video game platform acquisition.

Google Inc. (NASDAQ: GOOG) has a market cap over $180 billion and its new cash balance was listed as $22 billion. It is spending $750 million to acquire AdMob and $105 million to acquire On2 Technologies Inc. (AMEX: ONT).  But these are both stock deals rather than cash and that leaves its cash as is.  We saw that it might be buying stock to do the deal, but that is chump change for the king of search. Google has also noted it is on the prowl and these two small deals won’t stop that.  If Google can’t find a large target, it could pay close to $69.00 per share and just start over on its cash growth game.

Intel Corp. (NASDAQ: INTC) has a market cap of almost $110 billion and has close to $13 billion in cash equivalents after closing a recent deal. But it has another $4.3+ billion in equity securities and other long-term investments. If we took the same one-third out to water that down, that leaves almost $3 billion there and a grand total of right at $16 billion… Back out the $1.25 billion heading out the door in Q4 for the Advanced Micro Devices (NYSE: AMD) settlement and you have almost $15 billion.  There are dozens of core related technologies in computing and in communications that it would not fall under harsh antitrust reviews, but anything processor related to PCs would be a tough sell.

Oracle Corp. (NASDAQ: ORCL) is a wild card now as its deal for Sun Microsystems Inc. (NASDAQ: JAVA) at $7.4 billion, or $5.6 billion net of Sun’s cash and debt, is in jeopardy over the E.U. possible blockage. The company has a $111 billion market cap and it ended its August quarter with some $20.5 billion in cash and marketable securities. Ellison could pay out a special dividend of $4.00 if he wanted to start over at zero again.  He has proven to be a deal-maker and we already know how much he is willing to spend to grow even if a target is not making money.

And what about Sun Microsystems Inc. (NASDAQ: JAVA)?  If that deal is really blocked, it will have to do something other than fire employees.  Sun has ‘bought earnings before’ and its old balance sheet lists close to $3 billion in cash and other equivalents.. we will water that down to $1.5 billion because it needs capital while it keeps losing money.

Hewlett-Packard Company (NYSE: HPQ) ended with $13.7 billion in gross cash, but that is still over $24.6 billion in cash if you include its long-term investments on the books.  Back out $2.7 billion for 3Com Corporation (NASDAQ: COMS) and you end up with almost $22 billion in cash.  H-P is probably out of the M&A business until 2010 now.

QUALCOMM Inc. (NASDAQ: QCOM) has a $75 billion market, and its cash and equivalents was $17.7 billion at the end of its fiscal fourth quarter.  That would leave the potential for a $10.00 special dividend if it wants to return capital to holders and then start over building its cash. Or it could look for other intellectual property plays that would give it a 10 to 20 year patent lock.

EMC Corporation (NYSE: EMC) is worth almost $35 billion and no longer has the $2.1 billion from the deal to buy Data Domain.  But EMC also still has over 50% of the float of VMware (NYSE: VMW) and that company is worth $16.6 billion that could be counted.  The company said it ended its September quarter with cash and investments of $8.4 billion.  If you assume that VMware could be carved out for half its market value in a very discounted sale, then EMC is sitting on close to $17 billion before tapping any credit lines and before tapping any debt.

International Business Machines (NYSE: IBM) has a market cap of $167 billion and now lists roughly $11.5 billion in cash. That is down from the prior quarter after it boiught back shares and retired debt. It is also on notice now that H-P bought 3Com.  Based upon the debt pay down, we’d assume a deal would only come in the form of stock today.

Yahoo! Inc. (NASDAQ: YHOO) has a $22.5 billion market cap and may be a wild card because of new management and a Bartz-led reorganization.  It ended its September quarter with cash and equivalents of $4.5 billion.  It also holds over $3 billion in investments in stakes of other companies, so if you water that down by one-third it has access to $6.5 billion.

Dell Inc. (NASDAQ: DELL) completed its Perot purchase for $3.9 billion, which would leave roughly $8.8 billion in cash and equivalents versus $12.7 billion reported in August.  Add in another $1 billion in cash flow for this quarter just ended on October 31 (results not out yet) and you get an implied $9.8 billion today.  Michael Dell might not want to do another ‘me-too’ deal or transformative merger, but that choice may be one that is by force rather than by desire.

Amazon.com Inc. (NASDAQ: AMZN) completed its the Zappos.com buyout, but that was all in stock.  Its market cap is almost $57 billion and it had almost $4 billion in cash and equivalents.  Raising cash would be easy for the company to do after the huge run and with as well as everyone is treating it. It has made some very selective deals over the last year or two and we expect the niche acquisition game to continue.  Bezos was an investment banker before.

eBay Inc. (NASDAQ: EBAY) is worth almost $31 billion again, yet it ended last quarter with cash and equivalents of over $4 billion when you include investments.  But… the recent settlement will clear the sale of of the Skype unit of $1.9 billion, plus it will still retain 30% of the entity.  Include the cash flows and eBay is closer to $6 billion in cash.  Just sticking by its model probably won’t be a good message, but what it would buy is more of a question than an answer.

The cash and available amounts listed herein does sometimes differ with what was listed as just the cash and marketable securities.  Our figure includes its long-term investments that can be unlocked and also includes recent cash raises.  We also water the ‘equity investments’ down to give a more conservative picture.  In short, this $265 billion is probably a lot more available than what we are counting.  This is also just the U.S-based list.  With a very weak US Dollar, our companies are looking cheaper and cheaper to foreign buyers.

Brocade Communications Systems, Inc. (NASDAQ: BRCD) is being overly punished this morning with a 12% drop to $8.15 now that 3Com was the merger of choice by H-P.  Brocade may still be a target, yet you never know for sure.  JDS Uniphase Corp. (NASDAQ: JDSU) is up over 10% at $7.99 now that Jim Cramer joined in on what we commented about it being viewed as a possible takeover candidate before.  Stay tuned for a larger expanded list of takeover candidates in technology here.

You can join our open email distribution list which goes out several times per week to be notified of key merger news, key analyst calls, top early morning day trader alerts, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG
NOVEMBER 12, 2009

We have issued some options data and new levels to watch in Brocade Communications Systems, Inc. (NASDAQ: BRCD) now that its stock is down 10%.

3Com Corporation (NASDAQ: COMS) is setting multi-year record trading volume.  You already know why.

Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) is getting roasted on its own after earning.

DryShips Inc. (NASDAQ: DRYS) is challenging the $7.00 highs not seen since October.

Advanced Micro Devices Inc. (NYSE: AMD) is hitting 52-week highs on its settlement with Intel.

JDS Uniphase Corp. (NASDAQ: JDSU) is riding tech merger coattails with a 6% gain.

You can join our open email distribution list which goes out several times per week to be notified of key analyst calls, top early morning day trader alerts, along with news of IPO’s, key offerings, guru investor data on Buffett and others, key merger news, and more.

JON C. OGG

H-P is buying the networking and routing company for a price of $7.90 per share in cash, which comes to an enterprise value of about $2.7 billion.   The deal has also been approved by the boards of directors at each company.  Based upon Cisco Systems Inc. (NASDAQ: CSCO) expanding its reach further out into data centers and beyond and based on some recent moves from IBM (NYSE: IBM), this is actually a lower surprise than had this been announced a year ago.  That would make one wonder what moves those companies will make.

HP noted that this will widely expand its Ethernet switching offerings, add routing solutions and strengthen its place in China with the H3C (Huawei venture) offerings.

The deal is expected to close in the first half of calendar 2010 and is subject to regulatory and shareholder approvals.  HP noted that 3Com will be slightly dilutive to fiscal 2010 non-GAAP earnings.  H-P also issued guidance ahead of its upcoming earnings:

• Q1-2010 revenue will be about $29.6 to $29.9 billion, GAAP diluted earnings of $0.90 to $0.92 EPS and non-GAAP earnings of $1.03 to $1.05 EPS (non-GAAP excludes after-tax costs of about $0.13 per share intangible amortization, restructuring charges, and acquisition charges).For Fiscal-2010 revenue will be about $118 to $119 billion, above a prior range of of $117 to $118.0 billion; GAAP earnings in a range of $3.65 to $3.75 EPS (above prior $3.60 to $3.70 EPS range) and non-GAAP earnings of $4.25 to $4.35 EPS (above prior $4.20 to $4.30 EPS range).

Finally, 3Com has a real future.  3Com holders now just have to hope to hope the European Commission isn’t hellbent on blocking another merger to keep a company from being able to be as profitable as it could be.

Some deals get leaked and some do not, but 3Com was up 5.2% at $5.69 today on 6.7 million shares versus an average volume of 5.4 million shares.  3Com traded 3,961 of the NOV-2009 CALLS today versus an open interest of 964 contracts. In the December-2009 $5.00 CALLS we saw 3,269 contracts trade versus an open interest of 210 contracts.

JON C. OGG

Anheuser-Busch InBev SA (NYSE: BUD) hit a yearly high of $48.19 after yesterday’s announcement that the company would be setting its theme park business to private equity firm Blackstone Group for $2.7 billion.

Colgate-Palmolive Company (NYSE: CL) hit a yearly high of $79.03 after the company declared a quarterly cash dividend of $0.44 per common share, payable on the 13th of November to all those in possession of the shares as of October 26th.

3Com Corporation (NASDAQ: COMS) hit s yearly high of %5.54 after yesterday’s annoumcement that the company had entered into contracts with the Republic of Korea Army and Republic of Korea Air Force to upgrade their local area networks.

Garrett W. McIntyre