Arena Pharmaceuticals, Inc. (NASDAQ: ARNA) has filed a shelf registration statement to raise up to $150 million in any combination of Common Stock, Preferred Stock, Debt Securities, Warrants, and/or Units.  The company plans to use the proceeds “for the clinical and preclinical development of drug candidates, for discovery research for new drug candidates, for general corporate purposes, including working capital, capital expenditures and debt repayment, and potentially for the commercialization of any approved drugs.”  Arena’s market cap is listed as $325 million after a 2.7% drop down to $3.22; the 52-week range is $2.49 to $5.93.

Beazer Homes USA, Inc. (NYSE: BZH) is down after earnings came out showing the report was helped out on a note exchange gain; but it said orders were up 49% and its cancellations fell.  The offering is a 12.5 million share secondary offering along with 3.5 million tangible equity units and $300 million aggregate principal in unsecured notes due in 2018.  Shares were down 13.5% at $5.95 on already about double normal volume.  The market cap there is listed as $370 million.

Federal Signal Corporation (NYSE: FSS) announced a sale approximately $75 million in common stock to repay credit facility indebtedness associated with the recent acquisitions of Sirit and VESystems.  Shares are down 7.2% at $7.46 this morning.

Greenhill & Co., Inc. (NYSE: GHL) is down after saying it will sell 3 million shares of common stock via Goldman Sachs.  All shares are being sold by selling shareholders, so none of the proceeds will go into the Greenhill vault.  Shares are down 6.2% at $83.37 and the market cap is $2.36 billion.

Kinder Morgan Energy Partners LP (NYSE: KMP) is so large that the offering may go unnoticed.  The public offering price was $66.25 per common unit, with joint book-runners being Citi, Barclays, Goldman Sachs, J.P.Morgan, and Morgan Stanley.  Shares (units) are down 2.8% at $65.71.

KKR Financial Holdings LLC (NYSE: KFN) announced a new credit facility of $210 million versus the prior $150 million credit facility.  More importantly, it filed to sell 25 million common units and will use the sale proceeds for asset acquisitions and general corporate purposes.  Shares are down 5.9% at $8.65 and the market cap is $1.35 billion.

Pennsylvania Real Estate Investment Trust (NYSE: PEI) is lower after it priced a 9 million share secondary offering of common stock at $16.25 per share.  The market cap is listed as $730 million, and the stock is down 5.2% at $16.45 on already about 7-times normal volume.

Radian Group Inc. (NYSE: RDN) may have posted a loss $310 million on revenues of only $127.8 million (great business model there) but today’s drop is being added to after the company hired KBW and Morgan Stanley to lead a $550 million stock offering under an existing shelf registration from July-2009.  Shares are down 10.7% at $13.06.

Republic Services, Inc. (NYSE: RSG) filed late Monday before the close its automatic shelf registration statement for an undisclosed amount of Debt, Common Stock, Preferred Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units, and/or Subscription Rights.  This filing was for it, Allied, and literally dozens and dozens of subsidiaries in landfills, recycling centers, compost sites, and more all over the U.S.  Shares closed up over 1.5% yesterday, but the stock is down 3.7% at $30.40 and the market cap is roughly $11.6 billion.

Not all secondary offerings take a toll on the underlying stocks (or units), although that generally seems to be the case.  And that is the case today.

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JON C. OGG

KKR Financial (KFN) Plans to replace CEO on top of poor performance. Drops to $.60 from 52-week high of $16.78.

Zix (ZIXI) No news, just a bad day. Falls to $1.11 from 52-week high of $5.30.

Douglas A. McIntyre

• Alcoa (NYSE: AA) Cut to Market Perform at FBR.
• Allianz (NYSE: AZ) Cut to Hold from buy at Citigroup.
• American Capital (NASDAQ: ACAS) Cut to Market Perform at William Blair; Cut to Hold at BB&T.
• Avis Budget (NYSE: CAR) Cut to Underweight at Barclays.
• Comerica (NYSE: CMA) Cut to Hold at Deutsche Bank.
• Hertz (NYSE: HTZ) Cut to Equal Weight at Barclays.
• KKR Financial (NYSE: KFN) Cut to Sell at Citigroup.
• Sangamo Biosciences (NASDAQ: SGMO) Cut to Neutral at Merriman Curhan Ford; Cut to Sell at Piper Jaffray.
• Toyota (NYSE: TM) Cut to Underweight at HSBC.

Jon C. Ogg
November 11, 2008

Deep in the basements of most companies, the accounting staffs are working under orders from the CFO and board of directors to protect the balance sheet at any cost. Preparing for the economic siege of the next several quarters, many firms will send costs, necessary to run the company or not, to the guillotine in increasing numbers.

Now, the dividend is going the way of extinction. Yields  are up, for now, but so is debt taken on in the salad days. Cash flow is down. KKR Financial (KFN), which is doing remarkably well, eliminated it dividend yesterday.

The list of companies dispatching their dividends is going to move well beyond financial companies, although some banks may dump their payouts completely.

Bank of America (BAC) has a 6.2% yield, which is preposterous. At $1.28, it has to spread that across 4.5 billion shares in its float. Another quarter of losses and the dividend at BAC gets cut in half. Ditto, Wells Fargo (WFC), which has a yield at 4.6%

Newspapers have been pressed to the wall. The New York Times (NYT) has a 10% yield. Good for the ruling Sulzberger family. Bad for debt service. Gannett (GCI) pays out 15.2%. That will never last, not as long as the company’s ad revenue is dropping, which may be forever. Other media companies, especially TV and radio firms, are in trouble. CBS (CBS) won’t be paying 13.2% beyond next quarter.

And, there is the case of GE (GE), the flagship of American business, out ahead of a sinking fleet. GE’s financial arms are in trouble. Its money division may become a commercial bank under the Fed’s special needs program. At a 6.6% yield, even the greatest company in America may have to cut.

Douglas A. McIntyre

• Adobe Systems (ADBE) Cut to Market Perform at FBR.
• AMB Property (AMB) Cut to Sell at Goldman Sachs.
• Blackbaud (BLKB) Cut to Market Perform at Wachovia.
• Coca-Cola (KO) Cut to Hold at Deutsche Bank.
• EMC Insurance (EMCI) Cut to Underperform at KBW.
• Heidrick & Struggles (HSII) Cut to Underperform at Baird.
• KKR Financial (KFN) Cut to Neutral at JPMorgan.
• Omniture (OMTR) Cut to Market Perform at FBR.
• ProLogis (PLD) Cut to Sell at Goldman Sachs.
• Varian Medical (VAR) Cut to Neutral at JPMorgan.
• VMware (VMW) Cut to Market Perform at Wachovia.
• Vulcan Materials (VMC) Cut to Sell at Goldman Sachs.

Jon C. Ogg
October 6, 2008

Jon C. Ogg
September 4, 2007

Jon C. Ogg
August 20, 2007