Bank of America Corporation (NYSE: BAC) is actually indicated higher this morning by over 1% at $5.57 despite reports that it has been warned by regulators to bolster its financial position.

Brocade Communications Systems Inc. (NASDAQ: BRCD) may have turned in a net loss after items and options, but non-GAAP earnings were $0.16 EPS and $550 million versus estimates of $0.14 EPS and $527.4 million.  Shares were up 6% last night and the $4.48 close of Monday is still up 6.7% at $4.78 on Tuesday morning. 

Campbell Soup Company (NYSE: CPB) reported that normalized earnings were down nominally from a year earlier at $0.82 EPS and that sales fell 1% to $2.16 billion; estimates were $0.79 EPS on $2.2 billion in sales.

Chico’s FAS, Inc. (NYSE: CHS) reported that its third-quarter earnings was $0.16 EPS but after $0.02 in acquisition costs, while estimates were $0.20 EPS.  Sales were $538.5 million versus estimates of $548.5 million. Same-store sales in the quarter rose 3.7% versus 5% or more expected and it turned in another $0.05 dividend for a 1.8% or so dividend yield.

Focus Media Holding Ltd. (NASDAQ: FMCN) was crushed yesterday with roughly a 40% drop after short seller Muddy Waters raised concerns about the company.  The company has denied the allegations and said that the information provided was misrepresented.  Shares are trading up 12% at $17.40 so far this morning, but this is a fluid situation and the “Muddy Waters” stocks tend to remain highly volatile for a period after a report of this sort is issued.

Market Vectors Egypt Index ETF (NYSE: EGPT) has not traded but trading on the Egyptian Exchange was halted after a 4.5% broad market drop due to continues protests and violence in Cairo after reports of dozens of deaths.

Harman International (NYSE: HAR) had its CEO featured on a Jim Cramer interview last night and Cramer said it is now getting to be a bargain at barely 10-times earnings with 20% growth possibilities.  Zacks also named it the value stock of the day this morning. 

Hewlett-Packard Co. (NYSE: HPQ) is now down 1% at $26.59 despite having been up almost 4% after earnings.  Some wanted a better path to a return of growth but frankly the report and even the lower guidance should have been enough to quell at least some fears about the company.

Jack in the Box Inc. (NASDAQ: JACK) was up 4% in the after-hours on Monday after beating earnings estimates with higher same-store sales. Volume is very light and the stock is only indicated up 1% so far in early bird trading.

Medtronic Inc. (NYSE: MDT) has reported earnings of $0.84 EPS adjusted on $4.13 billion in sales; estimates were $0.82 EPS and $4.1 billion in sales. The medical devices giant has guided its fiscal year (April-2012) to $3.43 to $3.50 EPS versus estimates of $3.44 EPS.

Netflix, Inc. (NASDAQ: NFLX) had its secondary and placement offering announcement last night and now shares are getting hit all over again after a SELL rating was slapped on the stock.  Netflix is trading down 5.2% at $70.60 in active trading.

Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) is getting acquired after receiving a “going private” letter a month ago.  Monday’s ADS close in New York was $39.39 and the buyout price $41.35 per ADS.

JON C. OGG

The company has applied to list its ADS on the New York Stock Exchange under the stock ticker of “READ.”  It also listed Bank of America Merrill Lynch and Goldman Sachs (Asia) as its underwriters for the offering.  Terms are not set other than “up to $200 million” and that means that this may not be a true spin-off.  It might even resemble more of a tracking stock.

The company’s self-description is as follows: “We are the largest online community-driven literary platform in China. Our platform comprises an expanding library of original and copyrighted third-party literary works and a large and highly engaged community of users which can be monetized across multiple media formats and devices. Our platform includes six original literature websites covering a wide array of genres which in the aggregate attracted an average of over 69.0 million monthly unique visitors in the first quarter of 2011, according to monthly statistical reports issued by iResearch. Since our inception to March 31, 2011, approximately 1.3 million authors had created over 5.2 million literary works on our websites.”

The company also noted that its qidian.com unit is the largest Chinese original literature website, and it claims 43.4% of China’s online literature market in terms of revenues in 2010 per iResearch report data.  In short, the company offers a medium for authors to publish literary works in the internet age.

Shanda Interactive has a $2.2 billion market cap and its $38.81 close on Thursday compares to a 52-week range of $35.15 to $54.20.  The full F-1 filing is here.

JON C. OGG

Renren Inc. (NYSE: RENN) is the IPO that may have been the bubble of all bubbles as the company’s accounting issues and accounting officer resignation came right before the IPO.  The investment bankers should have known better than to bring this one out.  Shares are now under $11.00 and keep hitting new lows.  The post-IPO range is $10.40 to $24.00.  “The Facebook of China” was really the “Face&^%$ of China.”

NetQin Mobile Inc. (NYSE: NQ) was supposed to be the mobile security winner in China, but it has been taken to the woodshed since coming public as well.  This ADR is now around $5.00 and its post-IPO range is $4.82 to $11.90.

Qihoo 360 Technology Co. (NYSE: QIHU) was one we already accused the street of getting wrong right from the start.  Qihoo closed under $22 and its post-IPO range is now only $20.10 to $36.21.

Baidu, Inc. (NASDAQ: BIDU) is actually indicated slightly higher this morning but shares were under $121 on Wednesday against a 52-week range of $65.90 to $156.04.  The drop was “only 10%” in the last four days, but the valuation here remains high for the leader of search in China.

Shanda Interactive Entertainment Limited (NASDAQ: SNDA) is the online content and MMORPG game provider in China and it has been drummed.  This is a real business that generates real revenues with 25% annual growth and 7% sequential growth at its last report.   Down at $36.67, this just hit a new 52-week low this morning and the new 52-week range is $36.25 to $54.20. This was at $50 as recently as May 11 and now trades at what many would call a cheap 20-times earnings, what a twist of fate.

Sina Corp. (NASDAQ: SINA) was just above $120 four days ago.  Now the stock is under $100.  Wow. Shares are indicated under $96.00 this morning versus a 52-week range of $34.26 to $147.12.  SINA is a leading online media company and mobile value-added service and its sales were up 18% at its most recent earnings.  The beatings continue.

LDK Solar Co., Ltd. (NYSE: LDK) gets to deal with poor markets AND a poor solar situation and it will have to pay attention here for its coming unit spin-off.  And to add another mix in, now a blank check company has filed to come public that intends to acquire a natural resources company in Mongolia.

So, there is a reason to focus on these.  The “when” depends upon more factors than can be said quickly.  The markets have been sliding with a drop even in the U.S. each day in June so far.  We are challenging six consecutive weeks of lower share prices in the U.S. as well.  When a bounce will come is up to the markets, but it does not take a genius to say that a massive oversold market bounce is due even if the only reason is that the market is oversold.

Whenever that bounce comes, it will be some of these ADRs named here that perform the best.

JON C. OGG

AmerisourceBergen Corp. (NYSE: ABC) Reiterated Buy and raised target to $50 at Argus.
Boeing Co. (NYSE: BA) Reiterated Outperform and raised target to $94 at Credit Suisse.
Central European Distribution Corp. (NASDAQ: CEDC) Raised to Neutral at Credit Suisse; Cut to Neutral at Goldman Sachs.
Exxon Mobil Corporation (NYSE: XOM) Reiterated Strong Buy as Value at Zacks.
First Solar Inc. (NASDAQ: FSLR) Raised to Buy at Auriga.
Foster Wheeler AG (NASDAQ: FWLT) Reiterated Buy at Gabelli.
Goldman Sachs Group Inc. (NYSE: GS) Started as Buy at UBS.
J.P.Morgan Chase & Co. (NYSE: JPM) Started as Buy at UBS.
Las Vegas Sands Corp. (NYSE: LVS) Maintained Outperform at Credit Suisse; Maintained Buy at Gabelli.
Legg Mason Inc. (NYSE: LM) Cut to Market Perform at KBW.
MetroPCS Communications Inc. (NYSE: PCS) Reiterated Buy and Raised target to $22 at Argus.
Mylan, Inc. (NYSE: MYL) Cut to Equal-Weight at Morgan Stanley.
Office Depot, Inc. (NYSE: ODP) Cautious as Bear of the Day at Zacks.
OpenTable, Inc. (NASDAQ: OPEN) Raised to Outperform at Oppenheimer.
Ritchie Bros. Auctioneers Incorporated (NYSE: RBA) Cut to Underperform at BofA/ML.
Sanofi-Aventis (NYSE: SNY) Raised to Buy at BofA/ML.
Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) Raised to Hold at S&P Equity Research (lathe Tuesday).
SIRIUS XM Radio inc. (NASDAQ: SIRI) Maintained Buy with private market value of $2.85 at Gabelli.
SurModics, Inc. (NASDAQ: SRDX) Raised to Outperform as Bull of the Day at Zacks.
ValueClick, Inc. (NASDAQ: VCLK) Raised to Buy at Jefferies; Raised to Buy at Needham.

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JON C. OGG

Brightpoint Inc. (NASDAQ: CELL) Cut to Hold at Jefferies.
Chesapeake Energy Corporation (NYSE: CHK) Cut to Sell at Argus.
CNOOC Limited (NYSE: CEO) Raised to Overweight at HSBC.
Digital Realty Trust (NYSE: DLR) Started as Buy at Jefferies.
The Dow Chemical Company (NYSE: DOW) Started as Outperform at Macquarie.
DryShips Inc. (NASDAQ: DRYS) Started as Neutral at Goldman Sachs.
Gold Fields Limited (NYSE: GFI) Cut to Equal-weight at Morgan Stanley.
Harmony Gold (NYSE: HMY) Cut to Underweight at Morgan Stanley.
Integrated Silicon Solution  (NASDAQ: ISSI) Raised to Buy at Auriga.
Kinder Morgan Energy Partners (NYSE: KMP) Cut to Market Perform at Morgan Keegan.
Kinross Gold Corporation (NYSE: KGC) Raised to Outperform at Credit Suisse.
NetSpend Holdings (NASDAQ: NTSP) Started as Outperform at William Blair.
NRG Energy, Inc. (NYSE: NRG) Started as Neutral at Goldman Sachs.
Research In Motion Ltd. (NASDAQ: RIMM) Raised to Buy at Jefferies.
Shanda Interactive (NASDAQ: SNDA) Cut to Hold at Auriga.
Tiffany & Co. (NYSE: TIF) Started as Overweight at Morgan Stanley.
Yanzhou Coal Mining Co. Ltd. (NYSE: YZC) Raised to Buy at Citigroup.

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JON C. OGG

Agrium Inc. (NYSE: AGU) Started as Neutral at Goldman Sachs.
Campbell Soup Co. (NYSE: CPB) Cut to Equal-Weight at Barclays Capital.
Dynegy Inc. (NYSE: DYN) Cut to Sell at S&P Equity Research (late Tuesday call).
Echelon Corporation (NASDAQ: ELON) Started as Outperform at Baird.
Fair Isaac Corp. (NYSE: FIC) Reiterated Sell at Argus.
Hormel Foods Corp. (NYSE: HRL) Cut to Sell at Soleil.
Itron Inc. (NASDAQ: ITRI) Raised to Neutral at Macquarie.
Las Vegas Sands Corp. (NYSE: LVS) Reiterated Buy and $58 Target at Argus.
Millicom International (NASDAQ: MICC) Started as Buy at Deutsche Bank.
M&T Bank Corp. (NYSE: MTB) Started as Market Perform at BMO.
OmniVision Technologies Inc. (NASDAQ: OVTI) Reiterated Buy and Raise Target to $36 at Gleacher & Co.
Potash Corp. of Saskatchewan (NYSE: POT) Started as Neutral at Goldman Sachs.
SAP AG (NYSE: SAP) Reiterated Buy at BofA/ML.
Shanda Interactive Entertainment (NASDAQ: SNDA) Cut to Sell at Roth Capital.
Synopsys Inc. (NASDAQ: SNPS) Raised to Overweight at JPMorgan.
Trina Solar Ltd. (NYSE: TSL) Reiterated Buy and $38 target at Auriga.

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JON C. OGG

Auriga noted that the investable stocks are those with a content advantage, such as Neatease.com with a Buy rating, Perfect World with a Hold rating, and Shanda Games Ltd. with a Buy rating. The caveat on Shanda Games is that its pipeline has to work out.

The research team noted, “We believe the recent weakness in the business performance of China’s online game companies is more an industry trend rather than an individual company’s story. Based on our research, we believe China’s online game industry is undergoing a fundamental change – a transition from one of early stage, fast-paced growth to a more mature market.”

The first factor is that gamers are becoming more sophisticated and they no longer just play any game on the market.  The second reason is that disadvantages are showing up in the item-based revenue model, shortening the lifecycle of a game.

A good example was Giant Interactive’s game, Giant Online and version of ZT recycle, which has a good amount of the original content, so there could be longer times needed to develop new content for a game. One other case is Perfect World with the strongest in-house R&D company, where the average development time has increased to 12-24 months from 6-9 months.

This item-based model may be falling off the cliff… Auriga notes that China’s game operators have experimented with both item-based and time-based revenue models, with the item-based model appearing to gain traction. However, recent weaker than expected performance and guidance among all China online game companies (PWRD, NTES, CYOU, GA, and even GAME/SNDA) point to the negative side of this model.  The notion is that the item-based model is a trade-off between time and money, making developers have to develop games faster and more often.

Then there is the new bear market taking place now in both speculative and normal stocks, which is being magnified in the speculative Chinese stocks.

Giant Interactive Group, Inc. (NYSE: GA) is actually up marginally on the day at $7.12, but the 52-week range is $6.24 to $9.57.

Netease.com Inc. (NASDAQ: NTES) is off by 4% and the $28.62 price compares to a 52-week range of $26.16 to $48.50.

Perfect World Co., Ltd. (NASDAQ: PWRD) is down 0.6% at $25.28, and its 52-week range is $18.37 to $50.49.

Shanda Games Limited (NASDAQ: GAME) is down almost 4% at $5.47 and its 52-week range is $5.25 to $13.00.

Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) is down 1% at $39.65 and its 52-week range is $38.07 to $65.00.

Changyou.com Limited (NASDAQ: CYOU) was a hot IPO that fizzled.  Its stock is down over 4% at $26.33, but the 52-week range is $26.41 to $48.37.

Tough times are abound.  As we have seen in the United States, video games were thought to be recession-proof.  That turned out to not be the case.

JON C. OGG

Sponsor: 26 Cheap Stocks to Sell – Cheap stocks have been on a tear recently, but nine out of ten stocks are circling the drain!

Arch Coal Inc. (NYSE: ACI) Started as Buy at Deutsche Bank.
Brocade Communications Systems, Inc. (NASDAQ: BRCD) Cut to Market Perform at Bernstein.
eBay Inc. (NASDAQ: EBAY) Raised to Outperform at Credit Suisse.
Genzyme Corporation (NASDAQ: GENZ) Cut to Underweight at JPMorgan.
Marriott International (NYSE: MAR) Raised to Overweight at JPMorgan.
Mirant Corporation (NYSE: MIR) Cut to Sell at Citigroup.
NetEase.com (NASDAQ: NTES) Started as Buy and $49 target at Auriga.
Shanda Interactive Entertainment (NASDAQ: SNDA) Started as Buy and $55 target at Auriga.
Shanda Games (NASDAQ: GAME) Started as Buy and $10 target at Auriga.
Starbucks Corp. (NASDAQ: SBUX) Cut to Neutral at Baird.
Vodafone Group plc (NYSE: VOD) Cut to Underweight at Morgan Stanley.

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JON C. OGG

Mistra Group (NYSE: MG) priced its offering at $12.50 on October 7.  While it traded as low as $12.17, it has escaped the hangman’s file of ‘busted deals’ as it is now a $13.51 stock.  The one thing that may have helped was that it priced under an initial range of $14 to $16 per share.  Talecris Biotherapeutics Holdings Corp. (NASDAQ: TLCR) also went into the busted category temporarily after hitting a low of $18.01 after a $19.00 pricing.  Fortunately, it is up at $19.97 so is also now out of the hangman’s eyes.  Still, an 8% gain and a 5% gain in this market might leave some investors feeling lonely.  Banco Santander Brasil S.A. (NYSE: BSBR) was a very large IPO of over 500 million shares at an implied $13.40, and this one got out of the “busted IPO” dungeon on Thursday and closed at $13.51 on Friday.  Before Thursday it had spent its 6 prior trading sessions as a busted IPO.

Emdeon Inc. (NYSE: EM) had traded above $18.00 briefly after its IPO priced at $15.50 in August. But now the healthcare revenue and payment cycle management solutions provider, which is supposed to be a healthcare winner ahead, closed down at $15.35 on Friday  and had been slightly lower during the week.  This was effectively a re-IPO as Emdeon had been public before after General Atlantic Partners acquired it and it also received an investment from Hellman & Friedman. It also has ties to James Clark, the Netscape founder and was part of Healtheon.

Colony Financial Inc. (NASDAQ: CLNY) came public late in September at $20.00 per share, and it closed down at $19.69 Friday and has traded as low as $19.25.  Interestingly enough, Friday’s $19.68 close looks to be the highest price since the IPO date.   Colony is a newly formed real estate finance company (mortgage REIT) that will focus primarily on acquiring, originating and managing commercial mortgage loans, which may be performing, sub-performing or non-performing loans, other commercial real estate-related debt investments, CMBS, REO properties and other real estate-related assets.

RailAmerica Inc. (NYSE: RA) has been a busted deal after this was brought public in a re-IPO by Fortress Investment Group LLC (NYSE: FIG) after going private in February 2007.  This short line and regional freight railroad operator came public at $15.00 per share on October 12, so it hardly has much trading behind it.  But its absolute highest print this last week was $14.78 and it closed on Friday at $14.26 for a 5% loser.

Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) came public at $20.00 on September 24.  This comes out of Apollo Global Management, LLC and it intends to originate and acquire senior performing commercial real estate mortgage loans, commercial real estate corporate debt and loans and to purchase legacy and newly originated investment grade CMBS, and other performing real estate debt investments.  The highest price this one has seen since the IPO was $19.20, and it closed down at $18.57 on Friday to make the tally come to a 7% loser.

Then comes Vitacost.com Inc. (NASDAQ: VITC), which operates as an online retailer of various nutritional supplements, and health and wellness products.  Its September 24 IPO priced at $12.00 yet has been very volatile in not so much of a good way.  It has traded above the $12.00 mark at $12.25 during the first week, but then shares went as low as $9.34 and closed on Friday at $10.75 for still more than a 10% discount to its IPO price.

There are other 10% and higher losers as well.  Echo Global Logistics, Inc. (NASDAQ: ECHO), which provides business process outsourcing serving the transportation and logistics needs, came public at $14.00 on October 2, and while it did briefly hit $14.23 it closed down at $12.50 on Friday for a loss of 10.7%.

Chemspec International Limited (NYSE: CPC) was brought public in June at $9.00.  This Chinese chemical compounds company has traded as high as $10.50 and as low as $6.63.  Its closing price of $7.79 on Friday gives it a loss of over 13%.

Shanda Games Limited (NASDAQ: GAME) has all the earmarks of a forced copy-cat IPO.  Since it is out of China and a copy-cat strategy, we’ll even call it a knock-off IPO.  This was a Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) ‘spin-off’ that is technically still under control of the parent and by the IPO prospectus will remain that way.  The inspiration for this was this the successful Changyou.com  (NASDAQ: CYOU) spin-off IPO from Sohu.com (NASDAQ: SOHU), which had effectively doubled when Shanda decided a knock-off strategy.  Shanda Games came public at $12.50 on September 25 and briefly hit $13.00.  Yet it also went under $10.00 and closed Friday at $10.32 to come to a 17.4% loser.

Cumberland Pharmaceuticals, Inc. (NASDAQ: CPIX) came public at $17.00 per share and its $75.2 million was to be used for potential acquisitions, the pending launch of the Company’s Caldolor(®) product for pain and fever, expansion of the Company’s hospital sales force, product development, debt repayment and general corporate purposes.  It also markets Acetadote(®) for the treatment of acetaminophen poisoning and Kristalose(®), a prescription strength laxative.  It turns out that IPO investors felt like they got too much of that powerful laxative.  This did go as high as $17.75, but then the blow-holes opened up despite 3 broker as issuing buy ratings.  Shares have gone under $13 and closed Friday at $13.40 for a loser by over 21%.  This one has some revenues and has been profitable.

Lastly, there is Omeros Corporation (NASDAQ: OMER).  This is a biotech play as a clinical-stage company committed to discovering, developing and commercializing products focused on inflammation and disorders of the central nervous system.  It came public at $10.00, already at the bottom of the $10 to $12 per share range, and its shares closed at $6.88 Friday to account for a whopping 31.2% loss for IPO buyers.  No one who bought this has made money as its highest post-IPO price looks to be $9.49.

The Blackstone Group (NYSE: BX) is weighing as many as eight IPOs or target-acquisition exits in the coming months according to multiple reports.  If it wants a smooth exit, it better consider making the deals as good for new IPO buyers as it is for Blackstone.  KKR wants to bring back the giant Dollar General as a public company despite the thought that the dollar-store investment play may have already seen its best days during the recession.

As Gordon Gecko would say, there are many dogs with fleas.  Some will do well in the future, but investors were just too shell-shocked from late 2008 into the first quarter of 2009 to buy up other peoples’ mess.  Investors feel little need to support a private equity-backed IPO where all the proceeds are going straight back to the private equity firms.  Companies that are unprofitable also have less appeal to investors.  And complicated structures also offer conservative investors much comfort.

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JON C. OGG
OCTOBER 17, 2009

ABB (ABB) Cut to Hold at Deutsche Bank.
ArcelorMittal (MT) Cut to Hold at Societe Generale,
Black & Decker (BDK) Cut to Neutral at UBS.
Borg Warner (BWA) Cut to Neutral at KeyBanc.
Goodrich (GR) Cut to Buy from Conviction Buy List at Goldman Sachs.
Kroger (KR) Cut to Equal Weight at Morgan Stanley.
Medco Health (MHS) Cut to Neutral at Goldman Sachs.
Shanda (SNDA) Cut to Sell at Deutsche Bank.

JON C. OGG