June 13th, 2008
Yahoo finally struck a deal with the competition!
But, not Microsoft. Yahoo execs announced the company has reached an advertising deal with Google. In a nutshell, Yahoo will be able to display Google ads with Yahoo search engine results. Yahoo reps hope the deal will bring in an estimated $800 million a year.
CEO Jerry Yang spoke of convergence and flexibility in a statement released just hours after what appears to be a final divergence from stiff talks with Microsoft.
Yahoo’s stock sank ten percent yesterday after investors learned of the abandoned Microsoft talks. Even after today’s deal with Google was announced, the stock is down another four percent.
Meanwhile, shares of Microsoft traded up three percent this morning.
Why has Yahoo denied Microsoft so vehemently…it certainly hasn’t helped the stock!
Tags: deal, google, Microsoft, YahooShare This
By profsilver -- 11 comments
June 12th, 2008
Another one two bite the dust…
In its latest move to show commitment to fixing financial woes, Lehman Brothers relieved two of its highest ranking executives of their duties.
In recent days, spectators have been calling for the resignation of CEO Richard Fuld after the company posted a $2.8 billion loss. But, Mr. Fuld has escaped termination…at least for now. Instead, Chief Financial Officer Erin Callan and Chief Operating Officer Joseph Gregory were given the boot.
It was just Monday, that Ms. Callan made the media rounds explaining the great lengths Lehman has gone to in order to firm up its balance sheet. Meanwhile, Mr. Fuld opted to privately observe the company’s value shrink by $4 billion dollars in the past four days.
Lehman shares closed down another four percent today. I can see why Mr. Fuld might want some alone time, but shareholders deserve an explanation.
Tags: fired, lehmanShare This
By profsilver -- 1 comment
June 11th, 2008
Today was a terrible day to be an airline. The sector saw sharp decreases across the board as oil prices continued to force markets downward.
Shares of Delta, American and Northwest Airlines dropped more than nine percent. Shares of United Airlines suffered a 12.5% drop. The most lightly impacted carrier was Southwest, whose shares lost about 3% of their value. Perhaps Southwest was granted lenience for being the only major carrier to report a profit for the first quarter.
The Amex Airline Index has lost over half of its value since February and it looks like the trend will continue. Oil prices show no immediate signs of retreat, so airlines must find new ways to combat rising fuel costs. The most obvious potential solution is to increase revenue…
This week, Delta has raised selected fares by $20 and next week American will institute its baggage check fee of $15 for a single piece of luggage. Wonder what they will charge us for next?
Share This
By profsilver -- 4 comments
June 11th, 2008
Immunicon, a small company which develops diagnostic and research products, filed for Chapter 11 bankruptcy protection today.
Immunicon’s stock has been down steadily for the past two years and has been trading as a penny stock since last winter. Johnson & Johnson subsidiary, Veridex, will purchase nearly all of Immunicon’s assets for approximately $31 million.
The company had partnered with Veridex in the past. Once the asset sale is complete, Immunicon will use the proceeds to pay its creditors, cover the cost of the sale and finally (if anything is left!) pay shareholders.
News of the bankruptcy hit Immunicon shares like a ton of bricks. The stock was trading down approximately forty-eight percent at noon.
Share This
By profsilver -- 0 comments
June 10th, 2008
Corn prices have risen ten percent since last Tuesday!
Are the farmers trying to compete with oil traders and speculators? Not so, the cause of the recent corn run-up is much easier to identify. Torrential rain in the country’s Corn Belt is to blame for slowed planting and crop development.
The heavy rains caused the USDA to revise its May estimate for the 2009 crop season downward by three percent. The revision places year-end stocks at their lowest level in 13 years. Markets quickly digested the news of diminishing supplies and sent corn prices up for the fifth straight day.
This kind of basic shift in prices due to a shift in demand is so easy to grasp, it makes the recent oil price swings that much more frustrating! Oil is limited, the world consumes a lot…understood. But, what kind of supply concern or shock is large enough to warrant such volatility on a daily basis?
Tags: corn, futures, oil, rainShare This
By profsilver -- 0 comments
June 9th, 2008
Lehman Brothers pre-released details of their earnings announcement originally scheduled for next Monday. The company attempted to soften the blow of a larger than expected $2.8 billion loss with the announcement of plans to raise $6 billion in capital.
For a company that has proclaimed its financial well-being in recent weeks, raising $6 billion in capital may not be viewed in the most positive light. The terms of the new issue are even less flattering. The company plans to raise $4 billion of those dollars through the issuance of 143 million shares of common stock.
Herein lies the problem: The new issue calls for 143 million shares valued at $4 billion, which is $27.97 per share BUT shares of Lehman closed above $32 on Friday. Why the 13% discount?
What message is sent to investors when a company values new shares less than existing ones? Not a good one, shares of Lehman Brothers were down over nine percent heading into mid-day trading hours.
Perhaps the June 16th announcement will shed more light on the recent developments.
Tags: lehman brothersShare This
By profsilver -- 1 comment
June 6th, 2008
Thursday night I watched Larry King and was saddened to see one of Hollywood’s friendliest faces lamenting over the pending loss of his home.
Ed McMahon, famed Johnny Carson sidekick, Star Search host and Publishers Clearing House bearer of good news, is over $640,000 in arrears on his Hollywood home.
Countrywide has initiated foreclosure proceedings against Mr. McMahon, whose home has been on the market for about two years. Apparently, living a few doors down from paparazzi-magnet Britney Spears isn’t a major selling point. A note to the paparazzi in the words of Brit fan Chris Crocker, “Leave Britney alone!!”
Funds are tight since Mr. McMahon broke his neck early last year and has been unable to work. He remained in good spirits and I hope things work out for him.
I wonder if Mr. McMahon will encounter a higher level of treatment than other distressed Countrywide homeowners… read the details here.
Tags: britney spears, countrywide, ed mcmahon, foreclosureShare This
By profsilver -- 2 comments
June 6th, 2008
Surprise, surprise: oil prices have set another record high today.
The impact of oil’s resurgance is felt everywhere, as all three major indexes are trading sharply lower. The Dow has shed over 340 points on news of oil prices rising nine percent today, breaking $139 a barrel.
Did any fundamental change(s) occur in the world of oil supply and demand yesterday? Today? If not, then why the drastic increase? We may have a new “Gas Face” nominee on our hands…speculators.
I will be watching the markets to see how this session ends, tune in next week for the return of the gas face!
Tags: dow, gas face, oil, speculatorsShare This
By profsilver -- 0 comments
June 5th, 2008
Video game publisher Take-Two Interactive Systems posted jaw-dropping (in a good way) earnings today due to higher-than-expected sales of Grand Theft Auto IV.
Sales of Grand Theft Auto IV have generated over $500 million in revenue for Take-Two since its April 29 debut. The release was posptoned for six months but it appears the delay did not phase sales in the least bit. The game has sold approximately six million units, half of which were sold on the first day.
Take-Two reported profits of $98.2 million versus a loss of over $50 million for the same quarter last year. The huge swing to a profit can be attributed to a whopping 160% increase in sales.
Take-Two has been an unwilling buyout target of Electronic Arts, publisher of Madden NFL and NBA Live.
Shares of Take-Two closed at $27.65, which is about a $2 per share premium to EA’s offer. No doubt Take-Two will use today’s earnings surprise as fuel for a higher bid.
Share This
By profsilver -- 1 comment
June 5th, 2008
One of the nation’s largest investment banks has taken major steps to silence rumors of an impending Bear Stearns-esque collapse.
Lehman Brothers Holdings firmed up its balance sheet by cutting its risky debt positions by 25 percent. In addition to selling off debt, the firm raised $8 billion in capital.
Many investment banks are fleeing from risky, mortgage related debt like the plague. So who bought over $100 billion of these risky securities from Lehman?
One buyer is Loomis Sayles, a fund manager with a portfolio of more than $100 billion in bonds. Lehman reps have also met with potential buyers at BlackRock. BlackRock merged with Merrill Lynch in 2006 and has been buying up risky debt as of late. Coincidentally, Merrill Lynch just upgraded shares of Lehman from “underperform” to “buy.”
News of the risk reduction moves sent Lehman shares up three percent. Certainly, the Merrill Lynch upgrade helped the positive momentum.
Mighty timely upgrade…
Tags: bear stearns, investment banks, lehmanShare This
By profsilver -- 1 comment
Recent Comments