Archive for November 6th, 2007
Filed under: Google (GOOG), Yahoo! (YHOO), Initial public offerings
 OK, so is China really communist? Not from what I can see.
Just look at the IPO market. Yes, it’s been sizzling.
And, of course, the latest mega deal is the public offering of Alibaba.com, which operates a sprawling group of fast-growing Internet properties.
According to a report from Bloomberg.com, the IPO surged from HK$13.50 to HK$39.50. In fact, Alibaba.com sports a market cap of a cool $25.7 billion. That is a thrill for Yahoo! (NASDAQ: YHOO), which has a 39% stake in the company.
Actually, Alibaba.com even has earnings. Although, at the current valuation, they are more than 150 times the market cap. That makes Google (NASDAQ: GOOG) look pretty cheap.
While China certainly has strong growth prospects, there are still risks. Can the country continue its torrid growth rate? What about political instability?
If you look at the history of US markets, strong IPO markets are usually a sign of excess and a top. So, investors should show caution.
And if you want to check out the IPO action here in the US — which is not as frothy — you can visit DealProfiles.com.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements .
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Filed under: Google (GOOG), Yahoo! (YHOO), Cisco Systems (CSCO), China, Initial public offerings
Alibaba more than doubled on its first day of trading in Hong Kong today. After the trading day ended, Alibaba took its place as Asia’s second largest Internet company behind Yahoo! Japan. All in, Alibaba is now valued at over $23 billion.
With shareholders including Cisco Systems (NASDAQ: CSCO) and Yahoo Inc. (NASDAQ: YHOO), Alibaba joins other high-flying Asian IPOs in 2007. I wrote briefly yesterday about the PetroChina (NYSE: PTR) IPO, which after it saw its value triple, is now the world’s first trillion dollar company.
Part of what makes the Alibaba IPO so interesting is the firm’s growth prospects. China’s largest Web trading site for companies predicts profit will almost triple this year on increased spending in the world’s fastest growing major economy.
Hot? Yes. According to Bloomberg data, Alibaba’s IPO was the biggest by a Web company after Google Inc.’s (NASDAQ: GOOG) $1.9 billion float in August 2004.
Says Bloomberg, “Clients can advertise or buy products using Alibaba’s Web site for free. The company charges suppliers from China and Hong Kong an annual fee to become so-called premium members, which enable them to gain preferential access to buyers.”
China was home to 162 million internet users at the end of June, second only to the U.S., according to the government-backed China Network Information Center.
DISCLOSURE: I personally own shares of GOOG.
Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
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Filed under: Google (GOOG), Yahoo! (YHOO), Time Warner (TWX), Citigroup Inc. (C), Money and Finance Today, Sun Microsystems (JAVA)
In the News:
· Pittsburgh Steelers Named Strongest Local Brand in Sports
AMT Inaction May Delay Tax Season This Year
The hoped-for beginning of the 2007 tax-filing season is at risk due to congressional inaction, acting Internal Revenue Service Commissioner Linda Stiff said yesterday.
AMT Inaction May Delay Tax Season - WSJ.com
Most Affordable Places to Live Well
Triple-digit monthly parking fees, $12 movie tickets, clogged intersections and weekly grocery bills that rival some mortgage payments. Welcome to life in the Big Apple. And Los Angeles. And Chicago. Of course, residents in these cities also get access to world-renowned museums, seats at the games of the winningest sports teams, well-kept parks and cutting-edge restaurants. But, it’s possible to enjoy such amenities without the hassles. Yes you can, in Minneapolis which tops the list followed by Indianapolis, Cincinnati, St. Louis and Houston.
Most Affordable Places To Live Well - Forbes.com
Responsible Home Loan Payers Crying Foul
Not everyone is happy about mortgage lenders’ latest efforts to help troubled borrowers. Countrywide, for example, said it will refinance or restructure loans or reduce interest for hybrid ARM borrowers whose rates are scheduled to reset. And no one will have to pony up prepayment penalties for retiring loans early. Many responsible loan borrowers say why should help be given, and possible taxpayer money spent, to home owners in trouble? One lender says “The majority of people I talk to are upset already,” he said. “They say, ‘I make my payments on time. Why do these people get bailed out?’”
Subprime bailouts: Chump check - CNNmoney
How Do You Rank As a Taxpayer
The latest statistics show a growing income gap between rich and poor and a far wider gap between the tax burden carried by different economic classes. Where do you stand as a money maker and a taxpayer?
How Do You Rank as a Taxpayer? - Kiplinger.com
Interest Rates Defy Feds Recent Cuts
Interest-rate cuts by the Federal Reserve are normally bad news for savers and good news for borrowers. But that scenario hasn’t been playing out fully since the central bank began cutting rates in September.
Interest Rates Defy Fed’s Recent Cuts - WSJ.com
2 More Years for A Better Retirement
Just 24 more months of work can really improve your financial position. By waiting an additional seven years, you can double your nest egg’s size simply by earning the market’s historical 10% average annual return.
2 More Years for a Better Retirement - Fool.com
Consumer Reports’ Guide to Best Gifts for Holidays
Whether you’re shopping for people who like to cook, take photographs, listen to music, work out, or eat, we have the gift list for you. These products, culled from the thousands that Consumer Reports tested during the last year or so, all received high scores, and many were CR Best Buys.
ConsumerReports.org - Best gifts for the holidays
8 Over 80
Forget shuffleboard and croquet. With Americans living longer, more of them are embarking on entrepreneurial second careers — well into their 80s. So what are the real secrets to longevity, in business and in life? Meet America’s coolest octogenarian (and then some!) entrepreneurs.
Who Are the 8 over 80? - Inc
Most Affordable College Football Towns
Muncie, Indiana, ranks as the most affordable big football town for housing in the United States, according to an annual survey released Tuesday by Coldwell Banker. The home of Ball State University tops the list followed by Texas Christian’s hometown Fort Worth and Tulsa University hometown Tulsa, Oklahoma. The most expensive college football town is Stanford’s hometown of Palo Alto.
Most affordable college football towns - Nov. 6, 2007
Are Fast Food Fries Trans-Fat Free?
Consumer Reports sampling says Wendy’s still missed its mark. So did Burger King. McDonald’s fries claim a high 8 g for most locations and 0 g for New York City, and they met those claims. The best way to cut trans fat from fast-food fries? Try to stick with fries from Arby’s or KFC, which were virtually free of trans fats (and choose a small serving).
ConsumerReports.org - Trans-fat free fast food fries
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Filed under: Before the bell, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Google (GOOG), Microsoft (MSFT), Apple Inc (AAPL), Motorola (MOT), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Citigroup Inc. (C), Sprint Nextel Corp (S), US Airways Group (LCC), QUALCOMM Inc (QCOM), UAL Corp (UAUA), Delta Air Lines (DAL), Housing
 Before the bell: Techs to the rescue — stocks poised for a rebound
Citigroup (NYSE: C) was downgraded at Bank of America to Neutral from Buy. Also, CIBC analyst Meredith Whitney — whose downgrade of Citi last week triggered a sharp drop in the stock and the retirement of CEO Charles Prince — told the Daily Telegraph newspaper the only way forward is to carve the bank up and sell it off, because it lacks the capital to manage it.
Google Inc. (NASDAQ: GOOG) yesterday unveiled its mobile-phone strategy. It wants to break into the wireless market with a plan to create open standards for mobile phones. The search giant is teaming with several companies like Sprint Nextel (NYSE: S), Qualcomm (NASDAQ: QCOM) and Motorola (NYSE: MOT) to develop a strategy that could make devices cheaper and give consumers more control over their phones’ capabilities. Speculation that Google could announce a competing phone to Apple Inc. (NASDAQ: AAPL) iPhone didn’t materialize, although the company didn’t say if a there is such a plan for a Gphone. GOOG shares were 1.5% higher in premarket trading.
Two home builders announced news. Hovnanian (NYSE: HOV) delivered 3,969 homes during its fourth quarter, a decrease of 19% from the same quarter a year ago as its problems continue. Beazer Homes (NYSE: BZH) said after the close yesterday that it’s planning to take a $230 million fourth-quarter non-cash pre-tax charge and cut 650 positions, or 25% of its workforce. BZH shares are up nearly 3% in premarket trading.
Microsoft Corp. (NASDAQ: MSFT) announced it will build a $500 million data center in Ireland that will support customers throughout Europe, Africa and the Middle East.
Airlines announced October traffic Monday: Delta Air Lines (NYSE: DAL) system traffic increased 6.2% from October 2006 with a capacity increase of 2.9%. UAL Corp. (NASDAQ: UAUA) October traffic fell 0.6%. U.S. Airways Group (NYSE: LCC) October traffic was down 1.5% from October 2006.
According to the Wall Street Journal, the U.S. Federal Communications Commission sent questionnaires to XM Satellite Radio Holdings Inc (NASDAQ: XMSR) and Sirius Satellite Radio Inc (NASDAQ: SIRI), which give an indication into areas where it could ask for concessions as part of any satellite-radio merger approval.
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Filed under: Google (GOOG), Yahoo! (YHOO), Citigroup Inc. (C), IAC/InterActiveCorp (IACI), Merrill Lynch (MER), Goldman Sachs Group (GS), EMC Corp (EMC), Deere and Co (DE), Cramer on BloggingStocks
 TheStreet.com’s Jim Cramer says the market showed its stuff Monday, and health care, tech and retail look like buys.
Sweet comeback as people are getting too panicked and too bearish. I noticed it first in the retailers, which all trade like subprime-mortgage originators.
It then spread to the oil and oil-service stocks (as if oil is going to plummet, not just find a level). The minerals got whacked something awful off the usual recession gambit.
Then it started hitting tech names, including ones that are doing well and just reported, like EMC (NYSE: EMC) (Cramer’s Take) off the big downgrade.
To me the last straw was the collapse, for a second day, of Goldman Sachs (NYSE: GS) (Cramer’s Take), something that simply makes no sense at all except from the proposition that both competitors, Merrill (NYSE: MER) (Cramer’s Take) and Citigroup (NYSE: C) (Cramer’s Take), will now be better run (which is a given, by the way).
In fact, the only five stocks that were holding up throughout the onslaught — at least on my screen — were Yahoo! (NASDAQ: YHOO) (Cramer’s Take), Google (NASDAQ: GOOG) (Cramer’s Take) and IACI (NASDAQ: IACI) (Cramer’s Take) plus Deere (NYSE: DE) (Cramer’s Take) and Parker Hannifin (NYSE: PH) (Cramer’s Take) — the latter are incredible stalwarts.
The ability of this market to shrug off these losses will be the tale of today’s tape. Resilience has been the hallmark of this market when it comes up against key levels, and it showed it again today.
It’s probably time to do some buying of health care — we did Monday in Action Alerts PLUS — tech, and retail, and cover some of the financials.
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com’s sites and serves as an adviser to the company’s CEO. At the time of publication, Cramer was long EMC, C and Goldman Sachs.
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Filed under: Major movement, Earnings reports, Good news, Nortel Networks (NT), Options, Technical Analysis
 Nortel Networks Corp. (NYSE: NT) shares are trading higher today after the company announced Q3 earnings with a net income of $27 million, or 5 cents a share after one-time charges, compared with a net loss of $63 million, or 14 cents a share in the previous year. Analysts were expecting 12 cents per share, and NT beat that number before charges. If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NT.
After hitting a one-year high of $31.79 in February, the stock hit a one-year low of $15.32 in September. NT opened this morning at $16.98. So far today the stock has hit a low of $16.75 and a high of $18.65. As of 10:45, NT is trading at $18.47, up $2.19 (13.4%). The chart for NT looks neutral and improving, while S&P gives the stock a 3 STARS (out of 5) hold rating.
Continue reading Nortel Networks (NT) rises on Q3 earnings
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Filed under: Analyst reports, Analyst upgrades and downgrades, Microsoft (MSFT), Citigroup Inc. (C), Bed Bath and Beyond (BBBY), Nordstrom, Inc (JWN)
.gif) MOST NOTEWORTHY: Royal Dutch Shell, Citigroup, American Financial and Cognos were today’s noteworthy downgrades:
- Credit Suisse downgraded shares of Royal Dutch Shell (NYSE: RDS.A) to Neutral from Outperform based on valuation as analyst estimates now look about right, removing a potential catalyst.
- Banc of America downgraded shares of Citigroup (NYSE: C) to Neutral from Buy and lowered their target to $39 from $45 given the eroding confidence in the company’s earnings and book value.
- American Financial (NYSE: AFR) was downgraded to Neutral from Buy at UBS and to Market Perform from Outperform at Friedman Billings following its acquisition by Gramercy Capital Corp (NYSE: GKK).
- CIBC downgraded Cognos (NASDAQ: COGN) to Sector Performer from Outperformer based on takeover valuation premium and FX headwinds.
OTHER DOWNGRADES:
- Goldman removed Microsoft (NASDAQ: MSFT) from its Conviction Buy List.
- Merrill downgraded AMBAC Financial (NYSE: ABK) to Neutral from Buy.
- Morgan Stanley downgraded the hardlines and softlines retail sectors to Cautious from In Line; the firm also downgraded Bed Bath & Beyond (NASDAQ: BBBY) to Equal Weight from Overweight and Nordstrom (NYSE: JWN) to Underweight from Equal Weight.
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Filed under: Google (GOOG), Yahoo! (YHOO), Initial public offerings
OK, so is China really communist? Not from what I can see.
Just look at the IPO market. Yes, it’s been sizzling.
And, of course, the latest mega deal is the public offering of Alibaba.com, which operates a sprawling group of fast-growing Internet properties.
According to a report from Bloomberg.com, the IPO surged from HK$13.50 to HK$39.50. In fact, Alibaba.com sports a market cap of a cool $25.7 billion. That is a thrill for Yahoo! (NASDAQ: YHOO), which has a 39% stake in the company.
Actually, Alibaba.com even has earnings. Although, at the current valuation, they are more than 150 times the market cap. That makes Google (NASDAQ: GOOG) look pretty cheap.
While China certainly has strong growth prospects, there are still risks. Can the country continue its torrid growth rate? What about political instability?
If you look at the history of US markets, strong IPO markets are usually a sign of excess and a top. So, investors should show caution.
And if you want to check out the IPO action here in the US — which is not as frothy — you can visit DealProfiles.com.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.
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Filed under: Analyst reports, Analyst upgrades and downgrades, MasterCard Inc’A’ (MA), Research in Motion (RIMM), Sun Microsystems (JAVA), Oracle Corp (ORCL)
MOST NOTEWORTHY: Ericsson, Total SA, Research in Motion, MasterCard and Sun Microsystems were today’s noteworthy upgrades:
- Goldman upgraded shares of Ericsson (NASDAQ: ERIC) to Buy from Neutral and added the company to their pan-Europe Conviction Buy List, as they believe the factors that lead to the October earnings miss will be rectified and the company will report upside to Q4 estimates.
- Credit Suisse upgraded Total SA (NYSE: TOT) to Outperform from Neutral based on valuation and expectations for a return in upstream volume growth in 2008.
- Credit Suisse also upgraded Research in Motion (NASDAQ: RIMM) to Outperform from Neutral, citing RIMM’s expanding international market share.
- MasterCard (NYSE: MA) was raised to Buy from Hold at Deutsche Bank, as they believe the company’s margin potential is yet to be fully priced into shares or Street estimates.
- Citigroup raised shares of Sun Microsystems (NASDAQ: JAVA) to Buy from Hold to reflect the company’s improving product line, restructuring, and share buyback. They find the risk/reward attractive and expect solid Q2 results.
OTHER UPGRADES:
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Filed under: International markets, Oil, Federal Reserve
 The dollar must be feeling a little like the late stand-up comedian Rodney Dangerfield, because recently, the dollar “just isn’t getting any respect.”
The dollar fell to a record low against the euro Tuesday morning, moving to $1.4556 before trading around $1.4545 on talk that the U.S. Federal Reserve is likely to lower interest rates further in an effort to stimulate the U.S. economy and counteract the economic drag effect of subprime mortgage losses. If the Fed cuts rates at its next meeting in December, it would be the third rate cut in four months.
Against the British pound, the dollar moved to $2.0897, a 26-year low, before retreating to trade around $2.0875 in Tuesday mid-morning trading. The dollar also fell to 92.59 cents against the Canadian dollar, but traded slightly higher against Japan’s yen, rising to 114.75 yen from 114.55 yen earlier in the day.
Continue reading U.S. dollar continues to ‘get no respect’
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