Archive for June 1st, 2008
Filed under: Forecasts, Industry, AMR Corp (AMR), Delta Air Lines (DAL)
 Many institutional funds shy away from stocks that sell below the $5 mark. It is assumed that most low-priced shares are a sign of trouble. In many cases that is true.
As some airlines become small caps, driven down as the price of oil comes up, several could drop below the $5 threshold. That may hinder these stocks from rebounding by eliminating them from some fund portfolios.
It is hard to imagine that AMR’s (NYSE: AMR) stock trades at $7.19 and has been as low as $6. That puts the company’s market cap at $1.8 billion. Some biotech companies with almost no revenue are worth as much. Delta’s (NYSE: DAL) are at $6.15 and its market cap is about the same as AMR’s.
Airline stocks are now the province of speculators and day traders. Since some may face Chapter 11, the gamble on owning the stocks is high now.
The shares of these companies have been swept into the dustbin.
Douglas A. McIntyre is an editor at 247wallst.com and author of Ten Stocks Under $10.
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Posted by: admin in Goog news
Filed under: Launches, Consumer experience, Google (GOOG)
 When Google (NASDAQ: GOOG) bought RSS company Feedburner, experts seemed to think it made a good match with the search companies big blog business, Blogger. Most people who keep blogs use RSS as a way to get their content out. Google could offer a platform for blogging with Blogger, selling ads with AdSense, and distributing content with FeedBurner.
The system has one flaw. Google did not set up a system for selling ads in Feedburner so that consumers looking at a site’s RSS feed would also see targeted ads next to the headlines. It was a break in the system which made it incomplete in terms of helping blogs drive profits.
Google has fixed that. According to Alley Insider, “for content publishers who have long feared RSS as a monetization-killer, AdSense for feeds somewhat levels the playing field.” The trouble with running blogs or other small websites is the lack of ways to bring in revenue. Google is offering a partial solution to that.
Of course, since Google keeps a large portion of the AdSense for Feedburner revenue, the huge tech company is looking after its own interests.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 Newsletter.
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Filed under: Deals, Technology
 Founded in 2000, Kintera Inc. (NASDAQ: KNTA) has built on-demand technologies to help nonprofits with fund-raising. Interestingly enough, the company has never reached a profit. So, it should be no surprise that the stock price was below a buck and that the Nasdaq provided a delisting notice.
Well, things were much brighter this week. Blackbaud (NASDAQ: BLKB), which has an extensive software suite for nonprofits, has agreed to purchase Kintera for $46 million or $1.12 per share. On news of the traction, the company’s share price spiked 58%.
For the past year, Kintera has been restructuring operations. For example, the company has reduced its operating expenses by $1 million per quarter.
But, as a part of Blackbaud, there should be even more cost savings, such as with R&D and the salesforce. Keep in mind that there will be no public-company costs for Kintera (which is a big deal).
Something else: Kintera’s losses are quite valuable. That is, they represent a $10 million present value for Blackbaud (which can use them to shelter taxes). In other words, this essentially reduces the price tag of the acquisition.
Although, Blackbaud also sees some major strategic benefits. First of all, Kintera helps bolster the fund-raising segment, which looks like a growth market. Next, Blackbaud is transitioning to on-demand software approaches. Finally, the company will pick up 4,000 customers from Kintera.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements . He also operates MergerBook.com.
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Filed under: Ford Motor (F), India
 Sterlite Industries India Ltd. (NYSE: SLT), which is already the largest copper and zinc producer in India, is getting bigger. That is, the company has agreed to purchase Asarco LLC (based in the U.S.) for about $2.6 billion. With the deal, Sterlite will get an estimated five million tons of copper reserves.
Basically, it’s easier to mine for copper on Wall Street (with acquisitions) instead of digging into the ground. As a result, there were four suitors for Asarco (which, by the way, is in bankruptcy and is dealing with complex environmental liabilities).
Furthermore, with the surge in copper prices, there is definitely enough firepower to get deals done — at high valuations.
This deal also points to another interesting theme: the aggressive M&A of Indian firms. For example, Tata Motors recently purchased Jaguar and Land Rover from Ford (NYSE: F). There was also Tata Steel’s $12 billion acquisition of Corus Group.
And, it’s a good bet we’ll see a lot more deal-making. Simply put, India needs to snag more natural resources to facilitate its torrid growth rate.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
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Filed under: Deals, Ford Motor (F), General Motors (GM)
 Billionaire Kirk Kerkorian must know something we don’t. Or perhaps at his level, he might have other considerations than such trivial matters as a mere $34.5 million. That’s the premium his Tracinda Corp. would pay for 20 million of Ford Motor Co. (NYSE: F) shares over today’s price if it went ahead with the offer.
On May 9th, Kerkorian offered, through Tracinda Corp., to buy an additional 20 million shares of Ford at $8.50 a share. At the time, it was a small premium over the $8.20 price. Naturally, such a savvy investor had a clause providing him an out should the shares fall more than 10% from the time of the offer. Well, they fell about 18%, but Kerkorian is waiving the provision, saying he will go ahead with the purchase and that “Tracinda continues to believe in Ford’s management and turnaround efforts.”
For Kerkorian, it’s the third try with one of the Big Three. Chrysler and General Motors Corp. (NYSE: GM) felt his weight in the past, and while he may have effected changes in Chrysler despite, or maybe because, of his failed attempts to take it over, he didn’t manage much change and gave up on GM despite owning nearly 10% of it. Currently, Tracinda owns 100 million Ford shares, a 4.7% stake, and will likely own 20 million more by June 9 when the offer expires.
Continue reading Kerkorian still willing to pay up for Ford
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Posted by: admin in Goog news
Filed under: Earnings reports, Google (GOOG), Dell (DELL), Starbucks (SBUX), Tiffany and Co (TIF), Sears Holdings (SHLD), Costco Wholesale (COST), Novell Inc (NOVL), Marvell Technology Group (MRVL), salesforce.com inc (CRM)
Here are some highlights from this past week’s earnings coverage from BloggingStocks:
Also earnings of Google (NASDAQ: GOOG), Starbucks (NASDAQ: SBUX), and 400 other companies were affected by write downs of auction-rate securities.
Upcoming results to watch for include Toll Brothers (NYSE: TOL), Hovnanian Enterprises (NYSE: HOV), Ciena (NASDAQ: CIEN), Bob Evans Farms (NASDAQ: BOBE), Williams-Sonoma (NYSE: WSM), Del Monte (NYSE: DLM), National Semiconductor (NYSE: NSM), Smithfield Foods (NYSE: SFD), and Lululemon Athletica (NASDAQ: LULU).
Visit AOL Money & Finance for more earnings coverage.
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Ambac, one of the top bond insurers in the country continued to hemorrhage cash on bad mortgage-related bets. Ambac reported a loss of $228 million in CDOs and its investment portfolio in April. Many of the CDOs include subprime mortgage debt.
From the Associated Press on Ambac’s subprime mortgage backed CDO losses for April:
Bond insurer Ambac Financial Group Inc. said Wednesday it continued to take millions of dollars in charges in April tied to its credit derivative and investment portfolios.
Net write-downs on its credit derivatives holdings totaled $176 million in April, with the bond insurer taking a write-down of $228 million on the value of collateralized debt obligations. Those write-downs were partially offset by $52 million in gains among other credit derivative holdings.
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If you think you’ve seen it all be prepared to see the most manic pricing action in the history of this housing bubble courtesy of a condo in Long Beach California. That’s right, the home of Snoop Dogg and the beautiful Queen Mary. The ability to access past sales history readily makes for […]
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■Real Homes of Genius: 675 square foot home in Lynwood California at $425,000?!
■Real Homes of Genius: Today we Salute Inglewood. Bought in 1970 for $20,000 now selling for $397,400.
■Real Homes of Genius: Today we Salute you Stanton.
■Real Homes of Genius: Biggest Ever Percentage Housing Drop Ever in Santa Ana! 68 Percent Drop in 1 Year. The Journey of One Home in an Epic Housing Bubble.
If you think you’ve seen it all be prepared to see the most manic pricing action in the history of this housing bubble courtesy of a condo in Long Beach California. That’s right, the home of Snoop Dogg and the beautiful Queen Mary. The ability to access past sales history readily makes for some fascinating forensics on the incredible financial stupidity of this bubble. If this happened say 20 years ago, it would take some savvy journalist a lot of time to head down to the county clerk’s office, work with local realtors for MLS access, and finally be able to put all the pieces together to show the insanity of the housing orgy. Now all you need is an internet connection, some common sense, and the insanity of the housing market comes together like a thousand piece jigsaw puzzle.
For those of you thinking we are at a bottom, there are futures traders that would like to disagree. In fact, the futures markets are pricing in a 28.3% further drop for Los Angeles by November of 2010. The housing futures contracts are also pricing in 24.8% of that drop in the next year! You may want to take a look at some of the other housing futures over at housing derivatives that compiles a list periodically. Here’s a little rundown of the April 2008 published future prices:
November 2010
Las Vegas: -28.9%
Miami: -21.9%
New York: -15.2%
San Francisco: -25.6%
Chicago: -12.0%
Bottom line? More pain ahead at least from people that are putting their money where their mouth is. Think housing will go up? Go ahead and put some money down.
Let us now move on to one of our most absurd Real Homes of Genius on record (hat tip MC). Today we salute you Long Beach with our Real Homes of Genius Award.
From $1,325,000 to $200,000 in 3 Years?!
Today we are looking at a 948 square foot condo in Long Beach California. In housing bubbles, condos usually run up the quickest first but also correct the fastest as well. This place makes no exception to that rule. Yet the pricing action on this place makes you wonder if you aren’t living in some Twilight Zone. Instead of Ed McMahon stopping by your home with a $1 million check we get a reverse housing clearing house award; in this world you get a knock on your door and you have the potential of losing $1 million simply for turning the knob.
This place is located on Ransom Street which runs deep with Shakespearean irony. Let us look at some of the sales history on this place courtesy of the excellent website, Redfin:
Oh sweet mother of Earth! This place is now half off of a price that was reached 20 years ago! Could it be that we’ve found a condo that went through the late 80s bubble but also the current mega housing bubble? This place sold for $622,000 in February of 1988 and then sold for a peak of $1,325,000 in July of 2005! It also sold for a ridiculous price of $730,000 in January of 2004. The real action is all the entries that occurred in 2007. There is something going on here and I’ll leave it up your imagination as to what exactly is playing out.
Let us now take a look at the pricing action on this place:
Bwahaha! Hey, if this place sold for $622,000 in 1988, sold for $1,325,000 in 2005 anything is possible so why not ask for 10 zillion dollars? I think the $3,500,000 was an input error but at this point nothing would surprise me. This place is now listed at $200,000; that is a $1,125,000 discount in three years! Bwahaha! Hold on a second and let me catch my breath…Bwahahaha! What the hell is going on here? Why would you even want to rob a bank were you are probably only going to get $50,000 and be put behind bars when you can be a shady broker, lender, appraiser (seriously who the heck appraised this place?), or agent and you have yourself a method of getting criminal amounts of money without facing prison time. I’m still waiting to see massive amounts of people being put behind bars because I equate this with flat out stealing money.
I love how these ads tell us that you have “great freeway access” when everyone in Southern California by default has great freeway access. You’ll be stuck on the freeway once you do get on and idling away that precious $4 a gallon fuel but yes, you do have great freeway access. We are also told that this place has “low maintenances living” whatever that means.
Digg this article, Reddit, Stumble it, and get these insane examples out to the larger public. Frankly, the best way to show how idiotic any bailout would be is to highlight financial irresponsibility through actual real world examples. I think most folks with common sense can see how pathetic any help would be to lenders that clearly manipulated the system and now need to eat their own imprudence. The lenders can go pound sand for all I care and their CEOs think the same way about borrowers. How is bailing out a place like this good for our economy?
Today we salute you Long Beach with our Real Homes of Genius Award.
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Related Posts:
■Real Homes of Genius: Today we Salute you Buena Park. $511,000 for 864 Square Feet. Even Knott’s Berry Farm is Cheaper!
■Real Homes of Genius: 675 square foot home in Lynwood California at $425,000?!
■Real Homes of Genius: Today we Salute Inglewood. Bought in 1970 for $20,000 now selling for $397,400.
■Real Homes of Genius: Today we Salute you Stanton.
■Real Homes of Genius: Biggest Ever Percentage Housing Drop Ever in Santa Ana! 68 Percent Drop in 1 Year. The Journey of One Home in an Epic Housing Bubble.
 Via [DrHousingBubble]
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New home sales rose for the first time in sixth months but the sales gain was merely a rebound from the 11% loss reported in March - the lowest level in sales in nearly 20 years. Last month’s sales numbers were off 42% from the same time period in 2007 the biggest drop since 1981.
From Market Watch on the newest new home sales figures:
Sales rose 3.3% in April to a seasonally adjusted annual rate of 526,000, marking the first gain since last October, the Commerce Department reported Tuesday.
Economists said the sales gain was a rebound from the sharp 11% drop in sales in March to 509,000 units, which was the lowest level in sales since April 1991.
By region, sales jumped in the Northeast and rose slightly in both the Midwest and West. Sales were down in the South.
Underscoring the fragile state of the market, last month’s sales were down 42.0% compared with April 2007, the biggest decline since September 1981.
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