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Posted
Apr 14 2008, 06:07 AM
by
Douglas McIntyre
Filed under: Microsoft, Cisco, Yahoo, E*Trade, Intel, Sirius, XM Satellite Radio, JetBlue, Dell, Take Two Interactive, Electronic Arts, Level 3
Rating:
Most companies on Nasdaq did fairly well with the shorts in the two-week period which ended on March 31. The two tremendous exceptions were Level 3, where short interest moved up 20.3 million shares to 243.9 million, and Sirius, where shares sold short jumped 40.4 million to 137.8 million.
In a tough stock market and credit environment, it is not hard to see why investors would place bets against both companies. Each stock trades near its 52-week low. Level 3 recently pushed out its president. Although it is in an attractive business, bandwidth infrastructure, it is a patch-work of M&A work with a large amount of debt and almost no cash-flow. In other words, a liquidation candidate in a deep recession.
Sirius is also hurt by a high debt-load -- over $1.2 billion -- and negative operating income. If the company's merger with XM Satellite does not go through, it may not be able to survive as a standalone company either.
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Posted
Apr 08 2008, 01:36 PM
by
Kim Peterson
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AMD investors are banging their heads against the wall again today after the chipmaker said first-quarter sales will disappoint Wall Street. Shares fell 5% today to $6.03. A year ago AMD traded in the $13 range; two years ago the stock was at $34.
AMD also said it will cut about 1,700 jobs, or 10% of its work force. It estimated first-quarter revenue to be $1.5 billion, not the $1.62 billion analysts were looking for.
The economy is certainly to blame, but could Dell be a culprit as well? Citigroup analyst Glen Yeung said in a note that Dell is reducing its exposure to AMD, which is contributing to AMD's current woes. Yeung said he didn't know if Dell had completely bailed from the AMD camp, however.
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Posted
Mar 30 2008, 05:26 PM
by
Douglas McIntyre
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Starbucks has been a disappointment recently. Same-store sales in the U.S. slowed over the last couple of quarters. The company pushed down its guidance. Founder Howard Schultz kicked out his CEO and took over.
In late 2006, Starbucks traded over $40. It is well below that now -- under $18 on most days.
Right as the stock peaked, then-CEO Jim Donald made the audacious statement that the company would eventually have 40,000 stores. On the day he said that Starbucks had 12,440 stores. Looking back, it is almost certain the his prediction had no chance of becoming a reality. But, the $40 share price had gone to his head. He had become delirious with success.
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Posted
Mar 26 2008, 12:10 PM
by
Kim Peterson
Filed under: Google, Comcast, Time Warner, Sprint, wireless, Intel, Verizon, AT&T, Kim Peterson, Clearwire, WiMax
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Lots of big numbers are being tossed around today in support of WiMax, a wireless technology that can deliver high-speed Internet access over several miles. Clearwire is a leader in developing WiMax, and has been trying to hammer out a partnership with Sprint for months. But working out a deal hasn't been easy, partly because building out WiMax is so expensive and partly because both companies have their own struggles to deal with.
Now, the two biggest U.S. cable companies are stepping in with loads of cash. According to the Wall Street Journal, Comcast and Time Warner are talking about funding a new WiMax company, one that would be run by Sprint and Clearwire. The company would operate a nationwide WiMax network. Comcast is reportedly offering $1 billion and Time Warner is adding $500 million. Bright House Networks, a small cable company, might pony up between $100 million and $200 million.
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Posted
Mar 12 2008, 01:14 PM
by
Douglas McIntyre
Intel management and lawyers are in Europe talking with EU officials about whether the big chip company violated anti-trust laws in the region.
According to The Wall Street Journal "The E.U. filed preliminary charges against Intel in July, alleging the company offered rebates to customers only if they didn't use AMD products." Officials want to know whether Intel came by its 80% market share in the PC and server markets by playing fair or by using dirty tricks to keep customers away from AMD.
The case is much more important to AMD than it is to Intel. As E.U. dealings with Microsoft have shown, a large company can survive sanctions from the body, even penalties, and continue to do business successfully. AMD, on the other hand, is losing share. If it can get the locals to go along with its way of thinking, that Intel executives are thugs and mobsters, the smaller chip company might get a little wiggle room to sell more of its products.
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Posted
Mar 04 2008, 12:24 PM
by
Kim Peterson
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The Google freefall hit a notable mark today: its shares are trading lower than where they ended 2006. Shares slid as low as $435.78, but closed today at $444.60. That's down by a third since November; the company's market cap has dropped during that time to $140 billion from $232 billion.
Give Intel some of the blame. The chipmaker lowered its Q1 profit margin forecast, and when Intel does that it drags the whole tech sector down. There was also news today that one of Google's top sales execs is jumping ship for social-networking darling Facebook.
But bigger issues are felling Google -- concerns about slowing revenue and profit growth, and about the economy affecting Google's paid click business. A report out last week by research firm ComScore showed a 7% drop in the number of times people clicked on Google's advertising links in January. The number of paid clicks per Google search query fell by 8%.
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Posted
Feb 29 2008, 03:22 PM
by
Charley Blaine
Rating:
How bad have the first two months of 2008 been? Bad. January and February were the worst-ever opening two months for the Standard & Poor's 500 Index and the Nasdaq Composite Index. The Dow Jones Industrial Average wasn't much better.
The advice investors should take away from the numbers: Be patient for a bottom. Be very patient. The odds that the market will recover completely by year-end aren't great, if only because it will take a long time to solve all the problems facing the banking system and the credit markets.
(For some perspective, check Barry Ritholtz's blog The Big Picture. Barry also likes to toss in fun cartoons and thoughts about everything from digital cameras to rock music. Also, check Floyd Norris' blog at the New York Times site.)
The Dow finished the first two months of the year down 7.5%. Since 1928, that's the blue-chip index's 6th-worst opening two months. The worst was 1933, when the index fell 14.3%. The next worst was 2000, when the Dow fell a combined 11.9%.
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Posted
Feb 20 2008, 08:48 AM
by
Douglas McIntyre
Rating:
Hewlett-Packard turned in one of the best performances of the earnings season. Net income rose 38%. Revenue rose 13% to $28.5 billion. The computer company raised guidance and its shares moved up 5%.
HP is probably the best tech bellwether in the U.S. It not only sells PCs and printers, it has a large software and server operation. It has tremendous businesses outside the U.S., especially in Asia.
Shipments from the company's PC operations were up 27% in the quarter. That has to be good news for chip companies AMD and Intel. Because HP is No.1 in global PC market share, it is also likely a boost for sales of Microsoft's Vista.
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Posted
Dec 29 2007, 07:39 AM
by
Douglas McIntyre
Rating:
One of the most interesting sets of numbers that hits Wall Street every two weeks is short interest in stock traded on the major exchanges. The number represents bets being made against a stock going up and in favor of its falling. Several big names are usually high on the list, including Level 3, Sirius, and Intel.
For the period ending December 14, shares sold short went way up for the three big discount brokers. It makes sense that E*Trade is on the list. It has had such significant problems with sub-prime financial instruments that its short interest at 53.7 million shares, up 3.9 million from the last measurement date on November 30, is understandable.
But, shares sold short in Schwab moved up 6.1 million to 27.8 million for the period. At TDAmeritrade the short interest jumped by 8.2 million shares to 17.8 million.
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Posted
Nov 26 2007, 10:32 AM
by
Kim Peterson
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The Wall Street Journal has an excellent article about Nicholas Negroponte, an MIT professor who is pioneering an ambitious project to produce a $100 laptop that poor countries can buy for their children. It's a noble effort that would educate children and families as well as connect them to the Internet.
The article details the many challenges Negroponte is facing in his goal to get the laptop to 150 million children. So far, only about 2,000 children have received the computers. Why? Tech giants are worried the laptop will cut into future business opportunities in the developing world, so they're coming up with competing machines.
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