There will not be any economic news out today, however we do have a busy week ahead for us with lots of news due out this week. We learned over the past few days that online sales for this holiday season have been growing by double digits year-over-year and the number of $1 billion days has increased as well. This is not all bad news for the brick and mortar crowd, as they have a heavy presence online as well but it does highlight the growing trend of consumers looking for the best prices and using the net to enable them to find them.
We have no economic news due out today, but tomorrow will kick off the start of a busy week.
Asian markets finished mostly higher today:
All Ordinaries - up 0.14%
Shanghai Composite - up 1.07%
Nikkei 225 - up 0.07%
NZSE 50 - down 0.27%
Seoul Composite - down 0.00%
In Europe markets are lower this morning:
CAC 40 - down 0.64%
DAX - down 0.58%
FTSE 100 - down 0.31%
OSE - down 0.04%
Friday saw rumors that Groupon (GRPN) could receive a bid from Google to purchase the entire company. The shares got stronger throughout the session, ending the day at $4.685/share after having risen $0.875 (22.97%) on volume of 50.9 million shares. The rumor started with Bloomberg reporting the story quoting an analyst who thought the company was a buyout candidate, and then the rumor mill began. First off, we cannot find where Groupon was supposed to attend a Sterne Agee conference…nothing on the website, even though it was reported by numerous people and news sites. We also doubt Google would buy damaged goods in an industry with low margins, one would hope that they learned their lesson from the Motorola deal, and paying such a rich premium for a company no one else wants to own would be silly. We continue to believe the correct play is simply to stay away from this company.
When it comes to the financial media (the mainstream CNBC, Fox Business News and others) we are sometimes forced to sit back and simply shake our heads at their ridiculousness. Yes every now and then they do serve investors well with their parade of analysts and researchers, but far too often they are behind the trade. Recently they have been jumping on the bandwagon of the Apple (AAPL) bears. Everyone assumes that the company is broken because the shares have declined recently and there is big selling taking place. Sure the company has not introduced a new big product recently, but that does not mean that they have an empty pipeline in the R&D department. We think they are doing just fine minting money and will report some impressive year-end results. Apple is not down because of an issue with their business, but rather due to an issue with America's tax system and investors trying to lock in capital gains at this lower rate. We think that is the only reason they have come under this much pressure and that at $533.25/share that the market is pricing the shares to sell.
Amarin Corporation (AMRN) saw shares fall $2.26 (18.91%) to close at $9.69/share on volume of 19.1 million shares on Friday after the company announced a $100 million financing which would be accomplished without using equity. The company also announced that they are going to use the proceeds of this offering to hire a salesforce of 250-300 individuals to market their drug Vascepa. This indicates that the company will not receive a takeover bid or sign up a large pharmaceutical company to market the drug for them. It sure looks like the bears read this story correctly whereas the bulls were wrong on many accounts.
One biotech company which has come under some heat recently is Elan (ELN) which hit a new 52-week low on Friday. Shares ended the session at $9.76/share after coming back off of the lows, but this has been a pretty bad run for the stock. They still have a few irons in the fire so to speak, but it always seems that there is a catch with these guys and their drugs. With all of that aside, the company is doing a demerger and for those wanting to participate in it the record date is December 14, 2012. The meeting to approve this move will be held December 12th, or Wednesday of this week.
The more we look at the situation with Toronto Dominion and TD Ameritrade (AMTD) the more we think that it is inevitable that Ameritrade will eventually be folded into the TD umbrella of companies. Right now it makes very little sense for it to be a separate entity, especially when one considers that they have no tie-ins with other banks and that owning equity does Toronto Dominion little good in light of the change in banking rules regarding equity positions and how those count towards capital ratios. We think that a combination makes far more sense than the current situation and with Toronto Dominion's constant expansion here in the US, it only makes sense that they would want to bring all of the parts under one roof.