MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, June 19, 2013
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8:09 PM Five Below (FIVE) sinks in the post session after announcing an 8.6M share secondary offering. All of the shares are being offered by selling shareholders, including certain members of Five Below's management team and Board of Directors. The underwriters are expected to have a 30-day option to purchase an additional 1.3M shares to cover over-allotments. FIVE won't receive any proceeds from the sale. Goldman Sachs, Barclays, Jefferies, Credit Suisse and Deutsche Bank are joint book-running managers. Shares -6% AH. Comment!
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7:58 PM Echo Therapeutics (ECTE +1.9%) says that its priced its full 4.628M share public offering, which includes the full over-allotment exercise, at $2.70 per share, an actual 3% premium to today's closing price of $2.62. Demand for the deal was high, and the sale will generate around $12.5M in gross proceeds before the underwriting discount and other offering costs are deducted. Shares +1.9% AH. Comment!
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7:58 PM Ebix's (EBIX) merger agreement with a Goldman Sachs affiliate has been terminated. The termination is the result of Ebix's receipt of a letter from a U.S. Attorney for the Northern District of Georgia stating it has "opened an investigation into allegations of intentional misconduct" found in recent shareholder class action suits against Ebix. The letter follows an SEC investigation into Ebix's accounting launched earlier this year. EBIX -25% AH. SA contributor Gotham City Research has been quite critical of Ebix's accounting for some time. 2 Comments
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5:54 PM Zion Oil & Gas (ZN) says its Board of Directors has approved in-well testing at its Elijah #3 well in the Asher-Menashe License in Israel, in which an application was submitted the country's Petroleum Commissioner for a third one-year extension on April 26. The testing is a key method of obtaining information on the formation fluid and establishing whether a well has found a commercial hydrocarbon reservoir. Comment!
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5:39 PM Red Hat (RHT) guides on its FQ1 call for FQ2 EPS of $0.32-$0.33 and FY13 EPS of $1.31-$1.35, in-line with Street estimates of $0.33 and $1.34 and better than feared. Aided by strong demand from telco and cloud customers, FQ1 billings rose 14% Y/Y, a solid improvement from the 9% FQ4 growth that had disappointed some investors. Deferred revenue balance -3% Q/Q and +16% Y/Y to $1.06B, and $179M was spent on buybacks. Shares +3.9% AH, thanks in part to low expectations. (PR) (yesterday) Comment!
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5:05 PM Microsoft (MSFT) does an about-face, dropping the Xbox One's Internet verification requirements and all of its used game restrictions. GameStop (GME) investors are very pleased, shares +7.8% AH. Microsoft's change-of-heart follows a major backlash from gamers (they were far from appeased by Redmond's initial response), and plenty of gamer enthusiasm being shown for the PlayStation 4 (SNE), both due to its lack of similar restrictions and its lower price. 11 Comments
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4:41 PM Stratasys (SSYS) is acquiring desktop 3D printing upstart MakerBot in an all-stock deal that has an initial value of $403M (based on Stratasys' Wednesday close), but which could reach $604M via performance incentives. MakerBot, which has sold 22K+ printers since '09 (11K Replicator 2 units in the last 9 months) and had Q1 revenue of $11.5M, will operate as an independent unit. The deal is expected to be slightly dilutive to 2013 EPS, and accretive by the end of 2014. The companies estimate 35K-40K desktop 3D printers were sold in 2012, and see the market doubling this year. CC at 7AM ET tomorrow (webcast). SSYS +1.7% AH. (previous) 1 Comment
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4:28 PM Finisar (FNSR) +8.9% AH following its FQ4 beat. FQ1 guidance is for revenue of revenue of $245M-$260M and EPS of $0.22-$0.26, mostly above a consensus of $248.9M and $0.20. A 150 bps Q/Q increase in gross margin to 32.2%, caused by a favorable mix, contributed to the EPS beat. Finisar says it's seeing strong demand for 10G/100G Ethernet components for datacom gear - 10G is being rapidly adopted in data centers, and some firms are starting to embrace 100G. Opex +4% Y/Y. a little above rev. growth of 2%. JDSU +3%, NPTN +4.3%, and CIEN +1% in sympathy. FN, OCLR, and OPLK could also rally. CC at 5PM ET (webcast). (PR) Comment!
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4:24 PM SandRidge Energy (SD) +2.4% AH after naming CFO James Bennett as its new CEO and president, and appointing lead independent director Jeffrey Serota as interim non-executive chairman. Tom Ward is out, as the board decides new leadership is in the best interests of the company. 3 Comments
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4:18 PM Not escaping the post-FOMC, post-Bernanke selloff is gold (GLD -1.2%) which falls to $1,349 per ounce - key support as the technicians like to say as this is the level at which the metal's fast spring slide bounced from in both April and May. Underneath that, there's nothing but air going all the way back to 2009 and $800 per ounce. Ditto for silver (SLV -1.3%) and maybe even worse as that metal has cracked the April and May support. 11 Comments
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4:14 PM Nokia (NOK) +2.6% AH after the WSJ reports Microsoft (MSFT) held advanced talks to buy Nokia's phone business, and was "close to an oral agreement" at one point, but adds discussions broke down in part due to price and concerns about Nokia's competitive positioning. One source says the talks "took place as recently as this month, but aren't likely to be revived." 29 Comments
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4:05 PM Micron (MU): Q1 EPS of $0.04 beats by $0.01. Revenue of $2.3B beats by $0.06B. Shares -1% AH. (PR) 4 Comments
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4:05 PM Cytokinetics (CYTK -3.7%) gives back some of yesterday's gains made after the company announced that results from its Phase IIb clinical trial, ATOMIC-AHF, have been accepted for presentation during a Hot Line Late Breaking Trials Session at the European Society of Cardiology Congress 2013. Comment!
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3:44 PM George Zimmer on his ouster from Men's Wearhouse (MW -0.8%): "Over the past several months I have expressed my concerns to the board about the direction the company is currently heading. Instead of fostering the kind of dialogue in the boardroom that has in part contributed to our success, the board has inappropriately chosen to silence my concerns through termination as an executive officer." In addition to saying Zimmer might have "had trouble letting go," Stifel notes that MW still "has the legal right to his image." Comment!
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3:33 PM Paris Air Show: Rolls-Royce (RYCEY.PK -1.4%) says it wants to cut costs right across its aero-engine business to match the productivity of its major competitors, even as the U.K. engineering company ramps up production to meet booming demand for more fuel-efficient passenger jets. The company says it plans to slim down its portfolio, targeting increased sales of a narrower range of products. Comment!
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3:13 PM Markets start to fall in earnest as the reality of a tapering and then ending in QE sinks in - even as the chairman is at pains to prove it's anything but a tightening move. The DJIA (DIA -0.8%) is off 145 points as the 10-year Treasury yield soars 15 bps to 2.33%, its highest level in 2 years. Reversing sizable early gains is the mREIT sector (REM -2.3%) - a leveraged holder of the paper the Fed will no longer be buying - with American Capital (AGNC -2%), (MTGE -1.5%), Annaly (NLY -2.2%), Invesco (IVR -2.5%), Two Harbors (TWO -3.5%), and Anworth (ANH -2.2%) leading the way. The greenback (UUP +0.9%) continues to fly higher. 18 Comments
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3:12 PM Onglyza, a diabetes drug co-marketed by Bristol-Myers Squibb (BMY -1.3%) and AstraZeneca (AZN -1.2%), failed to reduce the risk of heart attacks and related disease compared with a placebo in a big clinical trial. The drug was approved by the FDA in 2009 to treat type 2 diabetes, but required a large clinical trial to assess its cardiovascular safety. The outcome disappointed those hoping for a boost to the market for type 2 diabetes pills, and could have implications for other companies with similar drugs, including Merck's (MRK) blockbuster Januvia. 1 Comment
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