MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Tuesday, May 21, 2013
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4:34 AM Vodafone (VOD): FQ4 organic service revenue -4.2% (in line, but worst quarterly drop on record): -12.8% in Italy and -11.5% in Spain. Impairment charge of £1.8B in Italy, bringing total impairments for Spain and Italy to £7.7B for the full year during which sales were down 4.2%, to £44.4B and core earnings were off 3.1% to £13.3B. Adjusted operating profit beats, rising 9.3% to £12B. The company said it will keep its 45% share of Verizon's (VZ) dividend payment to shore up operations. 1 Comment
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Monday, May 20, 2013
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7:53 PM TiVo (TIVO): Q1 beats across the board on narrower losses as the TV set-top box maker continues to boost its subscriber rolls and rack up stronger revenue. The company has now posted subscriber increases for seven straight quarters, following a four-year streak of declining subscriber numbers. In the latest period, TiVo added a net 255K subscribers, compared with the 206K subscribers gained in the prior year period. Shares +1.1% AH. Comment!
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7:07 PM Loopholes allowed Apple (AAPL) to avoid $44B in U.S. taxes from 2009-2012, claims a Senate report released shortly after Apple's official statement. Though peers have also been accused of using offshore havens, the report argues Apple went further by creating a subsidiary (responsible for ~1/3 of profits from 2009-11) that used differences in U.S. and Irish law to have no residence whatsoever. Sen. Carl Levin calls this "the Holy Grail of tax avoidance." Also, while Apple claims $6B in FY12 federal tax payments, the report claims the real number is $2.4B if one backs out deferred payments on foreign cash (only paid if/when the cash is repatriated) 52 Comments
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6:50 PM Google (GOOG) roundup: 1) YouTube's video upload rate has passed 100 hours per minute. That's up from 72 hours last year, and 48 the year before. The milestone comes as YouTube expands live streaming support, and announces plans to unify its design across devices/platforms. 2) In July, Dell (DELL) will begin selling Project Ophelia, a $100 USB flash drive-shaped device that allows any monitor with an HDMI port to be turned into an Android PC. Dell is also working on "a keyboard-like technology for users to type when Ophelia is docked to a screen." 6 Comments
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6:19 PM Intuit (INTU) unveils a big restructuring a day before its FQ3 report arrives. Starting Aug.1 (the beginning of FY14), Intuit will be split into 6 units: Small Business Financial Solutions (QuickBooks, Intuit Payments), Small Business Management Solutions (employee management, Demandforce), Consumer Tax (TurboTax), Consumer Ecosystem (Quicken), Accounting Professionals, and Financial Services (online banking). Kiran Patel and Alex Lintner, currently the respective chiefs of Intuit's Small Business and Global Business units, will be leaving. (tax season results) Comment!
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5:55 PM Yahoo (YHOO) shows off a big overhaul for Flickr on a day when Tumblr is dominating headlines. The new Flickr site dedicates a lot more real estate to images at the expense of white space, and (echoing Yahoo's home page revamp) features a Facebook-like activity feed. Yahoo is also now giving Flickr users a whopping 1TB of free storage (easily more than most rivals), and allowing 3-minute-or-shorter 1080p video uploads. Will it be enough to reverse the fortunes of a service that has become an also-ran in a very competitive online photo-sharing space? (previous) Comment!
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5:24 PM Universal Display (PANL +2.4%) finished higher after a couple of pieces of OLED-related news arrived: 1) A Taiwanese paper reports Apple is testing 1.5" OLEDs for use in the long-rumored iWatch. 2) LG Display (LPL) is showing off a 55" OLED TV and (more intriguingly) a 5" flexible OLED panel for mobile devices at this week's Display Week 2013 conference. Samsung's upcoming Galaxy Note 3 has been expected to sport a flexible OLED, but a recent report stated this won't happen due to mass-production challenges. 1 Comment
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5:05 PM More on BMO's downgrade of Red Hat (RHT -4.3%): Analyst Karl Keirstead says recent checks - discussions at a Linux Foundation event, and a talk with the CIO of OpenStack adopter HubSpot - were "a little more cautious than expected about the growth of the Linux OS market." Moreover, BMO isn't seeing clear signs of an IT spending pickup. While considering the popularity of Amazon Web Services and OpenStack a long-term positive for Red Hat (since many deployments involve Linux), Keirstead notes OpenStack is still in its early stages, and that many adopters will go for free Linux distributions. Comment!
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4:28 PM Marketing and customer service software/services firm SoundBite (SDBT +4.2%) is getting acquired for $5/share by private Genesys (now a unit of P-E firm Permira). The price represents a 67% premium to SoundBite's close today. Shares +52% AH to $4.55. (PR) Comment!
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4:11 PM Dish (DISH -0.7%) has made a $2B bid for bankrupt Lightsquared's spectrum even though the FCC hasn't yet approved its use due to GPS interference concerns, Bloomberg reports. The report comes with Sprint (S) and Clearwire (CLWR) continuing to play hard-to-get in the wake of Dish's offers for the companies, and a day before Clearwire shareholders vote on a Sprint offer many think will get shot down, at least if it isn't raised from a current $2.97/share. Comment!
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4:03 PM Apple (AAPL) releases Tim Cook's official statement (.pdf) to the Senate ahead of his Tuesday appearance at a hearing on corporate tax payments. Among other things, Apple claims it paid ~$6B in federal taxes in FY12 and a 30.5% effective federal tax rate, and that its foreign units don't engage in the practices the hearing focuses on (the shifting of IP to offshore havens, revolving loans from subsidiaries, etc). The company proposes a tax system that's "revenue neutral, eliminates all tax expenditures, lowers tax rates and implements a reasonable tax on foreign earnings." (previous) 39 Comments
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2:56 PM Sprint (S) acquires app developer/distributor Handmark, which has been around since the pre-iPhone era. Handmark runs an app store and (through its OneLouder unit) has developed a slew of iOS/Android apps, many of which have strong social media components. Sprint says the deal will strengthen its Pinsight Media+ targeted mobile ad platform; it comes a few months after Sprint struck a mobile ad partnership with Telefonica, and a couple weeks after a mobile content/ad deal was reached with Time. 1 Comment
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2:40 PM Real estate site owner Move (MOVE +9.9%) jumps after Citron Research uses less than 140 characters to disclose it's long, argue shares should trade at $17 given the valuations assigned to Zillow (Z) and Trulia (TRLA), and predicts Zillow or InterActiveCorp (IACI) will bid for the company. One big difference between Move and Zillow/Trulia: Move's revenue grew 14% Y/Y in Q1, whereas Zillow and Trulia's respectively grew 71% and 97%. Comment!
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2:33 PM STMicroelectronics (STM +2.1%) makes new 52-week highs after JPMorgan starts coverage with an Overweight. Investors have been encouraged by the margin gains posted by the European chipmaker as it winds down its money-losing ST-Ericsson JV, and also by relatively healthy set-top/TV and microcontroller chip sales. Comment!
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2:25 PM Splunk's (SPLK +2.5%) addressable market is growing and its results should beat estimates, says Pac Crest in a bullish note that's giving shares a lift. The machine data software leader, which has been touting the ability of its products to analyze Web data in addition to corporate data, is now up 60% YTD. Its FQ1 report arrives on May 30. Comment!
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2:10 PM MicroStrategy (MSTR -1.7%) trades lower in response to a downgrade to Market Perform from JMP. The downgrade comes 3 weeks after shares were clobbered thanks to a giant Q1 miss headlined by a 24% Y/Y drop in license revenue at a time when most rivals are growing. 2 Comments
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2:03 PM Apple (AAPL +1.9%) roundup: 1) Brian White cites Chinese 3G growth as a reason for his $888 PT: he points out China's 3G sub base rose 83% Y/Y in April to 293.1M, and is expected to hit 375M-400M by year's end. China Mobile (CHL - previous) had 120M 3G subs; China Unicom (CHU) had 92M, and China Telecom (CHA) 81M. 2) Taiwan's Economic Times reports Apple is testing 1.5" OLED displays for an iWatch, and that "market rumors" indicate Foxconn has received iWatch trial production orders. 3) Digitimes reports MacBook orders are expected to grow 20% Q/Q in Q2, as Apple launches new systems sporting Intel Haswell CPUs at June's WWDC conference. 13 Comments
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1:44 PM In addition to Qihoo's strong numbers, NetEase (NTES +5.5%) is benefiting from an upgrade to Buy from Citi, and an upgrade to Overweight from HSBC. The upgrades come a few days after the Chinese online game developer posted a Q1 beat and promised to pay out 20%-25% of annual net income via dividends. Comment!
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