MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Sunday, May 19, 2013
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12:25 PM Yahoo's (YHOO) board has approved a $1.1B, all-cash deal to acquire Tumblr, the WSJ reports. (previous) Comment!
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Saturday, May 18, 2013
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6:23 PM 32% of Q1 U.S. smartphone sales involved prepaid phones, up from 21% a year ago, says NPD. That trend could spell trouble for AT&T (T) and Verizon Wireless (VZ, VOD), whose recent growth has been heavily tied to selling costly postpaid data plans. With 72% and 61% of the carriers' postpaid bases now respectively on smartphones, they face pressure to gain prepaid buyers without cannibalizing postpaid subs. Cannibalization fears have led AT&T and Verizon to make their prepaid plans 3G-only; Sprint (S) and T-Mobile (TMUS) offer 4G. A mix shift towards unsubsidized prepaid phones could also be a challenge for Apple (AAPL), estimated to have just 8% of the Q1 U.S. prepaid smartphone market (though that's up 4x Y/Y). 10 Comments
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11:57 AM "There are only four sources of high-quality maps," Google, Waze, Navteq, and TomTom (TMOAF.PK), says Rolfe Winkler, and given Facebook's rumored $1B acquisition of Waze, TomTom may become an attractive takeover target for the likes of Apple (AAPL) and others who, while able to drive a hard bargain on map licensing fees, may prefer to bid for the Netherlands-based company rather than worry that a rival will acquire it. TomTom trades at an EV/EBITDA ratio of just 6x. (From December: Rabobank puts AAPL/TomTom odds at 30%) 21 Comments
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Friday, May 17, 2013
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8:08 PM Yahoo (YHOO) update: The board will meet Sunday night to decide on a $1.1B all-cash deal for Tumblr, according to AllThingsD. (earlier) 1 Comment
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7:18 PM Yahoo's (YHOO) NYC event will be focused on Flickr updates rather than Tumblr, Bloomberg reports. This, of course, doesn't preclude a Tumblr deal from being announced at some other time. Marissa Mayer reportedly doubled the size of long-neglected Flickr's engineering team last summer, and new Flickr apps have launched to positive reviews. However, Flickr's online photo market share is now well below that of Facebook/Instagram. 2 Comments
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6:50 PM UniPixel (UNXL -26%) crashed today in the absence of major news. Williams Financial's Cody Acree, who rates shares a Buy: "There were a lot of speculative things today, a lot of which probably got blown out of proportion." Among other things, Acree notes a recent Apple patent application for a large-display touch sensor panel (not a competitive threat), and the fact a 13G filed by Goldberg Capital notes the firm's stake in UniPixel has fallen to 5.25% (Acree says this is only due to dilution from the stock offering). Shares still +99% YTD. 18 Comments
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6:35 PM SolarCity's (SCTY +25.7%) big rally is "bubble-like," cautions Raymond James' Pavel Molchanov, who tried to temper enthusiasm about First Solar last month. Molchanov warns a June 11 lockup expiration could "open the floodgates." Credit Suisse also cited the lockup when downgrading shares on Tuesday; the firm estimates the lockup will increase SolarCity's tradable float by 8x-10x. (earlier) 1 Comment
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6:28 PM AOL is reportedly laying off ~3% of Patch's 1,400-strong staff and (per a company memo) is giving the oft-criticized local news unit a new CEO. Patch COO Steve Kalin is the division's new chief; current CEO Jon Brod will return to AOL Ventures. AOL asserts the changes are aimed at improving content quality/engagement and allowing Patch to make good on promises it will be profitable by year's end. comScore estimates Patch, bogged by questions over how well a business focused on "hyper-local" content can scale, saw traffic rise 26% Y/Y in April to 13M monthly uniques. 1 Comment
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6:08 PM Ubiquiti (UBNT) -5.9% AH after filing to sell 7.7M shares on behalf of existing shareholders through a public offering. CEO/NBA owner Robert Pera will be selling 1.7M shares, lowering his stake to 64.4% from 66.4%. Investment firm Summit Partners will be selling 6M, lowering its stake to 10.5% from 17.3%. The filing comes shortly after Ubiquiti closed near its 52-week high, and a week after shares took off in response to a Q1 beat and strong guidance. (S-1) 2 Comments
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5:46 PM QLogic (QLGC) CEO Simon Biddiscombe has resigned from his position, as well as from the company's board, to "pursue other opportunities." CFO Jean Hu has been named interim CEO while a search commences for a replacement. Biddiscombe became CEO in Nov. 2010, after serving as CFO for two years. QLogic has had a rough time during Biddiscombe's tenure, as both the company and archrival Emulex contended with soft storage adapter card demand and competitive pressures. Shares -2.2% AH. Comment!
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5:34 PM Though Google's rally and Apple's plunge have received more headlines, Microsoft (MSFT +2.3%) has rallied this month to levels last seen in '07, and in doing so has let Bill Gates pass Carlos Slim to become (once more) the world's richest man. Shares are up 32% YTD as value investors bet enterprise and cloud services strength will offset PC weakness and slow Windows 8 uptake. Microsoft currently trades at 8.6x FY14E EPS after backing out net cash/investments. 2 Comments
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5:28 PM Accenture (ACN) is acquiring e-commerce/online ad consulting firm Acquity Group (AQ) for $316M, or $13/share, in cash. The price represents an 118% premium to Acquity's close today. Much like Accenture's recent purchases of Fjord and avVenta, the deal is about increasing Accenture's exposure to a burgeoning Web/digital marketing services space, and pitch more comprehensive solutions to CMOs and ad agencies. Accenture notes Acquity brings expertise in popular platforms such as Adobe and hybris. Acquity shares +111% AH to $12.56. Comment!
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5:04 PM GameStop (GME +4.5%) closed with a big gain after NPD reported U.S. physical retail video game sales fell 17% Y/Y in April, better than some feared; they fell 1% in March, and 27% in Feb. Hardware sales fell 42%, as gamers wait for this fall's launches. Total industry physical retail sales fell 25%; as Electronic Arts (EA +0.9%) and Activision's (ATVI +0.5%) latest results show, such sales make up a declining portion of industry revenue. Take-Two's (TTWO +1.9%) Bioshock: Infinite and NBA 2K13 were the month's 3rd and 7th-most popular titles, and Activision's Call of Duty: Black Ops 2 and Skylanders Giants were #4 and #8. Comment!
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4:40 PM Maxwell Technologies (MXWL) says on May 14 it received an additional notification letter from the Listing Qualifications Department of the NASDAQ advising it that, due to its inability to file a 10-Q on a timely basis, and because the company remains delinquent in filing its Form 10-K for the fiscal year ended December 31, 2012, the company is not in compliance with NASDAQ Listing Rules. The company has until May 20, 2013 to submit a plan explaining how it expects to regain compliance. Comment!
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4:34 PM iRadio (AAPL) is "still bogged down in licensing talks," music industry sources tell The Verge's Greg Sandoval. In addition to Sony (already reported to have rejected Apple's licensing terms), BMG is said to be holding out for a better deal; one has reportedly been signed with Universal. Apple's interest in offering on-demand options not found on Pandora (P) and other Web radio services has reportedly complicated talks. Past reports stated Apple is aiming for a summer launch. 14 Comments
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4:17 PM More on Yahoo/Tumblr: Forbes' Jeff Bercovici reports talks are "proceeding rapidly and likely to result in an offer" as soon as Marissa Mayer can get board approval. He adds Mayer would prefer an acquisition over some other kind of deal, and is trying to allay Tumblr CEO David Karp's fears of being "absorbed into a behemoth." Tumblr is also said to have held talks with Facebook and Microsoft, but a lockup agreement with Yahoo makes them irrelevant. BI's Nicholas Carlson observes Tumblr sources who were happy to talk with him 3 weeks ago have gone silent. 2 Comments
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4:11 PM DirecTV (DTV) has joined the ranks of companies weighing a bid for Hulu (DIS, NWS, CMCSA), with an eye towards expanding its arsenal of TV Everywhere content, the WSJ reports. The scoop shortly follows a report Time Warner Cable and other MSOs are talking about a possible bid. Comment!
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4:02 PM With Tumblr speculation swirling, Yahoo (YHOO -0.3%) has scheduled a Monday evening NYC press event; CNBC reports Marissa Mayer will speak. Wells Fargo gives an overview of Tumblr's opportunities/risks. The firm notes comScore estimates Tumblr had 115M PC unique visitors in April (+85% Y/Y) and 14.5M mobile visitors (+227%), that engagement is strong, and that Tumblr is targeting $100M+ in 2013 revenue following just $13M in 2012 (ad sales are only starting to ramp). Wells thinks Yahoo could monetize Tumblr the way it did Flickr, but also points out the site has a ton of "provocative and even salacious material" that could deter brands. 2 Comments
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2:55 PM Volatile NII Holdings (NIHD +10%) is soaring after pricing a $700M debt refinancing deal. The Latin American carrier, which originally was looking to raise $500M, will be paying 7.875% on senior notes due Aug. 2019, and intends to use the proceeds to pay back Mexican and Brazilian loans. NII had $5.7B in debt on its balance sheet as of March 30, and $1.9B in cash/investments. 40.7% of the float was shorted as of April 30. (PR) Comment!
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