Today - Friday, December 6, 2013
7:14 AMLinkedIn boosted by BMO on China launch
- "Management has discussed [the China launch] previously, and we learned from a separate NDR with MDC Partners that one of their agencies has been hired to begin a public relations outreach for LinkedIn (LNKD) in China," says analyst Daniel Salmon, upping the stock to a Buy with $235 price target. "We assume a formal launch in 2014, with monetization beginning to ramp in 2015."
- Salmon's team also likes LinkedIn's increasing focus on salespeople (LinkedIn believes there are 6x as many in sales on the platform as there are HR personnel), with a stand-alone product expected to ramp in 2015.
- "We also expect the hiring of Penry Price to lead ad sales to improve the relationship with the agency community; some ad products will likely be culled and a continued heavy focus on Sponsored Updates is expected."
- Shares +1.6% premarket
5:35 AMBitauto prices follow-on slightly below market
- Bitauto Holdings (BITA) prices its follow-on public offering of 2,749,200 ADSs by the Company and a selling shareholder at $30.
- BITA closed Thursday at $30.77.
- BIT provides internet content and marketing services for China's fast-growing automotive industry.
5:31 AMFacebook in talks to acquire India-based Android optimization developer| Comment!
4:13 AMHouse OKs bill to stop frivolous patent lawsuits
- The House has overwhelmingly passed legislation designed to discourage patent trolls from filing frivolous lawsuits by requiring them to disclose more information about who owns the IP involved and so who would ultimately benefit.
- The measure, known as the Innovation Act, also requires judges to decide early on in the proceedings of a case whether a patent is valid, thereby potentially saving companies money on discovery.
- The legislation now needs authorization in the Senate.
- Patent companies include Vringo (VRNG), Wi-LAN (WILN) and Acacia Research (ACTG).
2:44 AMFCC commissioner doubts Comcast-TWC merger would be approved
- The Obama administration probably wouldn't authorize any attempt by Comcast (CMCSA) to acquire Time Warner Cable (TWC), FCC Republican commissioner Ajit Pai has told the WSJ.
- Precedents such as the government's blocking of AT&T's purchase of T-Mobile US suggest a Comcast-TWC deal "could face a number of hurdles in the Obama administration," Pai said. "A Republican administration likely would be more inclined to approve a deal."
- TWC has already turned down two bids from Charter Communications (CHTR), the WSJ reports, adding that Comcast and Charter are unlikely to make a joint offer.
- While the interest in TWC has sent the telecom carrier's shares soaring, it has also hurt its bonds, due to fears about a debt overhang that a deal could bring. The price of TWC's 30-year bond that matures in 2042 has tumbled 17% since the merger chatter began.
Thursday, December 5, 2013
7:01 PMCiena, Alliance Fiber up in response to Finisar's results/guidance
- Ciena (CIEN) +1.5% AH and Alliance Fiber (AFOP) +1.1% after Finisar beat FQ2 estimates and issued strong FQ3 guidance.
- Ciena, which reports on the morning of Dec. 12, is now up 10% from Tuesday's close, thanks in large part to an FBR note predicting a strong report and arguing the company will benefit from a long-term trend towards shifting more network intelligence to the optical layer (as compared with the switching/routing layer).
6:43 PMBroadcom reportedly scores LTE baseband wins in challenge to Qualcomm
- JPMorgan reports Broadcom (BRCM +1.6%) will ramp shipments of 4G baseband chips to Samsung in Q1 for use in mass-market phones, and has also scored 4G baseband wins with another top smartphone vendor.
- The report comes as Broadcom gets ready to begin selling its BCM21892 4G baseband (first announced in February), and works to integrate Renesas' 4G baseband ops (acquired for $164M).
- Any 4G share gains by Broadcom would likely come at Qualcomm's (QCOM +0.1%) expense. Qualcomm had a 97% 4G baseband share earlier this year (per Strategy Analytics), and just announced a new baseband modem that leverages TSMC's next-gen 20nm manufacturing process.
- Investors have already expected Qualcomm's 4G baseband share to fall some in 2014, thanks to fresh competition from Broadcom, Intel, and Nvidia.
- The JPMorgan report is a breath of fresh air for Broadcom investors, given the company's disappointing Q4 guidance was partly due to baseband weakness.
6:03 PMBallard +22.4% AH, inks MOU with Van Hool for buses, joint proposals
- Ballard Power Systems (BLDP) shares fly 22.4% higher AH after the company signs a non-binding Memorandum of Understanding with Van Hool, Europe's 4th largest bus manufacturer, in support of manufacturing/deploying zero emission fuel cell buses.
- The two companies intend to jointly submit proposals under the EU Hydrogen Fuel Cell Joint Undertaking and under future calls of the Horizon 2020 program, which has an incremental budget of €700M.
- 27 Van Hool buses powered by Ballard fuel cell modules will be deployed in 2014 and a dedicated service/parts center will be established in Belgium to support the buses.
5:58 PMAT&T discounts shared data plans for unsubsidized users
- Looking to both cut its smartphone subsidies and better compete against new/aggressively-priced service plans (I, II) from T-Mobile USA and Sprint, AT&T (T) is offering sizable discounts for its relatively costly Mobile Share plans to consumers who either buy a phone unsubsidized, sign up for AT&T's Next smartphone upgrade program, or have seen a contract tied to a subsidized phone sale expire.
- Ma Bell is also launching an 18-month payment tier for Next, which allows users to obtain a smartphone with no money down, and pay for it on a monthly basis. Until now, Next required payments to be made over 12 months.
- AT&T has already taken steps to lower its subsidy expenses, including the elimination of early upgrade promotions and the hiking of phone upgrade activation fees.
- The discounts follow a Q3 during which AT&T saw a mere 363K wireless postpaid net adds, with growth only positive due to 388K tablet adds. Verizon, on the other hand, saw 927K retail postpaid net adds.
5:27 PMFacebook roundup: Instagram event, advertising push, infrastructure talk
- Instagram (FB) has sent out invites for a Dec. 12 NYC event. The fact many of the invites featured a wooden box with an Instagram photo printed on it has fueled speculation the event will feature the launch of a printing service.
- Some think Instagram, which just began monetizing its service via ads, could make hundreds of millions annually simply by adding a print button to its apps, and taking a cut on orders placed through it.
- AdAge reports Facebook is not-so-subtly telling marketers they won't be able to reach users as effectively going forward via posts published on brand pages (and then distributed for free onto the news feeds of users who "liked" the page), as the company attempts to "make sure people have a meaningful experience on the site."
- While advertisers might view Facebook's efforts as an attempt to sell more ads, they do come amid worries certain users (particularly younger ones) are cutting their Facebook usage as a result of finding their news feeds filled with uninteresting material. AdAge's report comes shortly after Facebook tweaked its news feed algorithm to display more "relevant" news stories.
- During a Credit Suisse conference talk (transcript), infrastructure chief Jason Taylor shined a light on the huge investments that go into optimizing the performance, cost structure, and power efficiency of Facebook's data centers. Among other things, Taylor asserted Facebook only needs one technician for every 20K servers it owns, compared with a 1:450 ratio at other data centers.
4:44 PMFinisar +5.7% AH on FQ2 beat, guidance; JDS Uniphase +1.8%
- Finisar (FNSR) is guiding for FQ3 revenue of $290M-$305M and EPS of $0.43-$0.47, above a consensus of $289.3M and $0.38.
- FQ2 results beat estimates thanks in large part to an 11% Q/Q and 46% Y/Y increase in datacom component sales to $204.3M (70% of total revenue); the Y/Y growth rate represents a solid increase from FQ2's 32%. Healthy data center infrastructure spending from Internet/cloud services firms likely played a big role.
- Telecom component sales totaled $86.5M, +6% Q/Q but -6% Y/Y. Major customer Cisco recently reported seeing soft telecom hardware orders.
- Gross margin was 37.1%, +200 bps Q/Q and +660 bps Y/Y. FQ3 GM is expected be around 37%.
- Opex rose 15% Y/Y; R&D, sales/marketing, and G&A spend each grew by a double-digit percentage.
- Aided by yesterday's FBR note, Finisar is now up 17% from Tuesday's close. JDS Uniphase (JDSU) is following its rival higher AH.
- CC at 5PM ET. FQ2 results, PR, presentation
4:10 PMMore on Pandora/Spotify
- The WSJ reports Spotify will offer free, ad-supported access to its streaming library on mobile devices for the first time. However, while the service will allow users to "play a limited number of songs on demand," it will "mostly serve up music based on the user’s input."
- Thus far, Spotify has only provided free library access to PC users; free mobile users have been limited to Spotify's streaming radio service. However, that service, which has been around for nearly 18 months, is more of a direct competitor to Pandora (P -0.1%) than the library service.
- Spotify currently claims 20M active users and 6M paid subs (many of them in Europe, where Pandora doesn't operate). Pandora, by comparison, had 72.4M active listeners in November, and 3.18M paid subs at the end of October.
- This is far from the first time Pandora has sold off due to Spotify-related news. Shares currently +220% YTD.
- Previous: Pandora slips amid reports of Spotify service launch
3:54 PMAlcatel-Lucent replacing STMicroelectronics in CAC-40
- As predicted by many investors and analysts, Alcatel-Lucent (ALU +3.6%) is returning to France's benchmark CAC-40 index. NYSE Euronext says the telecom equipment giant will be added back on Dec. 23, and replace chipmaker STMicroelectronics (STM -1.2%).
- Alcatel, buoyed by a debt restructuring and improving margins, has made fresh 2-year highs today, and is now up 224% YTD. STM, which has been posting Y/Y revenue drops and contending with the unraveling of its ST-Ericsson mobile chip JV, is up 5% YTD, but well off its summer highs.
3:41 PMPandora slips amid reports of Spotify service launch
- Up nearly 2% earlier in afternoon trading, Pandora (P -0.1%) has given up its gains following headlines stating Spotify plans to offer a free music service.
- The headlines are somewhat puzzling, given Spotify already offers free (ad-supported) streaming services to go with its (ad-free) subscription services.
3:32 PMSimulations Plus climbs on preliminary FQ1 results
- Simulations Plus (SLP +2.7%) shares are up on the day after the company announced preliminary FQ1 results: revenue of $2.63M (+14.9% Y/Y) beat the lone analyst's expectation of $2.43M.
- New software license sales represented 20.8% of revenue while consulting studies/collaborations represented 5.4%.
- Marketing and sales VP John DiBella noted that license revenue was "robust, with significant growth seen in Asian territories."
2:53 PMAmbarella's FQ3 results arrive early, shares move higher
- Ambarella (AMBA +1.5%), which was expected to deliver its FQ3 report after the close, has reported FQ3 revenue of $46M (+29% Y/Y and beating consensus by $2M), and EPS of $0.37 (beats consensus by $0.08). (PR)
- Shares of the video-processing SoC vendor have ticked modestly higher on the news, and are close to their recently-made all-time high of $25.12.
- CC at 5PM ET.
2:38 PMApple makes new 2013 highs; China Mobile says talks ongoing
- Following the WSJ's report about a China Mobile (CHL -0.3%) deal, Apple (AAPL +0.9%) is up 27% from its mid-September low, and (after falling hard to start the year) up 7% YTD.
- The gains come even though China Mobile has responded to the WSJ's report by stating it's "still negotiating with Apple." The world's biggest carrier has long been rumored to be driving a hard bargain with Apple, which itself has plenty of experience on that front.
- As is their custom, analysts have been firing up their spreadsheets to estimate the impact of a China Mobile deal. Uber-bull Brian White thinks the deal could yield 20M-24M additional iPhone sales in 2014, boosting EPS by $4. Gene Munster is a little more cautious, forecasting 17M 2014 sales, as is Pac Crest's Andy Hargreaves, who sees only a $2 2014 EPS boost.
- Munster notes that while 16GB iPhone 5S and 5C respectively cost $846 and $718 unsubsidized in China, China Mobile has an estimated unsubsidized smartphone ASP of $270 (Verizon, by contrast, is at $449). The rising popularity of large-screen smartphones in China could also act as a headwind (at least until Apple launches one of its own).