Seeking Alpha
  • Friday, September 19, 2014

  • 7:26 PM
    • Seven months after launching the first desktop GPUs based on its 28nm Maxwell architecture (the low-cost GTX 750 and 750 Ti), Nvidia (NASDAQ:NVDA) has rolled out a pair of high-end Maxwell parts: The GTX 980 and 970.
    • The 980 retails for $549, and the 970 $329. For reference, AMD's high-end Radeon R9 290X (launched last fall) retails for $500. The dual-GPU R9 295 X2 goes for $1,000, and Nvidia's dual-GPU Titan Z (based on the older Kepler architecture) goes for an eye-popping $3,000.
    • "The GTX 980 is faster, less power hungry, and quieter than the Radeon R9 290X," says AnandTech in a very positive review. Its benchmarks often show the 980 holding a 15%+ performance edge over the 290X, and a 10%-15% edge in load power consumption. The site also praises the 980's build quality (deemed "impeccable"), and new features such as VXGI.
    • ExtremeTech offers similar comments for the 980, and thinks the 970's pricing will take a toll on AMD. "It’s nearly a match for the R9 290X, but with an ASP that’s nearly $200 less."
    • AnandTech suggests AMD price cuts are likely. "AMD can’t match NVIDIA on performance, but they can sure drive down prices." The chipmaker is believed to be prepping the R9 390X, a new high-end GPU that relies on liquid cooling.
  • 6:55 PM
    • Hundreds of car owners suing GM over an ignition switch flaw got a boost today when a New York judge ordered the auto maker to turn over internal documents about its handling of the defect to plaintiffs' attorneys.
    • The discovery order applies only to auto accidents that occurred after GM emerged from bankruptcy court protection in July 2009; GM had asked the judge to delay discovery while it waited for a ruling from a bankruptcy judge over whether some claims were blocked by the terms of its July 2009 sale order, which the company said barred suits over pre-bankruptcy incidents.
    • At issue is whether GM purposely chose not to disclose the ignition switch flaw that employees first flagged in 2005, which could be used to void the bankruptcy shield.
  • 6:30 PM
    • Iliad (OTC:ILIAF) has set a mid-October deadline to either make a new T-Mobile USA (NYSE:TMUS) offer or walk away, Reuters reports. The French carrier is said to be talking with U.S. banks to help finance a higher bid.
    • Reuters adds Iliad "faces resistance" from Deutsche Telekom (OTCQX:DTEGY), which would keep a minority T-Mobile stake under Iliad's proposed deal terms and is skeptical of the French carrier's prospects in a market it currently has no presence in.
    • Bloomberg reported earlier today Iliad was struggling to line up 3rd-party investors, and that DT's board was divided on whether it should "sell its only growing asset." Sources (within Iliad?) tell Reuters Iliad's management has "finished road shows to meet U.S. investors and is waiting to hear back from potential investors."
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  • 6:25 PM
    • Patterson-UTI Energy (NASDAQ:PTEN) today announced the purchase of a fleet of pressure pumping assets from an unnamed privately held company in a move praised by analysts.
    • The acquisition includes 143,250 horsepower of fracking equipment and provides PTEN with two additional bases of operations and employees to support customer activity in the Eagle Ford and Haynesville shale plays.
    • The seller is believed to be Clearlake Capital's Platinum Energy, with an estimated $143M price.
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  • 6:15 PM
    • With a market cap of $233.9B as of today's close, Alibaba (NYSE:BABA) is the 4th-most valuable tech company on the planet, behind only Apple, Google, and Microsoft. Nonetheless, many on the Street have argued shares are fairly valued or undervalued.
    • Cantor, which started coverage with a Buy and $90 target earlier this week: "We believe that a differentiated pricing model, strong brand, and unmatched scale give Alibaba an unfair competitive advantage relative to peers ... While the stock's not cheap, we believe the company's outsized growth and margin profiles, if sustained, should support higher valuation over time."
    • Wedbush, whose $80 target has already been surpassed, thinks "Chinese e-commerce appears to have room to grow at 30%+ for several years." CRT Capital's $95 target implies a multiple of 26x 2016E EPS, something it considers justified given a 35%+ revenue CAGR is forecast for 2014-2017.
    • On SA, Triton Research observes Alibaba's 2013 marketplace revenue as a % of GMV (3.1%) was a tiny fraction of eBay's (19.3%), leaving plenty of room for growth even if eBay-like monetization isn't feasible in China.
    • Value Record is more cautious, viewing Alibaba's VIE legal structure as a risk and questioning how successful its international expansion plans will be - Baidu and many other Chinese Web names have had a rough time trying to replicate their domestic success.
    • Yahoo (YHOO -2.7%) closed lower, albeit off the day's lows. With shorts having trouble borrowing Alibaba shares, some may have settled for shorting Yahoo instead.
    • Josh Brown thinks Yahoo's pending IPO windfall and large remaining Alibaba stake once more make it a prime target for an activist. "There is absolutely no way, in my opinion, they're going to allow this management team, this board of directors to take $6 billion, do a buyback and then have another free $6 billion in cash to experiment."
  • 6:00 PM
    • S&P -0.15%.
    • 10-yr +0.23%.
    • Euro -0.71% vs. dollar.
    • Crude -0.3% to $91.70.
    • Gold -0.87% to $1,216.20.
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  • 5:54 PM
    • Investors apparently were underwhelmed by the $2.2B offer for Total's (NYSE:TOT) adhesive company from specialty chemicals company Arkema, even though TOT was offered ~1.5% of its market value for a business which contributes barely 0.5% of its EBITDA.
    • The offer underlines the value of consumer-facing brands lurking in the majors’ downstream chemicals divisions, and a Bloomberg analysis suggests TOT could take a cue from Sinopec's sale of a stake in its fuel retailing business; a TOT spinoff of its gas station business could bring in ~$12B.
    • While TOT has set a goal to raise crude and natural gas output substantially and to boost cash flow, analysts expect the company to cut its production and cash flow guidance at its Sept. 22 investor day.
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  • 5:37 PM
    • Top gainers, as of 5:15 p.m.: CDZI +5.0%. DAKP +4.5%. DRL +3.3%. DRC +3.2%. INO +2.7%.
    • Top losers, as of 5:15 p.m.: FSM -6.7%. SSE -3.4%. FCEL -3.2%. WFD -2.4%. ILF -2.2%.
  • 5:32 PM
    • SmartEyeglass, Sony's (NYSE:SNE) first stab at creating a pair of smartphone-connected display glasses, have a design that "makes Google Glass look chic," says Engadget.
    • The site declares SmartEyeglass looks like "a bulky pair of 3D glasses that have been modified to include a 3-megapixel camera, accelerometer, gyroscope, compass, brightness sensor, a microphone and a pretty large battery pack." At the same time, it points out the device can "deliver hologram-like visuals through its lenses," and that its use of a monochrome display improves battery life.
    • Unlike Google Glass, apps are hosted on smartphones rather than the device itself. An SDK has been released; Sony promises a full commercial launch by the end of March. Glass (also awaiting a full launch) currently has a decent head-start in developer support.
    • SmartEyeglass is distinct from Sony's gaming-focused Morpheus VR headset, which will face off against the Oculus Rift. A Sony exec claims 85% of Morpheus' development work is now finished, but won't provide an ETA. He does state Sony won't release Morpheus until enough software is available.
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  • 5:21 PM
    • The latest speculation over Dresser-Rand (NYSE:DRC) now includes GE, which Financial Times reports is holding talks with DRC management about a possible takeover and is deciding whether to launch a bid.
    • If it does, it could be the second time GE has faced off against Siemens (OTCPK:SIEGY) over a multibillion-dollar deal in the past six months after competing over the takeover of the energy businesses of Alstom in June.
    • Siemens reportedly is in talks with DRC about a ~$80/share offer, and Swiss industrial pump maker Sulzer (OTC:SULZF) has said it is in talks with the U.S. oilfield equipment manufacturer about a possible merger.
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  • 5:00 PM
    • S&P -0.15%.
    • 10-yr +0.23%.
    • Euro -0.72% vs. dollar.
    • Crude -0.3% to $91.70.
    • Gold -0.87% to $1,216.20.
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  • 4:54 PM
    • Though Oracle's (ORCL -4%) cloud-related sales saw healthy growth in FQ1, its core database business saw negative license growth, notes Deutsche's Karl Keirstead, downgrading shares to Hold. "Coupled with Larry Ellison’s decision to give up the CEO role, our confidence in the core database business is getting tested and we’d prefer to step to the sidelines while Oracle shares are still near their 10-year high."
    • While Oracle blames the database weakness on tough comps and sales execution - the latter is a common excuse among enterprise software firms - Keirstead also sees other factors at work: A mature relational database market; Microsoft's share gains; and a secular shift to new data types (e.g. Hadoop/NoSQL) and cloud apps (often running on non-Oracle databases). He estimates Oracle's FQ2 guidance implies a 3%-4% Y/Y drop in license revenue.
    • D.A. Davidson (Neutral) also isn't thrilled with Oracle's numbers. "ORCL's financial results have now either missed or come in at the low end of management's guidance range in 7 of the last 9 quarters." Ditto Sterne Agee: "Given the current moderate size of the cloud business, the transition will span several years and create both revenue and EPS estimate volatility."
    • On the other hand, Sterne (like many others) isn't concerned about Oracle's CEO change, calling it "more of a change in titles than in functions." On the CC (transcript), new co-CEOs Safra Catz and Mark Hurd insisted there will be no major operational changes.
    • Wedbush, however, sees negative long-term implications. "Mr. Ellison's desire to delegate more responsibility (and credit) to Safra Catz and Mark Hurd is understandable ... but it underlines our view that Oracle's days as an organic grower are rapidly coming to an end."
    • Prior Oracle coverage
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  • 4:51 PM
    • Exxon Mobil (NYSE:XOM) has put its Torrance, Calif., refinery up for sale, Reuters reports, making it the latest big oil company to consider exiting the state amid tougher environmental standards.
    • The 155K bbl/day refinery, in the south part of Los Angeles, is XOM's only refinery in California and the second smallest of its half-dozen U.S. plants.
    • XOM may have some trouble making a sale, however, because of the state's environmental regulations and since several refiners including Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), Tesoro (NYSE:TSO) and Valero (NYSE:VLO) already operate two or more refineries there, limiting their ability to buy others.
  • 4:35 PM
    • The ADT Corporation (NYSE:ADT) declares $0.20/share quarterly dividend, in line with previous.
    • Forward yield 2.16%
    • Payable Nov. 19; for shareholders of record Oct. 29; ex-div Oct. 27.
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  • 4:30 PM
    • Kite Realty Group Trust (NYSE:KRG) declares $0.26/share quarterly dividend, in line with previous.
    • Forward yield 4.11%
    • Payable Oct. 13; for shareholders of record Oct. 6; ex-div Oct. 2.
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  • 4:23 PM
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  • 4:20 PM
    • Stocks finished mixed, marked by a new record for the Dow, as sentiment was lifted by Scottish voters' decision to remain part of the U.K., while Alibaba made its trading debut with strong gains.
    • Stocks opened with a quick rise, with the S&P 500 hitting 2,019 during the first 30 minutes but falling back and returning to its flat line by the close.
    • The industrial sector lagged amid weakness in machinery stocks after Caterpillar reported disappointing sales in the latest three months.
    • Participation was substantially above average thanks to the Alibaba IPO and quadruple witching, with futures and options contracts on indexes as well as individual stocks expiring; more than 1.8B shares changed hands at the NYSE.
    • Treasury prices rose steadily, pressuring the 10-year yield to 2.58%.
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  • 4:19 PM
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  • 4:18 PM
    • Agilent (NYSE:A) is redeeming $500M of the $600M in 6.5% senior notes due Nov. 2017 it currently has outstanding. The test equipment giant says the move is part of its broader efforts to lower its debt load ahead of the Keysight spinoff.
    • Agilent had $2.2B in debt at the end of July, and $2.4B in cash. In June, the company redeemed $500M worth of 5.5% senior notes due Sep. 2015.
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  • 4:08 PM
    • Janet Spitler is stepping down from the CFO spot at Merchants Bank (NASDAQ:MBVT) after a 24-year career, effective December 31, "to pursue other professional interests."
    • Source: Press Release
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