Seeking Alpha
  • Today - Sunday, March 1, 2015

  • 5:35 PM
  • 5:30 PM
  • 12:33 PM
    • Pirated downloads of House of Cards season 3 surged 112.5% vs. season 2 to 681,889 over the first 24 hours of the series being released by Netflix (NASDAQ:NFLX), according to tracking from Excipio.
    • The tally would be exponentially higher if there was a way to accurately count VPN downloads.
    • Torrent-streaming sites out in the wild such as Popcorn Time and Vuze have been identified by Netflix as one of its "biggest competitors" for subscriber growth.
    • A high-profile crackdown on Swedish site Pirate's Bay in December cut into torrent movie download activity by an estimated 6% for a few days before alternatives were found and piracy volume returned to normal averages.
    • What to watch: The Netflix vs. the pirates story will continue to play out as the streaming service rolls out in piracy-intense China, Russia, and India.
    • Q4 Netflix shareholder letter discussing piracy (.pdf)
  • 11:01 AM
    • Orange (NYSE:ORAN) and Telecom Italia (NYSE:TI) have been discussing a possible alliance, Orange's chief executive told the Journal de Dimanche.
    • "There are no negotiations ongoing just exchanges of points of view between the two management teams," said CEO Stephane Richard. "It would be an attractive European consolidation opportunity."
    • The news comes after a recent spate of deals in the European telecoms sector, with BT buying EE from Orange/Deutche Telekom and Hutchison Whampoa purchasing O2 from Telefonica.
    | Comment!
  • 10:43 AM
    • British Airways owner IAG (OTCPK:ICAGY) will make "concrete proposals" to the Irish government next week to try and convince it to sell its 25% stake in Aer Lingus (OTC:AIRXY), the Sunday Business Post reports.
    • The Irish government rebuffed IAG's latest €1.36B bid last Tuesday, saying it needed more assurances on jobs and growth prospects before it would consider selling the stake.
    | Comment!
  • 10:28 AM
    • Hyundai (OTC:HYMLF) is recalling almost 205K Elantras because of a power steering defect that might cause the cars to suddenly revert to manual steering, the company said in a report on the NHTSA website.
    • The recall affects four-door Elantra sedans produced from June 2008 to April 2010, and 2009-10 model Elantra Touring hatchbacks.
    | Comment!
  • 10:13 AM
    • Herbalife (NYSE:HLF) cut the pay of CEO Michael Johnson 36% for 2014 after he failed to meet performance goals, such as levels the company set for earnings per share and sales growth in 2014.
    • Missing out on the $3.7M incentive plan compensation he received two years ago, Johnson received total compensation of $6.73M in 2014, down from $10.5M the prior year.
  • 9:48 AM
    • For the second time in less than four months, the People’s Bank of China has cut interest rates, lowering by a quarter percentage point both the benchmark one-year loan rate, to 5.35%, and the one-year deposit rate, to 2.5%.
    • "Deflationary risk and the property market slowdown are two main reasons for the rate cut this time," said a central bank official.
    • In the last few months, China has been showing further signs of flagging economic growth, with its GDP dipping to 7.3% in Q4 - its slowest rate in over two decades, and its CPI sliding to 0.8% in January - its weakest showing since late 2009.
  • Saturday, February 28, 2015

  • 5:11 PM
    • Despite HollyFrontier's (NYSE:HFClackuster Q4, which was largely expected given the extended El Dorado downtime, the tide appears to be turning for HFC, Deutsche Bank says.
    • "Operational reliability is improving, with a light maintenance schedule for 2015. Mid-con refining margins are robust, with the Brent-WTI spread, contango benefit, and WCS profitability attractive and likely to widen further in the coming months."
    • "Improved execution will need to be demonstrated, and growth catalysts remain somewhat underwhelming for now, but the outlook is clearly much brighter."
    • Firm expects HFC to ramp up buyback activity in 2015, "aligning better with the rest of peers’ yield proposition (aggressive buybacks and regular yield)."
    • Deutsche has a Hold recommendation and a $53 price target. Implied upside 20.5%.
  • 5:05 PM
    • “Both the board and I believe we now have the right person to succeed me as CEO - a successor ready to assume the job the day after I die or step down," writes Warren Buffett in his sizable annual letter to Berkshire Hathaway (BRK.A, BRK.B) shareholders. It's the 50th anniversary of Buffett's time at the helm, and investors are being rewarded with a mammoth letter - 43 pages and 25K words - and a separate letter from Charlie Munger.
    • In his letter, Munger suggests reinsurance head Ajit Jain or energy boss Greg Abel as worthy replacements - both, especially Jain, have been on watchers' short lists for some time.
    • Both letters are here.
    • Breakup? Not anytime soon, as Buffett spends a nice chunk of his letter defending Berkshire's conglomerate structure, though allowing conglomerates "richly deserve(d)" bad reputation with investors. The conglomerate, says Buffett, allows master capital allocators like he and Munger to ... well ... allocate capital.
  • 3:51 PM
    • TechCrunch reports home/apartment rental platform Airbnb is in the process of raising funds at a $20B valuation - 2x what it was valued at in a $450M round last April. The company is "believed to be in the process of raising a war chest of close to $1 billion - with about half of that secured." Fidelity has been mentioned as a potential investor.
    • Airbnb has 1M+ listings, operates in 34K cities within 190 countries, and has handled 30M booking nights over its history. The company has become a thorn in the side of top vacation home rentals platform HomeAway (NASDAQ:AWAY), though HomeAway (often used to rent secondary homes) has argued its listings are more complementary to Airbnb's (often used to rent primary homes) than competitive.
    • There hasn't been any shortage lately of private tech companies that have reportedly sought or obtained $10B+ valuations. The list includes Snapchat, Pinterest, Palantir, and Uber.
    • Previously: Gurley argues fear of missing out leading private valuations to soar
    • Previously: HomeAway sues San Francisco over "Airbnb law"
  • 3:33 PM
    • Plenty of chipmakers and related IP providers have unveiled new products this week in tandem with the industry's ISSCC conference, and in advance of the Mobile World Congress (runs from Monday-Thursday).
    • ARM (NASDAQ:ARMH) has furthered its embedded/IoT push by launching IFC (short for Intelligent Flexible Cloud), a hardware/software framework for creating intelligent, reliable networks of Web-connected, ARM-powered devices.
    • IFC includes networking protocols for ARM-based processors, as well as support for software-defined networking (SDN - the offloading of network management to software-based controllers) and network functions virtualization (NFV - allows commodity hardware to be turned into a networking appliance). It complements ARM's mbed IoT platform for embedded/wearable devices.
    • ARM server CPU vendors Cavium, Marvell, and AppliedMicro support IFC, as does network processor vendor EZchip's (NASDAQ:EZCH) Tilera unit, which just unveiled a new line of processors (the TILE-Mx family) that supports up to 100 64-bit ARM cores and 200Gbps of throughput; it begins sampling in 2H16. Benchmark is upbeat about the TILE-Mx line's potential.
    • Broadcom (NASDAQ:BRCM) has launched: 1) A smartwatch platform featuring an app processor with 2G/3G modem support, a Wi-Fi/Bluetooth combo chip, a GPS SoC with an integrated sensor hub, an NFC radio, and a wireless charging IC. 2) An SoC for virtual (software-based) broadband customer premise equipment. 3) Two SoCs for wireless backhaul hardware that are declared to be the first to support 5Gbps of throughput.
    • NXP (NASDAQ:NXPI) has launched: 1) Embedded microcontrollers with advanced security features meant to protect against theft/cloning. Targeted products include smart meter hubs, home/factory automation devices, and aftermarket auto hardware; SemiAccurate likes what it sees. 2) An RF transceiver that enables fully wireless earbud headphones (no wires between earbuds).
    • Xilinx (NASDAQ:XLNX) has refreshed its UltraScale+ FPGA and programmable SoC lines with chips made using TSMC's next-gen 16nm FinFET+ (3D transistor) process. The chips improve performance/power draw via SRAM integration and new interconnect optimizations, begin shipping in Q4, and aim to keep Xilinx competitive on the high-end as Altera launches FPGAs using Intel's 14nm process.
    • IDT (NASDAQ:IDTI), an early leader in the wireless charging IC market, has rolled out new charging transmitter and receiver ICs that can respectively handle 15W and 10W of power. The transmitter contains a low-power ARM Cortex-M0 CPU core, and is contained within a tiny 5mm x 5mm package.
  • 12:24 PM
    • The Lattice Emerging Market Strategy ETF (NYSEARCA:ROAM), Lattice Developed Markets (ex-US) Strategy ETF (NYSEARCA:RODM) and the Lattice US Equity Strategy ETF (NYSEARCA:ROUS) began trading on the NYSE Arca Friday, February 28th.
    • Each fund tracks a Lattice Risk-Optimized Strategy Index tailored to the specific needs of investors in these target markets; however, these funds do blur the line between active and passive trading.
    • They are “active” in the sense that the resulting exposures differ from the benchmark in expressing more efficient risk allocation, and “passive” in the sense that they are regularly rebalanced and reconstituted according to a systematic and transparent process codified in an index.
    • “Our years of research into the risks inherent in traditional approaches confirms that superior results may be achieved by taking better risk, and by that we mean a focus first, directly, and deliberately on the efficient allocation of risk within each asset class and across a portfolio,” notes Darek Wojnar, Lattice’s Head of Single-Asset Strategies and President of the Lattice Strategies Trust in a press release.
    | Comment!
  • 11:57 AM
    • Casinos in Nevada saw a 7.75% increase in revenue to $953M during January, according to the Gaming Control Board.
    • Revenue on the Las Vegas Strip - dominated by MGM Resorts (NYSE:MGM), Caesars Entertainment (NASDAQ:CZR), and Wynn Resorts (NASDAQ:WYNN) - was up 15.4% Y/Y during the month.
    • Total revenue in Atlantic City rose 1% Y/Y in Jan. - although the tally improves to +19% if shuttered casinos are backed out.
    • Analysts say improved employment rates in the U.S. and lower gas prices ($2.04 avg in Jan.) helped to drive traffic, although an unusually high baccarat hold percentage in LV also played a factor there.
    • But perhaps the biggest driver of the Vegas momentum was the higher RevPAR churned up by hotels (see MGM's Q4) and a meaningful increase in convention business.
    • The strong attendance around the Consumer Electronics Show bodes well for major 2015 conventions, notes Macquarie Securities.
    • Earlier in the week, a strong report from Isle of Capri (NASDAQ:ISLE) helped to give a boost to regional casino stocks. Regionals have seen a steady increase in traffic over the last 6 months, although capacity concerns still impact some regions.
    • Previously: Regional casino stocks get a look as trends improve (Feb. 25)
    • Related casino industry stocks: NYNY, FLL, DDE, OTCQB:TPCA, CHDN, CNTY, PNK, BYD, SGMS, OTCPK:AMYGF, CACQ, PENN, MCRI
  • 7:45 AM
    • Chicago's credit rating was downgraded Friday by Moody's to Baa2, two notches above junk, with a negative outlook on the “expectation that the city’s credit quality could weaken as unfunded pension liabilities grow and exert increased pressure on the city’s operating budget."
    • Chicago's four pension funds have ~$20B in unfunded debt, and without further action the city would need to increase its payments to those accounts by $600M next year and even more after that.
    • The rating includes the city’s $8.3B billion of outstanding GO debt, $542M of outstanding sales tax revenue debt, and $268M of outstanding or authorized motor fuel tax revenue debt.
    • The downgrade could immediately terminate four interest rate swap agreements, costing the city ~$58M, and potentially lead to terminations of 11 more swaps deals that could cost another $133M.
    • Also yesterday, S&P warned it could slap its own multi-notch downgrade on Chicago in the absence of a plan this year to deal with the pension crisis.
    • It's all another big headache for Mayor Rahm Emanuel, who is facing a surprise run-off in his bid for re-election.
  • Friday, February 27, 2015

  • 8:17 PM
    | 1 Comment
  • 7:31 PM
    • Wind Telecomunicazioni -- the Italian unit of Russian telecom VimpelCom (NASDAQ:VIP) -- may be selling its wireless towers to Spain's Abertis Infraestructuras (OTCPK:ABRTY) as soon as the coming week.
    • The companies are talking about 6,000 towers that Wind values at as much as €700M ($786M), though other observers peg the value even higher, at €800M ($914M).
    • An additional 1,700 towers under discussion could easily boost the deal to that latter figure or even to €900M ($1B).
    • Abertis -- chiefly in toll-road management -- is reportedly considering transferring the towers into a unit to be listed on the Madrid exchange, in order to get more cash to shareholders.
    • The Spanish firm is winning the deal over competition from American Tower (NYSE:AMT), Mediaset's (OTCPK:MDIUY) EI Towers and a coalition of investment fund F2i SGR and Providence Equity Partners.
    • Shares of VimpelCom closed the day up 4.8%; they tracked lower in after-hours trading, -1.5%.
  • 7:14 PM
    • Shortly after CEO Keith Murphy suggested another capital raise is on the way to help his company grow its R&D investments, Organovo (NYSEMKT:ONVO) has filed to raise up to $190M via future stock, debt, and/or warrant offerings. (prospectus)
    • The 3D-printed tissue developer had $50M in cash at the end of 2014, and no debt. Shares have fallen to $5.67 AH.
  • 6:42 PM
    • With shares having gone into earnings just $0.29 away from a 52-week high of $23.44, investors weren't in a forgiving mood towards Pegasystems (NASDAQ:PEGA) regarding its Q4 revenue miss, nor its guidance for 2015 revenue of $653M and EPS of $0.78 (below a consensus of $680.2M and $0.94).
    • On its CC (transcript), the app development software vendor suggested near-term profits will be affected by major R&D and sales/marketing investments. It also mentioned more services work is being handled by partners.
    • License/cloud backlog rose 5% Y/Y in Q4 to $364.5M. License revenue rose 21% to $77.4M, maintenance revenue grew 8% to $48.7M, and services revenue fell 4% to $42.8M.
    • Shares fell 14.5% in regular trading to $19.79.
    • Q4 results, PR
    | Comment!
  • 6:37 PM
    • Fresh off their vote for re-regulation of Internet transmissions, the five FCC commissioners will be spending mid-March on Capitol Hill answering to the GOP Congress.
    • The House Energy and Commerce Committee is holding its hearing March 19, a day after the members are scheduled with the Senate Commerce Committee.
    • The chairmen of the two committees, Greg Walden and John Thune, are backing a bill that would reverse the FCC's Title II reclassification (treating Internet providers more like utilities) and substantively narrow its approach to ensuring net neutrality.
    • Following the 3-2 vote, major carriers indicated their strategy would be twofold: Lawsuits (CMCSA, T, VZ, CHTR worried about "years" of litigation); and legislative action to undo the move, with a cooperative congress apparently ready to act.
    • Other related stocks: CVC, TWC, CTL, FTR, ELNK, DISH, DTV, CCOI
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