Seeking Alpha
  • Friday, December 19, 2014

  • 6:35 PM
    • The FDA has approved the use of Cubist's (NASDAQ:CBST) Zerbaxa (ceftolozane/tazobactam) for "the treatment of adults with complicated urinary tract infections (cUTI) and complicated intra-abdominal infections (cIAI) caused by designated susceptible Gram-negative bacteria."
    • Cubist adds the FDA's decision was "supported by positive data from two pivotal Phase 3 clinical trials - one in patients with cUTI and the other in patients with cIAI."
    • Cubist, still set to be acquired by Merck (NYSE:MRK) for $9.5B, is up 2% AH.
    • Previous: PDUFA date approaches for Zerbaxa
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  • 6:15 PM
    • NQ closed slightly above $4 a day after finally releasing its Q1-Q3 results, providing cautious Q4 guidance, and announcing it has signed an MOU to do a reverse merger for its FL Mobile unit with apparel retailer Tack Fiori.
    • During the CC (transcript), long-time nemesis Carson Block (the founder of Muddy Waters) managed to jump in by telling the operator he was NQ investor Jim Oberweis, Jr. Block was cut off while asking whether recently-departed co-CEO Henry Lin is in jail, given media speculation to the effect due to Lin's ties to ex-CCTV anchor Rui Chenggang (detained on corruption charges).
    • Omar Khan, still a co-CEO, would only reiterate Lin's departure was for "personal reasons," and not due to "anything related to the company."
    • Khan also mentioned the NQSky enterprise mobility management (EMM) unit is now targeting larger customers, and that his shift is affecting near-term sales due to longer deployment times. He reiterated NQ's long-term revenue targets, but added the company isn't providing 2015 guidance for now.
    • In response to a question about the proposed FL Mobile deal, VP Matt Mathison suggested NQ isn't too interested in Tack Fiori's existing businesses. "This has to do with FL Mobile ... This is the greatest way for us, for experiencing certainty and the most cost effective approach to achieve our objectives of one, unlocking value and to enabling FL Mobile to continue to expand and grow and benefit from having their own public currency."
  • 5:36 PM
    • Top gainers, as of 5:15 p.m.: SAND +10.7%. MCHX +9.0%. NEM +3.0%. VRTX +2.8%. MRKT +2.6%.
    • Top losers, as of 5:15 p.m.: NG -9.0%. DNR -8.0%. EDU -7.2%. NBR -7.0%. CRK -4.4%.
    | 1 Comment
  • 4:15 PM
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  • 3:18 PM
    • American Apparel (NYSEMKT:APP) trades higher after news broke last night on the company receiving buyout offers.
    • A breakdown of the development by ValueWalk concludes the company is taking the offer seriously based on the observation that a $15M unsecured credit agreement hasn't been signed off on yet - despite being tipped off in November.
    • Shares of APP are up 9% to $1.09, still well-below the $1.30-$1.40 offer price reported to be offered by a Dov Charney-friendly P-E firm.
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  • 3:02 PM
    • Paragon Shipping (PRGN +10.2%) shares are substantially undervalued and could double next year, Maxim Group analysts say in naming PRGN as the top pick among dry bulk shippers for 2015.
    • The firm notes that supply/demand balance in the Panamax fleet should be bolstered by increased coal shipments and exports of U.S. grain to China.
    • Based on its estimated balance sheet and fleet for 2015, Maxim calculates a forward NAV of $8.12, implying that PRGN trades at ~0.29x estimates.; the firm's $6 price target implies a 0.74x multiple of the estimated NAV.
  • 2:54 PM
    • Potash (POT +1.9%) is upgraded to Buy from Neutral with a $40 price target, up from $38, at UBS, citing the company's strong dividend and improving free cash flow.
    • UBS says the planned closure of Mosaic's Carlsbad operations in Jan. 2015 and the current flood at Uralkali's Solikamsk-2 mine could remove 2.4M -3.4M metric tons of combined capacity from the market and provides an opportunity for POT to gain more volumes, which also could lead to higher pricing.
    • POT’s dividend yields ~4%, and UBS believes it provides downside protection given that the dividend can be funded even if potash prices remain flat; the firm thinks that over time POT may be able to return excess cash to shareholders through an increased dividend or further share repurchases.
    • Other potash producers are higher: MOS +2%, AGU +0.4%, IPI +2.6%.
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  • 2:52 PM
    • Geospace (NASDAQ:GEOS) is one of the Nasdaq's biggest gainers on options expiration day.
    • 2M shares (16% of the float) were shorted as of Nov. 28. With Geospace down 72% YTD going into today amid a major slowdown in seismic exploration work, many of those shorts likely have huge profits.
    | 1 Comment
  • 2:27 PM
    • U.S. coal companies will no longer be able to settle royalties at low domestic prices when they make lucrative sales to Asia, according to a new proposal from the Interior Department.
    • The reforms would update rules on how energy companies settle their royalty payments on coal, oil and gas pulled from federal lands, but the changes to the coal program may have the biggest impact.
    • Arch Coal (ACI +8.2%), Peabody Energy (BTU +4.2%) and Cloud Peak Energy (CLD +1.7%) are among the leaders in mining coal from federal land in the U.S. west.
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  • 2:20 PM
    • WTI crude oil has nearly recouped the week's losses today, up 4.5% to $56.80 per barrel. The move, however, doesn't even register on a daily chart.
    • Next year? Former WSJ energy reporter Ben Casselman takes to the FiveThirtyEight blog to remind that when he picked up the oil & gas beat in 2008, there was only one thing the experts agreed on: "U.S. oil production was in permanent, terminal decline ... No one has any idea what oil prices will do.”
  • 1:58 PM
    • ReneSola (SOL +12.4%) and Yingli (YGE +12.2%), beaten up along with other solar firms as oil prices plunged, are ending the week on a very strong note. Volumes for both firms are nearing their 3-month daily averages.
    • The gains come days after the DOC made final decisions to impose new anti-dumping and countervailing duty tariffs on Chinese solar module exporters, with the goal of closing a loophole that allowed exporters to avoid prior tariffs (imposed in 2012) by using non-Chinese solar cells.
    • JPMorgan and RBC have downplayed the ruling's impact on Chinese module makers: Both note Chinese firms are already relying heavily on locally-sourced cells, which are often cheaper than imported ones.
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  • 1:25 PM
    • Recent online lending IPOs LendingClub (LC -5%) and OnDeck (ONDK -7.4%) are each seeing big losses.
    • LendingClub is still up 71% from its $15 IPO price, with bulls trumpeting the disruptive impact of P2P lending and bears questioning the company's steep multiples (previous).
    • OnDeck, whose steep small business lending rates and balance sheet risk have sparked criticism, is up a relatively modest 20% from its $20 IPO price.
    | 1 Comment
  • 1:13 PM
    • Thinly-traded small cap Flamel Technologies (FLML +12%) heads north in response to its announcement that it achieved its objective of a single before-bedtime dose of sodium oxybate using its proprietary Micropump technology. A single dose option for sufferers of narcolepsy would eliminate a second dose 2.5 to 4 hours later that is necessary with the current standard of care, Jazz Pharmaceuticals' (JAZZ -0.9%) Xyrem (sodium oxybate). This would be more convenient and would eliminate the disruption in sleep.
    • Flamel plans to meet with the FDA before mid-2015 to clarify a regulatory path.
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  • 1:10 PM
    • VirnetX (NYSEMKT:VHC) was up 17.6% on the day prior to the halt, with very strong volume.
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  • 12:56 PM
    • The Delaware Supreme Court overturns a lower court ruling that had halted a deal by C&J Energy Services (CJES +0.7%) and Nabors Industries (NBR +6.1%), saying there was not enough evidence showing the C&J board had short-changed its shareholders.
    • A lower court last month held up C&J’s merger with a Nabors unit, finding C&J’s board did not adequately shop the company; the situation was unusual in part because C&J's board and management would keep control, while the new entity is to be incorporated in NBR’s home of Bermuda and 53% controlled by NBR.
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  • 12:45 PM
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  • 12:38 PM
    • Teekay Tankers (TNK -14.1%) is sharply lower after yesterday's move to launch a 20M-share public offering priced at $4.80/share and a subsequent downgrade to Neutral from Buy at UBS.
    • The firm notes that TNK has far outperformed tanker peers in the last three months, and believes the company has levered itself to a strong tanker spot market at the right time, probably accounting for much of the share price performance.
    • TNK's decision to double down on spot exposure in the midsize market proved wise, the firm says, thinking the share price has received full credit for the move.
  • 12:05 PM
    • After missing out on a market rally yesterday, GoPro (GPRO -4%) has fallen today to levels last seen in early September. The selloff is occurring ahead of the action camera maker's Tuesday lockup expiration.
    • SA author Chris DeMuth Jr. recently made a bear case: In addition to GoPro's valuation and the lockup expiration, he cited high R&D spend (10% of revenue over the first 9 months of the year) and growing competition.
    • Joe Albano has offered a more bullish take centered around GoPro's software/services investments - especially its efforts to make it easier for users to turn raw video into more polished clips that can be quickly shared online.
    • Shares now go for 44x 2015E EPS and 4.2x 2015E sales. Estimates have been gradually rising.
  • 11:44 AM
    • Transocean (RIG +4.6%) discloses that it plans to scrap seven of its older, lower-quality deepwater and midwater vessels, and adds that it may not be finished getting rid of parts of its fleet, even as oil prices and demand for offshore rigs have fallen.
    • RIG says it expects to take a related $100M-$140M charge in Q4.
    • RIG's decision to put the rigs up for sale comes after a string of vessel retirements and a $2.76B writedown of the company’s asset value in November.
    • Most offshore drilling service contractors are higher: ESV +5.1%, RDC +1.7%, DO +0.8%, ATW +3.1%, PACD +8.4%, but SDRL -4.3%.
  • 11:34 AM
    • Thinly-traded 2014 IPO Immune Design (IMDZ +14.7%) moves up on average volume albeit on turnover of only 29K. Shares are up 56% since the intermediate low of $20.02 on December 12.
    • After building a two-month base following its July 24 debut, shares more than tripled before correcting in late November.
    • The clinical-stage company develops cancer immunotherapies identified through its two discovery platforms, IMDZVex and GLAAS.
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