Tuesday, May 26, 2015
- With attention already starting to shift to regulatory approval, Charter Communications (CHTR +2.5%) CEO Tom Rutledge says his company's $55B acquisition of Time Warner Cable (TWC +7.3%) will do better with the FCC than Comcast's: Think small.
- "If you look at the ecosystem, who we're playing with in terms of other competitors, they're very large, and we'll still be a relatively small company compared to the large phone companies, compared to Comcast, compared to the wireless companies," he told CNBC.
- Charter's simultaneous deal for Bright House Networks may pump up its own leverage, but it was critical to the TWC bid, says analyst Craig Moffett: Virtually debt-free Bright House and its borrowing capacity likely added as much as $18/share to Charter's $195.71/share offer. Moffett says TWC's handling of Altice's (OTC:ATCEY) counter-play was masterful.
- About that debt: TWC bondholders are still nervous about the combined load (While the firm's 30-year bonds rose 11.7% today, they're still down about 16% from last month). Moody's is likely to push TWC into junk rating territory as debt-to-EBITDA rises from TWC's 2.97 to about 4.79 for the combination. But again, Bright House's addition and "conservative voice on the board" may be mitigating the effects.
- And MoneyBeat's deal tally: Aside from big winner TWC, winners include Goldman Sachs (NYSE:GS), (eventually) rewarded for backing Charter, and UBS, working as sole adviser to Bright House; Losers include Comcast backer JPMorgan Chase (NYSE:JPM), and Deutsche Bank (DB -3.4%) -- a Charter backer back when, but unseen in the new deal.
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
7:01 PM| Comment!
- Chinese data-center provider 21Vianet Group (NASDAQ:VNET) is off 9.9% after hours, adding to today's 4.1% decline, after Q1 revenues missed expectations and the firm guided to the low side for Q2 results.
- EBITDA of about $26.9M was up 47.8% but missed an expected $28.2M (one analyst). Gross profit was up 43.4% to about $37.2M and a gross margin of 26.8%, down from a year-ago 27.4%.
- The firm had a GAAP net loss of $0.22/share; adjusting for share-based compensation, amortization and other effects, non-GAAP EPS was $0.02, in line.
- Revenue breakout: Hosting and related services, $613.2M yuan (up 51.6%); Managed network services, 246.88M yuan (up 36%).
- The company guided to Q2 revenues of 886M-922M yuan ($142.9M-$148.7M, vs. an expected $153.2M) and EBITDA of 152M-172M yuan ($24.5M-$27.7M, up about 23% at midpoint but lower than an expected $30.2M).
- Conference call at 8 p.m. ET.
- Press Release
- Arguing the company is well-positioned to benefit from rapidly growing demand for big data/analytics software, Oppenheimer has launched coverage on Hortonworks (NASDAQ:HDP) with an Outperform rating and $50 target after the close.
- HDP +1.9% AH to $26.40. Shares jumped last week following a Barclays upgrade, and are now up 22% since a Q1 beat and strong guidance were provided on May 12.
- In another change of direction, Emerald Oil (NYSEMKT:EOX) now says it has decided not to proceed with its planned stock offering, citing the current market environment and associated dilution to existing shareholders.
- EOX now says it will not close the previously announced Delaware Basin acquisition, and instead will continue developing its Williston Basin leasehold position based upon original plans.
- EOX reiterates its previously announced 2015 guidance reflecting a $65M capex budget, of which $42M has been spent YTD.
- Earlier today, EOX had disclosed plans to move forward with the public offering but at a reduced size, prompting a 23% share price drop during the regular session.
- EOX +40% AH.
- With the company having provided above-consensus guidance more often than not since its IPO, Workday (NYSE:WDAY) has sold off after providing an in-line FQ2 outlook (affected by forex headwinds) to go with an FQ1 beat.
- Also: The cloud HR/financials software leader's unearned revenue balance rose 41% Y/Y in FQ1 to $653.4M, a slower clip than FQ3's 53% and trailing revenue growth of 57%. Subscription revenue rose 63% Y/Y to $201M, and professional services 38% to $50M.
- Financials: GAAP costs/expenses rose 44% Y/Y to $304.4M - sales/marketing spend totaled $94.9M, R&D $99.3M, G&A $32.2M, and cost of services $77.8M. Workday ended FQ1 with $1.9B in cash/marketable securities, and $496M in convertible debt. Free cash flow for the trailing 12 months is $50.4M.
- Shares have fallen to $85.12 AH.
- FQ1 results, PR
- Along with its FQ1 results, TIVO has announced it's acquiring Cubiware, a Polish developer of low-cost set-top and portal server software for emerging markets pay-TV providers. Terms are undisclosed; presumably, offshore cash is being used.
- TiVo states Cubiware's offerings will expand its presence in 25 countries, thereby helping it cross-sell its existing offerings overseas. Altogether, Cubiware claims ~40M Latin American and EMEA customers possessing 12M pay-TV subs between them. The deal follows last year's purchase of content discovery service provider Digitalsmiths.
- Helping shares rally: TiVo has guided for FQ2 service/tech revenue of $94M-$97M, above a $93.6M consensus. Net income guidance is at $7M-$10M.
- Subscriber data: FQ1 net subscriber adds totaled 285K, down from 332K a year ago and bringing the base to 5.76M. MSO subs rose by 285K to 4.81M; TiVo-owned subs were roughly flat at 944K. TiVo-owned ARPU fell to $7.43 from FQ4's $7.68 and the year-ago period's $7.81.
- Business performance: Service revenue +11% Y/Y to $39.8M; tech revenue (licensing) +5% to $52.6M; hardware revenue +6% to $22.3M. MSO service revenue rose 41% Y/Y, and Digitalsmiths revenue roughly doubled.
- Financials: GAAP operating expenses rose by $1M Y/Y to $52.5M. $27.9M was spent on buybacks. TiVo ended FQ1 with $686M in cash, and $354M in convertible debt.
- TiVo has risen to $10.90 AH. FQ1 results, PR
- In addition to beating FQ1 estimates, Nimble Storage (NYSE:NMBL) is guiding for FQ2 revenue of $77M-$79M, mostly above a $77.1M consensus. EPS guidance of -$0.11 to -$0.12 compares with a -$0.12 consensus.
- 542 new customers were added in FQ1, down from 650 in seasonally stronger FQ4 but up from 450 a year ago. Nimble, which has been trying to move upmarket with the help of its recently-launched Fibre Channel arrays, also claims to have more than doubled its bookings from enterprise and service provider clients.
- Financials: Gross margin rose 40 bps Q/Q and 140 bps Y/Y to 67.6%. GAAP operating expenses rose 51% Y/Y to $75.4M (compares with 53% rev. growth) - sales/marketing spend totaled $44.4M, R&D $21.7M, and G&A $9.3M. Nimble ended FQ1 with $201.5M in cash, and no debt.
- NMBL +1.6% AH to $25.80.
- FQ1 results, PR
- Thanks in part to a market selloff, 58.com (NYSE:WUBA) has closed with moderate losses after posting mixed Q1 results. The decline comes even though the Chinese online classifieds leader is guiding for Q2 revenue of $145M-$150M (+124.6%-132.3% Y/Y), far above a $122M consensus.
- Hurting Q1 EPS: Operating expenses rose 215% Y/Y to $138.9M (exceeding rev. growth of 80.5%). A 255.9% increase in sales/marketing spend to $114.2M - caused in part by a near-5x increase in ad spend to $61.9M - fueled the growth. R&D spend rose 109.6% to $16.2M, and G&A spend 99.4% to $8.6M. Many are counting on the Ganji.com deal to put a lid on 58.com's ad spend.
- On the bright side, membership rose 52.9% Y/Y to $42.1M, and online marketing (ad) revenue 116% to $44.3M. Paying merchant members rose 10.6% Q/Q and 51.7% Y/Y to 669K.
- Q1 results, PR
4:05 PM| 2 Comments
- Land drillers Patterson-UTI Energy (PTEN -6.1%), Nabors Industries (NBR -6.1%) and Weatherford (WFT -2.7%) are downgraded to Underperform from Outperform at CLSA, based on its belief that oil prices remain vulnerable.
- CLSA describes the advancement of unconventional drilling and completion as one of the most disruptive technologies in oilfield history, an achievement that likely will derail the normalization of a cycle and trigger a number of structural consequences; the firm says it favors maintstays such as Halliburton (HAL -1.1%) and Schlumberger (SLB -1.4%) "that have and will continue to facilitate the change, not those that will be impaired by the change."
- Magnum Hunter Resources (MHR -2.6%) agrees to sell more than 5K acres of non-core undeveloped and unproven leasehold acreage in West Virginia's Utica Shale for ~$41M.
- MHR says the land was not in its long-term drilling plans, and many of the leases in the acreage are set to expire soon; MHR has 210K acres of land under lease in eastern Ohio and West Virginia.
- MHR has said it wants to sell $450M worth of acreage as part of efforts to improve liquidity.
- Credit Suisse analysts find little reason to favor coal equities amid a "dire outlook" for the group, initiating Arch Coal (ACI -12.2%) and Alpha Natural Resources (ANR -12.3%) with Underperform ratings and $0.50 share price targets, and Peabody Energy (BTU -5.8%) with a Neutral view and $4.50 target.
- ANR suffers the greatest liquidity risk, the firm says, as negative free cash flow and upcoming debt maturities eat into its existing liquidity position, while ACI fares somewhat better but still is likely to burn through cash for the next several quarters; both companies are limited in their ability to borrow more debt and both face revolver maturities in mid-2016.
- Cloud Peak Energy (CLD -0.9%) - the coal stock “least likely to cause sleepless nights” - is started with an Outperform rating and $11 price target.
- Adding to ACI's woes are Friday's news that the company is in talks with restructuring advisers as it looks to reduce its debt, and the receipt of delisting notice from the NYSE.
- KOL -2.4%.
- Energy and natural resources stocks are among today's weakest performers as a sharp increase in the dollar destabilized commodity markets.
- Nymex crude oil futures fell 2.8% to its lowest level in a week at $58.03/bbl, while Comex gold fell 1.4% to a two-week low $1,186.90/oz., as upbeat U.S. data on new home sales and consumer confidence helped lift the dollar.
- Adding to oil price weakness was commentary from Goldman Sachs expecting the global oil market to be oversupplied by 1.9M bbl/day this quarter, saying "the market now depends on how U.S. producers will respond to the recent rally and whether low-cost producers can sustainably deliver higher production."
- ETFs: GDX, USO, NUGT, OIL, XLE, GGN, DUST, UCO, SIL, UWTI, VDE, ERX, OIH, SCO, XOP, BNO, DBO, UGL, DWTI, ERY, GLDX, DGP, DIG, GLL, DTO, UGLD, DZZ, DUG, BGR, USL, XES, IYE, GLDI, SGDM, IEO, BCX, ASA, SLVP, IEZ, DGL, DNO, DGZ, RING, FENY, PXE, DGLD, PXI, HAP, FIF, PXJ, IRV, PSAU, OLO, SZO, NDP, MXI, RYE, GNR, FXN, TGLDX, GUNR, TBAR, GEUR, UBG, GYEN, BAR, TWTI, OLEM, DDG
- Though the Nasdaq is down 1.2% and the Philadelphia Semi Index 1%, someone forgot to tell Ambarella (NASDAQ:AMBA): The video processor supplier has rallied strongly on moderate volume (1.27M shares vs. a 3-month daily average of 1.59M), leaving it within striking distance of a May 20 high of $86.75. The gains come ahead of Ambarella's June 2 FQ1 report.
- Short-covering could be helping out today: 7.26M shares were shorted as of April 30 - down from 10.4M as of January 15, but still equal to 26% of the float.
- SA author Advantage Capital provided a bearish take two months ago, citing (among other things) high multiples, Ambarella's GoPro dependence, and insider selling. Alvaro Campos offered a more positive view in January.
- After opening near its 52-week high of $38.20, Cirrus Logic (NASDAQ:CRUS) has become one of the day's biggest tech decliners. 1.19M shares have been traded thus far, topping a 3-month daily average of 1.12M.
- Buoyed by strong iPhone 6 and Galaxy S6 sales, Cirrus remains up 53% YTD and 114% from a December low of $16.80. The audio codec/amplifier IC developer trades for 15x an FY16 (ends March '16) EPS consensus of $2.40.
- Piper and Northland reiterated bullish ratings on Cirrus earlier this month following investor meetings. Piper's Ruben Roy: "[A]udio and related technologies will increasingly be used to differentiate mobile platforms in both the high-end and mid-range markets. CRUS’ approach, in contrast to most of its competitors, is to cover the entire audio signal chain with best of breed products. We believe that this approach will drive market share gains for CRUS as its customers will increasingly benefit from a more efficient [bill of materials]."
- Emerald Oil (EOX -18.4%) sinks nearly 20% after disclosing it will go ahead with a planned common stock offering but reduce the size to $80M from the original $150M.
- EOX says it plans to use the proceeds to the previously announced $75M acquisition of New Mexico oil and gas leasehold acreage, with the remaining proceeds going toward working capital and general corporate purposes.
- Shares surged on Friday amid unconfirmed reports that EOX had postponed the planned offering.
- HP (NYSE:HPQ) has returned the Friday gains it saw in the wake of its mixed FQ2 results and in-line FY15 EPS guidance. Today's selloff comes amid a 1.3% drop for the Nasdaq, and a 1.1% drop for the S&P.
- Separately, HP has announced it's acquiring ConteXtream, provider of a comprehensive software-defined networking (SDN) platform for carriers. Terms are undisclosed.
- SDN shifts the control and orchestration of network traffic flows from switches/routers to software-based controllers. Among other things, ConteXtream's platform includes SDN controller and mapping software, and software for powering commodity switches and analyzing network performance. An unnamed U.S. wireless carrier (possibly Verizon, which has invested in ConteXtream) is a customer.
- While discussing the deal, HP highlights the ability of SDN solutions to enable network functions virtualization (NFV), which allows dedicated/proprietary telecom hardware to be replaced with standard x86 servers (such as HP's). The ConteXtream purchase follows a deal by Ciena to buy carrier SDN vendor Cyan.
- MPG Ingredients (NASDAQ:MGPI) adds 3.2% to carve out a new all-time high of $19.22.
- No major Wall Street firm provides coverage on MPG, while only a couple of SA contributors have delved into the stock recently after it skyrocketed this year.
- The fortunes of the food industry supplier seem to have turned around after it appointed a new CEO last year.
- The company's margins widened considerably last quarter.
- Hyperdynamics (HDY +55.6%) surges after its late Friday announcement that the U.S. Justice Department closed its Foreign Corrupt Practices Act investigation into the energy exploration company without filing any charges.
- A DoJ letter says it has closed its inquiry but reserves the right to reopen it if new information became available.
- HDY has oil and gas exploration operations offshore Guinea in Africa, and said in 2013 that it had been asked by the DoJ to produce documents pertaining to its operations in the country.
- Europe's dealing with the usual worries about Greece and weekend election gains by the anti-austerity party in Spain may have some wondering about contagion. The Stoxx 50 ETF (NYSEARCA:FEZ) is lower by 2.9% as Monday's loss across the pond combines with Tuesday.
- This morning, a trio of economic reports - durable goods, home prices, and new home sales - beat expectations, giving another boost the greenback.
- The dollar's higher by 1% vs. the euro (NYSEARCA:FXE), yen (NYSEARCA:FXY), loonie (NYSEARCA:FXC), and aussie (NYSEARCA:FXA), and somewhat less vs. cable (NYSEARCA:FXB) and the Swiss franc (NYSEARCA:FXF). Buying ¥122.95, the greenback is at an 8-year high vs. the yen.
- UUP +1.15%, UDN -1%
- ETFs: UUP, UDN, FORX, USDU
- "The previous two-party regime is looking now more like a four-party contest," says Deutsche's Jim Reid, after the ruling People's Party was drubbed in weekend elections, amid gains for the anti-austerity Podemos Party (a Spanish Syriza).
- Podemos-backed activist Ada Colau was elected mayor of Barcelona, while a Podemos coalition looks set to take power in Madrid after 24 years of rule by the People's Party.
- A national election is due by year's end.
- The IBEX 35's two-day loss this week has topped 3%.
- EWP -4.1%
- Though the Nasdaq is down 1.1%, Castlight (NYSE:CSLT) has rallied strongly on volume of 1.51M shares, well above a 3-month daily average of 711K.
- Shares rallied two weeks ago following a Jon Najarian plug. They remain down 44% from last year's $16 IPO price.
- Update: Castlight closed up 5.5%. Possibly contributing to today's rally: Castlight disclosed it has struck a deal with United Healthcare regarding a process to "obtain a customer's plan information from United HealthCare to allow Castlight to provide its services to that customer." The company adds it has "begun to build the technology infrastructure to support this process and does not believe that this development will materially impact its financial results in 2015." (hat tip: SA commenter prolepses)
- Believing the company's huge post-earnings selloff (caused by soft guidance) is overdone, Summit Research's Srini Nandury has launched coverage on Qualys (QLYS +1.7%) with a Buy rating and $50 target.
- Nandury: "Qualys is the clear industry leader in Vulnerability Management (VM) and is growing faster (although the growth slowed in F1Q with stock slumping) than the market and gaining share from legacy VM vendors (McAfee)." The firm also highlights Qualys' efforts to expand into adjacent markets such as policy compliance software (9% of revenue). "New and impending product offerings will increase TAM and provide years of growth for the company."
- Shares are higher in spite of a 1.1% drop for the Nasdaq. They're still down 27% from where they traded going into earnings on May 4.
- Sky-mobi's (NASDAQ:MOBI) Q1 revenue of RMB233M (+81.2% Y/Y, equal to $37.6M) beat guidance of RMB210M-RMB215M. However, the company expects results "starting from the second quarter of 2015 to be materially and adversely affected" by the temporary suspension of certain billing/payment channels by China's big-3 carriers, and the introduction of a required payment verification step.
- Sky-mobi notes the policy changes "have discouraged mobile subscribers from purchasing mobile content from mobile application providers" Overseas and mobile data solutions growth is expected to partly offset.
- Business details: Smartphone revenue rose 20.8% Q/Q and 150.5% Y/Y in Q1 to $35.4M. ARPU for single-player games rose to RMB10.3 from Q4's RMB10; ARPU for multi-player games fell to RMB169.6 frm RMB175.8. Average monthly active users for Sky-mobi's Maopao app store/gaming platform rose 12% Q/Q to 37.7M.
- Financials: Gross margin was 20.6% vs. 20.4% in Q4 and 25.5% in Q1 2014. Operating expenses (non-IFRS) rose 27% Y/Y to $5.7M, thanks to both higher R&D and marketing/promotional spend. The company's $20M buyback program has been extended to May 25, 2016. Sky-mobi ended Q1 with $81M in cash/term deposits, and no debt (compares with a $122M market cap).
- Q1 results, PR
- Ecopetrol (EC -3.5%) unveils a new strategic plan targeting an average annual production increase of 1%-2% to reach ~870K boe/day by 2020, focusing on preserving margins and boosting reserves instead of high growth.
- EC says it will focus production on major profitable fields as it expects EBITDA of more than $30/bbl, and seeks to boost proved reserves by 1.7B barrels by 2020.
- As part of the new plan, EC says it will continue to divest non-strategic assets including stakes in Empresa de Energia de Bogota and Interconexion Electrica SA, as well as non-strategic E&P assets.
- A trio of economic reports - durable goods, home prices, and new home sales - came in faster than expected today, but 1% declines in the major stock averages are driving the 10-year Treasury yield five basis points lower to 2.16%.
- Coming up on Friday is the government's revision to Q1 GDP at which pretty much everyone expects a negative print.
- Previously: Durable Goods decline 0.5% to $235.5B (May 26)
- Previously: S&P Case-Shiller Home Price Index (May 26)
- Previously: New home sales bounce in April (May 26)
- TLT +1.25%, TBT -2.5%
- ETFs: TBT, TLT, TMV, IEF, TBF, EDV, TMF, PST, TTT, ZROZ, TLH, SBND, VGLT, IEI, TYO, UBT, DLBS, DTYS, UST, TLO, VGIT, TBX, SCHR, TENZ, GSY, TYD, LBND, ITE, DTYL, DLBL, TYBS, DFVL, FIVZ, VUSTX, TBZ, DFVS, TYNS, SYTL
- Shares of Shake Shack (NYSE:SHAK) peel off 8.4% following a week of frenzied trading which saw the burger chain gain 24% to top $96 off unbridled enthusiasm over the company's store growth potential.
- The wild action and low float on Shake Shack caught the attention of the WSJ.
- The publication notes Shake Shack turns over 19% of its float each day on average, but expects that mark to fall after company insiders are set loose to trade on July 29.
- Previously: Just another 10% pop for Shake Shack (May. 20 2015)
- It's not exactly new news, but taxi medallion prices are heading south. As CNBC reports, NYC medallion prices averaged about $800K in Q1, roughly 20% below four years ago.
- Medallion Financial (TAXI -8.3%) gets a mention during the segment, as does the company's note that 90% of its earnings come from outside the taxi business.
- Previously: Uber in talks for $1B credit facility (May 22)
- Previously: Icahn invests $100M in top Uber rival Lyft (May 15)
- NRG Yield (NYLD +2.4%) is added to the Best Ideas List at Morgan Stanley following the recent decline in the share price, maintaining an Overweight rating and $32 price target.
- NYLD has plunged nearly 4% this month vs. an average ~5% gain in peer yieldcos, a divergence that has not been driven by any fundamental business changes but by confusion about the recent recap, the firm says.
- Stanely believes NYLD's fundamentals, which are driven by the growth in U.S. renewables, remain robust and will drive a projected 17% 2015-19 dividend compound annual growth rate.
- NRG -2.1%.
- Microcap mobile IP licensing firm Unwired Planet (UPIP +23.2%) rallied strongly on Friday, and is posting even bigger gains today. No news explaining the move has yet hit the wires.
- 375K shares have already been traded today, topping a 3-month daily average of 220K. UPIP is 8 days removed from announcing VPs Daniel Mendez and Tom Robbins are resigning, paving the way for incoming CEO/Apple vet Boris Teksler to "assume principal responsibility for intellectual property activities." Teksler takes office on June 1.
- Thinly traded nano cap Imris (IMRS -86.8%) announces that its subsidiaries NeuroArm Surgical and Imris U.S. have each filed for Chapter 11 bankruptcy protection. The company intends to sell its business operations to an affiliate of Deerfield Management Company. The transaction is expected to close in late summer.
- Canadian Natural Resources (CNQ -2.7%) shut production yesterday from its Kirby South oil sands operation in Alberta, raising the amount of production brought offline because of the nearby forest fire that began earlier in the weekend to 233K bbl/day, or ~10% of the province’s total oil sands output.
- CNQ already had shut 80K bbl/day of production at its Primrose facility, and Cenovus Energy (CVE -2.7%) had closed its 135K bbl/day Foster Creek operations in Alberta.
- MEG Energy (OTCPK:MEGEF) also said it had suspended operations at its Christina Lake oil sands project and moved non-essential staff from the site due to the potential risk of the fires.
- "While we are modeling gross margin in line with company expectations provided at the 2014 analyst day, we model flattish revenue growth in 2015 and 2016, compared to the company's previous guidance of 19% growth in 2015 and 2.5% growth in 2016, based on analysis of the company’s backlog and project list" says RBC's Mahesh Sanganeria, downgrading to Underperform and cutting his target by $20 to $34.
- Sanganeria notes standard C-Si solar modules have gradually narrowed the pricing edge held by First Solar's (NASDAQ:FSLR) thin-film modules, and estimates C-Si module production costs will be only $0.02 higher by year's end. "Considering that lower efficiency may incur higher [bill of systems] cost, First Solar may lose its cost advantage for the whole system compared to competitors using multicrystalline silicon technology."
- His 2016 revenue and EPS estimates of $3.4B and $1.37 are well below a Thomson/First Call consensus of $4.04B and $3.40. First Solar has fallen to its lowest levels since February.
- Israel's Calcalist reports Nice Systems (NICE -3.5%) is in talks to buy cloud customer support software provider LivePerson (LPSN +14.8%). The site cautions a deal could take several months to finalize.
- Nice, whose product line includes software for analyzing customer interactions with contact centers, is 5 days removed from announcing the sale of its law enforcement/intelligence agency software unit for $157.9M. LivePerson, meanwhile, is 2 weeks removed from nosediving on account of a Q1 sales miss and weak guidance.
- For reference, Nice's market cap is currently $3.64B, and LivePerson's $585M.
9:35 AM| 1 Comment
- Time Warner Cable (NYSE:TWC) is up 5% premarket, to $179.75, following confirmation of Charter Communications' (NASDAQ:CHTR) plan to acquire it for roughly $195.71/share. Charter is up 0.3% early.
- The valuation puts TWC's enterprise value at $78.7B and allows for $100 in cash and $95.71 in "New Charter" stock (equal to 0.5409 Charter shares).
- As part of the deal, Charter's acquiring Bright House Networks for $10.4B, finishing a deal it was pursuing during Comcast's aborted pursuit of TWC. That deal's for $2B in cash, $2.5B in convertible preferred partnership units and $5.9B in common partnership units.
- As speculated, Liberty Broadband (NASDAQ:LBRDA) is investing $5B and will own 19% of New Charter as well, while Advance/Newhouse (owners of Bright House) will own 13% of New Charter.
- FCC Chairman Tom Wheeler: “The FCC reviews every merger on its merits and determines whether it would be in the public interest. In applying the public interest test, an absence of harm is not sufficient. The Commission will look to see how American consumers would benefit if the deal were to be approved.”
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
- Previously: WSJ: FCC's Wheeler reassuring cable execs mergers can happen (May. 21 2015)
- Previously: Bankers hustling to fund a Charter-TWC merger (May. 15 2015)
- Press release
9:01 AM| 1 Comment
- The FDA designates Intellipharmaceutics International's (NASDAQ:IPCI) Rexista Oxycodone XR for Fast Track review. Rexista is an abuse-deterrent formulation of the opioid oxycodone. The drug turns into a viscous hydrogel when pulverized and hydrated and is designed to prevent dose dumping if taken with alcohol.
- Fast Track status provides for more frequent interactions with the FDA review team and a rolling review of the New Drug Application (NDA).
- Shares are up 21% premarket on increased volume.
- Previously: Intellipharmaceutics up on accelerated approval path for Rexista (May 21)
- Goldman Sachs adds Dollar General (NYSE:DG) to its Conviction Buy list.
- The investment firm thinks the company is well-positioned within the discounting sector and will soon feel a major tailwind from increased low-income consumer spending.
- A price target of $87 is set by GS on Dollar General.
- DG +1.09% premarket to $74.36.
- McDermott (NYSE:MDR) +8.3% premarket on news it has been awarded a large brownfield contract by Saudi Aramco to build and install 12 jackets for offshore oil and gas fields in Saudi Arabian waters.
- Work is scheduled for completion by the end of Q1 2016 and will be included in MDR's Q2 2015 backlog; financial terms are not disclosed.
- Also, a Barron's profile over the weekend says MDR could rise more than 35% in the next year or so as it sheds more of its money-losing legacy deals and begins to profit from newer ones serving operators closer to shore.
7:44 AM| 2 Comments
- Analyst coverage has launched on Party City (NYSE:PRTY) a month out from the company's IPO.
- A majority of investment firms have made bullish calls.
- Credit Suisse, JPMorgan, Morgan Stanley, and Telsey Advisory Group all start off Party City at Outperform.
- Deutsche Bank lines up Party City with a Buy rating.
- Goldman Sachs initiates coverage at Neutral, while William Blair sets a Market Perform rating.
- PRTY +1.74% premarket to $22.18.
- Huntington Bancshares (NASDAQ:HBAN) has been a stalwart in the regional bank sector - its 7% gain in 2015 ahead of the regional bank index by more than 400 basis points, and its 24% advance Y/Y ahead by nearly 1,400 basis points.
- Macquarie hasn't been along for the ride, and today goes outright bear, downgrading to Underperform from Neutral.
- The stock's lower by 1.4% premarket.
- AutoZone (NYSE:AZO) reports same-store sales rose 2.3% in FQ3.
- Total auto parts sales increased 6.5% to $2.40B.
- Gross profit rate +30 bps to 52.3% attributable to higher merchandise margins.
- Operating expense rate +12 bps to 31.64%.
- Inventory +10.7% Y/Y to $3.47B driven by increased product placement, new stores, and the acquisition of IMC.
- Store count +233 Y/Y to 5,512.
- AZO +0.08% premarket.
- China Nepstar Chain Drugstore (NYSE:NPD) reports comparable-store sales rose 13.6% mainly due to increased in-store promotional initiatives and marketing of pharmaceutical products.
- Private label products sales comprised of ~15.4% of the revenue & 22.7% of the gross profit.
- Revenue contribution by products: Prescription drugs 23.7%; OTC 41.2%; Nutritional supplements 12.3%; Herbal products 4.6%; Convenience and other products 18.2%.
- Gross margin rate fell 20 bps to 40.8%.
- Inventory +2% Y/Y to $89.50M.
- Store count -88 Y/Y to 1,969.
- Q1 results
- Charter Communications (NASDAQ:CHTR) has agreed to buy Time Warner Cable (NYSE:TWC) for $55B, finally clinching an agreement after its early 2014 bid was rejected and Comcast abandoned its offer.
- Charter will pay $195.71 a share - 14% above Time Warner Cable's May 22 close - with $100 in cash and the remainder in its own stock, according to a statement Tuesday.
- Bright House Networks, a smaller cable company Charter previously agreed to buy, will also be merged into the combined entity.
- TWC +9.1% premarket
- AstraZeneca's (NYSE:AZN) goal of topping $45B in revenue by 2023 has been dealt a severe blow by a problem with an experimental psoriasis drug that the company had viewed as a potential billion-dollar plus seller.
- Amgen (NASDAQ:AMGN), its partner on the project, announced late on Friday it was ending a collaboration to develop brodalumab after suicidal thoughts were observed in patients taking the medicine.
- AZN -1.6%; AMGN -0.8% premarket
- Ryanair (NASDAQ:RYAAY) said full-year profits surged 66% in the year to March as passenger numbers grew almost 11% to 90M on improved service and lower fares.
- Net income came in at €867M from €523M a year earlier, while sales increased 12% to €5.7B.
- Europe's largest budget airline said it also expects to carry more than 100M passengers for the first time this year and anticipates net profit of €940M-€970M.
- Ryanair shares are up 4.6% in London.
- The mystery in Hong Kong continues after Goldin Properties surged as much as 52% today, after plunging more than 60% this past Thursday. CFO Kenas Chan said previously the company had no explanation for the decline.
- Despite the confusion, the stock has skyrocketed over 350% this year, the steepest rally on the Hang Seng Composite Index.
- Previously: What is going on in Hong Kong? (May. 21 2015)
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