Seeking Alpha
  • Today - Wednesday, April 16, 2014

  • 2:51 PM
    • Yingli (YGE +6.7%) and China's Shanghai Sailing Capital Management have signed an MOU to create fund through which the companies will invest in local downstream solar projects.
    • The fund will have an initial size of RMB1B ($161M), of which Yingli will contribute 51%. It mostly plans to invest in Yingli-built projects.
    • Shares are rallying thanks to the announcement, and a broader solar stock rally that has followed the DOE's solar loan proposal. Yesterday, Yingli announced a "framework agreement" to sell at least 300MW of plants to Chinese operator United PV.
    | Comment!
  • 2:31 PM
    • Finjan (FNJN -3%) has filed to sell up to 21.6M shares on behalf of existing holders through future offerings. (prospectus)
    • VC investors Benchmark and Israel Seed Partners are among the firms mentioned in the prospectus, as are Cisco and P-E fund of funds HarbourVest International.
    | 2 Comments
  • 2:22 PM
    • "Holy Alibaba!" exclaims Bernstein's Carlos Kirjner after looking at the Q4 numbers disclosed by Yahoo (YHOO +5.7%) yesterday.  He now values the Chinese e-commerce giant at $245B - 25x estimated 2016 earnings of $9.5B for its core Taobao and Tmall sites + a $7.5B valuation for Alibaba.com and Alipay. Taobao/Tmall profits are now expected to grow 41% in 2015, and 28% in 2016.
    • Wells Fargo and Gabelli have upgraded Yahoo: The latter calls shares "ready for takeoff" as hype surrounding Alibaba's (ABABA) IPO - an F-1 reportedly could arrive by Monday - continues growing.
    • Looking at Yahoo itself, UBS (Buy) is pleased with the top-line impact of the company's in-stream ads (now 20% of display ad volume). It's less happy with Yahoo's vague CC remarks (transcript) about the tax impact of Alibaba share sales and future cash returns, EBITDA weakness (due to growth investments), and high headcount.
    • SunTrust (Buy) observes rising mobile ad sales (along with in-stream and premium ads) helped display impressions rise 7%, and that the Americas (where new ad products have been launched first) is outperforming.
    • Marissa Mayer mentioned on the CC Yahoo's news app is respectively ranked #1 and #2 in the news app category on the App Store and Google Play, that most mobile search metrics rose nearly 100% Y/Y, and that video streams (boosted by the Olympics and recent content deals) rose 30% Q/Q.
    | 1 Comment
  • 1:47 PM
    • Though the Nasdaq is up 0.7%, many chip stocks are heading in the opposite direction (SOXX -0.6%) after Intel provided mixed Q1 top-line numbers for its business units - server chip sales were healthy, mobile sales were weak, and PC sales were in between - ASML lowered its 1H14 sales outlook and provided cautious 2H remarks (has dinged many chip equipment stocks), and Linear offered somewhat soft March quarter guidance.
    • Notable decliners: CRUS -3.3%. ENTR -3.3%. QUIK -2.4%CAVM -2%. PSMI -3.6%. ADI -2.3%. TXN -1.4%. MXIM -1.5%. FCS -1.5%. The last four companies all compete against Linear.
    • Himax (HIMX -1.5%) is off after Chardan Capital lowered its PT to $9 from $12; the firm downgraded Himax in January. Shares tumbled on Monday, then ticked higher on Tuesday following a Q1 pre-announcement.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    | Comment!
  • 1:10 PM
    • Intel (INTC - unchanged) has received 11 PT hikes after beating Q1 EPS estimates by a penny, offering healthy Q2 gross margin guidance, and reporting mixed numbers for its new reporting units.
    • At the same time, B. Riley has cut shares to Neutral. The firm, which upgraded Intel in October (shares have risen 17% since), sees a rising tablet CPU mix pressuring 2H margins and is worried about "a tough 2H14 catalyst profile at a time when [PC CPU division] Q/Q growth risks escalate."
    • Pac Crest, 9 days removed from an upgrade, remains bullish on improving corporate PC demand, the potential for foundry share gains, and a "high likelihood" Intel's Grantley server CPU platform will boost 2015 IT spend.
    • Deutsche calls Intel's 2H outlook "prudently conservative," given it assumes little PC seasonality, and sees growth initiatives and cost cuts unlocking EPS/FCF growth.
    • On the CC (transcript), Intel attributed a 61% Y/Y drop in mobile division revenue to weaker baseband chip sales - the business faces tough competition from Qualcomm and MediaTek - and contra revenue payments to OEMs adopting its tablet CPUs.
    • Intel expects contra payments to decline, if not end, in 2015, and is still aiming for 40M 2014 tablet CPU shipments after shipping 5M in Q1. IDC expects 2014 industry shipments of 260.9M.
    • Barclays' Blaine Curtis pressed management on the fact the mobile unit appears to be losing $3B-$3.5B/year. CEO Brian Krzanich insisted Intel "has a roadmap to get to profitability," and that its upcoming SoFIA (low-end baseband/app processor) and Broxton (high-end app processor) platforms will help.
    • Yesterday's Intel earnings coverage
    | Comment!
  • 12:20 PM
    • Atari is partnering with Majesco (COOL +10.5%) JV company Pariplay to bring its video games "across real money gambling formats, including iLottery, social, online and mobile platforms."
    • As part of the deal, Atari's real-money gambling site will feature classic Atari games such as Pong, Asteroids, and Centipede starting in Q4, and Pariplay will distribute Atari titles throughout its network.
    • Majesco, beset by solvency concerns, closed yesterday near its 52-week low of $0.37.
    | Comment!
  • 11:53 AM
    • Though Adtran (ADTN -6.2%) has reiterated guidance for Q2 revenue of $172M-$180M (consensus is at $174.9M), the telecom equipment vendor is forecasting gross margin will drop to 49%-50% from Q1's 52.9%.
    • In addition, Adtran says U.S. carrier spending was slower than usual in seasonally soft Q1.
    • Shares are off sharply in response, after opening with just modest losses in response to Adtran's mixed Q1 results. Rival Calix (CALX -0.9%), which reports on April 29, is edging lower on an up day for the Nasdaq.
    | Comment!
  • 11:40 AM
    • ASML (ASML -5.5%) has lowered its 1H14 sales outlook. Moreover, the lithography equipment kingpin says logic IC customers are "encountering timing uncertainties in next-generation device designs" for 2H, and that NAND flash memory makers are "continuing their evaluation of [3D] NAND and future-node planar technologies, resulting in uncertainties for system demand."
    • ASML's remarks about logic customers might partly be a reference to Intel, which has reportedly delayed the launch of its 14nm Broadwell CPUs. NAND vendors have been keeping a lid on capex for some time; recent price pressure might encourage them to do so.
    • Chip equipment peers Applied Materials (AMAT -2%), KLA-Tencor (KLAC -2.5%), Lam Research (LRCX -2.5%), Axcelis (ACLS -2.6%), Camtek (CAMT -5.8%), and Ultratech (UTEK -0.9%) are off in sympathy. Compared with many other tech companies, the group has held up well during the March/April selloff.
    • One silver lining: ASML says multiple customers are qualifying 10nm EUV lithography equipment, and that it expects to recognize revenue on 8 EUV systems in 2014. Investments in both EUV and 450mm wafers have been delayed.
    • Gartner has forecast chip wafer fab equipment spend will grow 14.9% in 2014 to $31B, after falling 9.1% in 2013.
    | Comment!
  • 11:11 AM
    • xG Technology (XGTI -16.1%) has priced a 5.27M-share offering at $1.90, 12% below its Tuesday close of $2.17. Underwriters have a 790K-share overallotment option.
    • xG expects gross proceeds of $10M. The company had $5.5M in cash at the end of 2013, and $2M worth of convertible notes payable.
    | Comment!
  • 10:57 AM
    • "The outlook for storage spending continues to look mediocre as users pause and consider their alternatives. Although there still may be a storage upgrade cycle coming, we don't see it in our recent survey work," writes UBS, explaining why it's downgrading NetApp (NTAP -3%) to Neutral. EMC (EMC -1.3%) investors also aren't crazy about the commentary.
    • A recent Barclays CIO survey also indicated storage spend remains soft, albeit while painting a brighter picture for broader IT spending. IDC estimates external disk storage sales grew 2.4% Y/Y in Q4 after falling 5.6% in Q3, with EMC grabbing share from IBM and NetApp's share roughly holding steady.
    • UBS is also worried about intensifying competition from storage startups and cloud infrastructure providers. Smaller vendors offering all-flash or hybrid flash/hard drive arrays - examples include newly-public Nimble Storage and private Tintri and Nutanix - have seen rapid growth. NetApp is hoping to counter them with its upcoming FlashRay systems.
    • Cloud infrastructure giant Amazon Web Services has been growing rapidly as well, and rivals such as Microsoft and Google are doing their utmost to play catch-up. Amazon, Microsoft, and Google all recently announced huge price cuts for their cloud storage offerings.
    • Amazon and Google's platforms run on white-label hardware, and Microsoft is reportedly thinking of going down the same path.
    | Comment!
  • 10:24 AM
    • ITG Research's checks suggest Facebook's (FB -1%) ad prices (on a cost per click basis) fell Q/Q in seasonally soft Q1, and that its revenue will be in-line or below consensus.
    • OTR Global reported last month its Facebook checks pointed to softening news feed and FBX Exchange ad spend due to rising prices; Facebook's ad prices rose 92% Y/Y on a CPM basis in Q4.
    • On the other hand, Facebook ad software provider Nanigans has said Q1 ad spend was stronger than expected following a slow start, and that it saw Facebook ad prices rise 10% Q/Q "across the board."
    • Facebook, which has seen its estimates rise following three quarters of blowout revenue figures, reports on April 23. Shares are down moderately while the Nasdaq trades up 0.5%.
    | 21 Comments
  • 9:55 AM
    • Yelp (YELP +2.1%) has been upgraded to Buy by Citi.
    • Cree (CREE +2%) has been upgraded to Buy by Needham ahead of its April 22 FQ3 report.
    • Youku (YOKU +1.2%) has been upgraded to Neutral by Goldman.
    • SouFun (SFUN +5.4%) has been upgraded to Buy by Goldman.
    • Motorola Solutions (MSI -1.6%) has been cut to Neutral by Nomura a day after announcing the Zebra Technologies deal and issuing a Q1 warning.
    • Control4 (CTRL +7%) has been upgraded to Strong Buy by Raymond James. Q1 results are due on May 1.
    • Nimble Storage (NMBL +5.4%) has been upgraded to Buy by UBS.
    • J2 Global (JCOM +7.1%) has been upgraded to Buy by Sidoti.
    • Xoom (XOOM +1.4%) has been upgraded to Equal Weight by Evercore ahead of its April 22 Q1 report.
    • Bitauto (BITA +9.1%) has been started at Outperform by Credit Suisse. Rival Autohome (ATHM +9.8%) has been started at Neutral, but is also up sharply.
    • IPO underwriters have given A10 Networks (ATEN +3.7%) five bullish ratings and one neutral one.
    | Comment!
  • 9:43 AM
    | 30 Comments
  • 9:35 AM
    • 3D Systems (DDD) is acquiring Robtec, a Sao Paulo-based firm declared to be the largest additive manufacturing service bureau and 3D printer/scanner distributor in Latin America.
    • 3D will initially buy 70% of Robtec, and the remainder of its shares in 5 years. The deal's price tag is undisclosed; 3D says it will be accretive to EPS within 12 months of closing.
    • Robtec, which operates in Brazil, Mexico, Argentina, Chile, and Uruguay, will support 3D's Quickparts custom manufacturing/prototyping service. 3D has already acquired a string of service bureaus over the last couple of years. Services accounted for 28% of the company's Q4 revenue.
    | 3 Comments
  • 9:18 AM
    • KING Digital is partnering with Chinese gaming/messaging giant Tencent (TCEHY) to bring Candy Crush Saga to the Middle Kingdom. The game will be distributed via both Tencent's QQ (PC messaging, 808M MAUs) and WeChat/Weixin (mobile messaging, 355M MAUs) platforms.
    • Candy Crush was responsible for 93M of King's 128M average Q4 DAUs. But bookings and unique payers started to slip in Q4 after seeing meteoric growth over much of 2013.
    • King is counting on newer titles such as Pet Rescue Saga and Farm Heroes Saga - they're promoted via Candy Crush and have moved up Facebook charts, but are nowhere are large right now - to help pick up the slack.
    | Comment!
  • 8:10 AM
     
  • 5:47 AM
    • ADTRAN (ADTN): Q1 EPS of $0.21 beats by $0.02.
    • Revenue of $147M (+2.8% Y/Y) misses by $2.65M.
    • Press Release
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  • 4:25 AM
    • ASML's (ASML) Q1 net profit almost halved to €249.1M ($344M) from €481M in Q4 but exceeded expectations of €230M. Profit in Q1 a year earlier was €96M.
    • Sales slumped 24% on quarter to €1.4B, as expected. On year, revenue rose 57% from  €892M.
    • ASML downgraded its H1 sales forecast due to slowing revenues in Q2, saying it expects turnover of €3B including extreme ultraviolet (EUV) systems for producing smaller chips. The company's prior guidance was €3B excluding EUV products.
    • "That ASML is now including EUV in its sales guidance means a difference on a yearly basis of around €500-600M, which is about 10% of sales," says ING analyst Robin van den Broek.
    • Shares are -3.6% in Amsterdam. (PR)
    | Comment!
  • 4:08 AM
    • Alibaba Group (ABABA) could file the prospectus for its U.S. IPO on Monday, Reuters reports, adding that the listing could be worth over $16B.
    • The report comes after major shareholder Yahoo (YHOO) disclosed that Alibaba's Q4 net income surged 110% to $1.35B as revenue jumped 66% to $3.06B.
    • Alibaba's results helped Yahoo's shares climb 6.8% in AH trading. In Tokyo, shares in SoftBank (SFTBF), which owns 37% in Alibaba, jumped 8.5%.
    | 5 Comments
  • Tuesday, April 15, 2014

  • 7:03 PM
    • Microsoft's (MSFT) new Azure Intelligent Systems Service allows companies to capture and manage machine data from various embedded devices and sensors, regardless of the OS they use. The service aims to enable Web-connected embedded platforms in verticals such as retail, health, manufacturing, and transportation.
    • IT outsourcing firms Cognizant and Infosys are among Microsoft's service partners. Intel and ARM are already going after this market by via solutions that combine their CPU designs with related software.
    • Microsoft is also unveiling its Analytics Platform System, a hardware appliance (to be sold by OEMs) that allows data handled by SQL Server's data warehousing solution (used to process/analyze structured data) and the Hadoop big data framework (used for giant unstructured datasets) to be integrated and jointly queried.
    • Satya Nadella calls the solution "big data in a box." Teradata (TDC) and Informatica (INFA) are among the companies in Microsoft's crosshairs.
    • SQL Server 2014 has also been launched. As promised, the latest update to Microsoft's database platform (produces $5B+/year in sales) features in-memory capabilities that arguably make it a meaningful rival to SAP's popular Hana in-memory database.
    • While going over the products, Nadella declares Microsoft needs to create a "data culture" to thrive, in part by using its own products. "Think of Office as the canvas, or the surface area, or the scaffolding from which you can access the data."
    | 6 Comments
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