Seeking Alpha
  • Today - Thursday, November 26, 2015

  • 3:48 AM
    • Alibaba (NYSE:BABA) is in talks to buy Hong Kong's leading English language newspaper, the 112-year-old South China Morning Post.
    • On Monday, Bloomberg reported that Alibaba executive chairman Jack Ma was in advanced talks to take a stake in SCMP, but sources have told Reuters that the talks involve Alibaba rather than a private investment by Ma.
    • It would not be the first time new technology has seen potential in old media. Two years ago, Amazon boss Jeff Bezos surprised many when he bought The Washington Post for $250M.
    | 3:48 AM | 9 Comments
  • Wednesday, November 25, 2015

  • 7:23 PM
    • Wells Fargo has picked its winners in March's FCC broadcast incentive auction for wireless spectrum -- and it figures AT&T (T +0.2%) will dominate bidding that should total $30B-$35B.
    • Analysts at the bank predict up to $10B spending coming from the telecom giant for a nationwide block of 2x10 MHz airwaves.
    • T-Mobile (TMUS -3.7%) -- which has been signaling aggressive moves in the auction -- will be second, with $8B spent, the analysts said, while Verizon (VZ -0.6%) should be last with $5B in bids. Sprint (S -1.8%) has already said it's sitting this one out.
    • While AT&T backtracked a bit on pledges to spend $9B while it was digesting DirecTV (NASDAQ:DTV), the analysts think the benefits of a nationwide block may signal higher spending from the company.
    • Verizon, meanwhile, has credit to spend up to $10B, but probably won't: "Similar to what T has said publicly and based on our conversations with spectrum experts, we look for VZ to contribute in a meaningful way if 2x10MHz bands are made available."
    • Previously: T-Mobile -2.2% as it pledges $200 for each Sprint line that switches (Nov. 25 2015)
    • Previously: SoftBank spending: Arora on investment universe, Sprint worries (Nov. 24 2015)
    | 7:23 PM | 13 Comments
  • 6:55 PM
    • While VimpelCom (VIP +6.8%) got a boost today on news that it may be close to settling with the U.S. in an Uzbekistan corruption probe, TeliaSonera (OTCPK:TLSNY +2.2%) may be facing a bigger headache as the U.S. looks to extend the probe into other markets, according to Swedish daily Svenska Dagbladet.
    • Danske Bank analysts think the company could now be facing compensation claims of 15B kronor ($1.72B), triple what they had expected before.
    • The probe is reportedly widening to TeliaSonera's activities in Kazakhstan and Azerbaijan, and even Nepal.
    • Other companies besides VimpelCom and TeliaSonera -- Mobile TeleSystems (NYSE:MBT) and Telenor (OTCPK:TELNY) -- are linked to dealings with Takilant, the company tied to Gulnara Karimova, daughter of Uzbekistan President Islam Karimov.
    | 6:55 PM | Comment!
  • 6:32 PM
    • VimpelCom (VIP +6.8%) is looking at stable debt even with ongoing dollar risks, Fitch says, giving the Russia-focused telecom a BB+ Issuer Default Rating with stable outlook.
    • While VimpelCom's debt is moderate and declining, 71% is in U.S. currency, which may increase costs for Amsterdam-based VimpelCom as the U.S. raises rates.
    • VimpelCom's interests in Italy's Wind are "highly leveraged but ring-fenced," the firm says.
    • Fitch expects VimpelCom to stay a strong mobile player in Russia despite competition from Mobile TeleSystems (NYSE:MBT), Millicom (OTCPK:MIICF) and Megafon (OTC:MFOYY): "Although its market share has been on a steady decline over the three years to 2014, a catch-up in capex should allow it to compete on a more level playing field with its larger peers."
    • Shares finished strong today after a report the company may be near a settlement with U.S. authorities related to an Uzbekistan corruption probe.
    • Previously: VimpelCom up 2.4% on report it's near $775M U.S. settlement (Nov. 25 2015)
    | 6:32 PM | Comment!
  • 5:57 PM
    • Walt Disney (DIS +0.6%) is keeping its toes dipped into the burgeoning phenomenon of e-sports, teaming up again with Nintendo (OTCPK:NTDOY +1%) for a second original show devoted to watching competitive videogaming.
    • The company's Disney XD channel will air Clash of Karts: Mario Kart 8 Dec. 5, a one-hour special where four two-person child teams will compete with the help of "YouTube influencers" as coaches.
    • Disney says it saw some positive results from an Oct. 16 special based on the Nintendo World Championships, and is taking a more specific game tack with this one because the Mario Kart franchise is cross-generational and also lends a comedy element.
    • “With e-sports we’re seeing the growth of a new business,” Disney's Marc Buhaj says. “We need to make sure that our game shows are appropriate to the folks watching. If we see a gaming opportunity that pops up, we’ll look at it.”
    • Elsewhere: As the company is moving toward a high-profile opening of its park in Shanghai, China has fined five fake Disney hotels that had set up in the area, for trademark infringement. The five hotels, all owned by Shenzhen Vienna Hotels Group, were penalized a combined 100K yuan (about $15,656).
    | 5:57 PM | 10 Comments
  • 5:19 PM
    • Through a string of purchases starting on Oct. 27 (the most recent disclosed purchase was yesterday), T.J. Rodgers has upped his Cypress Semi (NASDAQ:CY) stake to 8.37M shares (roughly a 2.5% stake).
    • The purchases have come with the microcontroller/flash memory vendor trading well below a March high of $16.25, hit amid a chip stock rally and Spansion merger enthusiasm.
    | 5:19 PM | 5 Comments
  • 5:05 PM
    • Microcap Chinese retail software/services firm eFuture Information Technology (NASDAQ:EFUT) has soared to $18.70 after hours after Hong Kong-based Shiji HK (owner of a hotel IT systems provider) disclosed a 2.45M-share (50.51%) stake. (13D filing)
    | 5:05 PM | Comment!
  • 4:50 PM
    • Game maker NetEase (NASDAQ:NTES) finished up 2.7% today after Goldman Sachs launched coverage of the stock at Buy.
    • The firm set a price target of $190; shares had closed yesterday at $164.98 and today at $169.43, implying 12% upside from here.
    • Other analysts had chimed in with price target increases this month after NetEase beat Q3 earnings expectations on strong revenues that doubled Y/Y. Barclays had raised its own price target to $171, from $153.
    • Meanwhile, BNP Paribas raised its own target to $190 from a previous $170. Both Barclays and BNP Paribas rate the stock a Buy as well as Goldman.
    | 4:50 PM | Comment!
  • 4:35 PM
    • ZAGG has filed to sell up to $100M worth of stock through future offerings. The company has also filed to sell 80.1K shares obtained by foreclosure of a judgment lien, and to allow seven existing holders to collectively sell up to 194.3K shares obtained via warrant exercises at their discretion. (S-3 filing)
    • Zagg has fallen to $10.00 after hours. The mobile accessory maker had $15M in cash at the end of Q3. Shares made a fresh 52-week high of $10.49 earlier today, before closing at $10.40 (up 3.6%).
    | 4:35 PM | Comment!
  • 4:03 PM
    • Digital Turbine (APPS -2%) is making expansion plans in Durham, N.C., as it looks to consolidate headcount and grow space that belonged to Appia, which it acquired in the spring.
    • CEO Bill Stone says the company is negotiating with landlord American Tobacco Campus to move into thousands of square feet of extra space to accommodate Appia's growth.
    • Digital Turbine has relocated technical and product development work for its DT Ignite product to Durham from Israel, and says it continues to hire there. "We expect it to continue to organically grow," Stone says.
    • He has also urged patience from investors and to let the company get through the holiday season, since gifted smartphones can boost the company's profits.
    • Shares in the company are down 55% YTD.
    | 4:03 PM | Comment!
  • 3:54 PM
    • Qunar (QUNR +4.1%) is back above $40 after beating Q3 estimates with the help of a 381% Y/Y increase in mobile revenue to $153.5M (now 73.6% of total revenue). Q4 guidance is for 105%-125% Y/Y sales growth (largely below a 124.6% consensus) and 85%-105% gross profit growth.
    • Top-line performance: Adjusting for a bookings model shift, hotel reservation revenue rose 188.6% Y/Y to $50.7M, and flight revenue 91.2% to $93.9M. Hotel and flight volume respectively rose 119.8% and 49.4% to 22M rooms and 33.9M tickets.
    • Financials: Spending remained heavy: Sales/marketing spend +188.6% Y/Y to $120.9M, R&D +78.1% to $64.3M, product sourcing 87.5% to $29.4M, G&A +15.6% to $19.4M. Due to certain hotel reservations being recognized on a gross basis, gross margin fell to 62.4% from 72% in Q2 and 72.4% in Q3 2014. The Ctrip deal has been expected to eventually yield lower spending growth.
    • On the earnings call (transcript), China's second-biggest online travel firm suggested it expects to reach EBITDA breakeven in Q3 2016. The company also said it remains on track to pare its aggressive offline marketing spend (aims to grow Qunar's customer base) in 1H16.
    • Q3 results, PR
    | 3:54 PM | 2 Comments
  • 3:09 PM
    • Japan's Nikkei reports Apple (AAPL -0.5%) will launch iPhones sporting OLED displays starting in 2018. To date, the company has exclusively used LCDs for its retina displays.
    • The paper adds securing enough OLEDs to meet Apple's needs (the company sells over 200M iPhones/year) could be difficult, and that Apple will "work over the next year or so" with suppliers to see if it can obtain enough displays and eliminate technical drawbacks such as performance degradation.
    • iPhone LCD supplier LG Display (LPL +6.9%), which has already unveiled plans to invest ~$8.5B in OLED manufacturing through 2018, is said to be "planning capacity upgrades." OLED materials/IP provider Universal Display (OLED +5.2%) have caught a bid on the Nikkei's report; LPL was already higher on the day.
    • OLEDs have long been a staple on Samsung's Galaxy S and Note lines. Supporters of the technology praise its high contrast/deep blacks and potential thickness and power consumption advantages. Apple, however, has argued its LCDs provide superior color accuracy.
    • There have long been rumors Apple is thinking of adopting OLEDs. The company recently filed a patent application for an integrated OLED display and touch panel, with a fingerprint reader located underneath.
    • Earlier: Apple buys Star Wars motion capture tech developer Faceshift
    • Five months ago: Apple reportedly working on iPhone design that eliminates home button
    | 3:09 PM | 32 Comments
  • 2:48 PM
    • Frontier Communications (NASDAQ:FTR) may be eyeing Connecticut -- where it acquired territory from AT&T -- as the spot of its next gigabit Internet service launch, to judge from marketing.
    • The company hasn't announced any formal plans, but users noticed website materials (now removed) pointing toward a fiber Internet launch.
    • The state has been subject to a dearth of options in high-speed Internet, and local governments have begun the (slow) process of pursuing municipal gigabit networks on their own.
    • Any Frontier gigabit deployment might be limited for some time. The company recently said it could provide some customers with new options, at download speed tiers of 90 Mbps and 115 Mbps. (via FierceTelecom)
    | 2:48 PM | 3 Comments
  • 2:45 PM
    • Vringo's (VRNG -3.2%) reverse split goes into effect after Friday's close.
    • The move will allow the company to regain compliance with the Nasdaq's $1.00 minimum bid rule. Shares are currently at $0.33, down 40% YTD and 89% from the end of 2013.
    | 2:45 PM | 13 Comments
  • 1:31 PM
    • What used to be HP's PC/printing unit (NYSE:HPQ) has plunged below $13 after missing FQ4 sales estimates on the back of 14% Y/Y sales drops for both its PC and printing segments, and cutting its FY16 EPS guidance below consensus.
    • With printing op. income (-18% in FQ4 to $862M) well above PC segment op. income (-17% to $294M), printing headwinds are getting a lot of attention. On the earnings call (transcript), CEO Dion Weisler stated weak market demand and price pressure both weighed on printing. "We do not expect the landscape to improve in the near future and we will constantly assess how the market evolves."
    • He added forex is affecting pricing, and that lower printer price points are "attracting buyers that might have different usage patterns then we originally targeted." Printing supplies revenue stabilization now isn't expected until the end of 2017. The growth of online/mobile document and photo sharing has been a major printing headwind for some time.
    • Needham's David Rold has downgraded to Hold just three weeks after upgrading to Buy on account of a low valuation and 3%-4% dividend yield. "[A]s some of the valuation argument has played out, we believe further upside will require real improvement in the underlying business. The sharp turn of the Printing market (and delay in improvement that results) in just 2-3 months since last speaking with the Street warrants caution..."
    • Likewise, Goldman's Simona Jankowski (Neutral) is worried about soft supplies demand (sales -10% in FQ4). "While the company intends to reduce its cost base to partially offset market headwinds, we would need to see evidence of supplies stabilization before becoming meaningfully more positive on HP Inc.’s trajectory."
    • Deutsche's Sherri Scribner (Buy) remains bullish. "While we do not expect HPQ to be immune to [market] trends, we believe the company can outgrow its peers and end markets, driven by market share gains and a focus on profitable growth opportunities. A recovery in supplies is a key driver of free cash flow strength longer term, and while we were disappointed by the push out of this recovery to later in FY-17, we believe [management] has the right tools in place to stabilize this business."
    | 1:31 PM | 17 Comments
  • 1:21 PM
    | 1:21 PM | 3 Comments
  • 12:56 PM
    • MagicJack VocalTec (NASDAQ:CALL) was down briefly as much as 4.7% after a Street Sweeper article pointed to "perilous declines in users, activations and app users," but has rebounded since early this morning, now up 7.5%.
    • "Any smidgen of magic left in magicJack VocalTec is vanishing quicker than street magician David Blaine can make a new quarter disappear," the article posed, setting a "generous" valuation at $5/share.
    • The stock had closed at $9.52 yesterday; it's now up to $10.23.
    • Volume has already surpassed its daily average, though the biggest blocks came in the early minutes to prompt the decline.
    | 12:56 PM | Comment!
  • 12:30 PM
    • 3D Systems (DDD +5.8%), Stratasys (SSYS +5.1%), Voxeljet (VJET +4.6%), and (especially) ExOne (XONE +16.6%) are up strongly on a day the Nasdaq is up 0.4%.
    • Profit-taking from shorts is likely helping out: 3D had 34.1M shares (32% of its float) shorted as of Oct. 30. Stratasys had 12.4M shares (25% of its float) shorted, ExOne 2.5M shares (26% of its float), and Voxeljet 1.3M shares (10% of its float).
    • ExOne's gains come less than three weeks after shares plunged on account of a Q3 miss and full-year guidance cut.
    | 12:30 PM | 5 Comments
  • 11:40 AM
    • Stating it sees only 14% upside for shares relative to 31% for other Buy-rated names, Goldman has downgraded eBay (EBAY -0.7%) to Buy from Conviction Buy, albeit while hiking its target by $3 to $33.
    • Goldman still thinks eBay's "ongoing investments into technology should serve to improve the user experience and conversion rates, while potentially slowing the declines in organic traffic from search results." It also sees potential for improved focus following the PayPal split, and notes StubHub and eBay Classifieds are performing well.
    • The online marketplace owner, pressured for some time by share losses to Amazon and Google algorithm changes, currently trades for 14.6x a 2016 EPS consensus of $1.97. Shares jumped last month in response to a Q3 beat and better-than-feared guidance.
    | 11:40 AM | 1 Comment
  • 11:18 AM
    • During yesterday afternoon's FQ4 earnings call (transcript), HP Enterprise (HPE +3.1%) CEO Meg Whitman disclosed Microsoft Azure (MSFT -0.5%) "will become a preferred public cloud partner" for HPE, through a partnership that will be detailed next week. In return, HPE will "serve as a preferred provider of Microsoft infrastructure and services for its hybrid cloud offerings."
    • The deal comes a month after HP announced it's shutting down its public cloud services ops, rather than compete head-on with well-established players such as Amazon (the market leader), Microsoft (#2), IBM, and Google. The company, whose on-premise IT service ops have been pressured by cloud adoption - enterprise services division revenue fell 9% Y/Y in FQ4 to $5B - added it's still committed to offering private and managed cloud services.
    • For Microsoft, the deal gives Azure the backing of HP's still-massive enterprise sales and IT services workforces. It follows a multifaceted Azure partnership with server OS rival Red Hat. Microsoft reported Azure revenue rose over 100% Y/Y in calendar Q3, but didn't give a figure.
    • HPE continues trading higher after beating depressed FQ4 sales estimates with the help of positive x86 server and networking hardware growth, and reiterating its FY16 EPS guidance (while guiding FQ1 below consensus). Analyst reactions have been mixed - bulls are trumpeting a low valuation and the potential for improved execution following HP's breakup, while bears argue sales and cash flow pressures remain substantial.
    | 11:18 AM | 13 Comments
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