Seeking Alpha
  • Today - Tuesday, March 3, 2015

  • 4:24 AM
     
    • German retail sales and record index advances in the U.S. fueled European stocks higher today, pushing the DAX up a staggering 16.4% YTD.
    • Retail sales rose by more by 2.9% M/M and 5.3% Y/Y in January, heavily beating economists' forecast for a 0.3% M/M decline.
    • U.S. stocks also began the new month in strong style, with the Nasdaq closing above the 5,000 level for the first time since March 2000, yesterday, and the Dow and S&P 500 also setting records.
    • FTSE 100 +0.3%; DAX +0.3%; CAC 40 +0.3%; Euro Stoxx 50 +0.3%.
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  • 2:04 AM
    • Australian stocks fell back from seven-year highs today after the Reserve Bank of Australia surprised markets by holding interest rates at 2.25% instead of lowering rates for a second consecutive month.
    • "Further easing of policy may be appropriate over the period ahead. The Board will further assess the case for such action at forthcoming meetings," said RBA Governor Glenn Stevens.
    • China cut its rates over the weekend and the ECB begins a trillion-euro quantitative easing plan this month.
    • S&P/ASX 200 closed down 0.4% at 5,933.90
    • ETFs: EWA, AUSE, KROO, EWAS, FAUS, QAUS
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  • Monday, March 2, 2015

  • 4:25 PM
     
    • Stocks began the new month in strong style, with the Nasdaq closing above the 5,000 level for the first time since March 2000 and the Dow and S&P 500 setting records, as investors cheered U.S. economic data and an interest rate cut in China.
    • Peter Boockvar notes that "for perspective purposes, the 5,000 figure of course is a nominal level. In order to reach its inflation-adjusted peak, the Nasdaq will have to touch about 6,900, 38% above 5,000."
    • Economic reports out today that pointed to a slowdown in manufacturing activity and consumer spending, but the data was considered positive in light of the west coast port shutdown.
    • The consumer discretionary sector (+1.2%) led all gainers, followed by information technology (+1%), health care (+0.9%), financials (+0.8%) and industrials (+0.8%); the energy sector (-0.7%) lagged.
    • Treasurys sold off as stocks rallied, with the yield on the benchmark 10-year note jumping 8 bps to 2.08% during the cash session.
    • Oil prices gyrated to trade below $49/bbl early, moving back above $51 later and ultimately settling pit trading $0.17 lower at $49.59/bbl.
    • NYSE volume totaled 740M shares, well below the 50-day average of 813M shares.
    | 7 Comments
  • 2:09 PM
    • Genworth (GNW -6.6%) discloses in its 2014 10-K it has "concluded that we did not have adequate controls designed and in place to ensure that we correctly implemented changes made to one of our methodologies as part of our comprehensive long-term care insurance claim reserves review completed in the third quarter of 2014," and that this deficiency resulted in the company failing to "identify a $44 million after-tax calculation error."
    • Though this error didn't cause "a material misstatement" for Genworth's financials, the company has "concluded a material weakness exists in the controls over the implementation of our long-term care insurance claim reserves assumption and methodology changes because such a misstatement could have occurred." It's working to address the weakness.
    • Shares have dived in response, and are just ~$0.50 removed from a 52-week low of $6.75.
    | 16 Comments
  • 1:41 PM
    • The Philadelphia Semi Index (SOXX +2.4%) has rallied to new highs after NXP announced it's buying microcontroller, network processor, and RF amplifier supplier Freescale for $16.7B after factoring net cash/debt, the biggest deal yet in the chip industry's ongoing consolidation wave. The Nasdaq is up 0.5%.
    • Microcontroller makers are among today's big gainers - NXP/Freescale assert they'll be the world's biggest supplier of general-purpose microcontrollers. Standouts include Atmel (ATML +6%) and STMicroelectronics (STM +3.4%), as well as Cypress (CY +3.1%) and merger partner Spansion (CODE +3.2%).
    • Other notable gainers include InvenSense (INVN +3.4%), Ambarella (AMBA +6.3%), Audience (ADNC +5.5%), Cirrus Logic (CRUS +3.7%), Cavium (CAVM +4.2%), ON Semi (ONNN +3.5%), Silicon Motion (SIMO +3.5%), InPhi (IPHI +3.8%), and TowerJazz (TSEM +5.5%).
    • With the Mobile World Congress as a backdrop, InvenSense has unveiled a 6-axis SoC that pairs a gyroscope and acceleromoter with a motion processor and related software/algorithms; the company claims 25%-50% better power consumption than rival solutions. It has also launched a software library meant to "provide sensor-assisted positioning in places where GNSS alone cannot provide desired accuracy."
    • Cavium has announced its OCTEON Fusion-M processor line for mobile base stations. The chips support up to 16 custom CPU cores running at 2GHz., and are declared by Cavium to enable "Smart Radio Heads" that can adapt to network conditions. They begin sampling in Q3.
    • Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
    • Previously: Chip product launches: ARMH, EZCH, BRCM, NXPI, XLNX, IDTI
    | 2 Comments
  • 12:51 PM
    • In a deal that furthers Microsoft's (MSFT +0.4%) iOS/Android push, the company's Skype, OneDrive, and OneNote apps are pre-installed on Samsung's just-launched Galaxy S6 and S6 Edge, and placed within a "Microsoft Apps" folder pinned to the phones' home screens.
    • S6/S6 Edge users also get 115GB of free OneDrive storage. Microsoft's Office apps weren't found on demo units, but past rumors suggest they could be part of the package. The deal comes after Microsoft and Samsung ended their Android royalty squabble.
    • Meanwhile, Microsoft has launched the Lumia 640 and 640XL, new mid-range Windows Phones that come with a free year of Office 365 Personal (normally costs $70). The 640 has a 5" 720p display, and respectively sells for $155 (3G) and $178 (3G/4G). The 640XL has a 5.7" 720p display, and sells for $211 (3G) and $245 (3G/4G). Both devices use Qualcomm's quad-core/mid-range Snapdragon 400 processor.
    • The software giant has also announced it won't release a new flagship Lumia until the mobile version of Windows 10 is ready. IDC estimates Windows Phone had a 2.8% smartphone unit share in Q4, down from 3% a year earlier.
    | 10 Comments
  • 12:01 PM
    • PayPal (EBAY +0.4%) is acquiring Paydiant, provider of a white-label platform that allows retailers to create their own mobile wallet apps, replete with payment, loyalty card, and digital coupon support. Multiple sources tell Re/code the purchase price is around $280M.
    • Paydiant's customer base includes Subway, CapitalOne, and (notably) MCX, a consortium of major retailers that plans to launch a QR-code based mobile payments platform (called CurrentC) later this year. MCX's backers include Wal-Mart, Target, Kmart, Best Buy, Dunkin' Donuts, CVS, and several large gas station chains.
    • The deal comes on the heels of the Apple Pay launch, Samsung's acquisition of mobile payments platform LoopPay, and Google's deals with U.S. carriers to pre-install Google Wallet on their Android phones. Google is also rumored to be working on Android Pay, an API for 3rd-party apps that can handle both online and in-store payments.
    • Though PayPal handled $45.6B worth of mobile transactions in 2014 (mostly online), the rise of mobile payments and authentication platforms backed by tech/Internet giants has been viewed as a long-term threat. Evercore last November: "[T]he convenience that mobile necessitates means that demand channels, including marketplaces, Search, Social and even the OS, are moving closer to sellers ... The result allows demand channels the opportunity to offer payment elements, including user authentication and stored payment credentials for the user on behalf of the merchant, a role traditionally reserved for payment players, most notably PayPal."
    | 5 Comments
  • 10:01 AM
     
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  • 9:45 AM
     
  • 8:55 AM
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  • 8:31 AM
     
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  • 7:38 AM
    • Boston Scientific (NYSE:BSX) acquires American Medical Systems' urology product product line for $1.6B in up-front cash plus a potential milestone of $50M. The assets will become part of Boston Sci's Urology and Women's Health unit.
    • The deal includes the minimally invasive GreenLight XPS and HPS Laser Therapy Systems for treating benign prostate hyperplasia (enlarged prostate), the AMS 800 Urinary Control System for treating stress urinary incontinence and the AMS 700 Inflatable Penile Prosthesis for treating erectile dysfunction.
    • The 800-employee AMS business generated ~$400M in sales last year with non-GAAP operating income of ~$130M (GAAP operating income was ~$60M). The acquisition is expected to deliver pre-tax synergies of more than $50M by the end of 2018. On a non-GAAP basis, the deal will be neutral to earnings per share this year, accretive by $0.03 in 2016, ~$0.07 in 2017 and increasingly accretive thereafter.
    • The transaction is expected to close in Q3.
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  • 7:31 AM
    • "The audit committee's investigation did not identify any material changes relating to ARCP's real estate ownership, rental revenue or fundamental business operations. The probe also found no changes to the financial statements or operations of the Cole Capital non-traded REITs.
    • For full-year 2013, AFFO is cut by $43.9M or $0.20 per share vs. what was originally reported.
    • Q1 2014 AFFO is cut by $38.5M or $0.07 per share. It was originally reported at $0.26.
    • Q2 2014 AFFO is cut by $19.3M and $0.03 per share. It was originally reported as $0.24.
    • Q3 2014 AFFO - reported for the first time - is $244.5M or $0.26 per share vs. $72.1M and $0.28 one year earlier (after restatement).
    • Q4 results and the 10-K are expected to be reported by the end of this month.
    • Source: Press Release
    • SEC filings
    • A conference call is set for 8:30 ET
    • Shares -1.1% premarket
    | 44 Comments
  • 7:14 AM
    | 1 Comment
  • 6:10 AM
    • Mitel (NASDAQ:MITL) will acquire Mavenir (NYSE:MVNR) for cash and stock worth $17.94/share based on Friday's close - a 23% premium.
    • For Mitel, which primarily serves the enterprise with UC (unified communications), the deal expands its footprint to more than 130 service providers and mobile operators, including 15 of the top 20 mobile operators worldwide. It says acquiring the VoLTE and RCS pioneer will expand its total addressable market by approximately $14B by 2018. (LightReading)
    • A webcast, at 8:30 AM ET, can be heard here.
    • Here are the presentation slides
    • Press release
    • Note: On Jan. 13, SA author Ben Axler recommended Mavenir as his top long idea for 2015 and beyond.
    | 2 Comments
  • Sunday, March 1, 2015

  • 9:56 PM
    • Shortly after Reuters reported a deal was close, NXP (NASDAQ:NXPI) has announced it's buying Freescale (NYSE:FSL) for $6.25/share in cash and 0.35 NXP shares for each Freescale share owned.
    • Based on NXP's Friday's close, the deal has a value of $36.14/share, nearly even with Freescale's Friday close. It has an equity value of $11.8B, and an enterprise value of $16.7B after factoring Freescale's net debt.
    • Freescale shareholders will own 32% of the post-merger company. NXP will pay for the deal with $1B in cash on hand, $1B in new debt, and 115M shares. It's expected to close in 2H15.
    • The companies predict $200M/year in cost savings in the first year after closing, and $500M/year eventually. They assert the post-merger company will be "the market leader in automotive semiconductor solutions and the market leader in general-purpose microcontroller (MCU) products." NXP promises the acquisition will be accretive to both EPS and free cash flow.
    | 6 Comments
  • 9:08 PM
    • As rumored, Samsung's (OTC:SSNLF) Galaxy S6 eschews the plastic-heavy designs of its predecessors in favor a body with a metal frame and both front and back glass panels - both panels use Corning's (NYSE:GLW) recently-launched Gorilla Glass 4 (offers better damage resistance).
    • Also as expected: The standard S6 is accompanied by the S6 Edge, a premium model with curved sides. Samsung has also launched a new version of its Gear VR headset (relies on Oculus' VR platform) that uses the S6/S6 Edge for its display instead of the Note 4.
    • The S6's display size is unchanged from the S5's 5.1", but (as was the case for the Note 4) the resolution has been upgraded from 1080p to 2560x1440 - that's a positive for OLED materials supplier Universal Display (NASDAQ:OLED). An 8-core Samsung Exynos processor powers international S6 models - Qualcomm Snapdragon processors have historically powered U.S. models, but that might not be the case this time.
    • A new fingerprint sensor (previous) only requires users to touch the home button (a la Apple's TouchID) rather than swipe over it, as is the case with the S5's sensor. Synaptics (NASDAQ:SYNA) should receive an ASP boost, provided it remains Samsung's fingerprint sensor supplier and not rival FPC.
    • Other features: Wireless charging support; a 16MP rear camera with optical image stabilization, improved software, and an F/1.9 aperture (good for low-light shots); a 5MP front camera that also has an F/1.9 aperture, 32/64/128GB storage tiers (up from 16/32/64GB); and far less bloatware - Samsung claims the S6 has 40% fewer software features than the S5.
    • Initial reactions are positive. "Samsung finally builds a premium smartphone," proclaims Ars Technica. The Verge calls the S6/S6 Edge "dramatically nicer and better phones than Samsung has ever produced." More than a few observers have spotted major design similarities with the iPhone 6 (NASDAQ:AAPL).
    • The phones go on sale on April 10. Samsung needs a hit: It's coming off a Q4 where its smartphone unit share fell to 20% from 28.8% a year earlier (per IDC) amid stiff competition from Apple and Chinese Android OEMs.
    | 72 Comments
  • 7:45 PM
    • NXP (NASDAQ:NXPI) is close to buying fellow microcontroller vendor Freescale (NYSE:FSL) for a slight premium to Freescale's current ($11.1B) market cap, two sources tell Reuters. The deal would be the biggest in the chip industry's 18-month-long consolidation wave, creating a company with a ~$32B valuation (~$40B after debt) and expected 2015 sales of $12.2B.
    • Two weeks ago, Freescale's shares jumper on reports it's exploring a sale; they've more than doubled from their October lows. In addition to making NXP a top player in the fragmented microcontroller market, acquiring Freescale would give NXP sizable network processor, analog/sensor IC, and RF power amplifier businesses.
    • Freescale's network processor and amplifier ops have strong 4G base station exposure, while its microcontroller business depends heavily on auto and industrial sales. The company has relatively little consumer hardware exposure.
    • Freescale currently trades for 17x 2015E EPS, and is expected by the Street to post 5% 2015 revenue growth. NXP trades for 15x 2015E EPS, and is expected to post 11% revenue growth. If recent deals are any sign, the companies will argue a merger can deliver major cost synergies.
    • Update: NXP and Freescale have officially announced the deal.
    | 1 Comment
  • 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.
    • ETFs: FXI, EWH, KWEB, PGJ, YINN, GXC, FXP, ASHR, HAO, TAO, YANG, CHIQ, CQQQ, CHIX, MCHI, QQQC, PEK, XPP, YAO, YXI, CHXF, ECNS, FCA, CHII, CN, CHIE, CHIM, EWHS, FCHI, ASHS, KFYP, CNXT, CHNA, KBA, FHK
    | 21 Comments
  • Saturday, February 28, 2015

  • 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"
    | 14 Comments
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