Seeking Alpha
  • Friday, May 22, 2015

  • 7:22 PM
    • Amazon (NASDAQ:AMZN) is prepping Handmade, a marketplace for handcrafted goods that takes direct aim at market leader ETSY. The WSJ reports Etsy sellers have received invites offering a sneak peek at Handmade, and directing them to a questionnaire regarding which products they offer.
    • Amazon's huge customer base and fulfillment infrastructure could quickly make it a thorn in Etsy's side. At the same time, Etsy's cult following and large network effect of craft/vintage goods buyers and sellers arguably make it tough to dislodge. Also (as noted by the WSJ), Etsy's 3.5% cut and $0.20 listing fee might make it cheaper than Handmade - Amazon currently takes up to a 15% cut on marketplace sales.
    • Amazon is two months removed from launching a home services site that competes against Angie's List. The company has also recently launched a restaurant takeout/delivery service that competes against GrubHub.
    • ETSY -1.2% AH to $16.96. Shares plunged on Wednesday thanks to the company's Q1 numbers, briefly dipping below April's $16 IPO price.
    | 2 Comments
  • 4:20 PM
     
    • Stocks ended slightly lower in a dull, range-bound session, that saw the Dow post a slight loss for the full week while the S&P inched higher.
    • Stocks slipped toward the end of the session, after Janet Yellen said she still expected the Fed to raise interest rates sometime this year.
    • Industrials (-0.4%) lagged throughout, dragged down by transportation stocks as the Dow Jones Transports extended the week's decline to 2.3%; the move overshadowed Deere's 4.3% spike after beating bottom-line estimates.
    • Energy (-0.4%) also lagged, as Nymex crude oil fell 1.7% to $59.66/bbl.
    • Investor participation was the thinnest YTD, with just 604M shares changing hands at the NYSE floor.
    • Treasurys hit session lows after Yellen's remarks but returned to their intraday levels shortly thereafter; the yield on the 10-year note settled higher by 2 bps to 2.21%.
    | 1 Comment
  • 1:19 PM
    • CNBC's David Faber reports Microsoft (MSFT -0.7%) held "significant talks" earlier this spring about acquiring Salesforce (CRM +2.4%), but the companies "remained far apart on a price." Microsoft was reportedly willing to offer $55B for Salesforce (current market cap of $49.3B); Salesforce CEO Marc Benioff is said to have wanted as much as $70B.
    • Faber adds the talks aren't expected to restart anytime soon. Aside from the price difference, Satya Nadella was reportedly "somewhat reluctant to pull the trigger on a deal of such size and consequence for his company."
    • Bloomberg reported on May 5 Microsoft is "evaluating a bid" for the cloud CRM software giant - Microsoft's name had already loomed large in speculation about a rumored suitor. Reuters reported soon afterwards Microsoft wasn't currently weighing an offer.
    • Salesforce has spiked higher on the report. Shares are up 6.3% since the company posted an FQ1 beat and reported 31% Y/Y deferred revenue growth on Wednesday afternoon.
    | 35 Comments
  • 12:23 PM
    • Re/code, which was the first to report Apple (AAPL +0.8%) plans to launch a Web TV service, now reports Apple wants to include "widespread access" to local U.S. TV channels, a feature not provided by Dish and Sony's offerings.
    • Apple's efforts are said to have "complicated its negotiations with the broadcast TV networks, because most broadcasters don’t own all their local stations." Some execs also state broadcasters will have to invest in streaming infrastructure to support local feeds.
    • As a result, the service might not launch in early fall, the target date Apple has given programmers. However, TV execs think it will eventually launch, and that money (rather than technical issues) is the main hurdle. The WSJ reported earlier this week Apple hopes to unveil the service at WWDC next month ahead of a fall launch.
    • Separately, research firm Slice estimates (based on an analysis of online sales receipts) U.S. Apple Watch orders have generally been below 30K/day (implies a quarterly run rate of ~2.7M) following big early sales. Altogether, Slice thinks Apple sold nearly 2.5M Watches in the U.S. from April 10 (the day pre-orders started) through May 18.
    • KGI's Ming-Chi Kuo recently cut his 2015 Apple Watch shipment forecast to 15M (others have forecast 20M-30M), citing a lack of major changes to shipment times in spite of supply constraints. Kuo also estimated ~80% of Watch orders are for the larger 42mm models.
    | 25 Comments
  • 8:35 AM
     
    | 17 Comments
  • 7:21 AM
    | 2 Comments
  • 5:44 AM
    • China's stock market burst back to life this week, continuing a year-long rally in the world's second-largest economy as Beijing steps up monetary easing and money floods in from overseas due to the new trading link with Hong Kong.
    • The rally took a brief pause recently on worries it had gone too far and too fast, but it seems like the bulls have returned.
    • The Shanghai Composite advanced 2.8% today, taking gains to 8.9% this week while Shenzhen rose 1.1% to bring its rally to a 12.2% gain over the past five days.
    • ETFs: FXI, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, CHN, PEK, CHIQ, CQQQ, MCHI, TDF, QQQC, XPP, YAO, GCH, ASHS, YXI, CN, CHXF, FCA, CHNA, CNXT, CHII, CHIE, ECNS, EWHS, CHIM, KBA, KFYP, FCHI, JFC, FHK, AFTY
    | 8 Comments
  • 4:46 AM
    • The Ifo measure of German business confidence weakened for the first time in seven months in May, albeit only slightly, another sign that growth in Europe's largest economy is losing momentum.
    • The Ifo business climate index slipped to 108.5 from 108.6 in April, its first drop since October 2014, but still rested above forecasts for a 108.3 print.
    • Germany’s economy is still set to outperform that of the euro area, with unemployment at record lows, lower borrowing costs, and exporters gaining from the ECB's asset-purchase program.
    • DAX -0.1% to 11,853.
    • ETFs: EWG, BUND, EWGS, DBGR, GERJ, DXGE, BUNL, FGM, BUNT, GGOV, HEWG
    | 1 Comment
  • 1:52 AM
    • As widely expected, the Bank of Japan kept its massive ¥80T monetary stimulus program intact on Friday, and revised up its assessment of the economy, despite inflation still hovering around zero.
    • Data last week showed GDP grew an annualized 2.4% in the first three months of 2015, as consumption climbed for a third straight quarter and companies boosted spending for the first time in a year.
    • Nikkei +0.2% to 20,244.
    • ETFs: DXJ, EWJ, DFJ, DBJP, NKY, JOF, EZJ, JEQ, JPNL, DXJS, EWV, SCJ, HEWJ, JSC, ITF, JPP, QJPN, FJP, JPMV, DXJT, DXJR, DXJC, JHDG, DXJH, DXJF
    | 2 Comments
  • Thursday, May 21, 2015

  • 8:07 PM
    • Now up in As the Cable Turns: French billionaire and controlling shareholder of Altice (OTC:ATCEY) Patrick Drahi met in New York Wednesday with Time Warner Cable (NYSE:TWC) CEO Rob Marcus to talk about a cash-and-stock takeover, The Wall Street Journal is saying.
    • Meantime, with Charter (NASDAQ:CHTR) also in active talks about a takeover, TWC's price tag (at least informally) seems to be going up, well north of Charter's 2014 bid of $132.50/share and Comcast's bid of roughly $158.82.
    • TWC closed down 0.6% today at $165.52 and in later after-hours trading was down 5%, to $157.33.
    | 1 Comment
  • 6:04 PM
    • Giving some key hope to suitors for Time Warner Cable not named Comcast (NASDAQ:CMCSA), FCC Chairman Tom Wheeler placed individual calls to various cable execs -- including TWC's Rob Marcus and Charter's Tom Rutledge -- to say the agency's not against any and all deals just because it kiboshed Comcast's, The Wall Street Journal is reporting.
    • Wheeler reportedly wanted to clarify the FCC stance amid industry confusion about just how much consolidation it would support, and said that each potential deal would be judged on its merits.
    • Wheeler did express that he's like to see more competition from companies that traditionally haven't battled in the same geographies, and encouraged the prospect of cablecos "overbuilding" into each other's service areas, according to the WSJ.
    • With TWC looking like the key catch, its stock has risen 8.9% over the past month.
    • Consolidation prospects: TWC, CHTR, OTC:ATCEY, CVC, CTL, FTR, WIN, FRP, CBB
    | Comment!
  • 4:35 PM
    • Revenue came up short of expectations for Lions Gate Entertainment (NYSE:LGF), though it beat on profits and is up 0.8% after hours after posting its Q4 and full-year report.
    • The studio cut interest expenses and theatrical marketing costs to aid profitability. GAAP EPS of $0.14 was a non-GAAP $0.39 after adjustments including stock-based compensation. Adjusted EBITDA of $90.4M also was short of an expected $95.7M.
    • For the quarter, revenues were dinged by the flop of Johnny Depp's Mortdecai, which earned just $7.7M domestically off a $60M production budget.
    • Fewer films released affected film-group revenues. For the fiscal year, Motion Picture segment revenue was $1.82B (down 17%); of that, theatrical revenue was $354M (down 33%). Home entertainment revenue was $707.5M (down 18%). TV revenue in the motion picture segment was $270.2M (up 20%) as the previous year's bigger slate reached pay-TV windows (including The Hunger Games: Catching Fire and Divergent). International revenue was $495M.
    • LGF had a smaller slate of wide-release films in fiscal 2015, just 10 compared to the prior year's 13. It's planned 14 wide-release theatricals in the coming fiscal year.
    • TV production boosted the company's results in the fiscal year, with revenues rising 30% to $579.5M from a record 238 episodes and 168 hours of domestic TV series (including Orange is the New Black, Nashville, Mad Men, and Anger Management.)
    • Press release
    | Comment!
  • 4:20 PM
     
    • Stocks inched higher in another quiet session, but it was enough to push the S&P 500 to another record closing high and the Nasdaq to within two points of a record close.
    • With the earnings season largely complete, many investors are sitting tight as they await new catalysts, and trading volumes have dropped sharply this week ahead of the Memorial Day weekend.
    • The energy sector (+0.9%) finished ahead of other cyclical sectors as U.S. crude oil surged 3% to $60.72/bbl.
    • The consumer discretionary space (+0.4%) gained with help from retailers after Best Buy and Williams-Sonoma reported better than expected results.
    • Fewer than 700M shares changed hands today at the NYSE floor.
    • Treasurys rallied as disappointing economic data supported expectations that the Fed would be patient in raising interest rates, with the 10-year yield sliding by 6 bps to 2.19%.
    | 3 Comments
  • 4:09 PM
    • Hewlett-Packard (NYSE:HPQ): FQ2 EPS of $0.87 beats by $0.01.
    • Revenue of $25.45B (-6.8% Y/Y) misses by $180M.
    • Expects FQ3 EPS of $0.83-$0.87 vs. an $0.87 consensus.
    • Expects FY15 (ends Oct. '15) EPS of $3.53-$3.73 vs. a $3.64 consensus.
    • Shares +1.2% AH.
    • Press Release
    | 2 Comments
  • 2:37 PM
    • 9to5 Mac (has a good track record with Apple product scoops) reports Apple (AAPL +1.1%) is prepping Wi-Fi and Wi-Fi/4G 12" iPad models (codenamed J98 and J99), and also plans to give its tablet line support for dual-app (split-screen) viewing and multi-user login.
    • Dual-app viewing, a feature long supported by Samsung's Galaxy Note tablet/phone line, will reportedly be baked into iOS 9 and possibly shown off at WWDC (runs from June 8-12). The 12" iPads and multi-user login are expected to arrive later. The dual-app mode (useful for business multitasking) will reportedly include support for 1/2, 1/3, and 2/3 views, depending on the app.
    • Bloomberg reported in March Apple had delayed production of a 12.9" iPad (expected to be aimed at businesses and creative pros) to "around September" due to panel supply issues. Past rumors have stated Apple is thinking of including a stylus accessory and USB 3.0 ports; Apple just filed a patent application for a stylus whose input adjusts based on factors such as pressure and grip.
    • Apple is coming off an FQ2 in which iPad revenue fell 29% Y/Y to $5.4B, and units 23% to 12.6M. Tim Cook defended the business on Apple's earnings call, noting a large portion of iPad sales still go to first-time buyers.
    | 67 Comments
  • 11:10 AM
    • After pricing its 7.7M-share IPO at $17 (above an elevated range of $14-$16), Shopify (Pending:SHOP) opened at $28.00 and is currently at $25.90, up 52.4%.
    • Shopify, whose cloud-based software and related services help 160K+ businesses (largely SMBs) run their online and (more recently) offline storefronts, is valued at $1.9B, or a steep 18x 2014 sales. The company had 2014 revenue of $105M (+109% Y/Y), and a net loss of $22.1M. Q1 revenue totaled $37.3M (+98% Y/Y), and net loss $4.5M.
    • Prospectus, IPO analysis
    | 17 Comments
  • 10:29 AM
    • Two days after a Tsinghua Unigroup spokesman said the P-E firm is buying a 51% stake in HP's (HPQ +1.2%) H3C Technologies Chinese networking hardware unit, HP announces it's selling a 51% stake in H3C and its Chinese server, storage, and IT services ops for $2.3B. The deal values the combined company at $4.5B net of cash/debt - less than the $5.5B HP had reportedly valued H3C at.
    • HP asserts "the new H3C" will have $3.1B in annual sales, and possess "a market-leading portfolio that will be #1 in networking [in China] and a leader in servers, storage and technology services." The deal is expected to close by year's end.
    • HP, whose Chinese sales (like those of other U.S. IT giants) have been hurt by the NSA spying uproar, will maintain full ownership of its Chinese PC/printing, software, Wi-Fi hardware (Aruba Networks), cloud services, and enterprise services ops. The WSJ  refers to these businesses as "less politically sensitive," and reports HP will maintain the right to appoint H3C's chairman and CFO.
    • The announcement comes ahead of HP's FQ2 report, due after the close.
    | 6 Comments
  • 10:00 AM
     
    | 8 Comments
  • 9:14 AM
    • Comcast (NASDAQ:CMCSA) and Level 3 Communications (NYSE:LVLT) say they've reached a long-term data interconnection pact that expands on their existing agreements.
    • The deal will see the two expanding capacity to cover needed traffic between their networks, and not only as they exist today but allowing for any expansion during the term of the new deal.
    • The move may be a vote of confidence for the FCC's new net neutrality rules, as recent skirmishing over such interconnections may be giving way to more friendly negotiations. Level 3 also reached a new interconnection arrangement with AT&T recently, as did Verizon and Cogent.
    • Comcast is down 0.2% premarket; Level 3 up 0.3%.
    | Comment!
  • 8:30 AM
     
    • Initial Jobless Claims: +10K to 274K vs. 271K consensus, 264K prior (unrevised).
    • Continuing Claims 2.2M vs. 2.23M prior.
    | Comment!
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