The streak is over!
Earnings - MV News
- Micron (MU) reported Q1 EPS of $0.09 vs $0.11 on revs of $1.36 bln vs $1.35 bln cons.
- Research in Motion (RIMM) reported Q3 EPS of $0.71 vs $0.65 cons on revs of $560.6 mln vs $549.2 mln cons. The company added 645k new subs in Q3.
- Red Hat (RHAT) reported Q3 EPS of $0.12 vs $0.09 cons on revs of $73.1 mln vs $71.2 mln cons. Gross margin was 84%. Operating cash flow was $54.1 mln. Billings were $88.8 mln.
Mini-Minyan Mailbag - John Succo - 2:59 PM
Are the institutional holders of General Motors (GM) (pensions and such) prone to bail at year-end, or will they just ride through the angst in the fading "blue chip"?
Thanks for making it a great year in the Ville.
Taxable accounts like mutual funds will do this; how much depending on the gains and losses they distribute. These accounts will sell for tax losses before their fiscal year ends, which can be from October to January.
Non-taxable accounts like pensions will not.
Position in GM
Flashback! - Bill Meehan - 2:11 PM
This day in market history...
- Closing levels this day 5 years ago found
- DJIA: 10487.29
- S&P 500: 1274.86
- Naz: 2340.12
- Crude: 26.06
- Gold: 441.20
This day in Minyanville history...
- Prof. Goepfert described the late December rally and subsequent seasonal drop in January in Ill-gotten Gains.
In other news...
- Happy 79th Birthday to Joe Paterno. With his best team in years, JoePa was named AP Coach of the Year yesterday.
Is there anything to the rumor on Jefferies (JEF) that Mother Merrill to buy them? - Phil Erlanger - 1:28 PM
We note that a rumor is going around that Merrill Lynch (MER) will bid for Jefferies Group (JEF). This actually makes a bunch of sense as the major brokers continue to swallow smaller brokers with unique skill sets. Shorts should be worried as our Erlanger Short Intensity is 100% with a short ratio of 17.71. We note option volume is 799, puts and calls traded, with call volume of 530. Average 20 day volume is 38. Also, the January Implied Volatility is up 22% to 33.21. Last, the slope of the puts and calls has dropped to 1.17 highlighting the bias to the call side. Another short squeeze in the making? Options data courtesy of www.orats.com.
Pop Quiz! - Todd Harrison - 11:51 AM
The game is getting interesting and interestinger, eh? With Hoofy knock, knock, knockin' on acne's door, Google (GOOG) decides to slip into Red Dye and plant seeds of a trap door in the bovine keppe. One stock does not a market make, we know, but this is living (and real-time) proof that risk is a two-sided equation.
While I honestly offered earlier that I don't have an uber-strong feel on the tick-to-tick shtick, the (potentially bearish) spread between volatility (VXO) and the S&P keeps flashing behind my eyes. That doesn't dictate direction, we know, but it's food for thought as we watch (what might be) the last gasp effort from the Matador Crowd.
As it stands, breadth remains buff (2:1) and our four feelers (BKX, XBD, RLX, S&P) are bumping up against resistance. With the VXO now a single digit midget, I'll ask critters of all shapes and sizes to keep their right paw, hoof and hand up.
As always, I hope this finds you well.
Ol' McDonald Had a Pharma - David Miller - 11:36 AM
Those who watch biotech for a living are abuzz at the action in Onyx (ONXX). It's been a fascinating battle between sellers and buyers. The consensus is the Nexavar label was better than expected and approval a few weeks ahead of time gives them that much of a jump on Pfizer's (PFE) Sutent.
The combination of a widely anticipated early approval, 13.67% of its float short (4.8M shares), and a transition between early-stage and late-stage biotech investors is making this stock whippy even by biotech standards.
Is there a play here? I'm probably not the best one to ask as this stock has confounded me for most of three years, but I have to think there are easier places to make money.
Recent COT data on bond futures is very very interesting... - Bennet Sedacca - 9:26 AM
The COT data just released shows the smart money 'commercials' long a record 113,525 Treasury bond contracts and large and small speculators and traders short roughly the same number. Can you say SHORT SQUEEZE? Also, this comes at a time when the Conference Board's Interest Rate Expectations Survey hovers at a record bearish position for bonds.
Incidentally, the data in the S& P 500 shows a similar story. Seems like the momentum boys and girls are all lined up for a rally in yields and stock prices while the big money guys are set up for a slowing economy and failing stock market (maybe not today or this week but over the intermediate term).
As it so happens, this jives well with our view, not meant to be advice of course. We continue to stick with our barbelled approach in our bond portfolios with short term Treasuries and ARM's and high-quality long term municipals.
Positions in ARM's, Treasuries and long-term municipals
Everybody ERTS, sometimes. - Jeff Macke - 9:22 AM
Electronic Arts (ERTS) seems to be shaking off the warning last night. The stock is down less than 2-bits, pre-market. I'm not playing in the games, at the moment, but it's hard to call the Erts call a "surprise" of any sort.
If Electronic Arts were a mafia family, as opposed to a video game maker taking longer-than-expected to create a mafia game, Ballmer and Gates would be at high risk for "whacking." Microsoft (MSFT) ruined Christmas for anyone involved in video games... A much more grave offense than, say, Moe Green refusing to let the Corleone's muscle him out of Vegas.
Speaking of vengeance, I'm going to be spending my morning finding the parents of whichever brat gave my daughter the germs which morphed into the debilitating, grim, chest cold I have today. Make your day a good one.
Say what? - Kevin Depew - 8:49 AM
A look at commentary, opinion and analysis from around the world:
- Mayor Bloomberg says the transit strike could cost New York $400 million per day. Writing in the Wall Street Journal, Carl Bialik says such figures are more art than science.
- Alan Murray says Google-mania is a wondrous thing to behold. "Google's 5,000 employees each bring in, on average, $4.4 million in pretax cash flow for the company. With the market currently valuing the stock at 52 times cash flow, that means each Google worker has a market value of a whopping $230 million," he writes. Nice work if you can get it.
- Apparently, the U.S. isn't the only place where corporate investment is lagging. The Korea Times worries about the "freeze" in corporate investment.
Captain's Log - John Succo - 8:43 AM
Captain Kirk sells 12 million General Motors (GM) shares.
What was he thinking? Maybe he wasn't.
But his latest action shows one possibility, a slight one (I may be grasping, but I am trying to make sense of his actions).
Maybe, just maybe, he was really buying the bonds of the company at $.80 on the dollar. Maybe he was buying the stock just to get influence and use this influence to force the company into bankruptcy.
I have said before, the sooner GM goes into bankruptcy, the better for bondholders. If done immediately, bondholders would almost certainly get all their money back plus interest. The longer this drags on, the more cash the company burns and the worse for bondholders. If he could force bankruptcy soon, he would make more money on his bond position than lose on his stock position going to zero.
Realizing that he could not force the company into bankruptcy soon enough, he punted some of his stock.
Just a possible theory. In a weird way if this is so, it actually decreases (or illustrates the real probabilities) of a bankruptcy any time soon.
Position in GM
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