24/7 Wall St.

Apple (AAPL) iTunes To Channel HBO

Apple (AAPL) appears to have picked up a deal to deliver HBO programming though iTunes according to Portfolio.

The new partnership will involve HBO, a unit of Time Warner (TWX) getting a better deal than other video content providers. The business magazine writes that "One possibility is that HBO programming will have a higher retail price than the flat $1.99 fee Apple currently charges for video content; another is that HBO will receive a larger cut of the same flat rate than other iTunes content providers receive."

Whether the new deal will sour relationships with other premium video content providers remains to be seen. There has been an ongoing fight between content providers and Apple, with content companies believing they should do better financially due to the money which Apple makes on it the iPod and iPhone,

Those battles are not likely to end.

Douglas A. McIntyre

Charter Slides On Earnings

Charter Communications Inc. (NASDAQ: CHTR) managed to post narrower losses for Q1 in 2008.  The highly in debt cable company posted a net loss of $358 million, or -$0.97 EPS.  This compares to last year's loss of $381 million, or -$1.04 EPS.  Revenues came in up over 10% at $1.564 billion pro forma basis and more than a 9% rise on an actual basis.  First Call had estimates pegged at -$0.75 EPS on $1.55 Billion in revenues.

Revenue gains were attributed mostly to increased telephone and high-speed internet revenues.  Here were some of the other internal metrics:

• Revenue generating units rose 7% from Q1 2007 with some 302,000 net adds.
• Video revenue generating units increased 90,900 and video average revenue per user rose over  6%.
• Digital video customers rose 102,800, while basic video customers fell by 11,900.
• Internet customers rose by 85,700.
• The decrease in the company's loss was attributed to 10.5% higher adjusted pro forma EBITDA of $545 million.
• Net cash flow from operations was $204 million, down from a pro forma number of $263 million in Q1 2007.

Interestingly enough, the net interest expense came in at $465 million for the quarter, and it had a derivative value change that grew to an expense of $37 million (from $1 million in Q1-2007).  If you deducted that derivative expense you could derive an implied raw pro forma earnings per share number of -$0.87 EPS.  As we just noted this weekend in our "10 Stocks Under $10" newsletter, Charter Communications' last seen short interest was more than 81.88 million shares (about 24 days of volume).

Right after the open, shares were up more than 1% at $1.205; after about 12 minutes of being open, Charter shares were down 5% at $1.14.

Jon Ogg
May 12, 2008

Nasdaq Short Interest: More Bets Against Sirius (SIRI) And Banks

The short interest in Sirius (SIRI) inflated by 30.9 million shares to 188.9 million. The figures compare April 30 to April 15 numbers. Investor are clearly willing to gamble against the company's merger with XM Satellite (XMSR).

Several banking stocks also say spikes in short interest. Shares sold short in Huntington (HBAN) moved higher by 9.6 million to 47.2 million. Shares short in E*Trade (ETFC) rose 9.2 million to 104.5 million. The short interest in Zions Bancorp (ZION) moved higher by 7.3 million to 23.2 million. Share short in Schwab (SCHW) moved up 6.9 million to 32.1 million. And, the short interest in Hudson City Bancorp (HCBK) was up 3.6 million to 27.2 million.

Other notable increases in short interest included share short in Oracle (ORCL) which rose 8.7 million to 51.4 million and Broadcom (BRCM) which had a move up of 8.2 million to 38.6 million.

Most technical and telecommunications stocks lost traders willing to bet against them. The short interest in Intel (INTC) fell 10.9 million shares to 44.9 million. Shares short in Microsft (MSFT) were off 10.6 million to 98.4 million. The short interest in Comcast (CMCSA) dropped 8.9 million to 60.7 million. Shares short in Cisco (CSCO) fell 5.9 million to 60 million. Short interest in Qualcomm (QCOM) dropped 5.7 million to 20.2 million.

Data from Nasdaq

Douglas A. McIntyre

Encana Splits the Company in Two (ECA, COP)

Encana Corporation (NYSE: ECA) has announced that it is splitting the company into two pieces.  The plan calls for the company to create an integrated oil company from both upstream and downstream assets, and a natural gas company. 

Shareholders will receive one share in each of the new companies in exchange for each share of Encana.  The natural gas company is expected to retain the Encana name and the combined dividends of the two companies will be set initially to $1.60 annually, equal to the company's current payout. Encana plans to complete the split by early 2009.

According to the press release, Encana is taking this action in order to "enhance long-term value for EnCana shareholders by creating two highly sustainable, independent entities, each with an ability to pursue and achieve greater success by employing operational strategies best suited to its unique assets and business plans." Last year Encana signed a deal with ConocoPhillips (NYSE:COP) jointly to develop some oilsands properties and to refine Encana's bitumen production in the United States. Separately, the company is expanding its oilsands processing capacity from 30,000 b/d to a planned 110,000 b/d by 2012.

In 2007, Encana sold off virtually all its non-North American assets. Its main assets now are 9 billion barrels of bitumen in the Alberta oil sands region, and about 19 TCF of natural gas, mostly coalbed methane. The company's current president and CEO will head the new natural gas company, and the current CFO will run the integrated oil company.

Encana's split recognizes reality. The company's natural gas assets in the U.S. promise to be a growing source of revenue as the price increases for coalbed methane in the Rocky Mountain region. This should be a real moneymaker going forward.

Encana is leaving its integrated oil company with about 2 TCF of natural gas to burn to create steam for the company's expanding in situ mining operations. That's smart because it will help insulate the new integrated oil company from natural gas price hikes or shortages. The problems with natural gas supplies and, especially, water are well known in the oil sands region.

All in all, this looks like a good move on Encana's part. And as we've suggested elsewhere, might be something big U.S. oil companies ought to be thinking about.  Encana shares are up over 5% pre-market at $90.75; its 52-week trading range was $55.13 to $87.69.

You can join our open email distribution list to hear about other break-ups, spin-offs, mergers, IPO's, secondary offerings, and other special situations.

Paul Ausick
May 12, 2008

Despite Recent Gains, IMAX Short on Earnings (IMAX, DWA)

IMAX Corporation (NASDAQ: IMAX) is one of the entertainment operations that has been trying to remedy its woes, and its shares at one point were up 100% and more from the 52-week low.  This morning the company issued earnings under estimates at -$0.25 EPS on a 12.3% drop in revenues to $23.5 Million.  First Call had estimates at -$0.14 EPS on revenues of $25.4 million; and the loss for Q1 2007 was only -$0.12 EPS.

IMAX also noted that the seasonally weak quarter faced difficult comparison because of last year's strong IMAX release of 300.  Below are some key metrics for last quarter and this quarter:

• The Spiderwick Chronicles opened on February 15 and grossed $6.8 million in IMAX theaters.
• Shine A Light, the Rolling Stones concert film opened April 4 and IMAX has grossed about $3.9 million to-date.
• The company noted that it was disappointed that Spiderwick and Shine a Light did not perform as well as it had hoped.
• On May 9, it grossed $1.9 million from 84 screens on the release weekend of Speed Racer.

A new announcement may mitigate the earnings discrepancy that has been seen this morning, although this is part of an ongoing award.  IMAX announced a deal with DreamWorks Animation (NYSE: DWA) to release Madagascar: Escape 2 Africa into IMAX theaters globally on November 7, 2008.

If you look through the numbers, the company's rising cost structure is probably more to blame on the earnings front than anything sinister on the entertainment side:

• SG&A expenses were $12.4 million in Q1, up from $10.3 million a year ago.
• R&D costs rose to $2.5 million in Q1. up from $1.5 million a year ago, largely related to investments in its switch from film to digital technology.
• Legal and professional fees (included SG&A) rose to $3.1 million in Q1 from $2.4 million a year ago.

With a last seen short interest of 2.25 million shares, or about 16-days volume, that may keep the selling from outweighing the buying after this stock opens.

Jon C. Ogg
May 12, 2008

JA Solar Earnings Overshadowed By $300M Offering (JASO)

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) came out with earnings this morning of $0.14 EPS vs. First Call estimates of $0.11 on a 234% rise in revenues to $160 million vs. estimates of $147.6 million.  The company is also reaffirming an equivalent revenue base of $1.03 to $1.14 Billion, which had previously been estimated at $990 million to $1.10 Billion.  First Call had estimates at $989.2 million. 

JA Solar also reaffirmed its Fiscal-2008 total production output of 340 MW minimum, and it sees a total annual production capacity at a minimum of 500 MW by the end 2008.

What is keeping a lid on the stock here is that the company is making offerings of $300 million in senior convertible notes due in 2013 and a borrowing and lending ADS agreements being borrowed by underwriters.  It is also entering into an ADS lending agreement, and an entry into capped call transactions.

In connection with hedging the capped call transactions, JA Solar expects to enter into various over the counter cash settled derivative transactions related to the ADS's after the pricing of the notes and to purchase ADS's in secondary market transactions shortly after the pricing of the notes.

Here is this week's full solar player earnings preview roster (JSAO, CSIQ, LDK, YGE).

Jon C. Ogg
May 12, 2008

Applied Materials Wins EU Solar Management Pact (AMAT)

Applied Materials, Inc. (NASDAQ: AMAT) has announced a contract award for its SunFab Performance Service™ program which would guarantee the performance cost and output of the Applied SunFab™ Thin Film Line.  This is for producing solar modules, enabling continuous cost reduction based on megawatt output. Applied signed a multi-year agreement to provide the SunFab Performance Service to T-Solar Global S.A. in Spain for the Applied SunFab Thin Film Line.

The SunFab Performance Service allows customers to quickly ramp production and to optimize the efficiency and productivity of their SunFab™ Line.  Using 5.7m2 glass panels, the SunFab Line can reduce the cost of utility-scale PV installs by more than 20%.

Applied will manage T-Solar’s SunFab Line performance with engineering, logistics, technology and automation software solutions; it will also provide improvement programs and factory optimization to enable low operating cost and on-going productivity gains.

The line is expected to have a nominal rated capacity of 40 megawatts per year when fully operational.  Financial terms have not been disclosed.

Jon C. Ogg
May 12, 2008

Top 10 Pre-Market Analyst Calls (AIG, BBW, CPST, LNG, CMC, DLTR, IMCL, PSUN, TDSC, TAL)

These are ten of the top analyst calls we are seeing this Monday morning:

• American International Group (NYSE: AIG) Cut to Neutral from Buy at Goldman Sachs.
• Build-A-Bear Workshop (NYSE: BBW) Cut to Neutral from Outperform at Credit Suisse.
• Capstone Turbine (NASDAQ: CPST) Started as Buy at Merriman Curhan Ford.
• Cheniere Energy (AMEX: LNG) Cut to Hold from Buy at Citigroup.
• Commercial Metals (NYSE: CMC) Started as Buy at UBS.
• Dollar Tree (NASDAQ: DLTR) Raised to Neutral from Underweight at JP Morgan.
• ImClone Systems (NASDAQ: IMCL) Cut to Underweight at Morgan Stanley.
• Pacific Sunwear (NASDAQ: PSUN) Cut to Sell from Buy at Citigroup.
• 3D Systems (NASDAQ: TDSC) Raised to Neutral from Sell at Piper Jaffray.
• TAL International (NYSE: TAL) Cut to Neutral from Outperform at Credit Suisse; but Raised to Outperform from Neutral at Baird.

Jon C. Ogg
May 12, 2008

Sprint (S) Shows Its Weaknesses (GOOG)(CMCSA)(INTC)

Sprint (S) may be building the nation's biggest broadband wireless network, but its core business is still in trouble. Is the company becoming so weak that its partner ship with Intel (INTC),  Comcast (CMCSA), and Google (GOOG) will get into trouble?

Revenue for the quarter were $9.3 billion, an 8% decline compared to $10.1 billion reported in the first quarter of 2007. Reported diluted loss per share was 18 cents compared to a 7 cent loss in the year-ago period.

Customers continue to walk away from the company. For the quarter, total wireless subscribers declined by 1.09 million due to losses of 1.07 million post-paid subscribers and 543,000 traditional prepaid users.Sprint had 52.8 million total subscribers at the end of the period, compared to 53.6 million at the end of the first quarter of 2007.

The company's subscriber churn rate and revenue-per-customer both fell.

Wall St. has to ask whether there will be anything left of the company when it is time to start creating the new WiMax infrastructure.

Douglas A. McIntyre

Apple (AAPL): The iPhone Goes To Asia

The Apple (AAPL) iPhone will soon be available in Asia. That will not include the pearl of all handset markets, China. but it does pick up potential sales elsewhere. According to Reuters, SingTel, Singapore's big phone company, and some of its partners will bring the iPhone to "Singapore, India, Australia and the Philippines later this year."

For Apple, the news could hardly be better. The iPhone sells well in the US and Europe but has not been available in the large markets in Asia like its competition, especially smartphones from Nokia (NOK) and Samsung. "Unlocked" iPhones do sell in that part of the universe, but Apple makes less on them than phones sold through cellular companies.

The ability to get the iPhone into all of the world's largest wireless markets becomes more important as each quarter passes. Sales of the iPod, which drove Apple back to being a consummate success in the tech world, are now slowing. The Mac may have some sales limitations as it moves from consumers sales to the business market. IT departments do not want to support both PCs and the Apple products.

All of that makes the iPhone the key to Apple's earnings growth two or three years out. Being in Asia helps.

Douglas A. McIntyre

RIM (RIMM) Tries To Keep A Market It Is Losing (AAPL)

Research In Motion (RIMM) has come out with a new version of its Blackberry called Bold. It incorporates many of the multimedia functions of the Apple (AAPL) iPhone. To trump the Steve Jobs product, it operates on 3G networks accessing faster wireless broadband. This will be a selling benefit in the US and in places like Europe where 3G is widely deployed.

Apple will not be far behind RIM in the 3G department. Its new iPhone will have the capability of working on these speedy airwaves. The most significant new features of the RIM Bold are its easier web access and its ability to download music and video. These are just the things that the prototypical Blackberry user does not want. It may increase the price of the product, but e-mail is at the core of the device's appeal and piling on features which are of use to people in their twenties does not bring much to the table.

RIM will be assaulted by the new Apple 3G iPhone. It already has multimedia capacity and will add 3G. E-mail will work better on the faster network so the iPhone's appeal to the general business user should go up.

The Blackberry is for e-mail. Making it more feature rich is a way to make it harder to use. For RIMM, that is a big mistake.

Douglas A. McIntyre

China: When Affording Food Gets Difficult

Inflation is still running like a brush fire inside China. Prices moved up 8.5% in April compared with the same month a year ago. The its a pittance compared to the rise in food costs, up 22.1% last month.

The central government also reported that exports are not growing. The slowdown in the West has finally ending the party in China.

The world's most populated nation is a microcosm, albeit a huge one, of the trouble about it hit other large economies. Food prices are being driven by high agricultural product prices while global trade is being battered by flat of falling GDP in some of the largest nations.

China actually has it better than many countries. Its government still underwrites the price of fuel. That is a luxury not found elsewhere.

The world food situation is, for the time being, hopeless. Production from countries like the US is being compromised by the need to create alternative fuels. In the third world, farmers being driven off of their land by political turmoil which has turned to civil war. At the same time, the world's malnourished population is spiking up sharply.

Inflation has become the great enemy of economic growth in China, trumping a slowdown in GDP. Prosperity among the new middle classes in the country has been pumped up by rising pay checks. Now, that income is being undercut by the cost of food staples. In the US, a similar process is taking place, but the main culprit, at least for now, is the cost of fuel.

Somewhere is the future, the lines cross. China cannot underwrite fuel costs forever. Food inflation will be joined by gas and diesel price inflation. In the US, while the huge engine of agriculture has muted increases in many items at the grocery store, demand for farm commodities overseas and ethanol production here will drag food prices up at a rate which could easily reach double digits.

There is a word for rising prices and falling GDP, but it has not been used much in the last thirty years.

Douglas A. McIntyre

AIG (AIG) And ILFC: Another Case For Financial Conglomerate Break-Ups

International Lease Finance Corp (ILFC), the big aircraft lending business owned by AIG (AIG) is being pulled down by the financial woes of its parent. It makes money, which AIG does not. Its business is growing rapidly. Now, a potential drop in AIG's credit rating could make ILFC's cost of borrowing money higher.

The Wall Street Journal reports that "AIG's problems could make it more difficult for ILFC to compete in the increasingly crowded airplane-leasing industry."

It is getting to be an old saw in the financial community. Good businesses are trapped inside their faltering parents. Their value is hidden and their ability to do business is often compromised by lack of faith in the companies that own them.

ILFC is a perfect example of a operation which is better spun-out than it is kept in. A share in an independent ILFC is undoubtedly very valuable. If AIG's problems worsen, its stock price could continue to sell of sharply. AIG's share price is down 30% so far this year.

The trouble at AIG is a fine example of what boards at big banks and brokerage companies do not want to admit. They do great damage to their stockholders by keeping together conglomerates which were formed one or two decades ago. Putting them together was probably a bad idea then and it is a worse one now.

It is nearly impossible to see why the Smith Barney unit of Citigroup (C) is helped by being attached to alternative investments or hedge fund operations which are volatile and, is some cases, dangerous drags on earnings. The Merrill Lynch brokerage network does not benefit one wit from being married to an investment bank which cannot get M&A work during a downturn in the deal economy.

AIG shareholders are being ill-served by its board of directors and that is on top of poor fiduciary activity over that last few years.

Douglas A. McIntyre

NYSE Short Invest Shows Split Bets On Financial Shares (BAC)(C)(ABK)(WB)(WM)(CFC)(F)(S)(T)(CC)

Not all financial shares are created equal, at least no according to short bets made on NYSE companies for the period ending. April 30 compared to numbers on April 15.

Short interest in Washington Mutual (WM) dropped 11 million shares to 184.3 million. Short interest in Citicorrp (C) fell 10.4 million to 109.4 million. Short interest in Countrywide (CFC) fell 22.5 million to 76.4 million. In the case of these companies, each has either raised money or is being bought out.

Short interest in several financial firms took a big jump. Wachovia (WB) was up 14.8 million to 117.4 million. Short interest in National City (NCC) rose 40.4 million to 100.3 million. Short interest in Fannie Mae (FNM) rose 12.8 million shares to 85.4 million.Share short in Wells Fargo (WFC) rose 12.3 million to 122.5 million. Shares sold short in Ambac (ABK) moved up 16.8 million to 48.1 million.

Other large increases in shares sold short  included Ford (F) where short interest rose 11.3 million to 293.1 million. Sprint (S) increased 16.6 million to 92.3 million.

Short interest in some large companies dropeed sharply. Shares short in in AT&T (T) fell 15.3 million to 38 milion and shares sold short iin Citicut City (CC) fell 8.5 million to 27.4 million.

Data from NYSE

Douglas A. McIntyre

Media Digest 5/12/2008 Reuters, WSJ, NYTimes, FT, Barron's

According to Reuters, Cablevision (CVC) is close to buy newspaper Newsday

Reuters writes that RIM (RIM) is releasing its Blackberry Bold, aimed at keeping its lead in the business market.

Reuters writes that April retail sales were flat with a year ago.

Reuters writes that SingTel will bring the Apple (AAPL) iPhone to Asia this year.

The Wall Street Journal writes that AIG's (AIG) aircraft leasing business is thinking about breaking away from the parent.

The Wall Street Journal writes that new nuclear plants will cost much more than previously expected.

The Wall Street Journal writes that inflation in China was near a decade-high.

The Wall Street Journal writes that some hedge funds with huge losses are coming back to investors with new ideas.

The Wall Street Journal reports that Facebook raised $100 million in debt financing.

The Wall Street Journal writes that American Axle and the UAW have both hardened their positions in a labor dispute.

The New York Times writes tha six million prime time viewers disappeared this year, but are still watching video on a different time table.

The FT writes that Morgan Stanley (MS) has put together a $4 billion fund to invest in Asia.

The FT writest that Canadian oil firm Encana will break into two pieces.

The FT reports that banks are starting to find buyers for mortgage securities.

Bloomberg reports that Citigroup (C) is leading Wall St. among banks punishing investors in auction rate securities.

Douglas A. McIntyre

Asia Market 5/12/2008 (DCM)

Markets in Asia were mixed with Hong Kong closed for a holiday.

The Nikkei rose .6% to 13,743. KDDI rose 2.3% to 665000. Docomo (DCM) fell 1.8% to 152000.

The Shanghai Composite moved up .4% to 3,627.

Data from Reuters

Douglas A. McIntyre

A Requiem For Ethanol (ADM)(AVR)(VSE)

Very few people drive down the miles-long highways and dirt roads in the middle of the country to see combines cut grain and fertilizer trucks spread chemicals. The picture is not monochromatic, at least not up close.

The expense of commercial fertilizers is so high that growing pastures for feed cattle is no longer viable. Processed human waste in pellet form is one of the few remaining methods for improving field production for crops which do not bring high prices. An entire segment of the agricultural industry is being forced to it knees.

At the same moment, farmers of corn, wheat, rice, and soybeans cannot plant enough crops to keep up with demand. The price of fertilizer matters much less to them.

New data from The U.S. Agriculture Department show a drop in total acres devoted to corn added to demand for ethanol production will keep prices for the commodity high through 2009. Corn now has to compete with other crops for yield-per-acre.

According to The Wall Street Journal "the U.S. ethanol industry is projected to use a record four billion bushels of corn, or one-third of the harvest that U.S. farmers are expected to collect this autumn." The federal government has provided a number of incentives to keep the ethanol industry in business. The desire to replace oil demand is a powerful, but perhaps lost cause. At. least for ethanol.

Wall St. is already creating the beginning of the end for ethanol stocks. Shares in Aventine Renewable Energy (AVR) are down to $4 from a 52-week high of nearly $20. Verasun (VSE) is off to $6 from a 52-week high of over $18  Of course, larger companies like ADM (ADM) have a small part of their business devoted to ethanol production, so small that the impact to the value their shares has been largely insulated.

As the choice with commodities like corn moves to one of food versus fuel and commodities prices versus the price of gasoline, ethanol companies are bound to lose.

Every once in awhile a promising industry grows up and then disappears, both in the matter of a few short years. The ethanol business is one of them

Douglas A. McIntyre

Is Financial Recovery A Mirage?

There is a new feeling suffusing the financial markets that the worst of the credit crisis is over. The Fed has done most of its work. US citizens are about to get their tax rebates. Large financial companies like Citigroup (C), Merrill Lynch (MER), and Lehman (LEH) have raised enough money to keep their heads above water.

All of that may not be as likely as it seems. Goldman Sachs has put the damage of the current housing and credit crisis at $500 billion, which means that the profuse bleeding in the system has not been stanched.

According to Reuters "Goldman Sachs economists expect a total of $500 billion in residential mortgage credit losses, a renewed slowdown in economic activity after the near-term boost from fiscal stimulus, and no monetary policy tightening in 2008 or 2009, according to a research note from the firm."

It is a pessimist's case which is deeply disturbing. But, it has begun to show in share prices, if the market is, indeed, wise.

Looking back over the last six months, the stocks of Citigroup and Lehman were both off 50% from November to March. Those deficits had closed to only 20% two weeks ago. But, they have now both slipped to being off 30% since November, a sharp move down in such a few days.

The bull case for financial stocks is that the Fed and investments from sources like sovereign funds have saved them. The bear case is that the fundamental troubles with mortgages and consumer spending are a deep undertow which will surreptitiously begin to drag them out to sea.

The housing and mortgage crisis is getting worse and that trumps all other cases.

Douglas A. McIntyre

China Creates Competition For Airbus And Boeing

Neither Airbus nor Boeing (BA) seem to be able to get their newest airplanes to customers on time. The Airbus super-jumbo A380 has frustrated the company's customers for the better part of two years. The plane may be big and efficient, but if it never makes it into service, what difference does it make?

Boeing (BA) has suffered repeated sefl-inflicted humiliation at it continues to push back the final delivery date of the 787 Dreamliner. The chance of a large strike at the company could make the problems worse and Boeing's earnings are not immune from the tardiness. Several large airlines are also asking for compensation because they won't have their Dreamliners on contracted delivery dates.

China may end up capitalizing on all of this and begin to push the two international airplane companies out of it market, which will becomes the world's largest. According to Reuters, "Europe's Airbus has forecast that China's domestic market will increase fivefold by 2026."

The central goverment in the world's most populated country has now set up its own firm to build and market large commercial planes. China Commercial Aircraft Co has been established to make aircraft with 150 seats and more.

China will not be able to get larger jets into production anytime soon. But, if it can have deliveries scheduled within the next decade it could significantly vex the efforts of Boeing and Airbus in the country. If the new Chinese company can deliver just one plane on time, it will have a big head start.

Douglas A. McIntyre

Breaking Up Exxon Mobil (XOM) To Create Value

Oil companies are not typically the stuff of break-up actions. What would be the purpose of knocking Exxon Mobil (XOM) or Conoco (COP) into two pieces?

Some of the answer to that comes from Canada. Encana, one of the largest oil and gas companies in the world, will cut itself in two. One new company will run the oils sands business of Encana. Another will handle natural gas.

A look at Exxon's "upstream" operations, which handle exploration and production shows that those businesses are growing quickly, especially outside the US. Earnings at the overseas "upstream" divisions  at Exxon were  $7.2 billion in the first quarter of this year compared to $4.9 billion in the period a year ago. The US earnings also grew from $1.2 billion to $1.6 billion.

"Downstream" operations at Exxon, which include refining and distribution, have done more poorly recently. The businesses had decreases in net income in the first quarter. The earnings drop in the US part of this company was more than 50% from $839 million last year to $398 in the most recent period. The refining industry has more and more obstacles as it get less margin out of the products it yields.

Exxon's chemicals operations have also encountered rough going. Earnings in the US and overseas both dropped by double digits.

The "upstream" businesses at Exxon clearly carry a higher valuation than the balance of its operations. There is a lesson in Encana's move.

Exxon may be worth more in three pieces than it is a single conglomerate.

Douglas A. McIntyre

Solar Earnings On Deck (JASO, LDK, CSIQ, YGE)

This week is an extremely important week for solar stocks and alternative energy stocks. JA Solar Holdings Co. Ltd. (NASDAQ: JASO), LDK Solar Co.Ltd. (NYSE: LDK), Canadian Solar Inc. (NASDAQ: CSIQ), and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) are all up on the earnings deck this week.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is the first of the solar companies to watch.  Monday's estimates from First Call are $0.10 EPS on $146.6 million in revenues.  The next quarter estimates are $0.15 EPS and $179.9 million, while fiscal Dec-2008 are $0.85 EPS on $984.4 million.  JA Solar is Chinese and it is thought of by many as one of the cheapest cost producers with some of the closest and firmest supplies of silicon to make solar pv cells.  This has been a monster performer since coming public early last year and many consider it one of the cheapest of the solar stocks.

LDK Solar Co.Ltd. (NYSE: LDK) is also set to report earnings Monday, and this has been one of the more controversial names in solar power for traders.  It is still down more than 50% from its highs, and is now up almost 100% from its lows since right before we covered this one securing silicon contracts and having its orders fully booked up.  We already gave guidance for its targets but the estimates for this quarter are $0.39 EPS on $217.29 million in revenues.

On Tuesday, we'll see earnings out of Canadian Solar Inc. (NASDAQ: CSIQ).  This solar player's estimates from First Call are $0.31 EPS on $151.88 million in revenues.  Next quarter estimates are $0.34 EPS on $167.6 million in revenues, and the fiscal  Dec-2008 estimates are $1.60 EPS on $730.7 million in revenues.  This one is up huge by some 400% or more since its September 2007 lows.

On Thursday morning, we'll see earnings out of Yingli Green Energy Holding Co. Ltd. (NYSE: YGE).  First Call has estimates pegged at $1.33 EPS on $1.47 Billion.  Estimates for next quarter are $1.38 EPS on $1.5 Billion in revenues and fiscal Dec-2008 estimates are $6.54 EPS on $6.84 Billion in revenues.

As a reminder, many estimates will have changed by the time the Tuesday and Thursday report gets here.  Also, with the performance that has been seen in these names you have to understand that for any real rally to be sustained based upon the actual earnings report that these have to "beat earnings targets and raise guidance."  Those that don't beat will likely either see profit taking or just outright short selling.

• Citi recently gave mixed coverage to other solar stocks.
• We recently highlighted the new solar ETF.

Jon C. Ogg
May 11, 2008

Sprint's Up... Earnings, Merger, or Deals To Dominate (S, CLWR, DT)

Sprint Nextel Corp. (NYSE: S) is set to report earnings on Monday morning, with an earnings conference call to follow at 8:00 AM EST.  First Call has estimates at $0.02 EPS on $9.41 Billion in revenues.  Estimates for the coming quarter are $0.04 EPS on $9.25 Billion in revenues, and estimates for Fiscal Dec-2008 are $0.12 EPS on $36.67 Billion in revenues.

The only real question besides wondering if the company's earnings report now even matters at all is if the bar has been set so low that it can't be stepped over.

We are in the camp that the earnings are going to be awful and largely irrelevant.  There have been persistent rumors that Deutsche Telekom (NYSE: DT) is going to spring for the flailing telecom giant.  We already saw teh WiMAX deal for 2009 and beyond get announced with Clearwire (NASDAQ: CLWR) and every other technology giant.  And we know that there is interest from current and past leaders of the company in perhaps taking it private.

The good news is that this stock has finally busted out of that long-term downtrend on the chart.  That doesn't mean it will do a V-reverse, but it means the worst has been seen.  Shares were over $20 a year ago, and shares have gone as low as $5.48.  Now at $9.38 on Friday, you have to wonder if a higher bid will come much higher since this has now risen some 70% from the lows.

Sprint could easily be trading at $11.00 or higher, and just as easily it could be back down to $8.00.  The only thing you can hope for on the earnings front itself is that the news could be less horrible than fears.  Otherwise it will take more buyout talk or more deal making to add substantial value.

Jon C. Ogg
May 11, 2008

China Gets Venezuela Oil Deal, Benefits US

The US has plenty of problems with Venezuela's mentally troubled dictator Hugo Chavez. The most recent confrontation has been over Chavez financing guerrillas in neighboring Columbia.

While the two nations throw bricks at one another, China has slipped in a side door and cut a huge refinery deal with the Latin American country. Under the terms about 400,000 barrels a day will be produced in Venezuela's Orinoco Belt. The new refinery there will be built by the Chinese.

According to Bloomberg "The venture between Petroleos de Venezuela SA and China National Petroleum Corp. will pump oil from an area called Junin 4."

At first pass, the deal might seem bad for the US, but the opposite may be true. If Venezuela and China can bring new supply and refinery facilities online, it cuts supply which the most populated country in the world would have to get somewhere else. That may serve to take some upward price pressure off of oil prices over time.

It is the first favor Venezuela has done the US since Chavez was elected.

Douglas A. McIntyre

News Corp (NWS) Walks On "Newsday" Bid, Cablevision (CVC) Shareholders Likely To Get Fleeced

Rupert Murdoch of News Corp (NWS) pulled his $580 million bid for large Long Island paper "Newsday" currently owned by The Tribune Company.

Cablevision (CVC), which has a large portion of its subscriber base on Long Island, has bid $650 million

The turn of events is extremely odd. Murdoch could have saved tens of million of dollars each year by combining key functions at "Newsday" with his NYC daily "The New York Post". The deal would have made both papers much more profitable.

Cablevision gains no ready economies of scale by combining a cable system with a newspaper. The company's bid is much too high and stands to yield very little benefit for the firm.

Cablevision's shareholder are likely to knock the stock down and, if the deal goes through, shares could stay down for a long time.

Wal-Mart Earnings To Show Recession's Best Friend (WMT, TGT)

Wal-Mart Stores Inc. (NYSE: WMT) is set to report earnings this coming Tuesday morning before the open.  The company already gave an approximate revenues number of $94 Billion.  As you will see below, Wall Street is under what the company already gave for guidance, and it looks like even the highest estimate is right under $93.7 Billion. 

The retail behemoth's estimates from First Call are $0.75 EPS on $92.44 Billion in revenues.  Estimates for next quarter are $0.81 EPS on $99.7 Billion in revenues, and Fiscal Jan-2009 estimates are $3.44 EPS on $405.27 Billion in revenues.  Wal-Mart already gave its same store sales at +3.2% in April, and it forecast same store sales for May on an ex-fuel basis to come in at 0% to 2%.

Target Corp. (NYSE: TGT) will report earnings the following week.  But last week, the April retail numbers showed a +3.1% reading for same store sales during the month of April.  That was slightly under its planned range.  Target also gave a tepid May forecast with sales projected to be in a range of -1% to +1%.

So why do we compare Wal-Mart to Target?  Target was the real thorn in Wal-Mart's side from 2002 to 2007.  But the economic environment is working in Wal-Mart's favor.  As consumers face the pinch from tighter finances, higher fuel costs, and higher food costs, all of a sudden it's Wal-Mart's advantage.  That won't last forever, but that's how it stands now.

Wal-Mart managed to close marginally up with a $0.02 gain to $57.18 on Friday.  It looks like only 6 other components of the Dow Jones Industrial Average closed up Friday.  Wal-Mart is less than $2.00 from its year highs, and are 35% higher than the 52-week low of $42.09.  The stock is also up almost 21% since the close of 2007.  Analysts have an average price target of about $59.00, so Wall Street is going to have to raise forecasts and estimates or we'll start hearing about how the stock is almost "fully valued" and the like. 

If those First Call estimates were updated properly, Wall Street is artificially low compared to the revenue projections for this quarter that the company just gave on Thursday.

Jon C. Ogg
May 10, 2008

Sirius & XM Investors Hunker Down For Earnings (SIRI, XMSR)

Monday may be quite an interesting day for satellite radio investors.  Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) will both report earnings.  While everyone will be breaking down the subscriber additions and the marketing costs, you know everyone wants to know what the companies each think is going on inside the FCC merger approval process. 

Sirius Satellite Radio Inc. (NASDAQ: SIRI) will have its results on Monday after the close, with a conference call to follow at 4:30 PM EST.  First Call has estimates at -$0.07 EPS on $272.3 million in revenues.  For the coming quarter estimates are -$0.08 EPS on $289.1 million in revenues, and for Fiscal Dec-2008 estimates are -$0.30 EPS on $1.17 Billion in revenues.  With a $2.73 close on Friday, shares are about 15% off of the 52-week low of $2.36.

XM Satellite Radio (NASDAQ: XMSR) is reporting earnings Monday morning, and its conference call will be at 10:00 AM EST.  First Call has estimates at -$0.39 EPS on $313 million in revenues.  Estimates for the following quarter are -$0.43 EPS on $324.2 million in revenues, and for Fiscal Dec-2008 the estimates are -$1.70 EPS on $1.34 Billion in revenues.  With a 4% drop on Friday and a close of $11.80, shares are still up 22% from the 52-week low of $9.62.

With a proposed ratio of 4.6 shares of Sirius per XM share, that would merit a full merger value today of $12.55.  This means that there is currently only a 6.4% merger-arb spread at today's prices.

While the companies may continue on their comments about the merger, it will be perhaps more interesting to get the body language on the company operations to see if there is any underlying body language showing that either company gives its standalone presentation. Both have noted they would be light on guidance until after they get merger approval.

• Rep. Gene Green gave us direct reasons why he's leading the charge against the merger.
• Here was some parts of what states attorneys general sent in regarding the merger.
• The DOJ has already approved the merger.
• Goldman Sachs panned Sirius regardless of the merger.

You can join our open email distribution list to keep up with mergers, IPO's, spin-offs, and other special situations.

Jon C. Ogg
May 10, 2008

Jon Ogg is a producer and editor of the "10 Stocks Under $10" weekly newsletter; he does not own securities in the companies he covers.

FedEx Can't Stand $126 Oil (FDX, UPS)

FedEx Corporation (NYSE: FDX) came out after the close.  Apparently $126 oil is a killer, like no one knew that.  When it gave its last earnings warning it was based on fuel not rising too much more.  Guess what.

The company took its prior forecast of $1.60 to $1.80 EPS down to a new $1.45 to $1.50 EPS range. Shares closed down 3% in regular trading, and they are down another 3% at $87.26 in after-hours. 

Big Brown, or United Parcel Service Inc. (NYSE: UPS) fell almost 2% in after-hours to $69.03 on the FedEx news.

Now you know why airline stocks have been stinking the trading floors up, like you didn't already.  It looks like this may bring about another downward push in those trucking stocks now too.

Consumers do not want to have to eat any more fuel surcharges.  Shareholders will want those fuel surcharges to be passed down.

Jon C. Ogg
May 9, 2008

Will 3G & TV Drive iPhone Demand Even More? (AAPL)

The rumors of launch dates for the new Apple (NASDAQ: AAPL) version of the 3G iPhone are still rampant.  Some target mid-June and some comment on early-June.  Apple's Worldwide Developers Conference is June 9 to June 13. 

Now if they'd just keep these in stock.  I have called several stores close by and they are either out of stock entirely or they have only the 8GB iPhone.  Even then, one store said it is only available for existing customers of AT&T Wireless.  That will keep people from being able to buy and then unlock them for another carrier. 

This low stock has been fueling more and more rumors and stories about the release date of the new 3G iPhone.  If Apple wants to see all the hot iPhone sales go into this quarter, it better get these new iPhones out or it better hurry up and get a bunch of new ones in stock to where they can sell the phones.  Otherwise it may have to tell shareholders iSorry.  We gave the scenario earlier for a $200.00 Apple stock.

Late yesterday a company called Orb announced it could now allow you to watch live TV on your iPhones for free, provided you have a TV card or adapter for your computer.  Maybe Apple can make people watch TV on the little screens, but that's been a tough ride for everyone else. 

Apple shares are down 1% at $83.10 shortly before the close today, after seeing price north of $185.00 on and off this week.

Jon C. Ogg
May 9, 2008

52-Week Low Club (LNG, CCE, GEOY, HANS, IPAS, KNOT, TDSC, VLO)

Cheniere Energy, Inc. (AMEX: LNG) can thank its earnings or lack thereof today for its implosion.  Shares were down well over 20% at last look around $5.78, while its 52-week trading range was $6.46 to $43.50.

Coca-Cola Enterprises Inc. (NYSE: CCE) was down less than 1% at $21.48 in the last hour; prior 52-week range was $21.55 to $27.09. Who would have guessed that bottling Coke and other drinks would result in this. 

GeoEye, Inc. (NASDAQ: GEOY) suffering from geospatial imaging sector woes.  While this was well above the 52-week lows, it has been more volatile than plastique in a lightning storm, and shares went as low as $16.05 today; Prior range $17.00 to $37.37.

Hansen Natural Corp. (NASDAQ: HANS) shares fell another 5% to $28.50 in the last hour but shares were as low as $28.20.  This one is making the list more than just once now.  The short sellers that bet against this one probably feel like they are monsters in their own right.

iPass Inc. (NASDAQ: IPAS) fell sharply after earnings and subsequent downgrades.  Shares were down 16% at $2.15 in teh last hour; prior 52-week range was $2.43 to $5.69.  Selling wi-fi spots probably is going to be tough once WiMAX does really hit the U.S.  Looks like the only thing people are passing at iPass is gas.

The Knot Inc. (NASDAQ: KNOT) was down almost 15% at $9.93 last in the day after posting a 65% drop in earnings.  Maybe bridezillas are not doing research anymore or maybe they are just using wedding planners.  Either way, you know when times are tough people don't go as extravagant on weddings.  Presumable that ad spending might be down too.

3D Systems Corp. (NASDAQ: TDSC) won "the daily fugly" award after its earnings report.  In the last hour shares were down almost 40% at $8.67; prior 52-week trading range was $11.51 to $26.50.   3-D is tough to explain to blind people.

Valero Energy Corp. (NYSE: VLO) seems counterintuitive with screaming oil prices, but its power costs and energy demands are costing more and more and it can't pass the costs along.  Shares were at $44.70 at the end of the day and the prior 52-week trading range was $44.94 to $78.68.

Jon C. Ogg
May 9, 2008

Storage Trusts Follow Public Storage Down, Despite U-Store-It Rising (PSA, YSI, EXR, SSS)

Public Storage (NYSE: PSA) is seeing some pressure this morning after earnings.  Interestingly enough, its smaller counterpart U-Store-It Trust (NYSE: YSI) rose a sharp 3.5% to $11.99 after its earnings.

As u-Store-It was already closer to lows, had seen more selling, is only a $693 million stock market cap, and is generally far less representative of the entire extra-storage space property sector... the sector is following the lead of Public Storage.

Public Storage posted funds from operations excluding items and excluding currency of $1.16, while estimates were $1.24.  The company attributed a shortfall compared to estimates as being due to higher than expected domestic expenses.  The company also showed a decrease in per square foot occupancy from 90.1% in Q1 2007 to 89.5%, although that was offset by a 3.8% increase in rent to $13.82 per annual square foot.

After looking over the books, the company is actually in great shape financially and it should have more than enough to keep repurchasing shares and to keep paying out its dividends.  The bad news is that it is no longer believed to be cheap on an underlying real estate land-bank basis.

With a $14.9 Billion market cap after a 5% drop today to $87.14, this one looks fully valued based on the current valuations and based on the current economic climate.  Its 52-week trading range is $65.66 to $98.01. Five years ago, this was trading at about $36.00 per share.

This is also weighing on a few related companies today. Extra Space Storage Inc. (NYSE: EXR) is seeing shares trade down over 1% at $16.74 and Sovran Self Storage Inc. (NYSE: SSS) is seeing shares down over 1% at $43.13.

Jon C. Ogg
May 9, 2008

Cheniere(s) Still Facing Issues After Earnings (LNG, CQP)

Last month we reported on a triple whammy that hit Cheniere Energy Inc. (AMEX: LNG).  Today, both Cheniere and its spin-off, Cheniere Energy Partners, LP (AMEX: CQP) gave their earnings report.

Cheniere Energy Inc. reported a net loss of $49.9 million, or ($1.06) EPS, for the first quarter of 2008, compared with a loss of $34.6 million, ($0.63) share, for the same period in 2007. Revenue for the quarter totaled $1.48 million. The company attributed the higher loss to operations at the Sabine Pass LNG terminal and to higher operating, G&A, and non-cash compensation costs. Analysts had been expecting a loss of $1.08/share on revenue of $250,000. The stock is down about 5% to $7.51 after 90-minutes of trading.

Cheniere Energy Partners LP (AMEX: CQP) reported a net loss of $14.5 million, or ($0.09) EPS.  The company had no revenues of the cut-off date.  The company went public on March 26, 2007, so comparisons with a year ago are based on results from predecessor companies. On that basis, for the first quarter of 2007, the company loss totaled $12.9 million, again with no revenue. The stock is flat today at $11.26 after 90-minutes of trading.

One important thing now for both companies is unrestricted cash stated on the books. Cheniere Inc. reported $141.5 million in unrestricted cash, while Cheniere Partners reported just $10,000 in unrestricted cash.  This one is not without controversy and not without risk.  But the operating prospects for both companies are good, if they can just weather the cash crunch.  That is not an assured event as of today, although the prospects may now be slightly better than last month. 

Cheniere Inc. just recently obtained an 18-month secured credit deal with Credit Suisse for $82.3 million at 16.458% interest. While that is a solid flow of operating capital that has been secured as its plant comes on-line, that interest rate is bitter medicine indeed.

Paul Ausick
May 9, 2008

Rick's Revisited, Still Growth & Value Alike (RICK)

Rick's Cabaret International Inc. (NASDAQ: RICK) may not be one of the most controversial companies out there, but it is definitely one of the stranger stocks out there because of the fact that it is the largest public "gentleman clubs" out there.  The company has also grown by acquisitions and the company plans to keep making acquisitions.  What is interesting if you look at the company's guidance and do not consider the industry it is in, it is hard to argue against the value of the company from a growth investor mind and from a value investor mind.  That's GARP for you.

The company posted earnings yesterday and gave its guidance, which it also gave in a second press release today.  For its 2008 fiscal year (Sept-2008 end) the company said it expects approximately $61 to $62 million in revenues.  That would put after tax net income around $10.5 to $11 million, which would yield about $1.25 to $1.30 EPS.  Its outlook for fiscal Sept-2009 puts revenues exceeding $100 million, and yields a an earnings range of $2.30 to $2.50 EPS.

While the company has very thin analyst coverage, these numbers are well above the two estimates measured by First Call.  Fiscal Sept-2008 estimates are $1.17 EPS and about $58 million (top estimate is $1.21 EPS).  Fiscal Sept-2009 estimates are $1.88 EPS and almost $79.7 million. 

The company did also note different numbers for the calendar years as well, although we wanted to compare the numbers above on an apples to apples basis.  These 2008 numbers don't reflect a pending acquisition, but the 2009 numbers do.  Between now and then, we won't be surprised if the company has made more acquisitions.

Rick's shares have more than doubled over the last year, and its market cap is now approximately $158 million based upon a $21.00 stock price.  As far as forward valuations, for 2008 it has a forward P/E ratio at the Low-end of estimates at 16.8 and trades at roughly 2.5-times revenues.  For Fiscal Sept-2009, its forward numbers at its own low-end of estimates are a 9.1 forward P/E ratio and roughly 1.5-times revenues.

We covered this when its market cap had just crossed over $100 million, and you can see how these new projections are ahead of those numbers.

There is no doubt that many cannot own this stock because it falls in the "sin stock" category.  But for those who can and if you can trust the company's numbers, then all of a sudden you have a low-multiple growth stock with the potential for close to 90% earnings per share growth.  Now that the market cap is north of $100 million, there are also many more funds that are not barred from owning it because many have a $100 million market cap minimum.  As long as you are comfortable with the company's projections and as long as you don't mind owning a sin stock, the projections look and sound great.

A college logic class might even deduce that topless bars are nearly recession proof. 

Jon C. Ogg
May 9, 2008

Jon Ogg is also a producer and editor of the "10 Stocks Under $10" weekly newsletter; he does not own securities in the companies he covers.

Charter (CHTR) Gives Away $40 Million In Gas

Yesterday, Charter Communications (CHTR) said it would give up to $100 in gas to all new subscribers or existing subscribers that make some upgrades to their service packages.

Investors are worried that they'll lose more money on this.  Today the shares are off 7% after a rapid sell-off early this morning, so the company has given up $40 million in market cap.

Gas has gotten expensive.

Douglas A. McIntyre

Anadarko Scores With Western Gas IPO (APC, WES, EP, EPB)

In June 2006, Anadarko Petroleum (NYSE:APC) bought both Western Gas Resources and Kerr-McGee for a total of more than $23 billion. Last night, Anadarko announced that it had priced an IPO of 18.75 million shares for Western Gas Partners, LP (NYSE: WES) at $16.50 per common unit. APC also granted underwriters an overallotment of 2.82 million shares. Book-runners include UBS, Citi, Credit Suisse, and Morgan Stanley, with a host of other institutions getting into the act as well.  Here were details from our coverage of the filing.

The new company's assets are a natural gas treatment plant in Texas, and gas gathering and pipeline systems in the Rocky Mountains and several Midwestern states. In 2007, these assets produced $116 million in revenue and $24 million in earnings.

If the overallotment is exercised, the limited partners will own about 40% of Western Gas Partners, LP, and Anadarko will own the rest, including the general partner interest. According to the filing, Anadarko receives the 2% general partner interest plus incentive distributions that could rise to 50% of available cash after the distributions reach $0.45/common unit. WES will return virtually all the proceeds (about $350 million) to Anadarko, which will use the money to repay a portion of Anadarko's recent $2.2 billion borrowing from, surprise, the underwriters.

Anadarko first filed with the SEC for this IPO in April 2007, and it's taken this long to get to the IPO. The company reported good results for the first quarter of 2008, and, according to Forbes, Moody's recently raised its outlook to 'stable' from 'negative' on APC's 'Baa3' senior unsecured long-term debt. Including the $2.2 billion, APC's total long-term debt and liabilities were about $26.6 billion at the end of the first quarter.

Spinning off midstream assets is nothing new for E&P companies. El Paso (NYSE: EP) hived off El Paso Pipeline Partners L.P. (NYSE: EPB) in November 2007 for about $540 million and EPB's stock price has risen about 11% since then. Anadarko and Western Gas Partners, LP should be happy with similar performance -- not great, but good enough to keep the debt rating companies happy.

Oddly enough, Carl Icahn was a huge owner of Anadarko as of the last filing dates.

You can join our open email distribution list to keep up with other mergers, IPO's, spin-offs, and other specialty financings.

Paul Ausick
May 9, 2008

Circuit City Finally Capitulates (CC, BBI, GS)

Circuit City Stores, Inc. (NYSE: CC) has finally capitulated.  There are two separate announcements this morning, but in reality it is all part of the same issue.  This will allow the company to deal with the activist pressure, and may ultimately lead to the company either being run by a better team or become a subsidiary of another company.

The company just issued a release that it has reached an agreement with Wattles Capital Management.

Circuit City will choose three board members proposed by Wattles, and now Wattles has agreed not to solicit proxies related to the 2008 annual meeting. In addition, two of Circuit City's current board members will step down by the annual meeting of 2009.

Circuit City has also announced that it has hired Goldman Sachs (NYSE: GS) in an effort to explore strategic alternatives to enhance shareholder value.  The company even agreed to allow Blockbuster Inc. (NYSE: BBI) and Carl Icahn to conduct due diligence related to its proposal to acquire the company.

Shares of Circuit City are up 11% at $5.35 in pre-market trading, and its 52-week trading range is $3.44 to $17.97.  Shareholders must be thinking, "It's about freakin' time."

You can join our open email distribution list to keep up with mergers, IPO's, spin-offs, and other specialty financings.

Jon C. Ogg
May 9, 2008

Jon Ogg is also a producer and editor of the "10 Stocks Under $10" weekly newsletter; he does not own securities in the companies he covers.