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Del Monte Ready To Scrap StarKist (DLM)

Del Monte Foods Company (NYSE: DLM) is responding to written reports and confirmed that the company is exploring strategic alternatives for its seafood business, which could include a potential sale of the business.

Of course it cannot assure that its exploration of strategic alternatives will result in a transaction and that the Board of Directors has not approved a transaction at this time.

Del Monte Foods generated $3.414 Billion in sales for fiscal April 29, 2007, and StarKist Seafood operating segment had sales of $542.4 million, a decrease of $23.5 million or 4.2%, compared to fiscal 2006.  Del Monte's total market cap is $1.87 Billion with shares down about 1.6% today.

The company also noted that it and two others accounted for some 79% of the canned tuna market, with Del Monte's StarKist having some 33.7% of that market.

StarKist is a brand that it should be able to unload rather easily despite some of the slowing from 2006 to 2007, or so it would seem.  Owning that much market share is perhaps value enough, particularly if this can be combined with another operation.

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

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Can Carl Icahn Fix Broken Biotechs? (ANX, BIIB, ENZN, IMCL, TELK, FOLD, AMLN, REGN)

Carl Icahn is a billionaire financier, activist, and investor.  Most think of Icahn as an activist investor that wants to get inside and drive value without having to acquire the whole company to resell it later.  This strategy works and works well, so long as the right strategies and efforts are applied properly to each stock.  The underlying sector a company is in is critical too, and for some reason Carl Icahn has been trying to do this in biotech stocks.  We took the biotech filings from both Mr. Icahn's own holdings and from Icahn Capital LP to see what Mr. Icahn thinks he has up his sleeves.

CARL ICAHN direct holdings, via several investment vehicles:

Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs

• $467,000.00 for 864,865 shares

Biogen-Idec (NASDAQ: BIIB) down about 25% from highs 

• $153.4M for 2,487,181 shares

Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs

• $5.6M for 614,420 shares

ImClone Systems (NASDAQ: IMCL) down 18% from highs

• $494.9M for 11,669,544 shares

Telik Inc. (NASDAQ: TELK) down over 50% from highs

• $2.536M for 1,039,165 shares

ICAHN CAPITAL LP direct holdings:

Adventrx Pharmaceuticals Inc. (AMEX: ANX) down 80% from highs

• $1.8M for 3,459,459 shares

Amicus Therapeutics, Inc. (NASDAQ: FOLD) down 45% from highs

• $2.16M for 201,940 shares

Amylin Pharmaceuticals Inc. (AMLN) down 40% from highs

• $185.1M for 6,339,653 shares

APPLERA (NYSE: ABI) down 10% from highs

• $21.3M for 649,026 shares

Biogen-Idec (NASDAQ: BIIB) down about 25% from highs 

• $613.7M for 9,948,723 shares

Enzon Pharmaceuticals (NASDAQ: ENZN) down only 16% from highs

• $22.6M for 2,457,683 shares

Regenron Pharmaceuticals (NASDAQ: REGN) down about 28% from highs

• $48.1M for 2,508,001 shares

Telik Inc. (NASDAQ: TELK) down over 50% from highs

• $10.1M for 4,156,663 shares

*** percentage down from highs means the 52-week highs, so many are off much more than all-time or historical highs.

It may not be fair to refer to all of these as broken, because many aren't.  What is interesting here is that if you follow biotech stocks and if you know these companies, most of these have fallen from their former glory.

Here is the problem with biotech stocks: They almost HAVE to be public to live up to expectations, so they very rarely go private because of the need for capital.  The mere nature of putting molecules and modified products into your body has risks, and many companies cannot control what happens or how people their meds after a while.  Biotech companies cannot control the FDA and they cannot control independent verification or investigative studies.  No company can control whether or not a competitor comes out with a greater product.  Biotechs are different in that investors would rather see a biotech spend cash to acquire another biotech rather than engage in a share buyback or pay out a dividend.  When was the last time you heard a broker or an investor discuss the high dividend check they expect from their biotech?  Me neither...

Mr. Icahn has a great track record of influencing companies.  He made a fortune off the move in Time Warner.  Motorola has so far been a flop and Yahoo! is just getting started.  But he didn't become a billionaire by throwing darts nor by investing in mutual funds. 

But there is a real discourse here from biotechs to other sectors, and it would just seem much easier for Mr. Icahn to get better returns elsewhere.  It might be easier backing high-risk and high-reward biotech ventures from scratch instead of trying to fix existing biotechs with problems.

You can join our open email distribution list to hear about activist investing, special financings, M&A, IPO's, secondary offerings, and other special situations.

Jon C. Ogg
May 16, 2008

Hypertension Results Drive Pharmacopeia (PCOP)

Pharmacopeia, Inc. (NASDAQ: PCOP) is seeing shares surge in pre-market and at the open of trading today.

The company said that PS433540, its first-in-class Dual Acting Receptor Antagonist, showed statistically significant blood pressure reductions in a Phase IIa study in patients with mild to moderate hypertension.

PS433540 is being evaluated and developed as a potential treatment for hypertension and diabetic nephropathy, and the company said this is a novel blood pressure product candidate that possesses two validated action mechanisms in a single molecule.

The data will be presented today at the at the American Society of Hypertension Scientific Meeting and Exposition in New Orleans.

The company has also announced that it will seek to release a Phase IIb result of 375 subjects in Stage I and II hypertension to evaluate safety and efficacy at three different doses versus placebo at the end of 2008.

While there are millions of Americans with hypertension and while there are many hypertension medications that have been on the market for years, the novel aspect of this is the single molecule that addresses hypertension and the possible complications from that mixed with diabetes.

Shortly after the open, shares are up almost 40% at $4.49 on nearly 1 million shares.  Its 52-week trading range is $2.89 to $6.14 and its current market cap is only $133 million.  As of last look, the company had $61.4 million in cash on the books.

Jon C. Ogg
May 16, 2008

GE Confirms Appliances Soon To Be History (GE)

General Electric Co. (NYSE: GE) has confirmed that it is reviewing strategic options for its Appliances business operations.  Three possibilities were noted for the unit:

• a strategic partnership or joint venture;
• spin off;
• or the sale of the business.

GE's Chairman & CEO Jeff Immelt said that it has exited slower growth and more volatile businesses and generated $52 billion in gross proceeds from those dispositions.

Well, when you have Ecomagination, GE Oil, jet engines and services, medical tech, key finance operations, and more, maybe kicking out the appliances operations will let the company get closer to that old target of 20% return on capital.

You can join our open email distribution list to hear about special financings, M&A, IPO's, secondary offerings, and other special situations.

Jon C. Ogg
May 16, 2008

Select Positive ASCO Data (ARRY, AZN, LLY, DNA, GSK, ONXX, PFE, ZGEN)

Last night was a novel release from the American Society of Clinical Oncology (or ASCO) as the society decided to publish all of the findings to the public at once.  Keep in mind that many of the larger drug companies will have other presentations as well.  Below is some of the key and very brief data:

Array BioPharma (NASDAQ: ARRY) and AstraZeneca have announced plans for two additional randomized Phase II trials for AZD6244 in the second half of 2008 to test AZD6244 (ARRY-886) in combination with a chemotherapeutic agent; one trial will be for melanoma patients and the other for non-small cell lung cancer patients.  AstraZeneca (NYSE: AZN) showed positive breast cancer data in survivability.

Eli Lilly (NYSE: LLY) showed that its Alimta showed 3 months longer survival in a lung cancer sub-set group.

Genentech (NYSE: DNA) showed that Avastin in brain cancer trials showed 9 months survival while most patients live only 6 months from the study point.

GlaxoSmithKline (NYSE: GSK) showed that Tykerb added 1 year survival on advanced breast cancer patients.

Onyx Pharmaceuticals, Inc. (NASDAQ: ONXX) and Bayer HealthCare Pharmaceuticals announced that Nexavar tablets significantly improved overall survival by 47.3% in patients in the Asia-Pacific region with primary liver cancer versus those receiving placebo; Nexavar improved time to progression in these patients by 74%.

Pfizer (NYSE: PFE) presented data showing Celebrex may prevent lung cancer in current and former smokers.

ZymoGenetics, Inc. (NASDAQ: ZGEN) showed additional data from Phase 1 confirm that the combination is well-tolerated and shows anti-tumor activity; also reported positive results from the cohort expansion portion of a Phase 1 study with IL-21 and Rituxan in relapsed/refractory indolent lymphoma.

In the past investors had to wait for abstracts to be published and for presentations to be made.  It also was a situation where embargoes were used with media on releasing certain data.  Needless to say, there were many leaks on key data on who got what information when... and many profited from it.

This is only a brief summary of data from only a handful of the companies.  You can count on there being more data from many more biotech and drug companies... Floods of it.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Top 10 Pre-Market Analyst Calls (APC, FISV, IPCM, KR, RSH, RAI, SWY, SNDK, URBN, ZEP)

These are ten analyst calls we are focusing on in pre-market trading this Friday morning:

• Anadarko Petroleum (NYSE: APC) Raised to Overweight from Equal-weight at Lehman.
• Fiserv (NASDAQ: FISV) Raised to Market Outperform from Market Perform at JMP Securities.
• IPC The Hospitalist (NASDAQ: IPCM) Cut to Market Perform from Outperform at Wachovia.
• Kroger (NYSE: KR) Raised to Overweight from Equalweight at Morgan Stanley.
• RadioShack (NYSE: RSH) Raised to Buy from Neutral at Goldman Sachs.
• Reynolds American (NYSE: RAI)  Cut to Underweight from Neutral at JPMorgan.
• Safeway (NYSE: SWY) Cut to Equal-weight from Overweight at Morgan Stanley.
• SanDisk (NASDAQ: SNDK) Cut to Market Underperform from Market Perform at JMP Securities.
• Urban Outfitters (NASDAQ: URBN) Cut to Equal-weight from Overweight at Lehman Brothers.
• Zep (NYSE: ZEP) started as Buy at KeyBanc Capital.

Jon C. Ogg
May 16, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

The Petroleum Price Problem: Guns For Oil

The balance of trade between the US and its Arab allies has taken several odd twists since the price oil began to move up sharply last year. The US buys oil at $125 a barrel. It has recently sold Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates about $20 billion in new weapons.

While some of this guns and ammo will be used to defend borders, a part of the planes, rifles, and explosives are quietly enlisted to keep militants from overthrowing the local kingdoms.

It has been eighteen years since Iraq invaded Kuwait. The US spent several billion dollars to push Saddam out. It was an expensive few days in the desert.

Iraq is no longer a threat to the kings and their courts, but Iran is. US carrier groups in the Gulf region are a display of commitment to keep sovereign states safe from the forces of evil. Batman in a battle group.

In exchange for protecting six nation states, all of which are targets of destabilizing parties who wish to see them out of power, the US gets no increase in oil production. Crude prices, which may be the largest inflationary force in the American economy, are not falling.

All of it may be a little unbalanced.

Douglas A. McIntyre

Goldman Sachs Pushes Up 2008 Oil Forecast To $141

Goldman Sachs (GS), king of the oil bulls, has raised its forecast for oil prices in the second half of this year to $141 from a previous estimate of $107. For those without a calculator handy, that is an increase of 32%.

The forecast does make sense no matter how unfortunate that may be. With oil at $125, it will only take modest interruption in supply caused by militias in Nigeria or mad bombers in Iraq to push the price up again.

So far, major Western nations have not been able to come up with a policy for bringing down oil prices. That may be because there is not one. That is, short of threatening to withdraw military and other aid from OPEC countries.

That may be next.

Douglas A. McIntyre

The Oil Refiners' New Ouija Board

Oil refiners have decided to produce more diesel and less gas. They believe that diesel is more profitable, which is true, and that demand for it will rise in developing countries, which may not be true.

Refiners have been losing money as the price of oil rises. They cannot always pass the increase on to customers. And, diesel prices are up 56% over the last year while gas in up only 20%. That makes gas production a bad deal. According to The Wall Street Journal "Diesel's higher price means the fuel is more lucrative for refiners at a time when gasoline profits are shrinking."

Part of the thinking by refiners is that gas consumption will drop as the economy falls off. This means that they cannot push up gas prices and make more money.

Refiners now view themselves as soothsayers in hardhats. Because gas prices are still rising sharply, it is not a foregone conclusion the it will be the low margin fuel. If large refineries move production toward diesel, they cannot turn on a dime and move back to gas.

Large developed countries like China and India are underwriting the price of diesel so that it is cheap for their citizens. That keeps demand up. But, if there are economic problems in those countries and the subsidies go away, demand for diesel will dry up.

Focusing less on the gasoline market is a dangerous game as long as the price the consumer will pay keeps going up.

Douglas A. McIntyre

Yahoo!: A New Ad Sales Model

Yahoo! (YHOO) and big global ad agency WPP will begin a marketing partnership aimed at better targeting of ads. Yahoo! will give WPP access to the thousand of independent sites on its ad network and help target messages which are allied with the behavior of the users of the sites.

The websites will get access to a broader array of WPP clients.

WPP will use software which helps identify the characteristics of the consumers who use sites on the Yahoo! network. According to The New York Times, "WPP’s clients will benefit from the extra information the agency will be able to collect about the behavior and demographic profile of people who visit sites on the Yahoo auction service."

The privacy police are likely to want to have a look at this system. It does use data from individuals and the data is very specific.

Big Brother is watching.

Douglas A. McIntyre

American (AMR) Inspections: Gee, We Skipped Those Planes

AMR (AMR), parent of American Airlines, decided to skip inspections on certain of its airplanes due mostly to cost issues. The aircraft in question were suspected of being hit by lightening. American reasons that there has not been a crash caused by electric bolts in over 30 years. Tell that to the people who are on the next plane that crashes during an electrical storm.

According to The Wall Street Journal "American made the procedural changes and revised its maintenance manual in an effort to prevent planes from being pulled out of service."

AMR does have a hard choice. It can risk going into bankruptcy because it cannot cover all of its costs, including FAA mandated inspections, or it can risk killing its passengers. Tough call.

If the government is going to expect that airlines will follow the letter of the law, it will have to find some way to offset airline inspection costs with subsidies. Having an industry which is largely in Chapter 11 does not do the airlines or the government any good. With rising fuel prices, the next few quarters may be so bad that banks start looking at balance sheets at companies like AMR.

If airlines cannot afford safety procedures, the may just have to stiff their creditors.

Douglas A. McIntyre

Media Digest 5/16/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Carl Ichan will fight to get Yahoo! (YHOO) to accept Microsoft's (MSFT) bid.

Reuters writes that the Senate has reached an agreement on a housing rescue.

Reuters reports that Warren Buffett will pul out of the RBS (RBS) insurance sale.

Reuters writes that Fannie Mae (FNM) will change its down payment policy.

Reuters reports that the Fed is seeing some healing of the credit markets.

Reuters writes that Yahoo and WPP has entered into an agreement for the ad agency to buy from the portal's ad inventory.

The Wall Street Journal reports that the FAA is looking to why AMR (AMR) skipped certain safety inspections.

The Wall Street Journal writes that US refineries are producing more diesel because of its profit margin and demand is growing in the developing world.

The Wall Street Journal writes that an Eli Lilly (LLY) drug has been shown to slow lung cancer.

The Wall Street Journal reports that RIM (RIMM) is producing a product to compete with the Apple (AAPL) iPhone.

The Wall Street Journal writes that a home building recover is still on hold.

The Wall Street Journal writes that airline mergers are being considered riskier but United (UAUA) and US Air (LCC) are still talking.

The New York Times writes that oil moved up after a volatile session.

The FT writes that Blackstone (BX) has begun to focus on depressed assets.

Bloomberg writes that profits at British Airways almost doubled.

Bloomberg also reports the the price of rice dropped sharply as supplies increase.

Douglas A. McIntrye

Asia Markets 5/16/2008 (SNP)(PTR)

Markets in Asia were mixed.

The Nikkei fell .2% to 14,219. Mitsubishi Corp rose 3.4% to 3690. NEC fell 2.4% to 538.

The Hang Seng rose .3% to 25,598. China Petroleum (SNP) rose 3..4% to 7.69. PetroChina (PTR) rose 3.4% to 11.52.

The Shanghai Composite was down .4% to 3,624.

Data from Reuters

Douglas A. McIntyre

Yahoo! (YHOO) Calls Icahn An Old Fool

In a letter which basically called Carl Icahn a dummy, Yahoo! (YHOO) responded to the billionaire's plan to offer an alternate slate of directors by writing that his understanding of the portal company's M&A negotiations "reflects a significant misunderstanding of the facts."

The letter was has two core arguments. The first is that the board offered a legal defense of its fiduciary actions by saying it has met twenty times to talk about the offer from Microsoft (MSFT). Then the board made the point that, based on Yahoo!'s future prospects, the company is worth at least $37 a share. It traded at about $19 before the Redmond approach.

The response is terribly flawed but reflects all that the Yahoo! board can say. The reality of the situation is that it does not matter how many times the board met or how many projections it reviewed. No one outside the board and senior management believes that there is any case for a valuation for Yahoo! that is above $30 or so, and that is only to Microsoft, which wants it for strategic reasons.

No other company made an offer for Yahoo!. If Icahn fails and Microsoft does not return, the stock will move back toward $20. That is the only part of the present situation which is crystal clear.

Douglas A. McIntyre

Buffett & Berkshire Hathaway Holdings T - W (BRK-A, BRK-B, TMK, TT, USB, USG, UNP, UPS, UNH, WBC, WMT, WPO, WFC, WLP, WSC)

After today's close, we saw the filing showing which stocks Warren Buffett held in Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) at the cut off date of March 31, 2008. This is a snapshot of his various holdings that were broken down alphabetically.  Some have multiple positions because of various entities that are held.  Here goes:

Torchmark Corp. (NYSE: TMK)

• $4.6M for 77,551 shares
• $27M for 449,728 shares
• $99.5M for 1,656,900 shares
• $38.4M for 639,700 shares

Trane Inc. (NYSE: TT)

• $500M for 10,901,900 shares

US Bancorp. (NYSE: USB)

• $754,224 for 23,307,300 shares
• $911,692 for 28,173,426 shares
• $270,691 for 8,365,000 shares
• $157,473 for 4,866,300 shares
• $70,351 for 2,174,000 shares
• $56,468 for 1,745,000 shares

USG Corp. (NYSE: USG)

• $628.5M for 17,072,192 shares

Union Pacific (NYSE: UNP)

• $558.3M for 4,453,000 shares

United Parcel Service (NYSE: UPS)

• $104.3M for 1,429,200 shares

United Health Group (NYSE: UNH)

• $219.9M for 6,400,000 shares

Wabco Holdings (NYSE: WBC)

• $123.1M for 2,700,000 shares

Wal-Mart Stores (NYSE: WMT)

• $1.00 BIL for 18,998,300 shares
• $49.8M for 946,000 shares

Washington Post (NYSE: WPO)

• $591.5M for 894,304 shares
• $98.1M for 148,311 shares
• $428.7M for 648,165 shares
• $24.4M for 36,985 shares

Wells Fargo (NYSE: WFC)

• $1.556 BIL for 53,489,420 shares
• $367.9M for 12,643,200 shares
• $1.114 BIL for 38,313,040 shares
• $81.1M for 2,788,000 shares
• $29.1M for 1,000,000 shares
• $3.771 BIL for 129,591,488 shares
• $46.8M for 1,609,720 shares
• $49.4M for 1,700,000 shares
• $23.8M for 820,000 shares
• $582M for 20,000,000 shares
• $465.6M for 16,000,000 shares
• $232.8M for 8,000,000 shares
• $78.57M for 2,700,000 shares
• $58.2M for 2,000,000 shares

Wellpoint (NYSE: WLP)

• $211.8M for 4,800,000 shares

Wesco Financial (AMEX: WSC)

• $2.3 BIL for 5,703,087 shares

You can join our open email distribution list to hear about special financings, M&A, IPO's, secondary offerings, and other special situations.

Buffett & Berkshire Hathaway Holdings A - H
Buffett & Berkshire Hathaway Holdings I - S

Jon C. Ogg
May 15, 2008

Buffett & Berkshire Hathaway Holdings I-S (BRK.A, BRK.B, IR, IRM, JNJ, KFT, MTB, MCO, NKE, NSC, PG, SNY, STI)

After today's close, we saw which stocks Warren Buffett held in Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) as of March 31, 2008.  Buffett's filing cut off date is longer as he has 45-days to make his filings.  This is a snapshot of his various holdings, and these were broken down.  Some of these have multiple positions because of the various entities that are held.

Ingersoll Rand (NYSE: IR) small position

Iron Mountain (NYSE: IRM) small position

Johnson & Johnson (NYSE: JNJ)

• $280M for 4,322,500 shares
• $1.314 BIL for 20,266,300 shares
• $1.711 BIL for 26,386,148 shares
• $21M for 325,300 shares
• $589M for 9,087,200 shares
• $51 for 792,000 shares
• $37M for 575,000 shares

Kraft Foods (NYSE: KFT) 

• $2.766 BIL for 89,222,400 shares
• $954.8M for 30,790,300 shares
• $310M for 10,000,000 shares
• $8M for 259,800 shares
• $248M for 8,000,000 shares

M & T Bank (NYSE: MTB)

• $483.1M for 6,003,360 shares
• $43.9M for 546,000 shares
• $13.3M for 165,700 shares

Moody's (NYSE: MCO)

• $1.124 BIL for  32,280,600 shares
• $547.5M for 15,719,400 shares

Nike (NYSE: NKE)

• $519.5M for 7,641,000 shares

Norfolk Southern (NYSE: NSC)

• $105M for 1,933,000 shares

Procter & Gamble (NYSE: PG)

• $4,099 BIL for 58,500,000 shares
• $1.524 BIL for 21,752,000 shares
• $437M for 6,240,000 shares
• $501M for 7,154,500 shares
• $54,655 for 780,000 shares
• $109,309 for 1,560,000 shares
• $384,369 for 5,485,500 shares
• $306,556 for 4,375,000 shares

Sanofi-Aventis (NSE: SNY)

• $18.3M for 488,500 shares
• $96.8M for 2,578,933 shares
• $6.3M for 169,300 shares
• $13.1M    350,000 shares

SunTrust Banks (NYSE: STI)

• $129.2M for 2,344,600 shares
• $47.4M for 860,000 shares

Very Small Position defined as "under $100 Million."  That may be an empire for the rest of us, but it isn't worth nothing on Mr. Buffett's scale.

You can join our open email distribution list hear about special financings, M&A, IPO's, secondary offerings, and other special situations.

Buffett & Berkshire Hathaway Holdings A - H

Buffett & Berkshire Hathaway Holdings T - W

Jon C. Ogg
May 15, 2008

Buffett & Berkshire Hathaway Holdings A-H (BRK-A, BRK-B, AXP, BUD, BNI, KMX, KO, CMCSA, CDO, COP, COST, GCI, GSK, HD)

After today's close, we got to see which stocks that Warren Buffett Held in the Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) as of March 31, 2008.  Buffett's filing cut off date as he has 45-days to make his filings.  Below is a snapshot of the various holdings, and we broke these down as they were in the fed filings.  Some have multiple positions because of the various entities that are held.  Here goes:

American Express (NYSE: AXP) $753M for 17,225,400 shares.

•     $349M 7,994,634 shares
•     $5.25B for 120,255,879 shares
•     $84.9M for 1,943,100 shares
•     $61M for 1,399,713 shares
•     $36.7M for 839,832 shares
•     $85.3M for 1,952,142 shares

Anheuser-Busch (NYSE: BUD)

•     $1.678 BIL for 35,371,000 shares
•     $9,120 for 192,200 shares

Burlington-Northern-Santa Fe NYSE: BNI) increased position

•     $5.88B for 63,785,418 shares

Carmax Inc. (NYSE: KMX)

•     $413.6M for 21,300,000 shares

Coca-Cola (NYSE: KO)

•     $108.1M for 1,776,000 shares
•     $438.6M for 7,205,600 shares
•     $2.443 BIL for 40,141,600 shares
•     $8.518 BIL for 139,945,600 shares
•     $556.3M for 9,139,200 shares
•     $29.2M for 480,000 shares
•     $55.5M for 912,000 shares

Comcast (NASDAQ: CMCSA)

•     $227.6M  12,000,000 shares

Comdisco (NYSE: CDO) very small position still.....
ConocoPhillips (NYSE: COP)

•     $1.334 BIL for 17,508,700 shares

CostCo Wholesale (NASDAQ: COST)

•     $341.3M for 5,254,000 shares

Gannett (NYSE: GCI)

•     $100.1M for 3,447,600 shares

General Electric (NYSE: GE)

•     $287.8M for 7,777,900 shares

GlaxoSmithKline (NYSE: GSK) small position
Home Depot (NYSE: HD)

•     $116.9M for 4,181,000 shares

Very Small Position defined as "under $100 Million."  That may be an empire for the rest of us, but it isn't worth nothing on Mr. Buffett's scale.

You can join our open email distribution list to hear about special financings, M&A, IPO's, secondary offerings, and other special situations.

Buffett & Berkshire Hathaway Holdings I - S

Buffett & Berkshire Hathaway Holdings T - Z

Jon C. Ogg
May 15, 2008

Berkshire Hathaway Dumps Ameriprise (AMP, BRK.A, BRK.B)

Ameriprise Financial Inc. (NYSE: AMP) was the stand out stock in Warren Buffett's holdings today.  Beakshire Hathaway inc. (NYSE: BRK.A, BRK.B) held some 661,742 shares and listed as worth some $36.4 million back at the end of 2007.  NO MORE....

Ameriprise was not in the holdings listed. today.  It was really a small position anyhow.

Jon C. Ogg
May 15, 2008

The 52-Week Low Club (UNH)(CNB)(SSTR)(SLRY)

Unitedhealth Group (UNH) Concerns about healthcare cost cuts still bother stock. Drops to $31.50 from 52-week high of $59.46.

The Colonial BancGroup (CNB) No bad news. Just part and parcel of being a bank. Down to $7.18 from 52-week high of $25.50

Silverstar (SSTR) Unpleasantness over quarterly report. Sells off to $.72 from 52-week high of $5.48.

Salary.Com (SLRY) Quartely loss and downgrades. Slips to $3.88 from 52-week high of $16.32.

Douglas A. McIntyre

Time To Switch From Wal-Mart Back To Target? (TGT, WMT)

On Tuesday, May 20, 2008, we'll see earnings out of Target Corporation (NYSE: TGT) and we'll get to see just how the "recessed" client base is as far as shopping on a relative basis.  Since Wal-Mart Stores, Inc. (NYSE: WMT) has enjoyed such a nice run-up while its prior thorn in the side (Target) has suffered, we wanted to see which stock represents the better investor choice for growth and for value based on today's expectations and past performance.  We had to peg prices, so we used $54.75 for Target and $57.00 for Wal-Mart.  Essentially, we are looking at this no different than a pairs trader would look at the companies.

As we noted on Wal-Mart, analysts were all under the company's own guidance.  On Target, analyst expectations have come down for this year and next year over the last 90 days.  Based upon the current analyst targets ahead, so below are some figures to outline this.

Target trades at 15.7-times Jan-2009 fiscal EPS and 13.7-times Jan-2010 estimates.  Wal-Mart simultaneously trades at 16.5-times Jan-2009 fiscal EPS and 14.9-times fiscal Jan-2010 estimates.  So the next fiscal earnings growth expectations from Wall Street are 14.6% for Target and 10.4% for Wal-Mart. 

We also wanted to look at forward revenue projection.  At almost $226 Billion in market cap, Wal-Mart trades at 0.55-times Jan-2009 revenues and 0.51-times Jan-2010 revenues.  With a $44.7 Billion market, Target trades at 0.65-times Jan-2009 revenues and 0.6-times Jan-2010 revenues.  The reason for this discrepancy on higher revenue multiple at Target is fairly simple to interpret since it has higher growth and higher margins. 

According to Capital IQ: Target's gross and net income margin for this last year were 31.6% and 4.5% respectively; and Wal-Mart's gross and net income margin for this last year were 24.4% and 3.4% respectively.

Busted IPO: Verso Paper Corp. (VRS, IP)

Verso Paper Corp. (NYSE: VRS) was one we noted yesterday as "slashing terms" after the pricing level was dropped and the share count in the sale was dropped.  The company priced 14 million shares at $12.00 a piece, and shares are now under $10.00.  It's also only the first day.

Verso was formed as an independent company that was acquired out of International Paper in the last few years, and the problem here is that the company's use of funds is to repay debt that was used to pay Apollo Management L.P. a dividend last year.

Many investors don't mind buying from private equity in an IPO, particularly if the investor group made the company stronger.  But investors often shy away from deals where all of the funds are directly or indirectly are going away from the company.

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

Jon C. Ogg
May 15, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Trouble Brewing In Oil & Gas MLP Land? (PAA, OGE, DVN, XCO, VQ, WES, APC, BSR)

We have tracked these Master Limited Partnerships (MLP's) and spin-offs or carve-out IPO's from larger oil and gas companies for quite some time.  What is amazing is that despite the rapid rise in oil and energy-related commodities has not translated to the "peak-IPO rush" like we saw with dot.com IPO flame-outs from 1999 and 2000.  Many have been withdrawn and many have gone in limbo.

Earlier this week, Plains All American Pipeline LP (NYSE: PAA) completed a public offering of 6.9 million common units at $46.31/unit, generating net proceeds of $315 million. In February, Plains withdrew a proposed IPO for a master limited partnership (MLP) in its general partner, which may have generated much more cash.

OGE Corporation (NYSE: OGE) withdrew a proposed MLP IPO in January, citing "market volatility."

Devon Energy (NYSE: DVN) had planned an MLP IPO for the third quarter of 2007, but the offering has neither gone forward nor been withdrawn.  This one is still in the "pending" category.

EXCO Resources Inc. (NYSE: XCO) filed in September 2007 for a public offering of 75 million common units in an MLP. Exco withdrew the offer in January, stating that "current market conditions do not support the completion of the offering in a manner that would result in the value enhancement to EXCO and its shareholders that was anticipated upon the initial filing of the registration statement."

Venoco Inc. (NYSE: VQ) announced an E&P MLP in February. This one is still outstanding as it is only 3-months old.  Venoco enjoyed a $3.00/share price jump on Monday's earnings report.

Last week we saw a pricing from Western Gas Partners L.P. (NYSE: WES), a spin-out from Anadarko Petroleum Corp. (NYSE: APC) saw a lackluster IPO with a pricing below the indicated levels.

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

If you want to see an even more broad example of this trend in MLP's, you can look at the ETF: BearLinx Alerian MLP Select Index ETN (NYSE: BSR)... This is technically an ETN, but who's counting.  Its chart has been highly unimpressive.

It's not all bad out there.  Some will still come public and some will still continue to do well.  We'll be showing some other pending or withdrawn IPO's in deals that are similar, but aren't going to be oil and gas or pipeline MLP IPO's. Stay tuned.

Paul Ausick
May 15, 2008

CBS + CNet = The Worst M&A Deal Of The Year

It is almost impossible to imagine what the CBS (CBS) management and board were thinking when they bought CNET (CNET) for $11.50 a share or $1.8 billion. CNET has done so poorly that the shares have not been above $10 since April 2006. The high price CBS is paying borders on being irresponsible.

A look at CNET's last 10-Q shows how troubled the company is .A large internet content operation should probably be showing revenue increases of 12% to 18%. In the last quarter, CNET revenue went from $89.1 million to $91.4 million, an increase of under 3%. CNET claims it has the premier technology news sites on the internet.

After backing out restructuring costs, CNET had an operating loss of about $13 million, almost double the number from the same quarter the year before.

CNET claims it has a growing customer base. The firm says it had an average of 161.3 million unique users per month in the first quarter of 2008 compared to 143.7 million unique users in the first quarter of 2007. And, the users generated 89.7 million web page views per day during the first quarter of 2008 and 81.2 million web pages views per day during the first quarter of 2007.

How is it possible that the company's revenue would not move up with those audience figures unless CNET is offering advertisers much better rates than it did last year? CNET is not likely to be able to raise those rates anytime soon.

The deal is made worse by the fact that CBS is almost as bad off as CNET, but on a larger scale. The company's revenue in the first quarter was flat as was operating income. Wall St. appreciates how poorly CBS has performed. Its shares are down almost 25% over the last year. Shares in rivals Viacom (VIA) and Disney (DIS) are down only slightly over the same period.

The buy-out can only be based on one premise which is that CBS can run CNET much better than CNET can, Given the pressure CNET's management has faced over the last year, it is likely that the company did everything it could to improve earnings. That did not work out.

It won't work out for CBS either.

Douglas A. McIntyre

Blackstone Loses & Contracts, Yet Assets Grow To Record (BX)

The Blackstone Group L.P. (NYSE: BX) has reported earnings this morning, and it's really hard to find anything pretty in the release. 

The private equity leader posted a GAAP net loss of $246.7 million after items, and its "economic net income" was listed also a s a loss at -$93.6 million.  Its total net reportable segment revenues were $32.3 million, driven down by declines in all business segments from $1.23 billion in 2007.  Its GAAP revenues were $68.5 million.

This will show you the magnitude of the drops in segments reported:

• Corporate Private Equity had negative first quarter revenues;
• Real Estate revenues down 94%;
• Marketable Alternative Asset Management down 81%;
• Financial Advisory Revenues decreased 24%.

You can look through the entire release, but as the company noted, most business segments were indeed lower.

Interestingly enough, the company now has $113.53 billion in assets under management.  That assets under management figure represents a 37% increase from last year. It has also decided to make a dividend payment of $0.30.

Shares of Blackstone are down about 4% at $18.70 in pre-market trading with about 30 minutes to the open.

Jon C. Ogg
May 15, 2008

JDS Uniphase Votes For Buyback Over Expansion (JDSU)

JDS Uniphase Inc. (NASDAQ: JDSU) has just announced that its board of directors has authorized the repurchase of up to $200 million in shares of common stock.  The repurchases can be via open market or private transactions, and it set this as a two year period ending May 14, 2010.

JDS Uniphase's market cap is roughly $2.6 Billion.  Based upon today's prices, this would net out approximately 17 million shares.  That in turn is representative of nearly 2.5 days worth of average trading volume.

As far as how this relates to total cash, as of March 29, 2008, JDSU had $1.045 Billion in cash and short-term investments, and still had $26.7 million listed as long-term investments.  Its total liabilities were also $1.13 Billion. 

Unfortunately, this buyback doesn't sound like it is going to be large enough to make any massive dent even though shares should run up initially on this news.  It also signals that there might not be that many great niche and complimentary or adjacent mergers it wants to make.

Shares closed at $11.51 yesterday and are up almost 1% pre-market at $11.61; its 52-week trading range is $9.49 to $16.05.

Jon C. Ogg
May 15, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

Blockbuster Managing Earnings (BBI)

Blockbuster Inc. (NYSE: BBI) managed to beat earnings expectations this morning.  The company posted $0.20 EPS on a 5.4% revenue decrease to $1.39 Billion.  First Call had estimates at $0.15 EPS on $1.44 Billion in revenues.

Operating income was $70.2 million.  The company's same store sales rose 2.9%, but this was on a smaller number of stores.  The company also noted that BLOCKBUSTER Total Access(TM), its subscription rental offering, is now profitable and positioned for growth.

Here were some balance sheet highlights:
Cash and cash equivalents             $137.7
Merchandise inventories                 $397.4
Rental library                                 $444.8
Accounts payable                          $453.8
Total debt (w/ capital lease
     obligations)                               $751.4

Blockbuster shares are up 10% pre-market at $3.40; its 52-week trading range is $2.52 to $5.80.

Jon C. Ogg
May 15, 2008

Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.

UBS Hikes Oil (CVX, DO, HERO, NE, PDE, RDC, RIG)

UBS has raised its raw oil price targets for 2008 to 2010 and has lifted its coverage in the oil sector.  UBS also initiated coverage on some of the oil and drilling companies this morning.  Here are a few of the stocks they initiated coverage on:

• Chevron (NYSE: CVX) raised to Buy from Neutral.
• Diamond Offshore (NYSE: DO) started as Buy with a $160 target.
• Hercules Offshore (NASDAQ: HERO) started as Neutral with a $35.00 price target.
• Noble Corp. (NYSE: NE) started as Buy with $81.00 target.
• Pride (NYSE: PDE) started as Neutral.
• Rowan (NYSE: RDC) started as Buy with $53.00 target.
• Transocean (NYSE: RIG) started as Buy with a $200 target.

As far as average oil price, UBS raised those as well:

• $115.00 average per barrel for 2008.
• $120.00 average per barrel for 2009.
• $116.50 average per barrel for 2010.

Jon C. Ogg
May 15, 2008

Top 10 Pre-Market Analyst Calls (CEL, EVEP, GMT, ITRN, CEC, LDG, NSM, SLRY, ELOS, TIVO)

Analyst coverage is looking pretty thin on individual calls this morning, but here are ten of the analyst calls we are looking at this Thursday morning:

• Cellcom Israel (NYSE: CEL) raised to Buy at Jefferies.
• EV Energy (NASDAQ: EVEP) started as Buy at Citigroup.
• GATX (NYSE: GMT) Raised to Outperform from Market Perform at Morgan Keegan.
• Ituran Location and Control (NASDAQ: ITRN) raised to Overweight at JPMorgan.
• CEC Entertainment (NYSE: CEC) cut to Hold at KeyBanc Capital Markets.
• Longs Drug Stores (NYSE: LDG) Started as Buy at UBS.
• National Semiconductor (NYSE: NSM) cut to Neutral at Merrill Lynch.
• Salary.com Inc. (NASDAQ: SLRY) Cut to Market Perform from Outperform at Wachovia.
• Syneron Medical (NASDAQ: ELOS) raised to Buy at Merriman Curhan Ford.
• TiVo (NASDAQ: TIVO) Raised to Market Perform at FBR.

Jon C. Ogg
May 15, 2008

CBS (CBS) To Buy CNET (CNET): Odd News

In a move that makes little sense, a TV network, CBS (CBS) will buy a tech website business, Cnet (CNET).

The price was $11.50. Cnet has been under pressure by activist shareholders to sell the company or restructure units.

According to CBS "The acquisition will make CBS one of the 10 most popular Internet companies in the United States, with a combined 54 million unique users per month, and approximately 200 million users worldwide."

It is, however, a TV company buying a online tech business. Nice match

Douglas A. McIntrye

GE (GE): A Proxy For US Economy Anymore?

For years, GE (GE) has been considered the single best corporate proxy for the US economy. For years it led all American companies in market cap. It businesses range from entertainment to medical equipment to infrastructure services to finance. It be hard to find as broad a representative for the scope of American business. Or is it?

GE has fallen out of favor and now it is selling one of its oldest businesses, its appliance operation. Investors have been calling for a break-up of the parent company for years. When the firm had a bad quarter earlier this year, the pressure to do something radical with the company increased. The appliance company auction is throwing the dogs a bone.

If GE is the best measure of the economy, then the economy is in bad shape. GE trades at $32.51, near its 52-week low and at about the same level as when Jack Welch left to marry his lover, the former editor of The Harvard Business Review.

Despite its size, it is not terribly hard to make the case that GE no longer looks anything like the larger economy as a whole.

The companies at the top of the market cap list of US firms look very little like GE now. They include Exxon (XOM), Microsoft (MSFT), AT&T (T), Procter & Gamble (PG), Johnson & Johnson (JNJ), IBM (IBM), and Google (GOOG). In other words, a close look at the most success firms in the US, at least judged on market value, shows that GE is not like any of them in any way.

GE has become out of step with American business and the stock market as a whole because it has not sold "old economy" businesses and used the capital to buy "new economy" businesses.

Selling a division which markets refrigerators will not help that.

Douglas A. McIntyre

IAC/Interactive (IACI): Another Foolish Move

No one needs to be reminded that IAC/Interactive (IACI) is breaking itself into five pieces to improve "shareholder value". The fight between Barry Diller and John Malone over whether the move was OK played out in all of the papers.

IACI was always a badly conceived company. It tried to put together things like a home shopping network, a lending operation, a ticket sales firm, and an unusually weak group of internet properties. As part of the preparation, for the spin-offs, the world's smallest search engine, Ask.com, part of the Diller internet division is buying Lexico which owns Dictionary.com, Thesaurus.com and Reference.com. According to The Wall Street Journal. "Lexico sites drew about 15.6 million unique U.S. visitors in March, according to comScore Inc., compared with 55.4 million for Ask and an array of affiliated sites."

Ask.com has about 5% of the US search market while Google (GOOG) has close to 60% and Yahoo! (YHOO) about 25%.

The purchase of Lexico is based on deeply flawed thinking. Consumers who use an online dictionary are not likely to use the search engine which is owned by the same company, especially if that search engine is Ask.com. Ask has already lost the search race because it is a weak product. People using the internet can click from Dictionary.com to their favorite search engine, probably Google, in one click which takes one second.

Buying a potential audience for an internet property that very few people use will not change consumer habits and that makes the investment a waste.

Douglas A. McIntyre

China: Inflation On Fire

It is not enough that the cost of food is moving up by double digits in China. Now other components of the economy are showing even worse inflation.

In April, factory and property spending rose 26% in the world's most populated country. The banks in the country are still tightening credit, but, so far that has not done much yet. According to Bloomberg, one senior Chinese official said  ``New local government officials who took office in March are politically motivated to expand their local economies.''

That motivation could do a lot to hurt China's GDP growth. Not only is the country's middle class being squeezed by rising food costs, but now the building industry may find that rising demand for the supplies required for commercial construction may make that process much more expensive.

The inflation pressure in the country is likely to meet falling demand for the nation's goods as Western economies slow and import less from China. If that happens, there will be a partial economic collapse in the country. No wonder the Shanghai Composite is down 50% from its peak last October.

Douglas A. McIntyre

Toyota (TM) Prius: No Longer Just For Sissies

No one can make the case that the Toyota (TM) Prius is just a car for tree-hugging environmentalists. The vehicle has now sold one million units worldwide. The figure is particularly impressive because the Prius tends to cost more than its "gas only" counterparts. The addition of the electric engine is expensive.

The Japanese car company says that the Prius has done a lot to please Al Gore. It even has the numbers to prove it, according to Reuters "Toyota believes that Prius vehicles worldwide have contributed to a reduction in carbon dioxide emissions by producing approximately 4.5 million tonnes less CO2 when compared with gasoline-powered vehicles in the same class and of similar size and driving performance."

Toyota has effectively trumped is competitors again by coming out with a popular model in mass productions years ahead of the rest of the industry. It did the same thing almost three decades ago when it put "zero defect" vehicles into the US market when cars from Detroit were still just a bucket of bolts. Matching Toyota on the quality meter took years and billions of dollars in production and design work.

Having jumped out to another lead, what can Toyota do next? A flying car is probably already on the drawing board.

Douglas A. McIntyre

Barclay's Earnings: Banks Still Bleeding

Barclays (BCS) said it would take a write-down of about $2 billion in impaired assets, some of them related to mortgages. The big Brit bank may have to raise $1 billion to keep its balance sheet looking good.

According to Reuters "Finance Director Chris Lucas said Barclays was keeping its options open in regard to boosting capital."

It does not matter so much the size of the writedown. What is important is that money center banks continue to write-off billion of dollars of assets as the year 2008 gets longer in the tooth. No really large bank in the US or Europe has given any indication that it is positive that the revaluing of assets is over.

Rumors and opinions that the credit crunch is over abound. Some of the bank stocks have recovered a bit of their huge losses. But, the mortgage fiasco cannot really end while default rates continue to move up, and other consumer credits held by banks, either directly or in derivative form, have not really hit the fan yet. Based on the economy, they surely will.

The temptation to think that the world of banking is getting better is wishful thinking. Barclays has just made that very clear.

Douglas A. McIntyre

Countrywide (CFC) Board: Sacked Behind The Line Of Scrimmage

A series of lawsuits against the board and management of Countrywide (CFC) accuses them of insider trading and not being careful enough in regulating the firm's lending practices. As is the wont in these things, the defendants sought to have the charges dismissed. The judge would have none of it.

According to The Wall Street Journal, the person on the bench wrote "Plaintiffs' allegations create a cogent and compelling inference that (Countrywide directors) misled the public with regard to the rigor of Countrywide's loan origination process, the quality of its loans, and the company's financial situation."

It also appears that directors sold hundreds of millions of dollars worth of CFC stock from 2004 to 2007. The mortgage lender was doing a large stock buyback during the later part of that process, which would have tended to keep the price up.

Countrywide and its executives face two major issues now. The first is whether any of them will go to jail. The prima facie evidence would say that most of them will serve some time in the big house.

The other open question is whether this whole mess will cause Bank of America (BAC) to back away from its purchase of CFC. So far, the bank is sticking to its acquisition plan. The deal may simply be too good to walk away from. If some of the CFC management is in prison, they will simply have to be replaced with executives from one of the hundreds of other mortgage companies which have failed.

It looks, at least for now, that none of the Countrywide board or management will go to the gas chamber.

Douglas A. McIntyre

Media Digest 5/15/2007 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, profits fell at Barclays (BCS) due to large write-offs.

Reuters writes that Carl Icahn has decide to begin a proxy fight against Yahoo! (YHOO)

Reuters reports that Sony (SNE) rose 10% after a good earnings report.

Reuters writes that sales of the Toyota (TM) Prius have hit one million units worldwide.

The Wall Street Journal writes that GE (GE) will sell its appliance division.

The Wall Street Journal reports that the US government is seeking the names of wealthy UBS (UBS) clients who may have used the company to avoid taxes.

The Wall Street Journal writes that  Paul Volcker is worried about the Fed's balance sheet.

The Wall Street Journal writes that the rising price of steel is halting some construction projects.

The Wall Street Journal writes that IAC (IACI) will buy Lexico Publishing,, the owner of Dictionary.com, Thesaurus.com and Reference.com.

The Wall Street Journal writes that a suit against Countrywide's (CFC) officers and directors will continue.

The Wall Street Journal writes that sales of Sony's (SNE) PS3 are out-pacing sales of Microsoft's (MSFT) Xbox 360.

The Wall Street Journal writes that Comcast (CMCSA) will by online networking site Plaxo.

The New York Times writes the Turner Entertainment will launch a product to match ads to relevant moments in the shows that they interrupt.

The FT writes that there may be signs that the rise of food prices is slowing.

Bloomberg reports that China factory and property spending rose almost 26% adding to concerns that its economy is overheating

Douglas A. McIntyre

Europe Markets 5/15/2008 (SNE)(CN)(SNP)

Markets in Asia were narrowly mixed.

The Nikkei rose .9% to 14,252. NEC rose 5% to 551. Sony (SNE) rose 8.7% to 5270.

The Hang Seng fell .9% to 25,357  China Netcom (CN) fell 6.7% to 23.60. China Petrolem (SNP) fell 2.8% to 7.28.

The Shanghai Composite fell .6% to 3,637.

Data from Reuters

Douglas A. McIntyre

High Profile Failures At Motorola (MOT) And Blockbuster (BBI) Make Icahn Yahoo! Bid Questionable

Carl Icahn has made the announcement that he plans a proxy fight to either control or influence the Yahoo! board. It is a remarkably poor idea.

Microsoft (MSFT) has made it clear that it does not want Yahoo!. At this point the bad blood between the two companies is such that a buy-out is almost certainly out of the question. MSFT may go after AOL or MySpace, but it will not go back with a $33 offer with Yahoo! trading at $28.50. It would ruin Steve Ballmer's reputation as a negotiator forever.

No one else stepped up to offer even $30 for Yahoo!. It is not worth that much to any media company. Its earnings growth is too modest and its search business is being eaten by Google.

Icahn has two high profile failures right now, Motorola (MOT) and Blockbuster (BBI). He can't make money on Yahoo!. A fight would be long and expensive.

And, he does not need a third failure.

Douglas A. McIntyre

GE's Ever-Changing Portfolio Mix (GE)

It seems the calls and progress in changing the shape of General Electric Co. are just never-ending.  The Wall Street Journal is reporting that General Electric Co. (NYSE: GE) is hiring Goldman Sachs to explore the sale or auction for its appliances business operations.  After seeing this and looking over our own ideas about the future of GE, this might make some sense and it also says something about what's ahead.

This would take out the slower growth unit with about $7 Billion in annual sales.  The appliances unit obviously isn't a bright spot since the housing market is on skid row.  Obviously, GE isn't holding out for a return to housing and appliances recovery in the next 18 months. 

This will allow GE to work more on its Ecomagination unit and other higher growth units around technology, medical tech, infrastructure, and oil. 

What is becoming more and more evident is that the GE conglomerate of tomorrow is looking less and less like the conglomerate GE of old.

The good news is that the push button tag on my gas stove that keeps wanting to come off may be a lot cheaper than that $189 the GE rep quoted me.

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

Jon C. Ogg
May 14, 2008

Google (GOOG) Tops List Of Most Visited US Sites For First Time

Search has already trumped all other models on the internet for making money, and now its popularity has reached the point where the Google (GOOG) sites have passed Yahoo! (YHOO) as the most visited online destination in the US.

According to the AP "The lead is tiny -- 466,000 visitors out of about 141 million apiece."

What may be small in number is great in symbol. The old line portals including Yahoo!, Time Warner's (TWX) AOL, and Microsoft's (MSFT) MSN used to hold the top positions on the comScore list. Those times are likely past and unlikely to return.

Google has simply dusted everyone else.

Douglas A. McIntyre

To Microsoft (MSFT) Xbox Goes The Victory Wreath

Microsoft (MSFT) claims that its Xbox 360 has reached the sale of ten million units in the US ahead of the Nintendo Wii and Sony (SNE) PS3.

The news is somewhat, if not entirely hollow, PR without substance or justification.

As Reuters points out "The Xbox 360 was the first of this latest generation of game machines to launch in the United States when it was released in November 2005. The PS3 and Wii were launched in the United States a year later."

Although the Wii has been in the market for a much shorter time, it has sold almost nine million units.

The people at the device division of Microsoft must not have enough to do.

Douglas A. McIntyre

ShengdaTech Raising Cash (SDTH)

ShengdaTech Inc. (NASDAQ: SDTH) announced that it will plans to offer an aggregate of $100 million of senior convertible notes due 2018, in an offering to qualified institutional buyers under a 144A placement.  Neither the notes nor the underlying shares will be registered in this offering.

The notes will bear interest and be convertible into shares of ShengdaTech's common stock at terms and a conversion price to be determined at the time of pricing of the offering.

Shengda is a manufacturer of nano precipitated calcium carbonate (NPCC) in the People's Republic of China and a manufacturer of coal-based chemical products in Tai'an City, Shandong Province. Its NPCC products are used in paper, paints, rubber, plastic, tire, and polyvinyl chloride building materials industries.

The company expects to use approximately $56 million of the net proceeds from the offering of the notes to expand its NPCC production capacity; and it plans to use the remaining proceeds for potential coal-based chemical acquisitions, strategic investments and to fund working capital requirements.

As far as what the $100 million means to the company, its market cap at todays close of $9.31 was $504 million.  Its 52-week trading range is $3.95 to $15.57.

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

Jon C. Ogg
May 14, 2008

The 52-Week Low Club (IMB)(TMA)(WFMI)(URRE)

IndyMac Bancorp (IMB) Fitch cuts debt rating  Down to $1.83 from 52-week high of $37.50.

Thornburg Mortgage Asset  (TMA) Ongoing concerns about company losses. Drops to $.64 from 52-week high of $28.23.

Whole Foods Market (WFMI) Big earnings miss. Sells off to $28.96 from 52-week high of $53.65.

Uranium Res (URRE) Company does private placement at low share price. Dips to $4.06 from 52-week high of $14.99.

Douglas A. McIntyre

Geron Given FDA Hold (GERN)

Geron Corporation (NASDAQ: GERN) announced today that the company received a verbal notice from the FDA that Geron's Investigational New Drug (IND) submission for GRNOPC1, its cell therapy for spinal cord injury, has been placed on clinical hold.   This is an order that the FDA issues to a company to delay a proposed trial or to suspend an ongoing investigation.

As the company has not seen the reasons for the hold in writing via a letter, it is unable to comment specifically.   The company said in the release that it has been in communications with the FDA for 4 years leading to its filing.

NASDAQ halted trading of the stock at 14:30:29 pending news, so it is now not trading.  Shares did manage to trade down almost 4% to $4.71 before this halt took effect.  Geron's market cap was almost $367 million before the halt, and its 52-week trading range was $3.97 to $9.85.

Jon C. Ogg
May 14, 2008

As UK Inflation Rises, A Ripple In US?

The CPI showed that prices for food rose .9% in April, the most in 18 years. Overall, total inflation was more muted and the market was relieved.

In the UK, the picture was not so bright. The Bank of England commented tha