Friday January 2, 2009
Navivest

The stock market is starting off the new year with a bang, with a broad-based rally that has the Dow up 2.19%, the Nasdaq up 2.54% and the S&P 500 up 2.31% at 2 PM. While volume is still relatively light, market internals are very bullish. There are more advancing issues than decliners, with four stocks climbing for each one that’s falling on the New York Stock Exchange.

Some of the best percentage movers among the stocks in the S&P 500 index are Massey Energy (MEE), up 14.8%, Sandisk (SNDK), up 14.1%, Consol Energy (CNX), up 11.02% and Starwood Hotels, which is up over 16.09%.

Starwood Hotels is one of the best S&P stocks today because the company in a regulatory filing, disclosed that it had signed a confidentiality agreement with Sam Zell’s Equity Group Investments. Wall Street is taking this as a sign that Sam Zell might be looking to buy a stake in Starwood.

Among the stocks propelling the Dow up, are Boeing (BA), which is the biggest point gainer, up $2.63 to $45.30 and IBM (IBM), which is up $2.22 to $86.38. Twenty-nine of the Dow 30 stocks are up, with JP Morgan (JPM) being the only laggard on the day.

Tags: Stock Market Rally  Massey Energy  Consol Energy  Sandisk  Boeing  IBM  Starwood Hotels

Wednesday October 22, 2008
Navivest

Samsung, which on August 9, 2008, made a $26 unsolicited offer to acquire Sandisk (SNDK) for $26 a share, retracted its offer yesterday, one day after Sandisk (SNDK) posted its third quarter 2008 earnings results.

Sandisk (SNDK) had on September 15, 2008, already rejected the offer in a letter to Samsung that reflected “the board’s unanimous conclusion that the proposal is inadequate in multiple respects and not in the best interests of SanDisk’s stockholders.”

According to Sandisk (SNDK), both companies had had several meetings before Samsung made public the offer, and on one such meeting on May 22, 2008, “Samsung had expressed a willingness to pay a significant cash premium over the then $28.75 price of SanDisk’s shares.”

Samsung withdrew the offer in a letter to Sandisk (SNDK), in which Samsung CEO Lee Yoon-woo wrote that “Your surprise announcements of a quarter billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organisation all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung,”

The relationship with Toshiba that Samsung referenced is an October 20, 2008 announced agreement in which Sandisk (SNDK) will sell 30% of its stake in a manufacturing joint venture that it has with Toshiba, to Toshiba, while continuing to be equal partners in the remaining 70%.

According to Sandisk (SNDK), it expects to “receive cash and reduce equipment lease obligations by approximately $1 billion through this transaction.”

Despite the withdrawal of its buyout offer however, there is still a chance that Samsung could come back to the negotiating table, as one reason it probably wants to buy Sandisk (SNDK) is because it currently pays hundreds of millions of dollars in royalty payments annually to Sandisk (SNDK).

Analysts estimate that Samsung is responsible for 90% of SanDisk’s (SNDK) royalty income and forecasts for SanDisk’s (SNDK) 2008 royalty income are $405 million, which would mean this year alone, Samsung has to fork over $364 million.

So this could possibly be a ploy to put pressure on SanDisk’s (SNDK) stock, which might then cause shareholders to start pushing for a deal with Samsung.

SanDisk’s (SNDK) shares closed at $14.76 on Tuesday, October 21, 2008.

 
Tags: SanDisk  Samsung

Korea’s Samsung Electronics on Tuesday 09/16/08, made public a $26 a share offer for flash memory products company Sandisk (SNDK). The $26 per share offer translates into $5.85 billion. The news was released after the markets closed and Sandisk (SNDK) shares rallied 52% or $7.89 to $22.93. The offer comes after four months of discussions among the two companies.

Sandisk (SNDK) has rejected the offer, claiming that it undervalues the company and reiterating that Samsung had been looking to pay about $28.75 for the company.

Tags: Sandisk  Samsung  Acquisition

Yahoo (YHOO) is set to report earnings today after the close of the stock market. The company has a lot riding on those earnings. To date, it has been able to fend of a takeover attempt by Microsoft that has had quite a few twists and turns, with the latest being that activist shareholder Carl Icahn, has bought a five percent stake in Yahoo, hoping to partner with Microsoft in getting Yahoo to sell the company. Icahn now has three of the 11 board seats at Yahoo.

Any weakness in the earnings will be jumped on by critics of the company who would like to see it sold, and going  by analysts comments, Yahoo (YHOO) will be in the hot seat once those earnings are released.

Amongst the analysts following the company, the consensus per share estimates for the second quarter is 12 cents, a penny above same period last year.  The analysts are expecting revenue to come in at $1.37 billion. For the same period last year, revenues were $1.24 billion.

With the way tech earnings have been coming in (Apple, Texas Instruments, Sandisk etc will be dragging the market lower today on their earnings that they released last night) and Google (GOOG) missing and getting twelve percent knocked off its market cap in the last two trading days, it would be quite a feat if Yahoo managed to beat and provide a forecast that’s palatable to analysts.

yahoo earningsyahooYHOOGOOG

The following are some of the companies that have released earnings reports this evening that are being seen as disappointing by analysts. Being that some of these are market-moving stocks, we should see blood on the floor of the exchanges tomorrow. We won’t bother posting how much the stock prices of these companies are changing in after hours trading, as some of them like Apple (AAPL) keep moving lower.

Apple (AAPL), American Express (AXP), Merck (MRK), Boston Scientific (BSX), Eagle Materials (EXP), Sandisk (SNDK). American Express and Apple will be the major problem for the market. American Express is down over 11% already and Apple is down almost 10%. American Express is already dragging down the financials as some of the major names such as Lehman, Mastercard (MA) and Visa (V) are now down in after hours trading as well.

As much as Apple is down, things might get worse in regular trading tomorrow, unless the company steps up its PR game between now and 9:30 am tomorrow. In addition to the earnings news, which were actually good but the company guided lower, there are now rumors circulating about Steve Job’s health - he successfully underwent surgery for a rare form of pancreatic cancer four years ago - and the company just added fuel to the flames by holding an earnings conference call that Steve Jobs did not attend.

An analyst at the conference call asked about Steve Job’s health and the CFO said that that was a private matter. That unfortunately, sounds like a “No comment” response from a politician and unless Steve Job’s is indeed ill, we hope they are smart enough to address the situation better before the market opens tomorrow.

steve jobsamerican expressamerican express earningsmerck earningssandisk earningsapple earnings