MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
Flip Order
-
Tuesday, May 22
-
7:53 PM Vanguard's Jack Bogle takes advantage of Facebook's (FB) plunge and the negative impact it's had on the psyche of the retail investor to hammer home the merits of index investing. Bogle says: "It all comes down to value and it all goes away from price, and avoiding IPO's and avoiding individual stocks is the best strategy for investors." (video) 28 Comments
-
7:37 PM More on Compuware (CPWR): FQ4 EPS beats on a per share basis. Net earnings sank 22% Y/Y on softer professional service fees and higher expenses. Going forward, the company forecast earnings of $0.45 - $0.49 cents per share on revenue of $1.07B - $1.08B. Street estimates are for an EPS of $0.51 on revenue of $1.07B, respectively. Shares +7.8% AH. Comment!
-
7:10 PM As Finra and the SEC investigate allegations that analysts cut their Facebook (FB -8.9%) estimates ahead of its IPO and only shared the info with select clients, a source tells BI the estimates were cut because a Facebook exec told them to. Backing up this claim is a May 11 Bloomberg column in which sources claim Facebook is telling analysts its sales "may not meet their most optimistic projections." 9 Comments
-
6:58 PM The application delivery controller (ADC) market grew 5% Q/Q in seasonally weak Q1, according to Dell'Oro. Especially positive for market leader F5 (FFIV) is Dell O'ro's estimate that sales of physical high-end ADCs - a market F5 dominates - rose 14%. Less positive is the fact the budding market for virtual (i.e. software-based) ADCs grew 167% - while F5 sells virtual ADCs, they risk cannibalizing hardware sales. Citrix Systems (CTXS) and Cisco (CSCO) also participate in the ADC market. (previous) Comment!
-
6:38 PM Renowned NYU finance prof. Aswath Damodaran assigns Facebook (FB -8.9%) a value of $29/share, a little below today's $31 closing price, based on a detailed valuation analysis. His assumptions: Facebook's annual revenue growth will average 40% over the next 5 years before slowing; its operating margin will fall from a sky-high 45.68% to 35%; and its cost of capital will be a relatively high 11.42% (to account for higher-than-normal risk). (Blodget's valuation) 1 Comment
-
6:24 PM OmniVision (OVTI -2%) announces two 16MP image sensors for smartphones and digital cameras. The chips are capable of taking 60 fps video at full resolution (3840x2160), and also support burst photography at 16MP. Overkill? Probably for many consumers. But smartphone vendors are pulling out all the stops to differentiate themselves, and OmniVision needs the margin boost provided by high-end sensors, given tough competition from Sony (SNE) and others. Comment!
-
6:07 PM VMware (VMW) is acquiring Wanova, a developer of software for managing and syncing enterprise PC "images" that contain a user's apps and data, for an undisclosed sum. Wanova's software should strengthen VMware's offerings for the PC virtualization market, a business where (unlike server virtualization) the company trails Citrix Systems (CTXS), and also faces strong competition from Dell's (DELL) Wyse Technology unit. Comment!
-
5:51 PM Driving home its commitment to financing original programming at the expense of library size, Netflix (NFLX -5.6%) has created a new position of VP of Original Content. Filling the position is content acquisition VP Cindy Holland, whose current job will be assumed by Latin America/Canada content acquisition chief Jason Ropell. The shakeup comes on a day when Netflix made new lows for 2012. 1 Comment
-
5:36 PM During its FQ1 earnings call (webcast), Dell admits its 10% Y/Y drop in notebook sales had much to do with tablet cannibalization (more with consumers, but also among businesses). Dell also claims price competition (especially in emerging markets) hurt PC sales, and an inefficient sales structure affected enterprise sales. Also, it adds April was particularly weak, and some enterprises are delaying IT purchases. DELL -12% AH. HPQ -2.5%. INTC -1.1%. (presentation - PDF). 2 Comments
-
5:20 PM Starboard Value can exhale: AOL CEO Tim Armstrong says his company has no plans to invest in a social network. However, he adds AOL, whose troubled Patch local news subsidiary just notified its 1,000-person staff of upcoming layoffs, remains committed to investing in its online media ops, in spite of the losses posted by the division. Comment!
-
5:09 PM In an interview with FierceMobile, Zynga (ZNGA) mobile VP Travis Boatman says his company is focused on maintaining a "freemium" model for its games, while occasionally charging for ad removal and other features. He also suggests Zynga is open to developing for Windows Phone (MSFT, NOK), but doesn't provide any firm commitments. Separately, Zynga has announced a partnership with American Express that allows cardholders to earn Zynga virtual game cash. 1 Comment
-
4:38 PM More on Take-Two Interactive's FQ4: The game developer, whose results are historically volatile and difficult to project, is guiding for FQ1 revenue of $225M-$275M and EPS of -$0.75 to -$0.60, well below a consensus of $302.1M and $0.14. For FY13, it expects revenue of $1.75B-$1.85B and EPS of $2-$2.25 vs. a consensus of $1.8B and $2.77. The in-line revenue guidance is apparently enough to satisfy lowered expectations. TTWO +5.7% AH. (PR) Comment!
-
4:15 PM More on Dell's FQ1: No EPS guidance. Services only +4% Y/Y vs. FQ4's 12%. Public revenue -4%, large enterprises -3% (+5% in FQ4). Asia-Pac/Japan flat (+10% in FQ4), EMEA -1%, Americas -7%. Storage -8%, servers/networking +2%, desktops -1%, notebooks -10%, software/peripherals -7%. Gross margin was 21.3%, +20 bps Q/Q but -160 bps Y/Y. $324M spent to repurchase shares. Dell is the second enterprise IT giant to recently post weak results, after Cisco. DELL -9% AH. CC starts at 5PM ET (webcast). (PR) Comment!
-
4:05 PM Dell (DELL): FQ1 EPS of $0.43 misses by $0.03. Revenue of $14.42B (-4% Y/Y) misses by $490M. Expects FQ2 revenue of $14.7B-$15B, below $15.4B consensus. Shares -7.5% AH. (PR) 5 Comments
-
3:14 PM More on SAP/Ariba: The purchase follows SAP's $3.4B acquisition of cloud HR software vendor SuccessFactors, and gives it a set of products and services that complement its core ERP software solutions. Also, Ariba's market leadership means there are no major rivals Oracle (ORCL) can acquire in response, though SciQuest (SQI +1.6%), a much smaller competitor, is rallying a bit. SAP is nearly unchanged, Ariba will resume trading at 3:15 PM ET. 1 Comment
-
2:59 PM SAP is acquiring cloud spend management software/B2B e-commerce network owner Ariba (ARBA) for $45/share in cash, or $4.3B. The price represents an 18% premium to Ariba's final trade before shares were halted at 2:30 PM ET. The deal will be funded using a combo of SAP's existing cash and a €2.4B term loan facility. SAP expects it to close in Q3, and be accretive to 2013 EPS. (PR) (previous) Comment!
-
2:56 PM The SEC and Finra look set to launch separate investigations of the Facebook IPO. Finra Chief Rick Ketchum calls allegations analysts for the lead underwriters leaked negative views about FB to select clients ahead of the IPO, "a matter of regulatory concern." 6 Comments
-
2:47 PM Sony (SNE) throws its hat into the crowded mobile music market by releasing an iOS app for its Music Unlimited service. The service charges $3.99/month for access to "core" online music stations and a user's collection, and $9.99/month for full access to Sony's library and "premium" stations. It competes with services from Apple, Google, Pandora, Spotify, Clear Channel, MOG, Rdio, Turntable.fm, and a few other companies. 1 Comment
-
2:38 PM China Mobile (CHA +1.8%) trades higher on an upgrade to Outperform from Credit Suisse, which sees strong 3G uptake in "Tier 2" Chinese cities leading to double-digit revenue growth for the country's carriers. CS notes 2/3 of China's net adds since April '11 have involved 3G, leading its penetration rate to grow to 15.6% of phones, and that 3G subs tend to sport higher ARPUs. Outperforms are reiterated for China Mobile (CHL) and China Unicom (CHU - previous). 1 Comment
-
2:21 PM Fast-growing enterprise videoconferencing firm Vidyo is set to close a $97M funding round that includes an investment from Juniper (JNPR). Vidyo's solutions, which use a combo of routing technology and proprietary software, have been causing headaches for market leaders Cisco (CSCO) and Polycom (PLCM), each of whom recently reported soft videoconferencing gear sales (I, II). Juniper may be interested in integrating Vidyo's tech with its own networking hardware. Comment!
-
2:10 PM The Street is pricing Qualcomm (QCOM +1.2%) as if its business model is broken, says Bernstein's Stacy Rasgon. At a sub-$60 stock price, he thinks investors are pricing in a major decline in Qualcomm's royalty payments, either due to a lower rate or declining 3G/4G phone prices, and/or a drop in its chip margins. Rasgon, who has a $75 PT on Qualcomm, doesn't see either scenario as likely. (earlier) 3 Comments
-
1:48 PM Machinima, a YouTube video developer that generated 1.6B views in April, has closed a $35M funding round led by Google (GOOG). The investment, which comes a year after YouTube acquired video developer Next New Networks, underscores Google's willingness to spend heavily to turn YouTube into a top professional content hub. Those efforts appear to be paying off. Comment!
-
1:27 PM Maybe Facebook (FB) won't prove a major boon for newspapers after all: AppData reports the Washington Post (WPO) and The Guardian have each seen dramatic falls in monthly users for their Facebook "social reader" apps, following news feed changes. Peter Kafka is pleased. "I don’t need to automatically know what my friends are reading — I only want to know about the articles they want me to read." Many users might not be crazy about sharing all of their reading activity either. 2 Comments
-
1:17 PM As Dish Network (DISH) tells the FCC to wait until at least 2016 for a 4G network launch, MetroPCS (PCS) and T-Mobile (DTEGY.PK) are calling for the agency to require Dish to sell half of its 40 MHz. of spectrum. Like others, the carriers think Dish will try to sell some or all of its spectrum to Verizon Wireless (VZ, VOD and/or AT&T (T), thereby putting smaller rivals at a disadvantage. Comment!
-
1:10 PM Looking to win over enterprises worried about handing major contracts to a cloud software vendor, Salesforce.com (CRM) is expanding its partnership with Accenture (ACN). As part of the deal, the companies will cooperate on R&D, and create "Cloud Centers of Excellence" in North America and Europe. Separately, Salesforce is introducing instant messaging capabilities for its Chatter business social networking software, which competes with JIVE's offerings. (earlier) Comment!
-
1:10 PM Alexion Pharmaceuticals (ALXN +5.2%) pops after Standard & Poors announces it will replace Motorola Mobility (MMI) in the S&P 500 index after the close of trading on Thursday, May 24. Comment!
-
12:46 PM Alcatel-Lucent (ALU +0.7%) has released its 7950 XRS line, its first products for a lucrative core router market currently dominated by Cisco (CSCO) and Juniper (JNPR). The 7950 line offers very high densities and runs on Alcatel's hyped FP3 network processor, which can handle 400 Gbps transmission speeds. Carrier inertia and comfort with Cisco and Juniper's software will be major challenges for Alcatel, but Nomura is optimistic the company can carve a niche. 1 Comment
-
12:28 PM Apple (AAPL) still has the world's most valuable brand, according to BrandZ's annual study, which estimates its value has risen 19% Y/Y to $182.9B. IBM is believed to have passed Google (GOOG) for the #2 spot thanks to a 15% increase, while McDonald's (MCD) is seen holding steady at #4 in spite of a 17% gain. Also in the top 10: Microsoft (MSFT), Coca-Cola (KO), Marlboro (PM), AT&T (T), Verizon (VZ), and China Mobile (CHL). Comment!
-
12:19 PM In tandem with Windows 8's fall launch, AMD is planning to release a new low-voltage CPU line, codenamed Hondo. Though based on an older 40nm manufacturing process, Hondo chips will consume only 4W-5W of power, making them rivals to Intel's (INTC) upcoming Clover Trail CPUs. AMD's Trinity CPU line, released last week, has been praised for its battery life gains, though commentary about its performance has been muted. Comment!
-
12:05 PM InterActiveCorp-backed (IACI +1.1%) Aereo succeeds in getting an unfair competition claim that was part of a lawsuit attempting to shut down its $12/month local TV streaming service dismissed. A ruling is still pending on a copyright infringement claim. Broadcasters such as CBS, ABC, NBC, and Fox accuse Aereo of depriving them of retransmission fees from pay-TV providers (ed: the pay-TV providers aren't thrilled about paying for content that's aired for free). Comment!
-
12:05 PM Amidst Sony's (SNE -0.3%) global woes, a bright spot is India, where the company forecasts that sales will jump 30% this FY from $1.15B last year as it benefits from rising incomes. Comment!
-
11:42 AM Goldman's Bill Shope is encouraged by the huge product refresh announced yesterday by EMC (EMC +0.7%). Shope sees the company's new VMAX systems allowing it to re-take share in the high-end storage market, and believes its OneFS system, a product of the Isilon acquisition, will put EMC on better footing in the network-attached storage (NAS) market relative to NetApp (NTAP). He also likes EMC's continued embrace of flash memory. (earlier) Comment!
-
11:34 AM Facebook's (FB) precipitous decline yesterday tripped a circuit-breaker just 15 minutes after the open and triggered restrictions on shorting. The break will remain in place until the end of today's session. Finra data shows that 23.6M Facebook shares were shorted on Friday and 6.4M yesterday. 4 Comments
-
11:03 AM Now that the merger is official, Bloomberg BusinessWeek has published a lengthy piece on Google's (GOOG) plans for Motorola (MMI), and the background of new Motorola chief Dennis Woodside. Woodside promises not to ask for special treatment from the Android unit, but wants to use Google's resources towards goals such as improving battery life and camera image quality. It's added Google will be creating a new Motorola R&D lab focused on advanced technology projects. Comment!
-
10:36 AM Preferential treatment from TSMC (TSM) or not, Qualcomm's (QCOM) 28nm baseband chip shortage is leading the likes of Samsung (SSNLF.PK), LG (LGEAF.PK), and HTC to worry they won't be able to meet 4G phone demand. While 4G devices make up only a small percentage of global phone sales, they account for a much larger chunk of high-end sales. And shipments are expected to surge in 2H thanks to the Samsung Galaxy S III and next-gen iPhone. (previous) Comment!
-
10:17 AM Microsoft (MSFT) has added facial expression-recognition capabilities to its Kinect motion sensor, courtesy of a software update. The update allows the Kinect to track joints in the upper body, as well as to identify users when sitting. It could prove useful as Microsoft moves forward with its plans to bring the Kinect to PCs. 2 Comments
-
9:53 AM Cree (CREE -9.3%) plummets after announcing CFO John Kurtzweil has resigned to become the CFO of Extreme Networks (EXTR +4.1%). Corporate controller Michael McDevitt will serve as Cree's interim CFO while a search is conducted for a full-time replacement. At Extreme, Kurtzweil replaces interim CFO Jim Judson. (CREE PR) (EXTR PR) Comment!
-
9:43 AM It's happening again. Facebook (FB -7%) dives in early trading to $31.65 - shares are now down 17% from their $38 IPO price, though the company's multiples are still high. If Facebook doesn't soon reverse course, class-action suits over last week's increase in its offering price may just be a matter of time. (also) 10 Comments
-
9:26 AM 9to5 Mac provides the latest rumor about the next iPhone sporting a larger display. According to its source, Apple (AAPL) has two iPhone prototypes in testing that sport a 3.95" display with an 1136x640 resolution (the 4S' has a 960x640 resolution), which indicates a wider aspect ratio. It's added Apple is testing versions of iOS 6 that are custom-built for the larger display. If the rumor is true, some developers might not be thrilled about the change in dimensions. (previous) 4 Comments
-
9:13 AM EMC has acquired Syncplicity, a provider of enterprise cloud storage services, for an undisclosed sum. Snycplicity, whose services compete with Box (formerly Box.net) and Dropbox, complements EMC's Documentum content management software business, and provides it with another value-added service to sell. The purchase comes shortly after a major product refresh that emphasized the cloud-readiness of EMC's solutions. There's some overlap between Syncplicity and VMware's (VMW) Project Octopus. Comment!
-
9:08 AM EDGAR Online (EDGR) agrees to be acquired by R.R. Donnelley (RRD) for $70.5M, which includes $1.092 per common share, assumption of debt and payment of an amount equal to the redemption price of the preferred shares. EDGR trading halted. 1 Comment
-
9:02 AM Google (GOOG) closes its $12.5B acquisition of Motorola Mobility (MMI), which remains a separate business. Motorola CEO Sanjay Jha has stepped down and been replaced by "long-time Googler" Dennis Woodside, who was President of Google's Americas region and who has already initiated an executive shakeup at Motorola. (PR) Comment!
-
8:52 AM Finra will oversee a process that will try to reconcile the botched trades that resulted from the technical problems that hit Facebook's (FB) debut on Nasdaq (NDAQ). Finra's review adds to an inquiry at the SEC. Comment!
-
8:32 AM Analysts at Facebook's (FB) lead underwriters cut their revenue estimates ahead of the IPO, reports Reuters, passing the information on to a few of their key clients. "My biggest hedge fund client told me they lowered their numbers right around mid-roadshow," says an IPO researcher. He still bought the issue, he says, but flipped it immediately and went short. Shares -3.8% premarket. 15 Comments
-
8:12 AM Facebook (FB -2.4%) continues to fall as the blame game starts over responsibility for its 11% slump yesterday. Among the chief names are Morgan Stanley (MS), the lead underwriter; Nasdaq (NDAQ), for the tech problems on Friday; and of course Facebook. Among the criticisms: the price was too high and too many shares were sold. 2 Comments
-
8:06 AM The FTC speeds up its investigation of Google's (GOOG +0.3%) competitive practices, Bloomberg reports, asking for information from rivals about the company's behavior. The requests to the firms, which include eBay (EBAY), were sent prior to the EU saying yesterday that Google has a "matter of weeks" to resolve a probe and avoid possible fines. Comment!
Other date
TECH ETFs IN FOCUS
Latest Tech Articles
