Posts by Jeff Macke
- Jeff Macke at Yahoo Finance7 hrs ago
In case you didn’t hear, Alibaba (BABA) is coming public sometime thing morning.
The truth is, unless you get an allocation of shares at the IPO price or have a massive legacy stake in the company you need to partially liquidate you probably shouldn’t trade Alibaba at all tomorrow. Beyond the intrinsic risk of the company structurally, the nakedly artificial supply constraint created by investment bankers and the opaque nature of the financials the fact is trading heavily hyped IPOs is a tough way to make money.
The buzz surrounding Alibaba is a strange mix of institutional excitement and public apathy. Unlike a year ago it’s not uncommon to get asked for stock tips (don’t bother… tips are for waiters). The public appetite for stocks is clearly stronger than it has been for years but Alibaba doesn’t have the same level of chatter surrounding it that Facebook (FB) or even Twitter (TWTR) had.
- Jeff Macke at Yahoo Finance8 hrs ago
It was just after 9pm on Thursday, September 18th, 2003 when the Pacific Heights neighborhood of San Francisco was bombed from above. The fusillade came with no advanced warning and had no historical precedent. My first thought was terror attack. My second thought was earthquake.
My third thought, the one that turned out to be correct, was that Larry freaking Ellison was up to something weird. Sure enough Ellison had hired a personal firework designer, bribed the right officials and gotten permission to park a barge in the Marina District of San Francisco. The show that resulted lasted for 30 full minutes and was close enough to the city that burned out husks of explosives landed on some houses.
It was also beautiful. Even my 10 month old daughter eventually stopped crying and just stared at the pretty lights that were almost certainly going to kill us all. The next day it was revealed that the display was a celebration of Ellison’s participation in the Moet Cup sailing race. Larry didn’t ask for permission or apologize. He just did.
- Jeff Macke at Yahoo Finance1 day ago
Pier 1 Imports (PIR) shares are on fire in a bad way. The wicker king is down more than 15% after missing earnings and lowering estimates. CEO Alex Smith says the Internet is negatively impacting sales and store traffic. You'd think he would have seen that one coming. Barclays downgraded the stock to underperform, noting that sales and earnings would be disappointing.
Vivus (VVUS) shares are barely safe for work, up more than 10%. The makers of erectile dysfunction drug Stendra have been given permission to advertise the drug as being effective in as little as 15 minutes. That gives Stendra users a quarter hour head start over users of competing drugs like Viagra. This small triumph in man's ancient war against foreplay is worth about $50 million based on today's price action.
- Jeff Macke at Yahoo Finance1 day ago
At this point even Roger Goodell must be questioning the very God who somehow deemed him worthy of being paid $44 million to sit at the head of the most powerful non-profit organization not based in Vatican City.
The NFL's day started with the Minnesota Viking's 12:47am announcement that Adrian Peterson had been placed on something called the Exempt Commissioner's Permission list . Peterson was later joined on the list by Carolina Panther’s lineman Greg Hardy as he appeals his July conviction on charges of assaulting and threatening to kill his girlfriend.
Don’t weep for Peterson and Hardy. Per the previously obscure terms of the ECP List players are paid their full salaries provided they do anything other than show up for work. That means Peterson and Hardy will collect a combined $24.87 million to stay home and spend time with their families. Hours later Arizona Cardinal running back Jonathan Dwyer was arrested on domestic abuse charges.
- Jeff Macke at Yahoo Finance2 days ago
More than six years after the collapse of Lehman Brothers triggered six months of near financial anarchy the SEC has announced plans to start stress testing mutual funds. Under the new rules asset management firms will be forced to disclose more detailed information about their holdings and create a variety of scenarios designed to simulate how the funds would act under extreme conditions.
As is the case with all of the nearly endless tests created to prevent another financial crisis, the idea seems full of good intentions but arguably toothless. According to Lee Kranefuss who is credited with fathering the modern ETF and is currently at Source ETFs, regulators are trying to do much with a limited tool.
“I’m not sure you get all that much,” says Kranefuss in the attached video. An examination would presumably safeguard against outright fraud but simulating a figurative run on the bank is unlikely to result in any surprises. Prices will move lower. “It can’t hurt but will it help?”
Allergan (AGN) shares are a bit higher after the company agreed to hold a special shareholder's meeting on December 18th as planned. Best known for its emotion-murdering Botox product, Allergan had been looking to delay or eliminate a shareholder vote that could result in the ouster of most of its board. Canadian pharmaceutical company Valeant and activist hedgie Bill Ackman have been seeking control of Allergan since last summer.
Boeing's (BA) got the right stuff as the shares push slightly higher. The makers of the Dreamliner are expected to be announced as the winners of a contract to build a so-called "Space Taxi" serving the International Space Station. Elon Musk's SpaceX had been considered the front runner but ultimately the government decided Boeing was more likely to deliver on-time, under budget. Just like the Dreamliner. The U.S. hasn't launched a manned spacecraft of its own since the end of the shuttle program in 2011.
Yesterday Sears (SHLD) announced that it would borrow up to $400 million from groups affiliated with CEO and Chairman Eddie Lampert's ESL Investments Inc. The filing is pretty densely worded but there are multiple listed lenders in the documents. As it turns out they all are under the sole control of Eddie Lampert.
On the surface it's a good transaction all around. Generous, even. Lampert's affiliates are charging an annual rate of 5% plus 1.75% up front. The loan ends on December 31st but Sears can extend it for another 0.5%. In return for what figures to be around $10 million Sears gets to buy Christmas inventory, thus avoiding the dreaded Retail Liquidity Death Spiral.
Eddie Lampert is brilliant and rich. He didn't get that way giving out sub-market rate loans to retailers burning through a billion a year in cash. There had to be a kicker in this package somewhere and it's a beauty.
Believe it or not there was a day when the Federal Reserve didn’t feel compelled to tell the public a damn thing about what it intended to do with rates. In his actual confirmation meeting, the forum in which a potential Chairperson would be expected to lay out their detailed thinking, Paul Volcker said he’d “have to call the shots as we see them” to fight inflation that was then rising at “a pretty good clip.”
This during a time of double digit inflation. Volcker later made a massive policy change which he announced on the Saturday of a Columbus Day weekend (back when that was a holiday).
From those days of no communication we’ve gone from Alan Greenspan’s fortune cookie obfuscations to Bernanke’s sometimes painful metaphorical journeys down mountains in racecars and landing on aircraft carriers in the dark.
- Jeff Macke at Yahoo Finance4 days ago
Molson Coors (TAP): The brewer is tapping in to the beer bidding frenzy this morning. Last Friday there were rumors Molson was looking to buy Heineken's Czech operations. This morning brings the news that Heineken itself is in play, rejecting a bid from SAB Miller which was in turn rumored to be the potential target of a $122 billion bid from Anheuser Busch (BUD). BUD denies that scuttlebutt but given low rates and lack of regulatory restraint the deal environment in the beer industry is starting to look like closing time at a bar; all these companies are looking to hook-up with just about anyone at this point. Molson Coors may end up a target or get assets from a spin-off of assets to satisfy anti-trust regulators, or possibly simply end up with Heineken's stake in the biggest per capita beer drinking nation on earth. Chug!
- Jeff Macke at Yahoo Finance4 days ago
Beer wars! Heineken has confirmed that it rejected a takeover bid from SABMiller. The Heineken family which still has a controlling interest in the world's number 3 brewer by volume says the company intends to remain independent. SAB Miller is the number 2 brewer in the world. It's not over yet though. Low rates have given all multinationals beer goggles and Heineken is still looking pretty good to Belgium's King of Beer, Anheuser Busch (BUD) which controls 20% of the global market.
UPDATE - The Wall Street Journal is reporting that Anheuser-Busch is talking to banks about financing what could be a $122 billion deal to buy SABMiller, according to a person familiar with the matter.