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Birdwatching! What to Know about Twitter IPO; How to Avoid Facebook Failures

Dan Berman
Hot Stock Minute
Birdwatching! What to Know about Twitter IPO; How to Avoid Facebook Failures

A little birdie told me... Twitter is about to go public. The social network says it has filed confidential paperwork to begin the process for an IPO. Now, because of that confidential status, we don't know how fast Twitter is growing, or whether it's even profitable. The company has a valuation of more than $9-billion based on private sales of its stock.


Facebook (FB) has gotten two more upgrades. JPMorgan has raised its price target on the social network to $53 a share and RBC Capital has hiked its target to $52. Facebook is up 88% over the last three months, with the biggest climb coming the week of July 22nd, when the company reported earnings. It's up about 17% since that now notorious IPO.

Apple (AAPL) has just had its price target cut to $425 by Jefferies. Analyst Peter Misek trimmed 2014 earnings estimates to $37.95 per share from $38.78. Compare that to the consensus of $42.66. It all stems from Apple's new iPhones. Misek says the price on the new 5C is too close to existing models. And he predicts supply problems with the 5S because of the fingerprint sensor. Apple stock is now down 14% year-to-date. It's down 31% over the past year.

JPMorgan (JPM) fell nearly 2% yesterday. The Wall Street Journal reports the bank has now committed an additional $4-billion dollars and 5,000 employees to deal with its risk and compliance problems. The company currently faces at least seven separate investigations by the Justice Department stemming from activities during the financial crisis. The bank has already spent $18-billion defending itself since 2008. JPMorgan shares have pulled back a bit over the last six weeks, but remain up about 17% year-to-date.

Vodafone (VOD) says it will announce full details on Monday of its plan to purchase Germany's largest cable company-- Kabel Deutschland. Word of the takeover attempt first surface yesterday. It is voluntary and said to be a $10-billion transaction. Vodafone is of course coming into a windfall of cash through the sale of its 45% stake in Verizon Wireless. Shares of Vodafone are up 30% year-to-date, most recently spiking on news of its exit from Verizon Wireless.


Consider the source here, but there's a report out that President Obama will in fact name Larry Summers as the next Fed chair. It comes from the Japanese newspaper called Nikkei. The article cites unnamed sources. Summers and Vice Fed chairman Janet Yellen have widely been considered the frontrunners.

Two big names have emerged in the Verizon (VZ) bond bonanza. The Wall Street Journal reports that PIMCO and BlackRock accounted for roughly $13-billion worth of the debt sold in the offering. Combined, their purchases come to 25% of the $49-million total. The bond sale is financing Verizon's purchase of Vodafone's stake in Verizon Wireless.

Changes in store at Trader Joe's. The market with the cult following is going to stop giving part-time workers health care coverage. Beginning in January, the company will instead give each part-timer $500 and direct them towards new health care exchanges available under the Affordable Care Act. Trader Joe's has previously been praised for giving its part-timers health benefits at reasonable prices.