The Good Part of Y2K: Qualcomm (QCOM) is in a giving mood with its shareholders, saying Tuesday that it plans to raise its dividend and keep buying back stock. The dividend component of the move will see the wireless technology company's quarterly payout rise to 25 cents a share from 21.5 cents, a nice 16% increase. The share repurchase is a new $4 billion program that will replace the old buyback, which had $948 million left to go.
That's not all investors in Qualcomm have to be grateful for. The stock closed Monday just above $62, meaning it has nearly doubled from the $32 range in July 2010. Not a bad advance in a little more than a year and a half. Perhaps even more impressive is the fact that Qualcomm is revisiting territory it hasn't been to since the year 2000. Right, the days when anything tech screamed higher almost daily.
Despite the shareholder-friendly nature of its announcement, Qualcomm is down slightly today. However, so is basically everything else, and it can be hard for a single stock to escape the kind of pressure the market is facing. At the NYSE, nine out of 10 stocks were trading lower, and on the Nasdaq, more than 80% of the stocks were giving up ground. On a relatively positive note, Qualcomm's loss-- 46 cents, or 0.7%%, to $61.65 -- isn't quite as steep as the 1.3% drop in the tech-heavy Nasdaq overall.
Corporate stock repurchases don't have to take place at the level the stock is currently trading, which means Qualcomm has the flexibility to look for entry points the company's executives think make sense. Buybacks cut the supply of available shares, which alone can perk up a stock price. If things keep working in Qualcomm's favor, and demand for the stock remains intact, it just might, might, continue looking like 2000 again.
--By Chris Nichols
MSG Stock Is Lin-ergized: Once upon a time, in a land called New York City, a basketball phenomenon by the name of Jeremy Lin was brought into creation. And on the following day, sports fans went Lin-sane. It was Feb. 4 when Harvard grad Jeremy Lin was catapulted off the bench and into the B-ball stratosphere, scoring 25 points, pulling down five rebounds and handing out seven assists to help his team notch a 99-92 victory against the New Jersey Nets. Lin, soon to be spoken of everywhere in the context of “Linsanity,” followed this auspicious “debut” (he had only played a total of 55 minutes in the previous 23 games) with impressive play in a string of games.
The perpetually modest player -- who also made history by being the first NBA-er of Taiwanese descent -- was (and is) a Lin-sation who can take the credit for boosting both stadium and Knicks merchandise sales. He even got credit for helping end the dispute between MSG and Time Warner, which had refused to carry the MSG sports channel (and, therefore, Knicks games) since Jan. 1.
Now, we get the news that Madison Square Garden (MSG), home of the Knicks, is raising its season ticket prices -- an average of 4.9% for the team of Linsanity and a rather massive 9.5% for the NHL’s Rangers. The Garden is in the midst of a three-part renovation that the company says will vastly improve audience experience. It’s likely that Knicks fans, hungry for more Lin-plays, will be willing to pay up.
But what of MSG stock? Has it seen the same kind of boost the Knicks have? It was just about two years before Linsanity became ubiquitous that MSG first traded as its own entity (at around $17 and change per share) after splitting from Cablevision Systems (CVC).
Is it a coincidence that it saw its all-time highest close of $33.43 (with volume of 1,027,676 shares) as the Linsanity frenzy was at its peak (Feb. 21)? And consider this: If you had invested in MSG stock on Feb. 3 (otherwise known as B.L.), you would be up around 10% now. The stock has come down from its Feb. 21 high but is still trading at $32 and change, as compared to the Feb. 3 close of $29.32. The stock has, in fact, only closed below $30 twice since the Lin era began.
How long will the adrena-Lin continue? That remains to be seen. But for now, it’s safe to say that both the Knicks and MSG’s stock have been Lin-ergized.
--By Rebecca Stropoli
InvestorsReading Too Much Into Amazon Pressures?: The unveiling of the iPad 3, or the iPadHD if rumors are correct, could deal a blow to Amazon (AMZN), which has been quietly facing incremental pressure. But then again, Amazon has been quietly doing something itself -- selling a lot of Kindle Fires, and subsequently selling a lot of things to the people who bought Kindle Fires. It's also reportedly prepping to launch a 10-inch version of the Fire in the second quarter.
Amazon bet big on the ultimate profitability of the low-priced Kindle Fire, but investors have not since bet big on Amazon. Although they are up 5% from a year ago, shares have fallen almost 18% since the Kindle Fire hit the market on Nov.15. During that same time, the S&P 500 has added 9%, and the Nasdaq tacked on 11%.
A Forrester Research report this week said that it believes Amazon’s low-priced tablets are paying off as the online retailer has expanded its market In the U.S. But Google (GOOG) is possibly -- these are anonymous sources being cited, so we don’t want to give them too much credit -- teaming with ASUS to release a 7-inch tablet that will launch in the summer for $199. That price would put it in competition with Amazon’s Fire. Google on Tuesday rolled out a rebranding of the Android Market as the Google Play Store, which will include its eBookstore and recently launched music service.
Of course, the less expensive tablet models have to contend not just with each other, but also with the iPad, which still has a firm grip on the tablet market. Mobile analyst Chetan Sharma told TechCrunch he believes Amazon sold around 4 million Kindle Fire tablets in 2011, while others are estimating 6 million. Either figure would trail the Apple (AAPL) iPad significantly.
Outside of competitive pressures, a consistent source of bother for the online retailer, the state-by-state sales tax battle has been slowly playing out, with Virginia being the latest front. Starting Sept. 1, 2013, Amazon will begin collecting and paying Virginia state sales tax under an agreement announced this week. All of those pressure points clearly give investors reason to be uneasy, but is the stock really worth so much less than the day the Kindle Fire launched?
--By Elizabeth Trotta