I just finished a 35 minute interview with Andrew Liveris, CEO of Dow Chemical. It covered US Energy Policy, oil, gas, Dow’s JV strategy, mergers, “the cash”, Dow Ag and other topics. Mr. Liveris was nothing but frank and honest as to his opinions and his outlook for the company. It was great….
As soon as I have it transcribed, I will begin to post it.
Disclosure (“none” means no position):Long DOW
Tilson talks about Ambac (ABK), MBIA (MBI), Lehman (LEH), Citigroup (C), Washington Mutual (WM) and Wachovia (WB). He always makes great points. Is it just me or do the short sellers like Ackman, Tilson and Einhorn (when they are short) make the best points?
Disclosure (“none” means no position):Long C, WB, none
Despite attacks by the NY Times, Einhorn keeps raising issues that, until Lehman (LEH) can answer honestly, will continue to crush the stock.
Like I said yesterday, Einhorn is raising very specific issues. There have not been specific answers from anyone. Here is what Einhorn has ACTUALLY said regarding Lehman. Read the entire piece because what has been printed and said about it is well, less that accurate
Disclosure (“none” means no position):None
One has to wonder what execs at Target (TGT) were thinking when they did noting to try to draw those with rebate checks to their stores like Wal-Mart (WMT) did.
As far back as January Wal-Mart began courting shoppers who were receiving rebate checks from the US government. In the middle of April I pondered why the “deafening silence” from the likes of Target and JC Penny (JCP) in regards to the payments.
All this against the background of questionable customer service tactics at the chain.
Well, the first monthly results since the stimulus checks began being mailed are in and Wal-Mart is the clear winner.
Wal-Mart said Thursday total U.S. same-store sales during the four-week period ending May 30 rose 4.4 percent due to strong sales of grocery, health and wellness and entertainment products. Excluding fuel sales, same-store sales for the month rose 3.9 percent. Analysts polled by Thomson Financial, on average, forecast a 1.6 percent increase in same-store sales.
Same-store sales increased 4 percent in its Wal-Mart Stores segment, while same-store sales at Sam’s Club stores increased 6.5 percent during the month.
Meanwhile Target said Thursday that its May sales at stores open at least one year fell 0.7%. Analysts, on average, had expected same-store sales to fall 0.2%. For June, the compnay sees same-store sales in a range of down 2% to flat. In the year-ago period, same-store sales rose 3.5%.
Wal-Mart see sales for same period up 2% to 4%.
It will not be very long before tough questions are asked at Target as to their decision to essentially ignore the coming rebate while Wal-Mart aggressively pursued the funds.
At least they should be……
Disclosure (“none” means no position):Long WMT, None
For those having problems with Internet Explorer, I fully concur with Mr. Mossberg on Firefox’s latest offering
Read it here
Hovnanian’s (HOV) CEO speaks.
Blah, blah, blah a loss. We all expected that. The key here is what he is seeing out there now. Not necessarily improvement, but stabilization. At this point, that would be fantastic news for the industry. Buyers have been sitting waiting for what they feel is the bottom, when the presume it to be here, they will act, fast.
This backs yesterday’s post on the subject.
Disclosure (“none” means no position):None
This is the first in either preparing for a sale by improving equity and debt levels OR, continuing the turnaround by improving liquidity.
From the press release:
Borders Group, Inc. (NYSE: BGP) today announced that it will sell 100 percent of its Australia/New Zealand/Singapore businesses — which includes 30 Borders superstores — to A&R Whitcoulls (ARW), the leading Australasian retailer of books and related products owned by private equity firm Pacific Equity Partners (PEP). The total transaction is valued at up to $110 million and is expected to close next week.
Upon closing of the transaction, Borders Group will receive proceeds of approximately $95 million (AUD) or approximately $90 million (USD based on current exchange rates). Additional deferred payments of up to $15 million (AUD) or approximately $14 million (USD based on current exchange rates) will be paid to Borders Group on or about March 31, 2009 if certain performance targets are achieved.
As part of the agreement, ARW, which owns and operates over 260 stores including Australia’s oldest bookstore chain, Angus & Robertson, as well as popular New Zealand book, magazine and DVD retailer Whitcoulls, among other holdings, will have the right to use the Borders brand throughout Australia/New Zealand/Singapore consistent with a brand licensing pact that is part of the agreement.
“These businesses have performed well led by a talented management team who has consistently delivered strong execution in Borders superstores in Australia, New Zealand and Singapore,” said Borders Group Chief Executive Officer George Jones. “This transaction represents an attractive valuation, permits us to forgo further investment in these businesses, and provides our company with a significant cash infusion to further reduce debt, which is one of our key financial initiatives. ARW is a well respected and highly successful retail company with outstanding leadership that will be strengthened with the addition of the local Borders executive team and our stores. We trust A&R Whitcoulls to successfully manage the Borders brand.”
A&R Whitcoulls Group Managing Director, Ian Draper, said that the Borders assets are complementary to his company’s existing holdings, offering a different yet enhanced shopping experience to Angus & Robertson in Australia and Whitcoulls in New Zealand. “Borders will bring a new dimension to our retail offerings,” he said. “The customer-experience based model invites shoppers to browse with a vast range of books, music, movies and cafes in Borders stores. This model has proven popular in the local market and will complement our existing presence by targeting a different demographic through the premium format and vast selection of products.”
Managing Director of Borders Asia Pacific, John Campradt, will continue to serve in his current role managing the Borders business. “Building the Borders brand throughout Australia, New Zealand and Singapore has been fulfilling,” he said. “Now, we enter an exciting new chapter as part of ARW, which has welcomed our management team, our stores, and our people, and will provide the support we need to drive profitable growth.”
In March the negotiations were put on hold while Borders looked at “other options”, primarily a financing agreement with Pershing and Bill Ackman.
Disclosure (“none” means no position):Long BGP
Radioshack, Congress, Secrets, Gumshoe
– Can it?
– Always blaming someone
– Busted
– Do not even buy a stock based on a mailing before you check here….ever
Radioshack, Congress, Secrets, Gumshoe
– Can it?
– Always blaming someone
– Busted
– Do not even buy a stock based on a mailing before you check here….ever
Upgrades
US Airways (LCC)- Credit Suisse Underperform » Neutral
UAL Corp. (UAUA)- Credit Suisse Neutral » Outperform
Whole Foods (WFMI)- FTN Midwest Neutral » Buy
Eli Lilly (LLY)- Cowen & Co Neutral » Outperform
Amdocs (DOX)- Kaufman Bros Hold » Buy
Novartis AG (NVS)- Cowen & Co Neutral » Outperform
Novatel Wireless (NVTL)- Morgan Joseph Hold » Buy
SAIC (SAI)- Jesup & Lamont Neutral » Buy
Prestige Brands (PBH)- Oppenheimer Underperform » Perform
Morgan Stanley (MS)- Wachovia Mkt Perform » Outperform
Tyson Foods (TSN)- Wachovia Mkt Perform » Outperform
Koppers Holdings (KOP)- UBS Neutral » Buy
Downgrades
Pentair (PNR)- Janney Mntgmy Scott Buy » Neutral
Western Union (WU)- DA Davidson Buy » Neutral $26
Indevus Pharm (IDEV)- Broadpoint Capital Buy » Neutral
VNUS Medical Tech (VNUS)- Piper Jaffray Buy » Neutral
Omrix Biopharma (OMRI)- UBS Buy » Neutral
Sunesis Pharma (SNSS)- Cantor Fitzgerald Buy » Hold
Bristol-Myers (BMY)- Cowen & Co Outperform » Neutral
Vertex Pharm (VRTX)- JMP Securities Mkt Outperform » Mkt Perform
SBA Comm (SBAC)- RBC Capital Mkts Outperform » Sector Perform
American Tower (AMT)- RBC Capital Mkts Outperform » Sector Perform
Crown Castle (CCI)- RBC Capital Mkts Outperform » Sector Perform
Trimble Navigation (TRMB)- JP Morgan Overweight » Neutral
Choice Hotels (CHH)- Oppenheimer Outperform » Perform
Intercontinental Hotels Group (IHG)- Oppenheimer Outperform » Perform
Marriott (MAR)- Oppenheimer Outperform » Perform
Upgrades
US Airways (LCC)- Credit Suisse Underperform » Neutral
UAL Corp. (UAUA)- Credit Suisse Neutral » Outperform
Whole Foods (WFMI)- FTN Midwest Neutral » Buy
Eli Lilly (LLY)- Cowen & Co Neutral » Outperform
Amdocs (DOX)- Kaufman Bros Hold » Buy
Novartis AG (NVS)- Cowen & Co Neutral » Outperform
Novatel Wireless (NVTL)- Morgan Joseph Hold » Buy
SAIC (SAI)- Jesup & Lamont Neutral » Buy
Prestige Brands (PBH)- Oppenheimer Underperform » Perform
Morgan Stanley (MS)- Wachovia Mkt Perform » Outperform
Tyson Foods (TSN)- Wachovia Mkt Perform » Outperform
Koppers Holdings (KOP)- UBS Neutral » Buy
Downgrades
Pentair (PNR)- Janney Mntgmy Scott Buy » Neutral
Western Union (WU)- DA Davidson Buy » Neutral $26
Indevus Pharm (IDEV)- Broadpoint Capital Buy » Neutral
VNUS Medical Tech (VNUS)- Piper Jaffray Buy » Neutral
Omrix Biopharma (OMRI)- UBS Buy » Neutral
Sunesis Pharma (SNSS)- Cantor Fitzgerald Buy » Hold
Bristol-Myers (BMY)- Cowen & Co Outperform » Neutral
Vertex Pharm (VRTX)- JMP Securities Mkt Outperform » Mkt Perform
SBA Comm (SBAC)- RBC Capital Mkts Outperform » Sector Perform
American Tower (AMT)- RBC Capital Mkts Outperform » Sector Perform
Crown Castle (CCI)- RBC Capital Mkts Outperform » Sector Perform
Trimble Navigation (TRMB)- JP Morgan Overweight » Neutral
Choice Hotels (CHH)- Oppenheimer Outperform » Perform
Intercontinental Hotels Group (IHG)- Oppenheimer Outperform » Perform
Marriott (MAR)- Oppenheimer Outperform » Perform
Discussed: MBIA (MBI), Ambac (ABK), Lehman (LEH),Yahoo (YHOO), Icahn, Oil (USO)
Best quote: About Yahoo management regarding Icahn, “I think perhaps they should have took him more seriously in the beginning”…Great..
Part 1
Part 2
Part 3
Disclosure (“none” means no position):None
THURSDAY’S PICKS
Jeff Macke recommends getting long Disney (DIS) $34.35
Guy Adami suggests Starwood (HOT) $47.85
Karen Finerman and Pete Najarian both think Microsoft (MSFT) $27.54 is a buy
WEDNESDAY’S PICKS
For the second day in a row Jeff Macke recommends shorting the Dow by getting long the Short Dow30 ProShares (DOG) $62.60 CLOSE $62.72 GAIN
Guy Adami suggests getting long Celgene (CELG) $61.31 CLOSE $62.83 GAIN
Karen Finerman thinks Aetna (AET) $45.65 is a buy.CLOSE $46.53 GAIN
Pete Najarian prefers Norfolk Southern (NSC) $65.50 on the pullback. CLOSE $65 LOSS
2008 Records:
Brian Schaeffer= 0-1
Carter Worth= 1-1
Jon Najarian= 4-3
Jeff Macke= 43-36-1
Tim Seymore= 17-14
Guy Adami= 47-36
Pete Najarian= 42-38
Karen Finerman= 41-32-1
Joe Terrenova= 1-3
2007 Results (Since 6/21):
Guy Adami= 58-46 = 56%
Jeff Macke= 60-40 = 60%
Pete Najarian= 49-41 = 54%
In a just release SEC filing, Edward Lampert through his ESL Partners hedge fund has upped his stake in AutoNation (AN) to 71.469 million shares or just over 40% of the total outstanding.
Lampert and individual investor Todd Sullivan now have a controlling interest in the company.
Disclosure (“none” means no position):Long AN
This is priceless……..Yang now needs to go. He is poison to the company now.
Roy Bostock
Chairman
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Mr. Bostock:
I have long been cynical about the effectiveness of many of the boards and
CEOs in this country and as a result the inability of our companies to compete.
I have constantly complained about how far CEOs and boards will go in order to
retain their jobs, yet even I am amazed at the length Jerry Yang and the Yahoo
board have gone to in order to entrench their positions and keep shareholders
from deciding if they wished to sell to Microsoft.
According to details in a complaint that I became aware of yesterday
(details Yahoo (YHOO) fought to keep under seal), Jerry Yang and a majority of the
board went to inordinate lengths to sabotage a Microsoft bid. The complaint
states: “Viewing employee retention as Microsoft’s (MSFT) Achilles heel, Yang
engineered an ingenious defense creating huge incentives for a massive employee
walkout in the aftermath of a change in control. The plan gives each of Yahoo’s
14,000 full-time employees the right to quit his or her job and pocket generous
termination benefits at any time during the two years following a takeover, by
claiming a “substantive adverse alteration” in job duties or responsibilities.”
The damage to Microsoft “is compounded by the fact that Yahoo’s thousands of
engineers, known as “Technical Yahoos!,” have detailed job responsibilities and
qualifications.”
Most importantly, Microsoft might never be able to trust a CEO and board
who, while claiming to be negotiating in good faith, went behind their back and
adopted a “plan” which not only sabotages any Microsoft acquisition but went so
far as to completely disable its own ability to rescind the “plan” as long as
Microsoft’s offer remains pending. Until now I naively believed that
self-destructive doomsday machines were fictional devices found only in James
Bond movies. I never believed that anyone would actually create and activate one
in real life. I guess I never knew about Yang and the Yahoo Board. In my
opinion, it will be extremely difficult for Microsoft or other companies to
trust, work with and negotiate with a company that would go to these lengths.
It is insulting to shareholders that Yahoo for the last month has told us
that they are quite willing to negotiate a sale of the company to Microsoft and
cannot understand why Microsoft has walked away. However, the board conveniently
neglected to inform shareholders about the magnitude of the plan it installed
which made it practically impossible for Microsoft to stay at the bargaining
table. Could this have been the problem?
Even more deceitful are Yahoo’s actions toward its own employees, for whom
you claimed to have set up the “plan”. Management neglected to mention to these
same employees that Microsoft in its proposals had earmarked $1.5 billion of
retention incentives (representing over $100,000 per employee) meant to allay
any employee concerns.
Ironically, according to the complaint, this is not the first time that
Yahoo has denied shareholders the opportunity of selling to Microsoft at a large
premium. According to the complaint, in January 2007 Microsoft offered to
purchase Yahoo at $40 per share but the company rejected that proposal. On
January 31, 2008, Steve Ballmer emailed a letter to Jerry Yang and Roy Bostock
making a new proposal of $31 per share. The letter recounts Microsoft’s prior
efforts to acquire Yahoo and noted that Microsoft had given Yahoo time to
implement business strategies designed to turn the company around. These
strategies obviously didn’t work. The letter went on to state: “Our proposal
represents a 62% premium above the closing price of Yahoo! common stock of
$19.18 on January 31, 2008.” Yahoo not only turned down this proposal but
sabotaged it. An article in CNET News cited in the complaint sums it up by
stating, “Yahoo may indeed agree to Microsoft’s [offer], but it will be over
Jerry Yang’s dead body”.
I and many of your shareholders believe that the only way to salvage Yahoo
in the long if not short run is to merge with Microsoft. However, because of HSR
considerations, to complete a merger of this magnitude will take a period of
time. Even if by some stretch of the imagination the Yahoo board finally
determines to do the rational thing and sell the company, I fear that, in light
of Yang and the board’s recent actions in response to Microsoft’s overtures, it
may be too late to convince Microsoft to trust Yang and the current board to run
the company during that period while Microsoft sits on the sidelines with $45
billion at risk. Therefore, the best chance to bring Microsoft and Yahoo
together is to replace Yang and the current Yahoo board with a board that will
negotiate in good faith with Microsoft and in whom Microsoft will have trust to
operate the company during the long period between signing and closing.
You stated in a press release yesterday that, “Yahoo’s board of directors
including Jerry Yang has been crystal clear that it would consider any proposal
by Microsoft that was in the best interests of its shareholders.” However this
is not crystal clear to me. You have allegedly turned down a $40 offer. You have
turned down and sabotaged a $33 offer. Instead, you appear willing to negotiate
an “alternative” deal that in my opinion will be worth less than $33 but will
entrench the board and Jerry Yang. I understand how these actions are in the
best interests of management and a board whose members each receive $40,000 per
month for several days work, but it is hard for me to understand how these
actions are in the “best interests of the shareholders.”
However, despite your actions to date, there is still some possibility that
you can resuscitate a Microsoft offer for the company. The board can rescind the
“severance plan” that is the largest impediment to a Microsoft deal. You
currently can do this because Microsoft withdrew their bid 30 days ago. It is
time for you to stop misleading your shareholders with respect to Microsoft. It
has been reported today that when asked to talk about the Microsoft bid, Sue
Decker indicated that Microsoft made an offer which Yahoo’s board didn’t feel
was at an attractive enough price. However, one doesn’t have to be a rocket
scientist to realize there is a simple method to possibly achieve a higher
price. Simply rescind the poison pill “severance plan”, which would free up
approximately $2.4 billion and possibly even more which could be added to the
bid. It is also time to admit to your shareholders that the severance plan was
not done for your employees (who you conveniently neglected to inform that
Microsoft had earmarked $1.5 billion in retention incentives for), but rather
was done simply as an entrenchment device and to impede a Microsoft bid. If you
are not completely disingenuous in your protestations concerning doing “the
right thing” for shareholders, you should rescind the severance plan
expeditiously and determine if Microsoft is still willing to purchase our
company and thereby create a true competitor for Google. I can only hope that
you will finally do what is in the “best interests of the shareholders.”
Sincerely yours,
CARL C. ICAHN
Disclosure (“none” means no position):None