Research in Motion Takes Dead Aim at Apple
While it remains to be seen if Apple, Inc (AAPL-NASDAQ) can wrest market share from Research in Motion's (RIMM-NASDAQ) bread and butter enterprise market, RIM is wasting no time in targeting Apple's stronghold, the consumer.
This summer will likely witness the release of a 3G iPhone to compete with RIM's new 3G Bold. But RIM's comments today at their Wireless Enterprise Symposium (WES) would seem to indicate that they are taking North American market share from Apple, and have increased their "non-enterprise" subscribers from 27% to 38% of the total, and according to Gartner, have a commanding lead over Apple:
"This is a very solid announcement," said Kevin Dulaney, wireless analyst and vice president of Gartner Inc. "The thing about RIM is that they don't make many mistakes. They still have a big advantage over the iPhone." Marketwatch
And they are not the only analyst singing the Bold's praises:
Google To Cut Electricity Usage via SSD Storage
Google’s braintrust have made an admirable effort toward conservation efforts, but with their server farms drawing unfavorable publicity over the electricity consumption, they are continuing to seek ways lower their consumption.
Intel and Marvell will benefit from the push, and while it might not move the needle at Intel, a drawdown in NAND flash chips might provide a floor of sorts in an industry that has been plagued by overcapacity:
Google plans to switch some of its servers over to solid-state drive-based (SSD-based) storage supplied by Intel in order to lower electricity consumption, according to sources at memory makers.
The more power efficient SSDs will be installed at severs at Google’s US headquarters. Intel will supply flash chips and Marvell the corresponding controller ICs, the sources detailed. Shipments are slated for late second quarter, they added.
With the increasing use of SSDs in server applications, a shortage for 16Gb and 32Gb NAND flash chips could become a possibility, the sources commented. DigiTimes
Intel’s Solid state drive (SSD) storage is beginning to get a traction; design wins at Apple AirBook should help. Booting up your computer will soon get a little faster, and the servers farms more efficient, good news for Intel, Micron and Marvell.
Intel gains SSD orders from Google, say sources
DigiTimes
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Positions
Canada’s National Sport: Insider Trading
Vancouver has long been a hotbed for shady stock operators, but crooks have long eluded the long arm of the Mounties.
But regulators are stepping up their enforcement activities, and are targeting the once untouchables.
Lawyers:
Securities regulators in the United States and Ontario have launched a major insider trading investigation that centres on 11 Canadian takeovers during the past two years and the U.S.-based law firm that advised companies involved in each of the deals.
According to documents filed in the Ontario Superior Court, the Ontario Securities Commission is investigating Toronto business consultant Stan Grmovsek, his sister Marian Grmovsek-Gatzos and his brother-in-law Alex Gatzos, alleging they earned a profit of $1.1-million by trading in resource companies shortly before they were engulfed in a frenzied wave of mergers and acquisitions that sent stock prices into orbit.
The deals include Yamana Gold Inc.’s three-way merger with Northern Orion Resources Inc. and Meridian Gold Inc., Goldcorp Inc.’s merger with Glamis Gold Ltd., and Iamgold Corp.’s union with Cambior Inc.
An affidavit filed by OSC investigator Stephen Carpenter states that the regulator’s review of potential sources of confidential deal information “revealed a connection” between Mr. Grmovsek, 39, and an unidentified lawyer with an unnamed law firm that represented a company in each transaction.
It does not take much detective work to figured out who was involved:
Corporate announcements of each of the deals show that only one law firm, Dorsey & Whitney LLP, acted as an adviser during each transaction. Dorsey & Whitney was founded in Minneapolis in 1912 and currently employs 650 lawyers in the United States, Europe and Canada.
The SEC certainly promised over a year ago that it would begin to step up enforcement activities, and this could be an example of the new posture:
The investigation is believed to mark the first time that lawyers have been publicly targeted in a Canadian insider trading probe. Heavy trading ahead of takeover announcements is common in Canada, but the OSC has only won convictions in a small handful of cases, mostly involving corporate officials.
Is sounds like the wild west days of Canada’s securities markets are coming to a close, a few decades too late for many straight shooters in North America.
P.S. Go Red Wings!
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Insider trading probe focuses on U.S. law firm
Globe & Mail
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Update:
The SEC recently signalled that it was troubled by the growing number of lawyers who have recently been targeted in insider trading cases. Linda Chatman Thomsen, the SEC’s director of enforcement, said in a March speech that she found it “depressing” and “inexplicable” that nine U.S. lawyers have been sued by the regulator in the past year for allegedly trading in stocks ahead of significant news.
Iamgold’s Mr. Conway said he regarded lawyers as his most “trusted advisers” because they give counsel over a long period of time on a variety of corporate decisions and transactions.
“There’s that level of trust and confidence that you have with a lawyer that is much higher than you would have with say an investment adviser or an investment banker. That’s the disturbing part about it,” he said.
Insider trading probe targets classmates
Globe and Mail
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.
Mudd’y Outlook for Fannie Mae
Originally Published In the News May 6, 2008 1:55 PM
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Capital injections into financials are far from over, as evidenced by news from Fannie Mae, which will mark one of largest injections yet:
Fannie Mae (NYSE:FNM) , the largest buyer of mortgages in the US, on Tuesday reported a first-quarter loss of $2.2bn and said it would seek $6bn in new capital as the deteriorating housing market extracted a heavy toll.
Fannie posted credit loss provisions of $3.1bn and swung to a loss of $2.57 a share as home delinquencies and foreclosures rose. This was in sharp contrast with a $961m or 85 cents a share profit for the first quarter a year ago. Credit losses were $249m a year ago.
Daniel Mudd, the government-sponsored company’s chief executive officer, made clear that difficult market conditions would continue. “Right now we are in the belly of the cycle,” he said, adding that 2008 and 2009 will be tough years.
The stock is in stronger hands today than it was several months ago, and perhaps investors have gotten comfortable with bad news and dilution. The stock is leading a rally this afternoon, and bears might want to stop looking in the rear view mirror to buttress their arguments that this tape is heading lower.
This battleground has been raging for months; it has largely been a stalemate but each passing day brings the bulls closer to victory.
That is the script, in any case.
INVESTools Sinks
Originally Published In the News May 2, 2008 1:38 PM
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INVESTools, Inc. (SWIM-NASDAQ) has a lot of friends in the trading community, but its shareholders are not too thrilled today with the stock, even though they beat Kaufman Brothers earnings estimate:
INVESTools reported record revenue of $90.99 million and EPS of $0.17 after imposition of a 17.6% tax rate. The taxes plus about $1.5 million in one-time technology costs, and $1.5 million in legal fees for the resolution of a dispute, equated to $0.05 in EPS. Our estimates had been $91.6 million in revenue and EPS of $0.19. We had not included any income tax in our estimate as the company has NOLs. It is phasing in its tax rate for reporting purposes, at approximately 17% per quarter in 2008, although cash taxes paid in the quarter were only $400,000.The company beat our estimate of net income, reporting $13.995 million, compared to our estimate of $12.827 million.
The stock is down 35% due to a SEC inquiry:
Management revealed the Securities and Exchange Commission (SEC) has launched an informal inquiry relating to certain representations by certain presenters in portions of their presentations at some of the company’s educational seminars. The company did not comment on the content or nature of the inquiry, and so we have no idea what is involved. In addition, it incurred $1.5 million in legal fees in the quarter for the resolution of a dispute with a California locality in which some of its seminar language in some sales did not conform to state standards.
Their ads seem to be all over the financial blogosphere, and they should be able to buy more love from bloggers, planning to allocate an additional $6 million to marketing later this year as they make the trading platform the focus of their operations, and rebrand the company.
KBRO is stepping to the sidelines, and downgrading the stock:
We are downgrading the stock to a HOLD from a BUY, due to lack of visibility on these issues and the potential effect on the income statement. We are also lowering our EPS estimates to $0.74 in 2008 and $0.97 in 2009 from $0.79 and $1.16, respectively. Our revenue estimates for 2008 remain essentially the same at $379.3 million and for 2009 our revenue estimate is increased to $507.90 million from $480.90 million as we believe that by that point, education will begin to generate more sales transaction volume and revenue as price elasticity at the lower pricing schedule achieves its desired results in added volumes.
Kaufman Brothers Research Note
