Fingad.com

Yahoo is "Fired"

Fri, 16 May 2008 16:44:34 EST

Yahoo is "Fired" - by michael

I wrote a review earlier "Carl Icahn steps in and buys 50M shares of Yahoo after Microsoft walks away" on FinGad. And guessed that Icahn will take some sort of action against the board. Well, no surprise. Icahn has selected an alternative board, interestingly with Mark Cuban on board, and is pushing a battle on Yahoo!'s management with the top majority shareholders of the company.

Techcrunch reported on this here, with a clever headline: "Dear Yahoo: You're Fired"

What a position to play. The man acquired over $1.5B of Yahoo! stock and combined with other top 2 or 3 shareholders, will have a 15% ownership battle. He's going after more shares after regulations are cleared.

Yahoo!'s board responds, interestingly from the chairman and not Jerry, here: Full Text

In this card game, successful CEOs expressed that for Microsoft to walk away from the deal would be a conspiracy theory. This is wonderfully expressed here, before the news of Microsoft walking away: Marc Andreessen blog.

In my view, it does not matter what the Yahoo! board says now. It all comes down to numbers. I once heard a brilliant CEO say if your numbers suck, no matter what you say, everyone will think you're an idiot. And if your numbers shine, no matter how stupid you act, everyone thinks you're a genius. This is not a word game, but a numbers game. What it comes down to is: who has the most voting power and support.

Carl Icahn is known for these major power moves. He tried this at Time Warner, however he got no progress there. This seems different. Considering that he's capable of generating support and voting power - of which we will learn - this makes it difficult for the existing board to continue in it's position. I believe the board will lose the proxy battle and Yahoo! will undergo major changes in senior management.

Does this mean to invest in Yahoo! stock?

In my view, the negative side to what will happen shall Carl succeed is the morale at Yahoo! will be burther deteriorated and key employees will continue departing to other organizations.

In my view, investing in Yahoo! is a high risk for a small investor as we don't have the information that's circulating in the top circles. At the same time, I don't believe in an ability to successfully turn around a company by replacing it's entire board, including the key founder CEO Jerry - which is very important for that person to stay on - as that person built the company from the ground. Now deep pockets are coming in with different intentions.

AIG's board says it's satisfied with their CEO Sullivan

Wed, 14 May 2008 15:05:42 EST

AIG's board says it's satisfied with their CEO Sullivan - by michael

The Wall St Journal reported that the board of directors of AIG are satisfied with the performance of their CEO, Martin J. Sullivan. Despite of the fact that AIG reported the largest ever net loss of $7.81 billion or $3.09 cents a share. Seems to me that since Maurice R. Greenberg 'departed' the firm, to those who have been following this story, the company has had a wealth of trouble. Also interesting to note that Greenberg went on to start his own company. Greenberg wrote a letter to the board saying that "AIG is in crisis."

I love watching this stuff and considering the stock will go down - it leaves a potential opportunity to invest shall AIG as they will regain the confidence of the investment community which is no easy task...

Carl Icahn steps in and buys 50M shares of Yahoo after Microsoft walks away

Wed, 14 May 2008 14:49:22 EST

Carl Icahn steps in and buys 50M shares of Yahoo after Microsoft walks away - by michael

Investment Opportunity

Super interesting to watch this. As Microsot walked away from the deal, some users on FinGad have said that Yahoo! stock is attractive.

Now that Carl Icahn has stepped in and bought 50M shares of Yahoo!, that in my mind makes Yahoo! even more attractive. The information that Carl has is different then the information we have, I'm willing to bet. Also, knowing that Carl does not invest in the stock market often, makes this bet look like he believes the stock will climb higher over the long term. I don't think we will see a dump of that many shares any time soon. Hence, anyone who picked up Yahoo! at it's lowest after Microsoft walked away stands to benefit.

Now we'll see what happens to the board with new ownership coming in. My guess is there will be a fight to replace some members. And considering Yahoo! has a ton of technology and great talent, the company is getting a kick and I believe will continue to innovate.

Vioxx Verdict Against Merck Reversed

Wed, 14 May 2008 14:37:05 EST

Vioxx Verdict Against Merck Reversed - by michael

Today the state appellate court overturned a multimillion dollar verdict involving Vioxx, ruling that there is not sufficient evidence linking it to a heart attack suffered by the plaintiff's spouse.

It's interesting that different courts are coming up with different rulings. On April 2006, a jury found Merck liable and awarded $32 million in damages. That amount was later reduced to $7.75 million.

This in my view makes investing in pharmaceutical companies very difficult. Not only that the courts fluctute in opinions, there are jurors without medical degrees who are coming up with the results, and hence make these companies extremely unstable.

Your thoughts are welcome.

Inaugurating the New York Times Deathwatch by Marc Andreessen

Sat, 02 Feb 2008 09:26:34 EST

Inaugurating the New York Times Deathwatch by Marc Andreessen - by michael

Link to article: http://blog.pmarca.com/2008/02/inaugurating-th.html

Allegheny Energy - Ouch

Fri, 30 Nov 2007 15:05:08 EST

Allegheny Energy - Ouch - by michael

Allegheny Energy Inc (NYSE:AYE)

Avoid it

The electricity industry in the United States accounts for $250 billion in sales, and demand for electricity is increasing. The industry faces issues which make meeting that demand difficult. These issues include slow rates of technology adoption, a transmission system designed for an earlier era, a hybrid of regulated and deregulated jurisdictions, and incomplete markets.

Allegheny energy is an investor-owned utility company with over $3 billion in annual revenues and more than 4,000 employees. The company has two major businesses, Allegheny Energy Supply Company, LLC, and Allegheny Power. It owns and operates generating facilities and delivers low-cost, reliable electric service to over 1.5 million customers in Pennsylvania, West Virginia, Maryland, and Virginia. Allegheny own approximately 9,670 megawatts (MW) of generating capacity. 95% of power output comes from coal. It burns nearly 19 million tons of coal annually. Its regulated utilities, doing business as Allegheny Power, are West Penn Power Company (Pennsylvania); Monongahela Power Company (West Virginia); and The Potomac Edison Company (Maryland, Virginia, and West Virginia).

Paul J. Evanson is the Chief Executive Officer. Prior to joining Allegheny Energy, he was president of Florida Power & Light Company (FPL), the principal subsidiary of FPL Group, Inc., which is one of the largest investor-owned electric utilities in the nation, and also the director of FPL Group, Inc. Mr. Evanson in 1992 was vice president, finance and chief financial officer of FPL Group, Inc. and Florida Power & Light Company. In January 1995, he the president of Florida Power & Light Company (FPL). Prior to he worked with Lynch Corporation as CEO. Before this he was executive vice president of Moore McCormack Resources, Inc., a diversified natural resources and transportation company, and was an audit and tax manager for Arthur Andersen & Co.

Its top competitors are Public Service Enterprise Group, Exelon, Entergy, EXcel Energy, Northern Indiana Public Service Company, DTE Energy Company and Wisconsin Energy. Allegheny Energy, Inc. posted solid results for 3Q 2007 earnings. Retail sales of energy increased 7%, plant efficiency increased, operating revenues increased by $30 million, and debt expense declined. On the negative side, coal costs were up by $14 million. EBITDA for the third quarter of 2007 was $308.6 million, a increase of $22.3 million compared to the same quarter of the previous year. At $60 the twelve month trailing PE is 27.7 times. The twelve month trailing EPS is $2.17.

Allegheny Power, the electric delivery subsidiary of Allegheny Energy, Inc. filed with the Pennsylvania Public Utility Commission to offer a voluntary wind energy program to customers in the state. Residential, commercial and industrial customers will be able to participate in the program at various levels, with rates starting at an additional $2.50 per month on electric bills. Allegheny Power will partner with Community Energy, Inc., a wind energy marketer and developer. Similar programs are offered by utilities in other states, including New York's Consolidated Edison Inc

The West Virginia Public Service Commission sometime back ordered Allegheny Energy to decrease rates by $132 million to 2 Allegheny Energy subsidiaries, while allowing Allegheny Energy to pass on a $126 million fuel charge to customers. Net loss to Allegheny Energy is an additional $6 million. This is, relatively speaking, not that big a deal for Allegheny Energy, which posts annual revenues in excess of $3 billion. But the company did get slapped around in public for being heavy-handed in trying to push more costs than allowed onto customers. Its long term growth prospects are not rosy. There is growing opposition to its new power line project in its transmission area in West Virginia, Pennsylvania and Maryland. It's P/E multiple, 27.7, is the highest among its competitors while its EPS, $2.17, is the lowest. Allegheny Energy suspended dividend payments in December 2002 and has yet to re institute them. None of its cost factors are going to change for the better in the immediate future. It is best to look elsewhere for utility stock investment possibilities.

Applera Corporation is cool

Mon, 26 Nov 2007 13:20:26 EST

Applera Corporation is cool - by michael

S&P500 stock - Applera Corporation-Applied Biosystems Broup (NYSE: ABI)

A very good Stock to own

Medical Equipment is over $90 billion industry. In the U.S. this industry has a competitive advantage due to technological advancements in micro electronics, telecommunication systems, instrumentation, biotechnology, software development etc. The ageing population has started influencing the future direction of medical equipment industry due to the changing needs of health. Baby boomers are living longer lives than the previous generation. There are about 8000 medical equipment firms catering to various needs and hence the technological advancement is significant.

Applera Corporation is at #874 on the 2007 Fortune 1000 list, is one of the largest international biotechnology companies based in the United States. It is the successor company to what was the Life Sciences Division of Perkin-Elmer Corporation. Applera is not publicly-traded, but instead it consists of two major groups which are publicly-traded tracking stocks in the proteomics industrial sector. These two groups are the S&P 500 listed Applera Corp-Applied Biosystems Group (NYSE: ABI) of Foster City, California, and Applera Corp-Celera Genomics Group (NYSE: CRA) of Rockville, Maryland.

Applera Corporation-Applied Biosystems Group was founded in 1937 and is headquartered in Norwalk, Connecticut.It develops and markets instrument-based systems, consumables, software, and services. Its products and services are used in basic human disease research and genetic analysis; pharmaceutical drug discovery, development, and manufacturing, agriculture research, human identity testing; bio security, and quality and safety testing. The company's products include PCR (polymerase chain reaction) and Real-Time PCR Systems and related consumables, including amplification instruments, various combination thermal cyclers, PCR detection systems, and reagents, disposables, and software necessary for the PCR amplification and detection process, Genetic Analysis Instruments for performing both DNA sequencing and fragment analysis, Capillary Electrophoresis and Next Generation Systems for analyzing DNA molecules using a process referred to as capillary electrophoresis, Genomic Assays, which are a set of pre-selected oligonucleotides, used to measure a DNA or RNA target, reagents associated with RNA interference, referred to as RNAi, and products for the analysis of microRNA, referred to as miRNA; sample preparation products, used to isolate and purify RNA and reagents used to convert an RNA sample into DNA; and reagents for PCR amplification.

The company also offers products used for the study of cell and biological molecule function; mass spectrometry products, biochromatography media products, and protein sequencing and synthesis systems; and products for the small molecule analysis market. Applied Biosystems also develops and markets products for forensic testing and human identification, biosecurity, pharmaceutical manufacturing, and food testing. It also develops, markets, and distributes software products for laboratory information management systems.

The three Applera businesses facilitate discoveries that could lead to powerful new tools to address diseases. Three years ago project to sequence the human genome was launched. With industrial scale discovery and bioinformatics capabilities in place, the company is opening new routes to commercialization of that information. Over the next year, Applera plans to invest approximately $75 million to be funded equally by its three businesses, to initiate a program to capitalize on the discovery foundation they have built. These funds will be used for a resequencing effort, to develop validated reagent sets and to initiate disease association studies.One of the biggest challenges in health care today is improving the productivity of the discovery process. This Applera project is expected to yield information and tools that could make it possible to cost effectively identify, and therefore address, the medically relevant differences among individuals.

The Mass Spectrometry product revenue category increased 4% as compared to the prior year quarter, when revenues rose 19%, setting up a particularly difficult comparison for this quarter. They continue to see strong acceptance of the QTrap product line across the core Pharma, biotech and CRO customers for small molecule applications, in protein biomarker applications, and in the applied markets. QTrap sales were the biggest driver of growth in mass spec systems during the quarter. Moderators to growth in the mass spectrometry category were funding delays in Europe and business challenges in Japan.

In the Applied Markets, they continue their focus on developing targeted applications, work flows and complete systems for food, environmental and forensic toxicology applications. As part of this strategy, they introduced the Cliquid Drug Screen and Quant Software for a Routine Forensic Toxicology, a new, mass-spec-based automated toxicology testing application designed to better identify drugs of abuse for forensic investigations

Tony L. White is the Chairman of the Board, President and Chief Executive Officer. Prior to this he was with Baxter International Inc., a manufacturer of health care products and instruments as its CEO. He has led a team at Celera that has made incredible achievements in a short period of time; most notably involving the historic sequencing of the human genome. Following completion of that milestone, the focus was on leveraging their accomplishments to facilitate a new model in the rapeutic discovery. Several recent steps have been taken in that regard, including the acquisition of Axys Pharmaceuticals as well as various management changes. These are his impressive achievements and he is well positioned to guide the company.

Dennis L.Winger is the Chief Financial Officer and Senior Vice President. He joined the company from Chiron Corporation where he had served as Senior Vice President, Finance and Administration, and Chief Financial Officer since 1989. At Chiron, he played a key role in shaping the company's financial and business strategy. He oversaw the financial development of its five different businesses and all of its financial operations. Before that, Mr. Winger was with Cooper Companies, Inc. in Palo Alto, CA from 1982 to 1989, where he held positions of increasing responsibility, including that of Chief Financial Officer. Prior to his position at Cooper Companies, Mr. Winger held a number of management positions with Continental Can Company, including Head of Finance for their international division and General Manager of Latin American Operations. Mr. Winger received a bachelor's degree in history in 1969 from Siena College, and an MBA in finance and marketing in 1974 from Columbia University. His contribution to Applera is immense.

Applera Corporation is the successor in whole or part to defendants PE Biosystems Group, PE Applied Biosystems, PE Corporation.Their DNA Sequencing product category grew 4% over the second quarter of last year, and is up 5%, fiscal year to date in 2007. This growth is a validation of their perspective around the DNA sequencing market and now believe that they will see modest growth in the product category for the fiscal year. They're seeing encouraging consumables growth driven by the increase in the total number of reactions performed on Applied Biosystems' installed base of over 14,000 sequencers, primarily as a result of increased focus in applications such as re-sequencing and fragment analysis. With respect to the next generation sequencing initiatives, the commercialization of Advanced Genetic Analysis platform is progressing as scheduled and they remain on target to provide initial instruments to early access customers by mid calendar 2007.

Their Real-Time PCR and Applied Genomics product category grew 18% over the second quarter of last year. Growth in the real-time product category was affected by difficult year-over-year comparables in their BioSecurity business as well as from on-going competition within the real-time PCR instruments market.

Apparel corp, Affymetrix, Inc., Beckman Coulter, Inc.,Bio-Rad Laboratories are some of Applera's competitors.Although the Company believes it has the product offerings and resources needed for continuing success, the Company cannot reliably predict future revenue and margin trends and this may cause the Company to adjust its operations. Factors external to the Company can result in volatility of the market prices of the Company's common stock. Because of the foregoing factors, recent trends should not be considered reliable indicators of future stock prices or financial results.The company recorded revenues of $2,132.5 million during the fiscal year ended June 2007, an increase of 9.4% over 2006. The operating profit of the company was $173.1 million during fiscal year 2007, an increase of 4.8% over 2006. The net profit was $159.3 million in fiscal year 2007, a decrease of 25% compared to 2006.

This stock is in the biotechnology industry, which has proven to be an excellent industry over the trailing 5- and 10-year periods. Compared to other stocks in its industry, though, its five-year returns have been about average. We need to keep in mind when looking at a stock or industry's record that historic returns are not necessarily a predictor of future performance. Persistent strength or weakness, however, may very well say something about the structure of an industry or quality of a company's management. Most stocks in the biotechnology industry have seen rapidly growing revenue and earnings over the past three years.

Applied Biosystems has the following expectations regarding its financial performance for fiscal 2008. Fiscal 2008 Revenue Growth Rate: The Group expects mid to high single digit growth assuming current exchange rates. Revenues are expected to increase for both instruments and consumables

Applied Biosystems is one of the clear market leaders in using the Axeda Device Relationship Management (DRM) solution to enhance they way they deliver service to their customer's .Expanding BioMonitor Service to more product lines enables even more customers to take advantage of the strong benefits that the service delivers.

Time to take advantage of advance warnings and plunge deep to own as many shares as possible. Its one helluva stock!!