SUN 10:33 PM ET July 8 - Stocks to watch (some from Barrons) -->
AOL Time Warner (AOL: news, msgs, alerts) said Friday that it will shut its
Warner Bros. Studio Stores, probably by October, and cut 3,800 jobs. The
stores, which sell merchandise of Warner's cartoon characters, have been on
the market since the January merger of AOL and Time Warner without any
buyers surfacing. Shares of AOL were down $1.25 to $50.11 Friday.
AT&T (T: news, msgs, alerts) spins off its wireless
unit (AWE: news, msgs, alerts) Monday, with British
Telecom (BTY: news, msgs, alerts) erecting a
last-minute roadblock. BT asserts in a letter to Ma
Bell that its approval is required for AT&T
restructuring, according to Bloomberg. AT&T shares
closed up 26 cents at $22.24 on Friday. AT&T
Wireless climbed 57 cents, or 3 percent to $17.15.
British Telecom shares rose 15 cents at $65.80. See
full story.
On Sunday, Comcast (CMCSA: news, msgs, alerts)
made an unsolicited $58 billion offer for AT&T's
broadband business in a bid to become the industry's
largest operator. A combined entity would have some
22 million subscribers and leading positions in eight
of the nation's 10 largest markets. Comcast is
offering 1.0525 billion of its own shares -- valued at
$44.5 billion based on Friday's closing price. It would
also assume $13.5 billion in AT&T Broadband debt.
Ma Bell stakeholders would get $12.60 in Comcast
stock per AT&T share, 75 percent of the entire value
of AT&T excluding the eventual spin-off of the rest of the carrier's AT&T Wireless
business. At the same time, AT&T shareholders would retain their interest in Ma
Bell's consumer long-distance and corporate-service units. "We have no current
plans to sell our broadband business, including the transaction proposed today
by Comcast," chief AT&T spokeswoman Adele Ambrose said on Sunday night.
"We will analyze their proposal and respond in due course. We have recently
had some conversations with Comcast, but no agreements have been reached
on any aspect of the proposed transaction." See full story.
Dow industrial component International Paper (IP: news, msgs, alerts) could get
a pop Monday after a Barron's article gave a favorable assessment of the
company's position in the troubled paper sector. The article noted IP's four
acquisitions in the past five years, global sales of $28 billion and one analyst's
calculation of the company's net-asset value of $52.82. Shares, which hit a
10-year low last October, closed at $35.62 Friday.
Mellon Financial (MEL: news, msgs, alerts) is reportedly in talks to sell about
350 banks in the Northeast to Citizens Financial Group, a division of Royal Bank
of Scotland (UK:RBOS: news, alerts) . A sale would be for an estimated $3
billion and involve $14 billion in deposits. Shares of Mellon were off $1.04 to
$44.60 Friday. See full story.
Genesis Microchip (GNSS: news, msgs, alerts) could feel a chilly breeze
wafting from an Alan Abelson column Saturday in Barron's. Abelson notes that
the chipmaker, whose shares rose from $6 early this year to a Friday price of
$33.80, has a price-to-earnings ratio of 75 times its estimated fiscal-year
earnings and faces a patent infringement suit as well as selling by insiders.
A Barron's article speculates on the future of Web-hosting firm Exodus
Communications (EXDS: news, msgs, alerts) , citing insider sales totaling about
$6.7 million by CEO Ellen Hancock and the company's earnings warning on
June 20. Potential suitors could wait for Exodus to run out of money and then
snap up a bankrupt firm for pennies on the dollar, suggests Barron's. Shares
closed Friday at $1.75, down from a 52-week high of $69.
Microtune (TUNE: news, msgs, alerts) may be in the sites of sellers after a filing
with the U.S. Securities and Exchange Commission indicated billionaire investor
George Soros has reduced his equity stake in the company to 1.15 percent, or
453,926 shares. As recently as Mar. 22, Soros held a 9.6-percent stake in the
maker of broadband radio-frequency products, or approximately 3.76 million
shares, according to a proxy statement filed with the SEC. The stock closed
Friday down $1.44 at $18.06, but was 147 percent above the Mar. 22 closing
price.
British telecom manufacturer Marconi (MONI: news, msgs, alerts) (UK:MONI:
news, alerts) , which warned on earnings last week and triggered a sector
shivering fit, suffered another blow late Friday when Deputy CEO John Mayo
resigned. That was a switch from Wednesday, when Mayo and CEO George
Simpson insisted they hadn't considered quitting and stood by their strategy. At
the same time they announced a halving of expected profits for the year to
March 2002 and a 15 percent fall in sales as telecom companies slash their
capital expenditure. Marconi's Nasdaq-traded shares ended at $3.05 Friday.
Power generators and California utilities remained in weekend talks with a
Federal Energy Regulatory Commission judge hoping to settle California
allegations of $9 billion in electricity overcharges. Unless there is an agreement,
the judge will give a refund recommendation -- possibly for billions of dollars -- to
FERC for its five members to decide. Virtually every generator that sold power
into the California market during the past year is subject to the negotiations,
including Duke Energy (DUK: news, msgs, alerts) , Williams Cos. (WMB: news,
msgs, alerts) , and Reliant Energy (REI: news, msgs, alerts) . Generators,
meanwhile, contend that they haven't been paid for some power sales to PG&E
Corp. (PCG: news, msgs, alerts) , which is in bankruptcy protection, Edison
International's (EIX: news, msgs, alerts) Southern California Edison and the state
Department of Water Resources.
NetScout Systems (NTCT: news, msgs, alerts) lowered its first-quarter financial
targets, citing a reduction in IT spending and its change in relationship with
Cisco. The company now sees first-quarter revenue in the range of $18 million to
$18.5 million, with a pro forma per-share loss in the range of 3 cents to 4 cents.
Shares finished Nasdaq trading at $6, down 3.2 percent.
PlanVista (PVC: news, msgs, alerts) said late Friday that it had raised $3.3
million through the private placement of securities. The medical cost
containment company added that in connection with the placement, it issued
unregistered shares of common stock priced at a 15 percent discount to the
10-day average price of its shares through July 2. The company also said it
issued an additional 75,000 shares to HealthPlan Holdings, as part of
PlanVista's divestiture of its HealthPlan Services business, and another 75,000
shares to its creditors, which had agreed to extend certain payment obligations
that were due June 30 and July 31. PlanVista added that it has solicited the help
of its investment bankers to evaluate alternatives to maximize shareholder value.
The shares closed Friday down 13 cents at $7.84.
Qualcomm (QCOM: news, msgs, alerts) and Korea's SK Telecom (SKM: news,
msgs, alerts) announced late Friday the formation of a joint venture that will
invest in upstart companies that are engaged in the development and
commercialization of products and services based on code division multiple
access wireless technology, which was developed by Qualcomm. The
companies will each invest $5 million in the initiative.
SportsLine.com (SPLN: news, msgs, alerts) warned that it expects to lose
between $1 and $1.10 per share on revenue of $14 million in the second quarter.
This compares to previous estimates of a loss of between 90 cents and 95 cents
on sales of between $18 million and $20 million. The stock fell 39 cents, or 16.2
percent, to $2.01 ahead of the warning. See full story.
TeleCommunication Systems (TSYS: news, msgs, alerts) said second-quarter
results will miss Wall Street estimates due primarily to delays in customer
spending. The company sees its second-quarter loss per share in the range of
38 cents to 42 cents, vs. the 33 cent loss per share currently expected, on
average, by analysts polled by First Call/Thomson Financial. Shares closed
down 10 cents at $2.21 and were halted going into the evening session.
Canadian paper and forestry products company Tembec (CA:TBC: news, alerts)
said Friday that it would reduce its pulp production by 100,000 tons in the third
quarter due to expected weak demand. The company also said it would slash its
lumber output by 50 million board-feet in the quarter. The move will hurt
Tembec's earnings but the company declined to provide further details. Tembec
shares fell 15 cents, or 1.3 percent, to C$11.15 in Toronto. |
