MARKET TALK: Deals Of Size Alter IPO Proceed Data
15 Mar 13:19
Edited by Thomas Granahan
Of DOW JONES NEWSWIRES
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1:18 (Dow Jones) Anyone who says size doesn't matter hasn't looked at the IPO
market. Alone, insurer Travelers' $3.68 billion in expected proceeds from its
IPO next week is more than the $3.07 billion raised by the 12 domestic
common-stock IPOs so far this year, according to data from Dealogic LLC. Add
the second deal, a $2.3 billion deal from eye-care company Alcon, and these two
deals are 95% higher than what has been raised previously. (RJH)
1:13 (Dow Jones) When it comes to earnings exposure to employee stock
options, the drug industry is not out of the ordinary, said Salomon Smith
Barney analyst Mark Striker. The issue of accounting for employee stock options
- oft a significant source of compensation - has come to the fore in the wake
of high profile bankruptcies. In 2000, U.S. pharmaceutical companies had an 8%
operating earning exposure if these options were accounted for as a
compensation expense, equal to the exposure seen in the S&P 500 index in 2000.
Schering-Plough (SGP), Eli Lilly (LLY), Bristol-Myers Squibb (BMY), Merck (MRK)
and Wyeth (WYE) have low exposure while Pharmacia (PHA) and Pfizer (PFE) have
the highest exposure because of the major mergers carried out in 2000. (BMM)
1:04 (Dow Jones) Before reading this item, which we completely disagree with,
you might like to know that Pitt is up two, Oklahoma's on top by five, and
Creighton is hanging with Florida. Anyway, a company called Websense (WBSN)
says March Madness may cost companies $504 million in lost productivity as a
result of employees checking scores and viewing game Webcasts during work
hours. How they come up with that number is almost as hard to figure as how
Kansas nearly lost to Holy Cross, but you don't have to be mad to figure out
their motive: Websense software enables businesses to manage how their
employees use the Internet. (TG)
12:47 (Dow Jones) It's the Repeat-Offender play: Because some investors
believe - and research shows - that companies that had issued earnings warnings
tend to do so again, CSFB's equity research group drew up a list of such
"repeat-offenders." For recalcitrant companies, implied volatility often climbs
heading into earnings season and then subside after. So to capitalize on the
potential volatility rise and possible downward stock price moves, the CSFB
team drew up a list of companies that show a likelihood of warning this quarter
and whose defensive puts are relatively cheap heading into the preannouncement
season. The list is long and includes names like Texas Instruments (TXN),
American Express (AXP), Bank of New York (BK), Altera (ALTR), Phelps Dodge
(PD), May Department Stores (MAY), UST Inc. (UST), Gillette (G), Knight Ridder
(KRI), Medimmune (MEDI) and Broadcom (BRCM). (KT)
12:36 (Dow Jones) The Treasury market got a small safe harbor jump on reports
by Sky television news of an explosion near the U.S. embassy in Yemen. The
two-year is up 3/32, and is yielding 3.56%, while the 10-year price is up
14/32, yielding 5.35%. (MSD)
12:28 (Dow Jones) The floodgates have opened in the junk market, with mutual
funds reporting a whopping $1.228B in inflows, says AMG Data Services. That's
the most since '97, says Merrill's Marty Fridson, and the second consecutive
week topping $1B. "Simply put, people are looking at signs of improvement in
the economy," says Fridson. (RTB)
12:21 (Dow Jones) JP Morgan trims FY03 revenue and earnings estimates for
Rational Software (RATL) to reflect "continued weakness in key technical
segments." Analyst Chris Galvin says his March quarter estimates ($180M in
revenue and EPS of 9c) seem appropriate, but he's concerned about the June
quarter consensus. Rational shares down 11.5% to $16.93. (MLP)
12:13 (Dow Jones) Sanders Morris Harris analyst David Miller cut his 2Q
earnings estimate on Walt Disney (DIS) to 9c a share from 14c, citing continued
weakness in the core media networks' operation. In addition to ABC having to
offer make-good time to advertisers because of low ratings, the Arts &
Entertainment cable channel has also seen a ratings decline this year, the
analyst said. (DDO)
11:58 (Dow Jones) It's possible Toys R Us (TOY) was headed to junk before
announcing plans to sell equity and equity-linked securities, says Gimme
Credit. Moody's cut to one notch above junk Thursday, while S&P said triple-B
was likely even if equity deal came off (it's triple-B-plus now). Without the
equity, Gimme Credit thinks the barrier junk would have been broken. (CSE)
11:49 (Dow Jones) Bear Stearns analyst Bob Lam expects strong growth for
companies making technologies for managing increasingly complex computer
networks, despite a sluggish macroeconomy and telecom recovery. He put industry
growth at 20% to $21 billion over the next four years, but predicted four
companies will outpace the average as they solidify leadership positions: NetIQ
(NTIQ), Micromuse (MUSE), Mercury Interactive (MERQ), and Concord
Communications (CCRD). He called all four good long-term investments, but rates
the first two buy and the second two attractive. "These young companies have
the right technologies, partnerships, healthy balance sheets (including strong
cash flow), and management teams to address changing customer demands and to
overcome the current challenges," Lam said. (RR)
11:38 (Dow Jones) More layoffs in the investment-banking industry. SoundView
Technology Group (SNDV), a technology boutique, has laid off 19% of its staff.
But the firm, which has been hurt by the market and economic slump, is also
seeking to expand: Come April, SoundView will open a new office in Boston, to
be run by John Cronin, formerly with FleetBoston Financial Corp.'s (FBF)
Robertson Stephens unit. SoundView shares are up 2.2%. (GFC)
11:34(Dow Jones) Delta (DAL) remains Deutsche Banc Alex. Brown's top airline
pick this year. Firm cites strategic and financial position to weather the
sharp falloff in demand due to weak economy and terrorist attacks. Also likes
airline's use of regional jets. Keeps strong buy and 12-18 month target of $61.
DAL up 2% at $36. (TG)
11:23 (Dow Jones) Currency markets usually waffle on Friday's in NY and this
one is par for the course, with EUR choppy around $0.8820 and USD/JPY on either
side of Y129. EUR is $0.8823; USD/JPY is Y129.03 (JRH)
(END) DOW JONES NEWS 03-15-02
01:19 PM |
