Archive for 2012

Yahoo! and Alibaba Reach Agreement on Comprehensive Plan for Alibaba Stake

Courtesy of Benzinga.

Yahoo! (NASDAQ: YHOO) and Alibaba Group Holding Limited (ALBCF) announced Sunday they have entered into a definitive agreement for a staged and comprehensive value realization plan for Yahoo!’s stake in Alibaba.

The first step is the repurchase by Alibaba of up to one-half of Yahoo!’s stake, or approximately 20% of Alibaba’s fully-diluted shares. The purchase price will be based on a valuation of Alibaba to be established through equity financings that Alibaba intends to undertake to finance the transaction, subject to a floor valuation of approximately US$35 billion. The agreement includes substantial financial incentives for Alibaba to raise the additional equity at a valuation higher than US$35 billion. At the minimum price and assuming the initial repurchase of the full 20% stake, Yahoo! would receive from Alibaba consideration of approximately US$7.1 billion, composed of at least US$6.3 billion in cash proceeds and up to US$800 million in newly-issued Alibaba preferred stock.

Yahoo! intends to return substantially all of the after-tax cash proceeds to shareholders following the closing of the transaction. While the form of the return of capital to shareholders has not yet been finalized, Yahoo!’s board has increased Yahoo!’s share buyback authorization by US $5 billion concurrently with this transaction.

The transaction is subject to customary closing conditions. Alibaba will be required to close the repurchase with respect to at least one-quarter of Yahoo!’s current stake in Alibaba regardless of the amount of financing raised, and up to one-half of Yahoo!’s current stake if it obtains the requisite financing. Alibaba intends to finance the repurchase through a combination of its own cash resources, debt, equity and equity-linked financing. The transaction is expected to close within approximately six months.


For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.





Weighing the Week Ahead: Any Help from the European Summit?

Courtesy of Doug Short.

The turmoil in Greece and the potential contagion have once again taken center stage.

While the economic and debt problems are well-known, the question for many is why should Greece be so important? The answer lies in whether there is a threat to global financial stability, or whether the rest of the world will experience secondary effects from reduced European growth.

A year ago the systemic risk question seemed to be off the table as a result of more aggressive policies, especially the ECB’s LTRO program. What happened?

The Greek and French elections have underscored the limits of the austerity solution. The severe, multi-year recession in Greece is worse than ever and government programs face future cuts. This account from The New Athenian has a nice summary:

  • 72% of Greeks believe the parties should make concessions to each other and form a government, while 23% believe Greece should have repeat elections
  • 78% want Greece to stay in the euro, while 12% want a return to the drachma
  • In answer to the question “which of the parties elected to parliament would you like to see participating in the government?” the top two are (radical) Syriza and (moderate) Democratic Left, so it seems absolutely correct for conservatives and socialists not to try and build a government that skirts around them
  • Asked whether they find Syriza’s proposal realistic, 35% say quite realistic or very, while 62% say a little or not at all, which suggests that while the great majority don’t believe Syriza can implement what they say, it still wants them in to hopefully change things in the right direction, even if it doesn’t go all the way.

The Greeks expect and hope for further concessions, but want to remain in the euro. Many (most?) believe that this will not be possible, but it really depends upon what concessions the rest of Europe will make. There is also a wide range of possible outcomes, some of which are illustrated in this WSJ review.

I will have some thoughts about Europe in the conclusion, but first let us review last week’s news and data.

Background on “Weighing the Week Ahead”

There are many good sources for a list of upcoming events. In contrast, I single out what will be most important in the coming week. My theme…
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European Crisis: Your 1 Minute Update

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

This is where we stand right about now.

  • Future of the euro area — German Finance Minister Schäuble and former ECB president Trichet float proposals on the future of the euro area – an elected EU president, political union, “federation by exception”. While more integration is likely as a response to the current crisis, progress is not likely to be quick.
  • France and the fiscal compact — German FM Schäuble and Eurogroup chairman Juncker are confident that French President Hollande and German Chancellor Merkel will find a common position on the fiscal and growth pact. New French FM Moscovici says France will not ratify the pact unless it includes ambitious commitments to promote economic growth. However, with results of the French public finance audit due on 1 June, fiscal consolidation may get more airtime in the legislative election campaign than during the presidential one.
  • EU bank resolution scheme: The head of the banking unit at the EU Commission indicated that a crisis management proposal to wind up failing banks would be adopted by the EU on June 6.
  • Spain — Economy secretary Fernando Jimenez was quoted by Reuters on Thursday saying that, with Spain having done everything necessary in terms of fiscal policy adjustments and structural reforms, “we think that there should be some type of reaction from the ECB”. He denied the story run in El Pais that Bankia has lost over €1bn in deposits, around 1% of retail and corporate accounts, in the past week. LCH.Clearnet hiked Spanish bond margins (>1.5 years) on Friday. 
  • Moody’s downgrades 16 Spanish banks. Spanish government approves 2012 budgets for 16 out 17 of the autonomous regions. In the process, Spain discovered that its 2011 budget deficit was not 8.5% of GDP, but 8.9%. Oops 
  • Netherlands: Some details on austerity measures. According to De Telegraaf, the austerity package will include measures worth €16bn and taking into account the impact on the economy and also €1bn of extra spending, the government will expect a reduction in the budget deficit of €12bn.
  • Greece — Fitch downgrades Greece rating from B- to CCC. Fitch said that should new elections fail to result in a mandate for a new government to continue austerity measures, a Greek exit from the monetary union would be “probable”.One poll shows New Democracy back in


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By The Time Operation Twist 1 Is Over, The Fed Will Have Quietly Completed 40% Of Operation Twist 2 As Well

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By the time Operation Twist (1) ends in just over 40 days time, on June 30, Fed Chairman Ben Bernanke, according to his previously announced “loose” target, will hope to have extended the average maturity of all bonds in the System Open Market Account (SOMA) to a record of roughly 100 months from 75 month at the onset of the program in October 2011. After all the sole purpose of Twist was to load up the Fed’s portfolio with duration, forcing the rest of the market to shift its investing curve even further into risky assets, as the Fed will have effectively onboarded the bulk of securities in the 3-4% return interval. Now as we showed back in early April, hopes that the Fed will simply continue with Operation Twist 2 after the end of “season” 1, as suggested by some clueless “access journalists” who merely relay what they are told by higher powers, are completely misguided as the Fed simply does not have enough short-term securities (1-3 years) to sell, and would have at most 2 months of inventory for a continued sterilized operation. Which however, does not mean that the Fed can not be quietly ramping up its operations in the ongoing Twisting episode. Because as Stone McCarthy demonstrates, as of the past week, the Fed has already surpassed its 100 month maturity target of 100 months, and is at 102.82 months as of May 16. And this is with 6 more weeks of Twist to go: at the current rate of SOMA purchases, the Fed will have a total portfolio average maturity of just shy of 110 months by June 30! Which means that contrary to market expectations of what the Fed’s own stated goal may have been, Bernanke will have gobbled up nearly 40% more long-dated Flow relative to estimates! In other words, Ben does not need to do a full blown Operation Twist 2 episode: by the time Twist 1 is over, he will have attained nearly 40% of the goals of the next potential sterilized operation.

Why is this important? Well, recall that over a month ago Goldman Sachs itself admitted what we have been saying for over 3 years: it is not stock that matters… it is flow. Recall the Goldman punchline:


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Yahoo, Alibaba Near Deal on Stake

Courtesy of Benzinga.

Yahoo (NASDAQ: YHOO) is very close to selling back half of its stake in China’s Alibaba (ALBCF) for $7.1 billion. The deal could be announced as early as Sunday night.


For more Benzinga, visit Benzinga Professional Service, Value Investor, and Stocks Under $5.





Weekly Market Commentary: Another Heavy Week of Selling

Courtesy of Declan Fallon

Markets were left in an interesting position by Friday’s close.  Ordinarily, I like to be a buyer when the S&P is at least 10% below its 200-day MA and sector breadth is in the position it’s in, but I think there is enough here to have me jump in on Monday’s open and add to my long term positions.   I suspect there will be a big one day gain to help establish the swing low. But I doubt it will be the absolute low for the current decline; at the same time, I don’t want to be looking at a swing low with hindsight!

Market Breadth is in swing low territory.  The Percentage of Nasdaq Stocks above 50-day MA dropped sharply to 18% although stochastics for this breadth indicator have not yet reached oversold territory.  Although the MACD histogram reached a new multi-year low – lower than the 2008 low.

The Nasdaq Summation Index has some way to go before turning oversold based on stochastics, although the Index is close to a swing low based on past occurrences.

The Nasdaq Bullish Percents is the only market breadth indicator which hasn’t yet reached swing low territory.  Also, supporting stochastics only recently dropped out of overbought territory.

Last week’s losses left the 2012 Nasdaq rally high-and-dry.  The decline is on course to test the broadening wedge with support around 2,600 (but rising).

The Russell 2000 broke the rising channel line and 760 support – a double whammy for the index. However, I think it more likely a large trading range bound by 625 support and 850 resistance will emerge from this decline; part of a consolidation of the rally from March 2009.

Finally, the S&P edged outside of its rising channel in a probable breakdown, but more worryingly, there was a ‘bull trap’ to the 1,370 breakout.


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Stock World Weekly: Test Issue

NEW: Ilene is available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here is this week's test version of the latest newsletter. We apologize for some formatting issues that need to be worked out. Please tell us what you think. 

Click on Stock World Weekly here, and sign in/sign up.





Europe’s Firewall Is Insufficient – A One Chart Explanation

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Unlike Eurocrat rhetoric, which is increasingly full of lies (thank you Jean Claude), prevarications, and half-truths, math is simple and binary. There either are enough numbers, or there aren’t. In the case of the European firewall, there aren’t (and that is even assuming the IMF somehow manages to convert all the money pledged for a European bailout bailout into money available for disbursement… because there is a world of difference between the two).

Source: Deutsche Bank





Guest Post: Italy And The Great Tax Revolt

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by James Miller of the Ludwig von Mises Institute of Canada

Italy And The Great Tax Revolt

Taxation is theft.

There is no denying this.  If I and a few brutes appeared at the door of an unsuspecting individual and demanded monetary compensation less we drag him off to jail, this would be a clear cut case of robbery.  It is a common tactic used by mobs or street gangs to offer protection with the barrel of a gun.  The only difference between shakedowns by private thugs and those employed by the state is the badge.  The badge legalizes extortion and imprisonment.

With that being said, it has been three years since the financial crisis and governments around the world are still reeling in the lesser Depression.  Tax collections are down while public expenditures have skyrocketed in a vain effort to stabilize the economy.  Much of this mass orgy in spending has been financed by central banks printing money and the suppression of interest rates down to artificially low levels.  This is the Keynesian remedy to recession.  Spend what you don’t have via the printing press.  Have central bankers create paradise on Earth through counterfeiting.

So far it hasn’t worked.

Like the Great Depression before, regime uncertainty and an emphasis on consumption over private investment have prevented a sustainable recovery from taking hold.  Public debts continue their upward trend with no conceivable end in sight.  The bond vigilantes have started their attack on the Eurozone; namely Greece, Portugal, Italy, and Spain.  Greece is all but finished as even the most dimwitted of commentators is conceding than an exit from the euro is likely.  Meanwhile in Italy, the lack of tax collection has forced the hand of Prime Minister Mario Monti to crack down on tax evasion.  This hasn’t gone over well with the Italian public.  From the San Francisco Chronicle:

Equitalia, the state tax-collection agency, has been targeted in a wave of attacks as Italians chafe under stepped-up efforts to recover an estimated 120 billion euros ($153 billion) in lost revenue from evasion. On May 12, a Molotov cocktail exploded outside Equitalia’s Livorno office, one day after a parcel bomb was delivered to the Rome headquarters, site of a December explosion that tore off…
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Zero Hedge

Auto Shares Surge As Fiat, Renault Confirm Merger Talks

Courtesy of ZeroHedge. View original post here.

With President Trump in Japan for a state visit and most of Europe headed to the polls to vote in the quinquennial EU Parliamentary elections, there was enough news to keep market watchers occupied during what was supposed to be a quiet holiday weekend in the US. 

But on top of these political headlines, on Saturday afternoon, the news broke that Italian-American carmaker Fiat Chrysler had approached France's Renault with a merger proposal that would leave the shareholders of each carmaker with half of the combined company, in a tie-up that would create the world's third-largest au...



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Phil's Favorites

Trump and the problem with pardons

 

Trump and the problem with pardons

Courtesy of Andrew Bell, Indiana University

As a veteran, I was astonished by the recent news that President Trump may be considering pardons for U.S. military members accused or convicted of war crimes. But as a scholar who studies the U.S. military and combat ethics, I understand even more clearly the harmful long-term impact such pardons can have on the military.

My researc...



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Insider Scoop

Jefferies Sees 60-Percent Upside In Aphria Shares, Says Buy The Dip

Courtesy of Benzinga.

After a red-hot start to 2019, Canadian cannabis producer Aphria Inc (NYSE: APHA) has run out of steam, tumbling more than 31 percent in the past three months.

Despite the recent weakness, one Wall Street analyst said Friday that the stock has 30-percent upside potential. 

The Analyst

Jefferies analyst ...



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Kimble Charting Solutions

DAX (Germany) About To Send A Bearish Message To The S&P 500?

Courtesy of Chris Kimble.

Is the DAX index from Germany about to send a bearish message to stocks in Europe and the States? Sure could!

This chart looks at the DAX over the past 9-years. It’s spent the majority of the past 8-years inside of rising channel (1), creating a series of higher lows and higher highs.

It looks to have created a “Double Top” as it was kissing the underside of the rising channel last year at (2).

After creating the potential double top, the DAX index has continued to create a series of lower highs, while experiencing a bearish divergence with the S...



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Chart School

Brexit Joke - Cant be serious all the time

Courtesy of Read the Ticker.

Alistair Williams comedian nails it, thank god for good humour! Prime Minister May the negotiator. Not!


Alistair Williams Comedian youtube

This is a classic! ha!







Fundamentals are important, and so is market timing, here at readtheticker.com we believe a combination of Gann Angles, ...

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Digital Currencies

Cryptocurrencies are finally going mainstream - the battle is on to bring them under global control

 

Cryptocurrencies are finally going mainstream – the battle is on to bring them under global control

The high seas are getting lower. dianemeise

Courtesy of Iwa Salami, University of East London

The 21st-century revolutionaries who have dominated cryptocurrencies are having to move over. Mainstream financial institutions are adopting these assets and the blockchain technology that enables them, in what ...



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Biotech

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

Reminder: We are available to chat with Members, comments are found below each post.

 

DNA as you've never seen it before, thanks to a new nanotechnology imaging method

A map of DNA with the double helix colored blue, the landmarks in green, and the start points for copying the molecule in red. David Gilbert/Kyle Klein, CC BY-ND

Courtesy of David M. Gilbert, Florida State University

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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