The $19 billion WhatsApp deal could become the Facebook founder's legacy . . . or his albatross.
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Wild price swings in the stocks of Plug Power and FuelCell Energy are a bad sign, he says. But if they cool down, the market can return to normal.
Those stocks saw huge losses during Tuesday's trading after sharp increases in share prices, with Plug Power reaching an all-time high of $11.72 on Tuesday, up from 15 cents last April. Fannie Mae and Freddie Mac -- the mortgage lenders taken under government control during the financial crisis -- also saw big declines that continued into Wednesday morning.
The relationship between the country's currency and how its traders use the metal as collateral is being revealed.
By Carla Mozée, MarketWatch
For the first time since July 2010, prices for a most active futures contract are trading below $3 a pound, according to data from FactSet.
China is the major culprit for the price drop, as the country is one of the metal's biggest customers and recent poor trade data have rattled the investing world. But the collapse in prices to their worst level in nearly four years isn't solely about demand concerns.
Overnight, the Chinese solar-energy company Baoding Tianwei Baobian Electric saw its bonds suspended on the Shanghai exchange after a second year of net losses spurred default fears. Such action would follow last week's first default by a Chinese company on its onshore corporate bonds.
The Buckeye State is currently weighing legislation that would ban automakers -- namely, electric-car company Tesla -- from owning a dealership outright.
In a report first seen in The Columbus Dispatch, Tesla and the Ohio Automobile Dealers Association met Tuesday regarding whether Tesla's business practice of having company-owned stores, as opposed to traditional dealerships, should be banned in the state of Ohio.
Tesla is banned from selling directly to consumers in Texas, Arizona and, as of April 1, New Jersey.
Senate Bill 260 is currently up for debate in the Ohio Senate, which states that an auto manufacturer cannot own a dealership outright. The bill was introduced in December, as dealers have become concerned about Tesla's presence in the state.
Activists seem to be lurking everywhere, and boards of directors are listening to them. It's all part of an unexpected 2014 landscape that's making the market tough for negativists.
If you were to ask a short seller what the most dangerous words in the lexicon are right now, he might say: "Our company is actively looking at ways to optimize our capital structure."
Those were the words that Pete Bensen, the chief financial officer of McDonald's (MCD), uttered Tuesday, and they drove a spike through the heart of anyone who was betting that numbers were simply way too high for the company and had to be slashed.
For the longest time, companies just took it. They took the beating that came from disappointing performance. So same-store sales are down? That means estimates are too high. Estimates coming down? The stock gets hammered. So if you can predict who is going to disappoint for the quarter, then you can short the stock, then cover when it disappoints and numbers come down and the owners turn into sellers.
It really was that simple.
Down for the short term, BHP Billiton, China Mobile and McDonald's should have profitable futures.
There's no law that says a bull market in stocks can only last five years. But "efficient market" theory does state that eventually all equities will be fairly and fully valued based on the information available. That should result in blue chips with compelling features such as BHP Billiton (BHP), China Mobile (CHL) and McDonald's (MCD) rising again to reward the patient long term investor.
Over the past 12 months, the Standard and Poor's 500 Index ($INX) is up more than 23 percent.
But not all stocks have been lifted by the rising S&P. BHP Billiton, the world's largest natural resources company, has fallen more than 12 percent over that period. China Mobile, the world's largest cell phone company, is down by more than 15 percent. McDonald's, the world's largest fast food restaurant, is off by 3.7 percent.
Shares of Plug Power took a beating Tuesday after an analyst listed the fair value of the stock at 50 cents.
By Joel Elconin
It's fine and dandy to be long momentum stocks when they are on their parabolic moves higher. However, once the tide turns, it can get really ugly in a hurry.
There is no better example of this price action than Tuesday's activity in the fuel cell sector, Plug Power (PLUG) in particular. The issue, which began the year at $1.56, reached $11.72 in Tuesday's trading before the longs pulled the plug. The flurry of selling has taken the issue down over $4.00 from its intraday high to $7.11.
Perhaps the decline can be attributed to a delayed reaction to a scathing report issued by well-known short seller, Citron Research. The firm's analysis is pretty straightforward: during its decade of existence, the solar company has lost close to $850 million, has developed no intellectual property or shown meaningful revenue growth. In their opinion, the fair value of PLUG may be $0.50.
Chipotle is an extremely well-run company in the midst of robust growth. But its stock, like Wal-Mart's a decade ago, may nonetheless be hitting its peak.
Throughout the 1990s, shares of Wal-Mart (WMT) and Microsoft (MSFT) exploded higher year after year. Investors realized that these firms had so powerfully revolutionized their respective industries, that they could maintain solid growth far into the future. (Microsoft owns and publishes MSN Money.)
Their faith was well placed. Wal-Mart, for example, which had racked up an impressive $156 billion in sales by fiscal (January) 2001, would boost sales above $300 billion by fiscal 2006 and $400 billion by fiscal 2010. For its part, Microsoft saw its sales grow from $23 billion in fiscal (June) 2000 to $60 billion by fiscal 2008.
Trouble is, investors didn't benefit. Shares of Wal-Mart fell more than 25 percent from their 1999 peak over the next decade, while shares of Microsoft lost half of their value. In hindsight, it would have been wise to sell these two stocks prior to another decade of solid sales and profit growth. Simply put, their valuations had become so extended that the company's financial performance needed a decade to catch up.
While they don't know when it will burst, they do recommend looking to Europe if you want a safer bet.
Prominent money managers are warning of a bubble in some technology stocks and recommending investors avoid emerging markets in favor of Europe.
"The high probability is when you look back on this period five years from now, you'll say some of these companies grew into their (earnings) multiples ... but I think biotech and other areas in tech have seen multiple expansions beyond what we can justify beyond any kind of reasonable cash flow expectations," Doug Silverman, co-founder of $6.7 billion hedge fund firm Senator Investment Group, said Monday at the Portfolios with Purpose Awards Night in New York.
"You can only call it a bubble. But I have not guessed when it will end," Silverman added.
The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
The company reported sales that were down 7 percent for the quarter, citing the harsh winter weather as a cause. But sales for the full year were also down by 5 percent, which gave investors cause for concern that there was more than just the cold weather at play here.
On Tuesday's installment of Stock of the Day, host Mark Reeth and Motley Fool analyst Taylor Muckerman discuss what else may have pulled the company down.
As the economy picks up steam and baby boomers retire, sales of recreational vehicles are making a comeback. Here are 3 stocks to play the trend.
By Nelson Hem
The growing economy and the mass retirement of baby boomers have led to a resurgence in the recreational vehicle industry.
Sales of new RV units increased 11 percent year-over-year in 2013, and some estimates call for 2014 sales of more than 335,500 units, which would be the highest in six years.
While there have been concerns about how the inclement weather has so far affected sales and production, most RV sales come in the spring and summer, by which time the polar vortex should be a distant memory.
Below we take a look at how Drew Industries, Thor Industries and Winnebago Industries have fared and what analysts expect from them.
The Detroit automaker recalled 1.6 million vehicles last month -- several years after a deadly problem was discovered.
General Motors (GM) and the National Highway and Traffic Safety Administration are under scrutiny for taking years to address an ignition switch problem that is tied to 13 deaths.
Last month, the Detroit automaker recalled 1.6 million vehicles. NHTSA has launched an investigation into how long it took GM to admit there was an issue and take action.
GM learned about at least one incident of ignition switch problems in the 2005 Chevrolet Cobalt around the time of the vehicle's launch, according to a chronology report submitted to NHTSA.
The report says GM employees were able to replicate the ignition switch issue, where the key moved out of the "run" position when the driver accidentally contacted the key or steering column. An engineering inquiry was opened to investigate the issue. Although there were potential solutions, the inquiry was closed without action "after consideration of the lead time required, cost, and effectiveness of each of these solutions," according to the report.
The coffee company's plan to make K-Cups exclusive to its new Keurig machine sounds awfully familiar to iTunes' failed plan for music files a decade ago.
A company built around hardware with functional obsolescence decides to enclose its ecosystem by using digital rights management (DRM) to limit the use of its fairly interchangeable software.
Why are we seeing this flawed plotline again in 2014 when we learned how the story ends in 2009?
Mostly because Green Mountain Coffee Roasters (GMCR) thinks that turning its Keurig business into iCoffee is just about the only way it can keep third-party suppliers from cutting into its take.
According to a report last week from TechDirt, Keurig has been striking proprietary agreements with its suppliers that will make their K-Cup coffee pods exclusive to new Keurig machines that the company will introduce in the fall. A lawsuit filed by Treehouse Foods against Keurig found that the company is working with the coffee equivalent of DRM to not only make third-party and refillable pods unusable in its new machines, but to lock its new K-Cups out of older, more open-source Keurig models.
The activist investor is best known for ruffling corporate feathers. Here's a look at how companies he's targeted have fared lately.
By Nelson Hem
In his latest letter to eBay shareholders, Icahn said he had "not yet begun to fight" and again pushed for the company to spin off its PayPal unit, as well as replace certain board members. eBay denies that shareholders support such moves, despite results of a new survey that suggest otherwise.
Below is a quick look at how these four stocks have fared, and what analysts in general expect from them. Some other Icahn picks include Hologic, Navistar International, Nuance Communications, Talisman Energy, and of course his own Icahn Enterprises.
China still calls the shots on commodities, but there's a small sign of change.
Does anyone besides China use raw materials? What has happened to the world that one country seems to be the end all, be all of commodities? Isn't there materials demand elsewhere? Are we simply going to use the price of some commodities to determine the future of hundreds of companies? And are we going to decide that the savings of consumers of commodities equal nothing to anyone -- nothing positive, at least -- even as we care so much about gross margins?
Monday was the first day that I can recall when we plunged on China weakness and then shook it off, although we never shook off anything commodity. The way the commodity stocks work these days is that they must go down on every weak Chinese data point. If you graph weak Chinese data points over the stock prices, what you will see is a pretty perfect correlation between the downticks on both. It simply doesn't matter, by the way, if the companies are making money or even if they are trying to do the right thing to bring down costs.
Softbank's president is back in Washington to try to sway US regulators that a Sprint/T-Mobile merger would be good for everyone.
Japan's Softbank hasn't given up on the idea of some sort of merger of the third-largest U.S. cellular carrier Sprint (S) and the country's No. 4, T-Mobile (TMUS).
In a new interview with PBS's Charlie Rose, Softbank President Masayoshi Son, who also is the chairman of Sprint, said Sprint is still very interested in buying T-Mobile.
Son told Rose in no uncertain terms that he wants a T-Mobile deal so he can compete with the big guys -- Verizon (VZ) and AT&T (T) -- and so the new company can pressure everyone to lower the high monthly service fees U.S. consumers are currently being charged.
Sprint's stock gained nearly 1.5 percent to $8.85 and T-Mobile was up more than 2.9 percent to $31.85 in early trading on Tuesday.
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The relationship between the country's currency and how its traders use the metal as collateral is being revealed.
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[BRIEFING.COM] At midday, the major averages trade in mixed fashion. The Nasdaq (+0.1%) hovers just above its flat line while the Dow Jones Industrial Average (-0.2%) and S&P 500 (-0.1%) display modest losses after making a brief appearance in positive territory.
Equity indices began the day on the defensive, but were quick to notch their lows before turning around and heading back to their flat lines. The early weakness took place amid cautious action in Europe where the major ... More
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