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Fannie Freddie Rally Returns With a Vengeance

Thu, 23 May 2013 15:15:51 EDT

NEW YORK (TheStreet) -- Fannie Mae and Freddie Mac shares have more than doubled over the past 10 trading days on heavy volumes, adding to big gains posted in March after the shares had been dormant for several weeks.

Professional investors who have long touted the junior preferred shares of the Government Sponsored Enterprises (GSEs) have shaken their heads in disbelief at the common stock rally, though at least one big fund focusing on distressed investments is now rumored to be trading the common shares. The senior preferred shares of the GSEs and 80% of the common stock are owned by the U.S. Treasury, which put Fannie and Freddie into conservatorship in Sept. 2008.

Despite a broad market decline on Thursday, Freddie Mac common shares were up 17.37% to $1.98 at about 2:30 p.m. EST and are up about 650% year to date. Fannie Mae shares were up 14.21% to $2.09 and are up more than 700% year to date. That compares to roughly 200% gains for preferred issues. ...

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Windows Ad Turns The Table On Apple

Thu, 23 May 2013 13:15:53 EDT

NEW YORK (TheStreet) -- The tablet operating system wars are heating up once again. In case you missed the new Microsoft Windows 8 commercial, the 30-second spot takes direct aim at industry leader Apple's iPad.

Microsoft has turned the tables on Apple's iconic "Siri" ads. The ones where famous and not-so-famous people ask their iPhones questions and the mechanical female voice provides almost human responses. In this new ad Microsoft spoofs the original Siri ads and shows what Apple's voice control won't be able to accomplish.

...

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Cramer Quick Take: Dropbox Demystified

Thu, 23 May 2013 11:49:11 EDT

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TheDeal: Goodman Networks Buys Multiband

Thu, 23 May 2013 11:33:24 EDT

NEW YORK (TheStreet) -- Goodman Networks Inc., which provides engineering services to the telecommunications sector, said Wednesday, May 22, that it agreed to acquire Multiband Corp. for about $116 million in cash.Plano, Texas-based based Goodman, which is family owned, is going to pay Multiband $3.25 per share, valuing the target's equity at around $70 million. The buyer is also going to assume Multiband's debt and redeem its preferred stock.The purchase price represents a 26% premium over Multiband's Tuesday closing stock price of $2.58.The news sent Multiband's stock up 24% to $3.20 on Wednesday afternoon.Minneapolis-based Multiband, founded in 1975, provides installation services to satellite and cable providers. The company generates the majority of its revenue by completing about 20% of installations for DirecTV Group Inc.Multiband generated a 2012 revenue of $305.6 million compared to $300 million in 2011. The company operates 37 offices across 19 states.A Goodman spokesman said Wednesday that the acquisition will diversify the company's services into the cable and satellite sectors.Multiband got involved installing video services in single-family homes in 2008, when it acquired a 51% stake in Michigan Microtech Inc. from DirecTech Holding Co., a DirecTV fulfillment agent.In July 2012, Multiband reached a deal to acquire rival MDU Communications International Inc. for $42.6 million, but that deal was never completed. Multiband called it off as a result of the Goodman acquisition, according to a filing with the Securities and Exchange Commission.Multiband has a 45-day go-shop period and will have to pay Goodman a breakup fee of up to $6 million if it agrees to another offer.Multiband said Wednesday that it considered a number of options before it agreed to be acquired by Goodman.After the deal is completed, Multiband will become a wholly owned subsidiary of Goodman and will continue to be led by CEO James Mandel.The transaction is expected to close in the third quarter, pending shareholder and regulatory approval. It is not subject to financing conditions.Craig-Hallum Capital Group LLC and Winthrop & Weinstine PA advised Multiband.Jefferies LLC, Credit Suisse (USA) Inc. and Haynes and Boone LLP advised Goodman.Multiband did not return calls Wednesday.

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TheDeal: Is Saks an LBO Candidate or Strategic Target?

Thu, 23 May 2013 11:04:06 EDT

NEW YORK (TheStreet) -- Did Saks Inc. hang a sale sign out for itself because of a hot market for luxury retail leveraged buyouts or because it's in the crosshairs of a strategic acquirer? Those were the possibilities Wall Street bankers and analysts kicked around after The New York Post broke the news Tuesday that the iconic New York department store has hired investment bank Goldman, Sachs & Co. to explore strategic alternatives. Also see: Tesla's Elon Musk: A Financial Wizard The Daily Deal has since confirmed Saks has hired the investment bank. But one retail sector investment banker said hiring Goldman was more likely a defensive response to an investor that recently and significantly increased its stake in the company.Saks spokeswoman Julia Bentley said in an e-mailed statement, "It is against our policy to comment on rumors or speculation."Southeastern Asset Management Inc., which has been invested in Saks for several years, has had the biggest run-up in its share ownership within the past month. In a regulatory filing on Dec. 10, the investment firm reported it had boosted its stake to 17.8%. Then, by April 26, the firm raised its share of the company to 19.3%.Although Southeastern is known to sometimes take an activist stance -- witness its pairing up with Carl Icahn to oppose Michael Dell and Silver Lake's $24.4 billion LBO for Dell Inc. -- a source familiar with the Saks situation said it was unlikely that the firm was directly behind a sale process.Southeastern declined to comment on its investment.Other major shareholders who have accumulated stakes in Saks, according to regulatory filings, include Diego Della Valle, the chairman of Tod's SpA, with nearly a 15.1% stake, as well as Italian bank Mediobanca Banca Di Credito Finanziario SpA, with about a 5.3% stake. Mexican tycoon Carlos Slim, through his company Inmobiliaria Carso SA de CV, has a 15.4% stake.But one thing that could be motivating Saks is the potential buyout of rival Neiman Marcus Group Inc., which recently hired Credit Suisse Group to explore a dual-track initial public offering and sale.As Neiman shops itself, Saks too, could be looking to take advantage of the available pool of buyers being generated.And Saks has been considered a leveraged buyout target ever since Neiman Marcus was taken private in 2005 by private equity firms TPG Capital and Warburg Pincus LLC in a $4.7 billion deal. Also see: 5 Reasons the Housing Market Will Keep On Rising The financial crisis squashed takeover speculation, but with the buyouts of J.Crew Group Inc. and Gymboree Corp., both in 2010, practically every retailer was thought to be a possible target.While reports have Kohlberg Kravis Roberts & Co. LP weighing buyouts and a merger of Neiman and Saks, an industry analyst said such a move was unlikely.Neiman and Saks have overlapping stores at a number of locations, so acquiring Saks to merge with Neiman Marcus would essentially be the equivalent of buying a competitor to shut it down, this analyst said. And the only businesses that would get any benefit from that would be competitors such as Nordstrom Inc., Macy's Inc., Bloomingdale's and Barneys New York Inc., the analyst added.Also, Steven Dennis, president of SageBerry Consulting LLC and a former executive and current shareholder of Neiman Marcus, said Saks' real estate portfolio would weigh against a Neiman combination because of the limited use for many of the locations if they were closed.On paper, Saks looks like a decent buyout candidate, with an enterprise value as a multiple of Ebitda of 9.5, and low debt, even at its current stock price of $15.52, up about 13.5% Wednesday after the news about a potential sale broke.Ebitda as of May 4 was nearly $266 million, cash was $20 million and total debt was $317 million. Its market cap was $2.24 billion, with an enterprise value of nearly $2.54 billion. Also see: Windows Ad Turns The Table On Apple But Dennis said that at 9.5 times Ebitda, Saks is now becoming expensive enough to give potential buyers pause, particularly because Saks is a fairly mature brand.Saks is often viewed by analysts as the dowdy rival to sleeker, hipper and better-operated competitors such as Neiman Marcus, Nordstrom, Bloomingdale's and the ultra-cool Barney's.All the chatter about a sale of Saks comes against a backdrop of a bull market and luxury goods space, leading some to wonder whether the sector is reaching its peak in terms of sales, growth and valuation.Results this reporting season have "shown the negative relationship of inventories to sales growth for all companies other than Macy's," Credit Suisse analyst Michael Exstein said in a note Tuesday. "Saks putting itself up for sale may be another indication that we are getting closer to a cyclical peak for some retail stocks."

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Starwood Upgraded as Capital Return Eyed

Thu, 23 May 2013 08:47:20 EDT

NEW YORK (TheStreet) -- Starwood Hotels got an upgrade to "buy" from Bank of America Thursday as analysts at the bank cited the potential "for a significant return of capital."

Starwood's price target also got a lift from the bank's analysts, to $84 from $70. The analysts also see the potential for asset sales "later in the cycle."

Hotel stocks have underperformed the market year to date, as revenue per available room (RevPAR) -- a closely watched industry metric, has been "volatile," according to Bank of America's analysts. ...

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Electric Cars: The Right and Wrong Reasons for Buying

Thu, 23 May 2013 06:00:00 EDT

NEW YORK (TheStreet) -- The purpose of this article is to sort out some of the main arguments for and against electric cars.

For reference and clarification, by "electric" I hereby mean both pure electric cars and those accompanied by an on-board generator, such as the Chevrolet Volt or the upcoming BMW i3. Basically, any car that plugs into a wall in order to store energy in a battery that will (help) drive the car.

1. "Electric cars save money on gasoline." ...

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Morici: The IRS Scandal Smoking Gun?

Wed, 22 May 2013 09:44:34 EDT

NEW YORK (TheStreet) -- In the IRS targeting scandal and others, Washington and the media are obsessed with the question: What did the president know and when did he know it? That misses the point -- Obama's presidency is much more damaging to the nation than the mistakes of subordinates now coming to light.

Most recently, we learn President Obama met with anti-Tea Party IRS Union President Colleen Kelley just before the tax agency began targeting conservative groups. Is that the smoking gun? Was the president in on the plan to harass opponents of big government?

Through labor-management forums, the union has a lot to say about how the IRS is run, but I doubt a transcript of the meeting, if we could get one, would prove the two presidents directly conspired to use IRS powers to target conservative groups. Instead, it would likely show they were in concert on the need to defeat the GOP in 2012, and countering the Tea Party's influence was important. ...

Tumblr Completes Mayer's Yahoo! Vision

Wed, 22 May 2013 06:00:00 EDT

NEW YORK (TheStreet) -- A few weeks ago, when VMware announced its Pivotal Initiative, my eyes were distracted by a deliberate display of eye candy.

Well behind the executives with their PowerPoints stood a line of desks, extending into the middle distance. Behind the desks were programmers, pounding on keyboards, going back and forth to the water cooler, or standing to talk with one another.

It was an illustration of cloud development. The unspoken message was that Pivotal would be developed using a bunch of young programmers, working tightly together, at all hours, and in close collaboration. ...

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HP Bets on Google With the Help of Nvidia

Wed, 22 May 2013 06:00:00 EDT

NEW YORK (TheStreet) -- After years of strategic and executional debacle, HP is undergoing a variety of divorces and entering new relationships as part of the surgery it takes to find itself a future in the personal computing business. By personal computing, I mean PCs, tablets, as well as in the future also likely smartphones.

Let's start by mentioning HP's relationship with Microsoft. To be sure, HP will continue working closely with Microsoft in all conceivable product categories -- as they should. This includes PCs, tablets and smartphones.

What is important to realize, however, is that until very recently Microsoft was HP's exclusive partner in these areas. In a few short months, this exclusive relationship has started to change. ...

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Bubble, Bubble, Are We in Trouble?

Tue, 21 May 2013 18:11:53 EDT

NEW YORK (TheStreet) --Major U.S. stock indexes continue climbing further into bubble territory as investors ignore weak economic news and count on the Federal Reserve to keep the money spigots open.

All major indexes remain overbought and in record territory, according to several technical indicators.

...

Salmon: Jamie Dimon Needs a Boss

Tue, 21 May 2013 06:00:01 EDT

NEW YORK (Reuters Blogs) -- Jamie Dimon is wagging his finger from newstands across America this week, above the kind of headline his PR team can only dream of: "DIMON IS FOREVER: Why Jamie Dimon is Wall Street's Indispensable Man".

The story itself, by Nick Summers and Max Abelson, consists mainly of rich corporate insider types talking about how wonderful Jamie Dimon is, and how ridiculous it is that anybody might consider stripping him of the chairmanship of JPMorgan Chase. Here's a doozy: Admiring rivals have been known to call Dimon "the sun god." That cosmic aura has real use, says Kathryn Wylde, who served on the Federal Reserve Bank of New York's board with Dimon until his term ended last year. "There's no doubt that it helped the bank, because so much of that business is built on confidence." The intrusion of shareholders, in the form of a vote on Dimon's dual roles, she adds, is "indefensible if the company is performing well."

Wylde is one of those great-and-good people who turn up on boards all over the place: not only the New York Fed, but also everything from the NYC Economic Development Corporation and the Manhattan Institute to the Lutheran Medical Center and the U.S. Trust Advisory Committee. Her day job is serving as the president and CEO of the Partnership for New York City, a partnership made up exclusively of large companies and the rich people who lead them. JPMorgan is unshockingly among them. Her view of the role of shareholders in corporate governance is fascinating: It's "indefensible" for them to care about such things so long as they're getting paid. ...

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European Banks Face Severe Handicap Recruiting in U.S., Asia

Tue, 21 May 2013 02:00:00 EDT

NEW YORK (TheStreet) -- European banks may soon find it far more difficult to attract and retain talented U.S. executives, as new pay restrictions draw closer.

Under new rules being finalized by the European Banking Authority, top executives at European banks and money management companies will likely be required to limit bonuses to no more than 2 or 2.5 times their base salary, according to Alan Johnson, head of compensation consulting firm Johnson Associates.

"I don't think people are focused enough on what that's really going to mean," Johnson says. ...

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Build a Strong Portfolio With REITs: Opinion

Mon, 20 May 2013 11:41:52 EDT

NEW YORK (TheStreet) -- It's hard to argue REITs should not be in your core portfolio when the dividend-centric sector is crushing just about all other well known asset classes. Year to date, all equity real estate investment trusts have returned over 15%, according to NAREIT, beating out the broader S&P 500 index (11.6%) and the Russell 2000 (9.2%).

Some of the REIT sectors have produced some extraordinary results including the freestanding, or triple-net, sector that has returned an average of 28.8% for the year to date. The health care sector has also had a remarkable run, returning around 23.7% in the same period, also according to NAREIT.

I'm not a gambler but I'm betting retail REITs will continue to outperform. Year-to-date the shopping center REITs have returned around 17.3% and the regional mall REITs have returned over 11% in April alone. ...

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Did Google Just Place Three Big Bets on Nvidia?

Mon, 20 May 2013 10:30:49 EDT

NEW YORK (TheStreet) -- Google is in increasing competition with the main computing ecosystem players. Among the biggest fights Google is engaging, are the following three: Apple : Google needs to out-gun Apple in mobile computing -- smartphones and tablets. Microsoft : Google needs to out-gun Microsoft in traditional PCs and gaming. Facebook : Google needs to become the main alternative to Facebook in social networking.

In the last few days, it appears that Google's weapon of choice to fight these three battles may be Nvidia . Let me tell you why: Apple

Apple and the iPhone/iPad: At the annual Google i/o developer conference last week, the Android development leadership was on stage and answered questions from the very large audience. One question was -- and I am paraphrasing -- what Google considers the biggest opportunity for Android going forward? ...

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