BloggingStocks

Chicago Cubs auction starts today

Zac Bissonnette — 2008-07-18T15:41:00+00:00

Filed under: Tribune Co. (TRB), Business of sports

The Sam Zell-owned Tribune Co. is selling its prized baseball team, the Chicago Cubs, and opening bids are due today.

Reuters reports that 10 parties have been approved by Major League Baseball to make bids, and the team could fetch over $1 billion. Potential bidders include a group led by taxi tycoon Andew Murstein, including Hank Aaron and Jack Kemp, and the usual band of moguls. But if you want to see some passion restored to baseball, you have to be routing for internet billionaire Mark Cuban, the flamboyant owner of the Dallas Mavericks.

Cuban has the cash and he's the one guy who would probably be willing to commit the resources to make the company a champion for the first time since 1909.

Murstein's, who is vice chairman of Sports Properties Acquisition Corp. (AMEX: HMR) told Reuters that "We're not going to chase the deal. With us, it's not going to be an ego buy."

For disenchatned Cubs fans, a billionaire on an ego trip would be the best buyer.

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Cramer on BloggingStocks: Yesterday's technology, yesterday's news

Jim Cramer — 2008-06-18T09:22:00+00:00

Filed under: Industry, Newspapers, Google (GOOG), Market matters, New York Times'A' (NYT), Tribune Co. (TRB), Gannett Co (GCI), Stocks to Sell, Cramer on BloggingStocks

From TheStreet.com Network

TheStreet.com's Jim Cramer says massive debt at the newspapers means they no longer work as businesses.

Maybe newspapers don't work as businesses. The shocking 10% workforce reduction announced this week by McClatchy (Cramer's Take) (NYSE: MNI), formerly the best-run chain out there, is a reminder that all of these companies have borrowed too much money and don't generate the cash flow to make it work. McClatchy, with an 8% yield, is showing signs of collapsing under its own weight, something that has been exacerbated by Wall of Shame performer Gary Pruitt, a man who is still, amazingly, the CEO.

But all of this was totally predictable. I have never seen an industry attract so many buyers with so much debt and so little equity.

Take Tribune (Cramer's Take). Sam Zell's a smart guy. He let the newspaper employees do the heavy lifting when he bought the Tribune company. That was so smart. He will be out very little if the deal fails. The workers will be out their retirement money. That was a smart deal -- unless you work there -- but I have spoken against that deal so many times I am sick of talking about it.

McClatchy could have weathered this downturn, instead of -- it is a bit unthinkable, but I think it will happen -- defaulting on its debt, if it hadn't been determined to buy a bunch of properties for much more than they are worth. The New York Times (Cramer's Take) (NYSE: NYT) and Gannett (Cramer's Take) (NYSE: GCI) spent a lot of money, but they didn't have to buy back stock. Gannett's 6% yield isn't tempting in the least.

What got into all of these guys? First, they weren't portals. Each lacked critical mass to become the destination sites on the Web. Second, it makes very little sense to advertise with them for many of the bread-and-butter advertisers: classifieds, movies, real estate. Those are all purchased better on the Web, because the interactivity has an immediate payoff. Those ads for real estate you see are almost all for older, wealthier people and are vanity projects by the brokers to keep their salespeople happy.

Finally, the younger people aren't all that interested in news. That's really the rub. News isn't that important to them. Sure, they follow the election, but for the most part news isn't of real value. They don't care that much, and if they do they go to Google (Cramer's Take) (NASDAQ: GOOG) News, which is actually better than a newspaper because the newspaper companies were never able to gate their stuff.

So you have all of these old fuddy-duddy bankers and editors and publishers missing the whole point: New potential readers don't read papers any more. They don't even care much about the news.

When you layer on the cyclical aspect of things: quickly declining auto ads and retail ads -- much less competition there, so many fewer ads -- you really get a tsunami of pain that will make it so it is possible that most newspapers will have to restructure to stay in business. Basically, offline journalism isn't a business as it is currently configured. And all of these deals made no sense whatsoever.

My prediction: Within one year, most of the levered players will eliminate dividends, close papers and fire so many people that whatever might intrigue young people will be gone.

If they weren't so indebted, this would all be less of a problem. Much less.

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RELATED LINKS:
McClatchy to Cut 10% of Staff
They Just Don't Get McClatchy!
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.

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Fliers in for pain, next billion-dollar food brand?, top 25 newspaper web sites rated - Today in Money 6/3

Allan Halprin — 2008-06-04T08:46:00+00:00

Filed under: Microsoft (MSFT), Yahoo! (YHOO), New York Times'A' (NYT), Money and Finance Today, Tribune Co. (TRB), Procter and Gamble (PG), News Corp'B' (NWS), UAL Corp (UAUA), EMC Corp (EMC), Lehman Br Holdings (LEH)

In the News:

· United Airlines Plans Major Fleet Reduction; Ground 737s, 747s; Cuts 1,600 Jobs

· Smuckers Brews Up Deal to Buy Folgers

· Carl Icahn Says CEO Jerry Yang, Board Have to Go, Annual Meeting August 1 Now

· Why Yahoo's Yang Is Holding Out

· Debt Looms as Cash-Strapped Americans Use More Plastic

· Megabucks Las Vegas Development Project Scrapped

· Lehman Brothers Denies Rumors, Says Has Plenty of Cash

· Merrill Sees Countrywide Losses Up to $12 Billion

· Former 'It' Stock Iomega Gobbled Up By EMC

· MSN Bets Million as it Looks to Hollywood for New Site

· Ed McMahon Faces Foreclosure

Fliers in for Pain as Airlines Pack It In

The USA's air-travel map is shrinking fast, dropping scores of routes and flights that airlines simply can't afford anymore in a world of $130-a-barrel oil. The nation's most popular vacation destinations will be among the biggest air-service losers. Many flights to Honolulu, Orlando, Las Vegas and other favorite vacation venues have vanished or will soon because cheap tickets bought by tourists don't cover the cost of getting there.

Fliers in for pain as airlines pack it in - USATODAY.com

Aiming to Be the Next Billion-Dollar Food Brand

Success has followed Steve Hughes wherever he has roamed in the food industry the past two decades. Today, Hughes is betting that he can take another small, fast-growing, good-for-you product and turn it into a billion-dollar brand with a wide assortment of items found all across the grocery store. The brand is Smart Balance, which you've probably seen in the margarine shelf.

Can Steve Hughes make Smart Balance a billion-dollar brand? -FORTUNE

Top 25 Newspaper Web Sites Rated

24/7 Wall Street puts a magnifying glass on the 25 largest newspaper websites to see which sites are making the grade and which ones are failing miserably. See who gets an A and who flunks out.

24/7 Wall St.: The Newspapers: Rating The Top 25 Newspaper Websites

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Newspaper wrap-up: HSBC's allowance for bad U.S. loans is lower than expected

Laurie Pasternack — 2008-05-12T08:00:00+00:00

Filed under: Newspapers, Magazines, Tribune Co. (TRB), News Corp'B' (NWS)

MAJOR PAPERS:

The Wall Street Journal reported that a spokesperson for New Corporation (NYSE: NWS) said the company has dropped out of the bidding for Tribune Co's (NYSE: TXA) Newsday. This leaves Cablevision Systems Corporation (NYSE: CVC) as the apparent winner of the auction.
According to people familiar with the matter, the Wall Street Journal reported that American International Group Inc's (NYSE: AIG) airplane-leasing unit is considering a split from the company. The people said International Lease Finance Corp have grown "increasingly concerned" the company will be hurt by AIG's financial troubles.
Royal Dutch Shell Plc (NYSE: RDS.A) and Spain's Repsol YPF SA (NYSE: REP) are pulling out of one of Iran's biggest gas projects, the $10B-plus development of phase 13 of South Pars, the world's largest gas field, the Financial Times reported.

WEB SITES:

Bloomberg reported that HSBC Holdings Plc (NYSE: HBC) set aside a smaller-than-forecast $3.2B for bad loans in the U.S. The bank also said its Q1 profit was higher than Q107.

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News Corp. pulls bid for Newsday

Trey Thoelcke — 2008-05-10T16:10:00+00:00

Filed under: Tribune Co. (TRB), News Corp'B' (NWS)

The Wall Street Journal, which is owned by News Corp. (NYSE: NWS) is reporting that News Corp. has withdrawn its bid for Newsday (subscription required). Rupert Murdoch's News Corp. was unwilling to match the $650 million bid offered by Cablevision (NYSE: CVC). New York Daily News owner Mort Zuckerman had also bid on Newsday.

Besides being higher, Cablevision's bid is likely to face fewer regulatory hurdles, considering Murdoch's and Zuckerman's New York holdings. But, according to the Journal, the bid could prompt some pushback from investors who question the the strategic rational for the deal. Cablevision could bundle Newsday subscriptions with other broadband and phone services it offers in the New York area.

Tribune Co. (NYSE: TXA), current owner of Newsday, recently reported that first-quarter revenue and circulation was down, as newspapers continue to struggle. Cablevision also reported a first-quarter loss of 11 cents per share.

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Will Rupert Murdoch expand his print media holdings?

Jonathan Berr — 2008-03-21T16:10:00+00:00

Filed under: Newspapers, Marketing and advertising, Tribune Co. (TRB), News Corp'B' (NWS)

To the surprise of no one, the newly private Tribune Co. is probably going to sell Newsday. The once-venerable New York paper, like all metro dailies, has fallen on hard times and Tribune's new CEO and owner Sam Zell has got a mountain of debt to pay down.

According to The Wall Street Journal . Long Island-based Cablevision Systems Corp. (NYSE: CVC) and New York's Daily News as potential buyers. Rupert Murdoch probably would love to buy Newsday and combine it with News Corp's (NYSE: NWS) New York Post, but I am not sure whether the antitrust regulators would allow it. He is trying to merge everything but the editorial staffs of the Post -- never a hugely profitable enterprise -- with Newsday to save money in a joint operating agreement, the Journal says.

After spending $5 billion for Dow Jones, Murdoch needs to pick all of the low-hanging fruit he can. I expect this deal to happen. Maybe it will lead to others for papers that buyers are eager to unload. Perhaps, Murdoch might buy other Tribune papers from Zell such as The Baltimore Sun or Los Angeles Times. As the Australian tycoon showed in chasing Dow Jones, influence matters as much to him as profits. Gaining more big papers furthers that goal at the expense of shareholders.

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Tribune Company buyout finalized, no word on the Cubs

Michael Rainey — 2007-12-21T10:52:00+00:00

Filed under: Deals, Newspapers, Private equity, Tribune Co. (TRB)

Sam Zell formally completed his buyout of the Tribune Company yesterday. It only cost $8.2 billion and months of difficult negotiations -- but now he can go out and get the pitching his newly acquired Chicago Cubs have long needed to win it all. Well, maybe not. Word on the street is that he plans to sell the Cubs and Wrigley Field for a cool billion as soon as he can.

Zell has made it clear that he plans on allowing the various units within the Tribune Company to stand on their own feet. By his count, there are over 60 entities within the company, and each one needs to strike out on its own. As Zell put it, "As I've said over and over again, there are something like 60 entities in the Tribune Co. and I view it as 60 ways to get lucky."
Zell also plans to sell a number of Tribune assets -- and there are plenty to choose from. Tribune owns 23 television stations and nine newspapers, including the Los Angeles Times, the Chicago Tribune and the Baltimore Sun (for a complete list of assets owned by the company, take a look at this Wikipedia page). Tribune also owns stock in a number of companies, some or all of which could be liquidated for hundreds of millions of dollars, if not billions.

So while the media environment is a difficult one, and newspapers in particular face a difficult future, I wouldn't be surprised to see Zell turn the Tribune Company around, and in short order. He's already moved to get rid of the old guard, which had gotten fat on the troubled company. Former CEO Dennis FitzSimons stepped down yesterday, taking $38 million in cash and prizes with him. Losing a few more executives like that will do the Tribune a world of good -- and maybe with the money saved getting rid of the corporate fat cats, Zell can find a way to keep the Cubs and grab a World Series ring.

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The 52-week high club

Douglas McIntyre — 2007-12-20T18:35:00+00:00

Filed under: After the bell, Archer-Daniels-Midland (ADM), Tribune Co. (TRB), Activision Inc (ATVI)

Activision, Inc. (NASDAQ: ATVI): Revised it's outlook upward. Shares moved up to $27.98 from 52-week low of $16.05.

Hologic, Inc. (NASDAQ: HOLX): Company is to be added to the Nasdaq 100. Traded up to $69.75 from 52-week low of $45.88.

Archer Daniels Midland Company (NYSE: ADM): The company is still moving up on strength of legislation of new law to increase ethanol production. It hit $43.37 up from 52-week low of $30.20.

Tribune Company (NYSEL: TRB): Deal to take company private finally closes. Up to $34 from 52-week low of $22.78.

Douglas A. McIntyre is an editor at 247wallst.com.

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Best & Worst stocks of '07, one-year AMT fix passed, returns may be delayed & worst sttes for speeding - Today in Money 12/20

Allan Halprin — 2007-12-20T08:25:00+00:00

Filed under: Starbucks (SBUX), Coca-Cola (KO), Amazon.com (AMZN), Home Depot (HD), McDonald's (MCD), Citigroup Inc. (C), Money and Finance Today, Tribune Co. (TRB), ConAgra Foods (CAG), Countrywide Financial (CFC), Research in Motion (RIMM), Amer Intl Group (AIG), NIKE, Inc'B' (NKE), Oracle Corp (ORCL), Washington Mutual (WM), Merck and Co (MRK), Bear Stearns Cos (BSC)

In the News:

· One-Year AMT Fix Passed By Congress; 20 Million Taxpayers Saved

· Oracle Profits Jump 35%, Stock Soars

· Bear Stearns Posts First Quarterly Loss Ever, Mortgage-Related Writedowns $1.9 Billion

· Nike Profit Rises 10%, Pushed By Overseas Sales

· ConAgra Profit Jumps 15%

· Tribune Co. Poised to Go Silent Under Sam Zell

· Retail Sales Weak Over Holidays, But 35 Million People Haven't Started Shopping

· MTV to Break Into Video Games With Jerry Bruckheimer

· NetSuite $26 IPO Price at High End of Range

· Minivan Bumpers Do Poorly in Tests

· Boomers Discover It's Easy Being Green

Tax Change May Mean Delay in Refunds
More than 20 million taxpayers will escape the alternative minimum tax this year, thanks to a stopgap measure Congress approved Wednesday. But lawmakers waited so late in the year to vote that many early filers could have to wait until March to get their refunds. Ordinarily, the IRS starts processing tax returns in mid-January. But the schedule will be delayed this time because the IRS will need about seven weeks to reprogram its computers to reflect changes in the tax law.
Tax change may mean delay in refunds - USATODAY.com

Best and Worst Stocks of 2007
These are the stocks and sectors that came out ahead - and far behind during a very volatile year for Wall Street. Among the winners were Amazon.com, Research in Motion, Merck, McDonald's, Coca-Cola and National Oilwell Varco which was the biggest gainer in the S&P 500 with a 128% gain. The top Nasdaq stock was Baidu.com with a 231% gain. The biggest losers of 2007 were E*Trade which was down 84%, followed by Countywide Financial with a 78% drop. Other losers include Citigroup, Washington Mutual, Pulte Homes, AIG, Home Depot, Sepracor and Starbucks.
2007 stock winners and losers - CNNmoney

Worst States for Speeding
Taking a road trip home for the holidays this year? Be sure to go easy on the gas pedal, particularly if your travels take you up or down the East Coast. Even a first offense can bring a four-digit fine in some parts of the country. Topping the list is Virginia where the maximum fine for a first speeding ticket is $1,350.
The Most Expensive States For Speeding Tickets 2007 - Forbes.com 10 Worst States for Speeding

Starbucks vs. Dunkin' Donuts
Starbucks positions itself as a provider of coffee for the upscale connoisseur, while Dunkin' Donuts roasts joe for the Average Jane. Yet despite their differences, the country's two coffee biggies are looking more similar than ever this holiday as they battle over the $10 billion premium coffee business.
Battle brews for your coffee-drinking habit - USATODAY.com

Your House Isn't the Cash Cow It Once Was
Home-equity loans have gotten riskier as home prices fall. So before you consider this route here is what expert financial experts say you should consider before borrowing from their equity in the present declining market, and what you should know about the equity line you may already have.
Your House Isn't the Cash Cow It Once Was - TheStreet.com

Web Celeb 25
Forbes second annual list of the biggest stars on the Internet include gossip blogger Perez Hilton who replaces YouTube star LonelyGirl15 at the top of the list in 2007. TechChrunch's Michael Arrington comes in second place.
The Web Celeb 25 - Forbes.com

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Before the bell: GM, TRB, RIMM, AAPL, ETN, BA ...

Melly Alazraki — 2007-12-20T08:16:00+00:00

Filed under: Before the bell, Earnings reports, Deals, Rumors, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), General Motors (GM), Boeing Co (BA), Carnival Corp (CCL), Tribune Co. (TRB), Research in Motion (RIMM), Dow Chemical (DOW), Eaton Corp (ETN)

Before the bell: Futures rise following Oracle's earnings; ahead of data

Following the new emission laws, General Motors (NYSE: GM) said the law could "hamper muscle cars." Also, the Wall Street Journal reported that GM may sell its medium-duty truck unit to Navistar International.

Tribune Co. (NYSE: TRB) is bracing for the "Sam Zell era" as he is set to take the ailing newspaper and TV company private with the expected closing of his $8.2 billion buyout as soon as Thursday.

According to Think Secret, Apple Inc. (NASDAQ: AAPL) and Think Secret have settled their lawsuit in a confidential, "amicable" settlement. While no sources were revealed, Think Secret will no longer be published. Bloggers lament ThinkSecret: TUAW and Engadget -- if this is true, I wonder if Apple made the right move.

Research In Motion (NASDAQ: RIMM) is expected to post earnings of 62 cents a share in the third quarter. Cruise operator Carnival Corp. (NYSE: CCL) is also scheduled to report earnings today.

Eaton Corp. (NYSE: ETN) said it's planning to buy two firms in Europe and Asia to expand its electrical systems business outside the United States. The deal is valued at as much as $2.8 billion.

Boeing Co. (NYSE: BA) said Thursday it signed a 10-year agreement with India's Hindustan Aeronautics Ltd. "targeting the transfer of more than $1 billion of new aerospace manufacturing work to India."

Johnson Matthey shares rose over 13% in London after a report in the Financial Times suggested that Dow Chemical (NYSE: DOW) may make an offer for the U.K. platinum specialist.

The EU isn't happy with Google Inc's (NASDAQ: GOOG) planned takeover of rival DoubleClick for $3.1 billion, saying it would "harm European citizens through greater intrusion of privacy, the EU's top consumer lobby BEUC said on Thursday."

The big three Internet companies, Microsoft Corp. (NASDAQ: MSFT), Yahoo Inc. (NASDAQ: YHOO) and Google have agreed to a combined $31.5 million settlement with the U.S. government for accepting ads promoting illegal online gambling, as well as to stop accepting ads for sports wagering and other online gambling.

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Newspaper wrap-up: Google, Cablevision to bid for FCC spectrum

Eric Buscemi — 2007-12-19T08:15:00+00:00

Filed under: Newspapers, Magazines, Google (GOOG), Merrill Lynch (MER), Tribune Co. (TRB), QUALCOMM Inc (QCOM), Bear Stearns Cos (BSC)

MAJOR PAPERS:

The Wall Street Journal reported that in a list released last night by the FCC, Google Inc (NASDAQ: GOOG), Cablevision Systems Corporation (NYSE: CVC) and other "nontraditional" players are set to compete against more traditional wireless companies like Qualcomm Incorporated (NASDAQ: QCOM) and MetroPCS Communications Inc (NYSE: PCS) in the federal government's spectrum auction next month.

OTHER PAPERS:

Banks that include Merrill Lynch & Co Inc (NYSE: MER) and The Bear Stearns Companies Inc (NYSE: BSC) are reportedly in talks to help bail out struggling bond insurer ACA Capital Holdings, which lost $1B in the most recent quarter, according to two people briefed on the situation and reported by the New York Times; ACA Capital has guaranteed $26B in mortgage securities.
Executives at Tribune Company (NYSE: TRB) were faced with last-minute questioning from bankers that were reluctant to fund the final portion of the $8.2B deal to take the company private, according to sources close to the company, the Chicago Tribune reported.

WEB SITES:

Barron's Online's "Inside Scoop" reported that analysts are not convinced that the deal with Citadel is enough to save E*Trade Financial Corporation (NASDAQ: ETFC), as it does not eliminate E*Trade's $12.4B second-lien mortgage exposure, and the company could potentially face further customer attrition, which many think will continue to pressure the shares.

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Tribune (TRB) higher on expected FCC changes

Brent Archer — 2007-12-18T12:33:00+00:00

Filed under: Major movement, Good news, Industry, Tribune Co. (TRB), Options, Technical Analysis

Tribune Co. (NYSE: TRB) shares are rising this morning as the U.S. Federal Communications Commission is expected to approve a measure that will ease restrictions on media ownership. The plan would lift a ban in the twenty largest American cities restricting media outlets from owning a newspaper, and a television or radio station in the same market.If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on TRB.

After hitting a one-year low of $22.78 in August, the stock has hit a new one-year high of $33.40 today. TRB opened this morning at $33.37. So far today the stock has hit a low of $33.09 and a high of $33.40. As of 11:05, TRB is trading at $33.28, up 99 cents (3.1%). The chart for TRB looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $27.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just 2 months as long as TRB is above $27.50 at February expiration. Tribune would have to fall by more than 17% before we would start to lose money.

TRB hasn't been below $27.50 since October and has shown support around $29.50 recently. This trade could be risky if the stock breaks its upward trend, but even if that happens, this position could be protected by support the stock has formed around $31 over the past week. Plus, TRB might find some support at its 200 day moving average, which is currently at $30 and rising.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in TRB.

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Newspaper wrap-up: Tribune buyout contingent on solvency opinion

Eric Buscemi — 2007-12-07T08:05:00+00:00

Filed under: Newspapers, Magazines, Tribune Co. (TRB), Countrywide Financial (CFC), News Corp'B' (NWS), Dow Jones and Co (DJ)

MAJOR PAPERS:

The Wall Street Journal's "Deal Journal" reported that Sam Zell's planned buyout of Tribune Company (NYSE: TRB) is contingent on the receipt of a solvency opinion, and that this is the first time they have ever seen a deal dependant on this.
The WSJ's "Heard on the Street" reported that Countrywide Financial Corporation (NYSE: CFC) may not be out of the woods yet. Despite executives promising a return to profitability, there is still a risk the company may eventually seek bankruptcy protection or "resort to huge sales" of new stock.
U.S. private equity group JC Flowers "is understood" to have walked away from the auction for troubled bank Northern Rock, the Financial Times reported.
Rupert Murdoch is shaking up the management of News Corp (NYSE: NWS.A), the Financial Times reported, giving his son, James Murdoch, control over the company's European and Asian operations, and appointing two trusted executives to lead Dow Jones & Company Inc (NYSE: DJ) and the Wall Street Journal.

WEB SITES:

Barron's Online's "Weekly Trader" said AutoNation Inc (NYSE: AN) looks attractive now, despite hovering near a multi-year low. The company has also been on a slow but steady quest to diversify away from unpopular domestic brands by snapping up luxury and import dealerships.

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Option update: Tribune (TRB) volatility collapses; Zell's buyout could close soon

Paul Foster — 2007-12-06T12:12:00+00:00

Filed under: Tribune Co. (TRB), Options

Tribune (NYSE: TRB) is recently up $32.08.

CNBC's David Faber says the TRB deal could close very soon. TRB has expected its $34 per share sale to Sam Zell, private equity, debt holders and employees to be closed by year-end. The FCC granted temporary waivers to complete the deal. TRB announced this morning it intends to use cash on hand to reduce total amount of bridge loan to $1.6 billion from $2.1 billion. TRB January option implied volatility of 33 is below a level of 79 from Dec 6th and below its 26-week average of 38 according to Track Data, suggesting the close of the $34 deal is near.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Option update 12-4-07: Tribune put volume spikes as buyout nears close

Paul Foster — 2007-12-04T16:10:00+00:00

Filed under: Deals, Tribune Co. (TRB), Options

Tribune (NYSE: TRB) is recently down 55 cents to $29.95. TRB expects its $34-per-share sale to Sam Zell, private equity, debt holders and employees to be closed by end of 2007. The FCC granted temporary waivers to complete the deal on Dec. 30. TRB call option volume of 2,688 contracts compares to put volume of 15,775 contracts. TRB December option implied volatility of 80 is above its 26-week average of 36 according to Track Data, suggesting larger price risks.

LDK Solar (NYSE: LDK) is a manufacturer of multicrystalline solar wafers. Dow Jones reported LDK will tap $700 million in long-term debt and credit lines, as well as about $100 million in customer prepayments. LDK auditing report on the investigation of allegations of inaccurate inventory is expected in early December. LDK has said the company has correctly reported its inventories. LDK is expected to report Q3 EPS in mid-December. LDK December option implied volatility is at 165 and March is at 133; above its 21-week average of 98, according to Track Data, suggesting larger risk.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

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Cramer on BloggingStocks: Three tests for financial stocks

Jim Cramer — 2007-11-14T09:17:00+00:00

Filed under: Citigroup Inc. (C), Bank of America (BAC), Merrill Lynch (MER), Tribune Co. (TRB), Countrywide Financial (CFC), Goldman Sachs Group (GS), Washington Mutual (WM), Housing, Cramer on BloggingStocks

TheStreet.com's Jim Cramer says if any of your holdings in this sector have too much of any one kind of credit, use current market strength to sell.

Getting our arms around the problem. That's the real way we get closure on this credit problem. That's why the market was able to rally Tuesday, even though no one says the problem is getting better.

At last we're just trying to figure out how bad it can be because we know it is worse than the $42 billion that has already been charged off in subprime. By the way, even that figure, which seems staggeringly high, is only a fraction of the $250 billion minimum number I am using.

What's so maddening is that there isn't one kind of debt problem. There are three kinds of debt, with a subset for the worst kind. You have to run the gauntlet of all three kinds if you are going to be blessed by the market. And so far, only Goldman (NYSE: GS) (Cramer's Take) has done that.

1. Private equity debt. This is the least-of-our-problems debt. It's very factored-in but confusing because it is "Tier Three." It gets that title because of its liquidity and its tendency to hang on in a company's balance sheet, the so-called "hung deals."

One reason the market's unlikely to take out August's lows is that this chunk of credit, a huge problem in August, has now receded. In fact, that's a positive for those companies that wrote it down.

The reason Goldman's having a big quarter now is that in the third quarter, it wrote down these pieces of paper to 85-90. Now that the deals are done, it looks like it's going to get par (trader-speak for 100). Goldman's quarter ends in a couple of weeks and this will be a huge source of upside for the firm.

Most companies kept this stuff written at par, which was dangerous when it was actually at 85 and 90 and should have been marked down. But now it's a smaller part of the problem, depending on unclosed deals that most likely will be closed. (If you want to worry, think Tribune (NYSE: TRB) (Cramer's Take).)

2. Structured debt. This stuff is just awful. We have no idea what is in it; we just know it's billions of dollars of disparate mortgages of varying variety and vintage. I have not heard a single bank be candid and honest about what's in its collateralized debt obligations (CDOs).

That's because, as Citigroup (NYSE: C) (Cramer's Take) explained last week, unless you managed the CDO -- that is, unless you put it together -- it's too opaque to the holders. Citibank and Merrill (NYSE: MER) (Cramer's Take) took it on the chin with these and will again because we don't know what they're worth.

The resistance to writing down structured debt paper is based on the fact that most of the debtors involved have continued to pay on their mortgages and the ratings agencies have stuck by their AAA ratings and designated everything okey-dokey -- even if it isn't.

This was the debt that Bank of America (NYSE: BAC) (Cramer's Take) detailed last night. Many of the firms that have CDOs are hiding behind structured insurance that the insurers may not be able to make good on.

3. Direct mortgage, either issued or purchased. There are two classes of this debt: first lien (the actual mortgage) and second lien (a home-equity loan). These are unpackaged loans and they are either good or bad and are not mixed up with some silly instrument that has both.

This is the problem that Washington Mutual (NYSE: WM) (Cramer's Take) has. It's also the problem that E*Trade (NASDAQ: ETFC) (Cramer's Take) has, except there it's exacerbated by the fact that E*Trade bought a lot of really bad second-lien mortgages in an action that has put the whole franchise at risk.

Mortgages made before 2005 are considered "seasoned" and fine. Mortgages written between 2005 and the first half of 2007 are dangerous, and when you add in the people who took second loans (home-equity loans) to pay for their first loans, the effect is disastrous. Any bank that has these is most likely understating its losses, and I include Countrywide (NYSE: CFC) (Cramer's Take) in that group.

Unlike CDO paper, these loans are defaulting right now. Many of the institutions that have this paper are hiding behind private mortgage insurers that may not be able to make good.

Why is Goldman doing so well? Because it passed this tripartite test with flying colors. It has private-equity loans that are rising in value from the previous quarter. It is short CDO paper using the instruments that allow it, including 2005-2007 CDOs -- which is brilliant and something most firms didn't bother to do because their businesses were too big to hedge. (Listen to Citi's CFO Gary Crittenden on the post-Chuck Prince conference call if you want to hear this alibi writ large.)

And Goldman was never in the mortgage origination business. That's why the notion that Goldman has a lower multiple than all of the other guys is just ridiculous. It is why I believe that Goldman belongs at $300 a share, but I wrongly predicted it would get there this year.

So, put every financial institution through this three-part test. If it has too much of any one kind of credit, use this strength to sell. We are up 5% since the bottom. That's a decent place to begin selling if you are still long any of the tripartite flunkers.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Goldman Sachs and Citigroup.

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VMIX: Avoiding the YouTube onslaught

Tom Taulli — 2007-11-05T15:42:00+00:00

Filed under: Internet, Next big thing, Tribune Co. (TRB), Technology

When VMIX got started several years ago, the company realized that online video would be big. So why not be the mega brand in the category?

But thankfully, the company changed its strategy. "While YouTube was still young," said Greg Kostello, the CEO of VMIX, "we realized that they were getting lots of traction and may become the category killer."

As a sign of its success, VMIX raised $16.5 million last week. The investors include JK&B Capital, ATA Ventures, Mission Ventures and Enterprise Partners.

VMIX has built a rich media platform, which allows for not only videos, but also blogs, slide shows, and even social networking. "We focus on technology," said Kostello, "And our customers focus on what they are good at. That is, creating great content."

More than 190 websites use VMIX's technology - handling more than 60 million monthly unique visitors. Customers include Tribune Interactive (NYSE: TRB), Media General (NYSE: MEG), and Lee Enterprises (NYSE: LEE).

Also visit DealProfiles for more recent venture capital activity.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements.

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Mergers I'd like to see -- Cubbies (TRB) and Emergency Med (EMS)

Tom Barlow — 2007-10-28T16:00:00+00:00

Filed under: Tribune Co. (TRB)

Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a foul ball and a plate glass window, these two were meant for one another.

Pity the poor Chicago Cubs fan. The modern Sisyphus has spent a century coaxing his baseball team to the verge of greatness, only to see it collapse into a pile of baseline chalk time after time. The 2007 season was especially painful, after investing $136 million in slugger Alfonso Soriano and inking one of the game's best managers, Lou Piniella. The team eked into the playoffs, only to be swept in three games by the Arizona Diamondbacks.

The Cubs are part of The Tribune Company (NYSE: TRB), currently in the process of being bought by Sam Zell. Many expect the Cubs to be sold when/if this deal is completed.

Given that the Cubs have provided a century of heartbreak to the windy city, perhaps the team should merge with a company that can make money off of fans' paroxysms. Emergency Medical Services (NYSE: EMS) could be such a partner.Last year EMS served around 10 million patients in 39 states and the District of Columbia. With almost $2 billion in sales and a year/year growth of 16.84%, they could almost afford to bid on Alex Rodriguez. And every dollar they spend to build the team and the fans' fantasies is a dollar they recoup when those newly hopeful Cubs fans collapse after seeing their dreams dashed once again.

The Cubbies and EMS -- made for each other? I even have a slogan for them: "The heart of a Cubs fan -- We break it, then we take it."

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Analyst upgrades: APOL, ZRAN, AMSG, AAPL and TRB

Eric Buscemi — 2007-10-23T11:20:00+00:00

Filed under: Analyst reports, Analyst upgrades and downgrades, Apple Inc (AAPL), Tribune Co. (TRB)

MOST NOTEWORTHY: Apollo Group, Zoran, AmSurg Corp, Apple and Tribune Co were today's noteworthy upgrades:

Baird upgraded shares of Apollo Group (NASDAQ: APOL) to Outperform from Neutral based on positive enrollment and revenue trends, margin improvement, and a strategic international announcement.
CIBC upped its rating on Zoran Corporation (NASDAQ: ZRAN) to Sector Outperformer from Sector Performer following strong Q3 results and guidance.
Jefferies upgraded shares of AmSurg Corp (NASDAQ: AMSG) to Buy from Hold as they believe the new CEO is preparing to drive earnings growth through acquisitions.
ThinkEquity continues to expect Apple (NASDAQ: AAPL) to outpace the industry in growth. The firm upgraded shares to Buy from Accumulate.
Barrington upgraded shares of Tribune Company (NYSE: TRB) to Market Perform from Underperform on valuation, as they believe the current price significantly discounts the risks of the going private transaction getting done.

OTHER UPGRADES:

Citigroup upgraded Jarden Corporation (NYSE: JAH) and Teradyne (NYSE: TER) to Buy from Hold.
Lehman upgraded SunPower Corporation (NASDAQ: SPWR) to Overweight from Equal Weight.
HSBC upgraded ArcelorMittal (NYSE: MT) to Overweight from Underweight.
WestLB raised Roche Holding (OTC: RHHBY) to Add from Hold.

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Rupert Murdoch may get to own TV stations and newspapers in same city

Lita Epstein — 2007-10-18T08:10:00+00:00

Filed under: Law, Newspapers, Tribune Co. (TRB), News Corp'B' (NWS), Politics

Media owners have been chomping at the bit to be able to own both a TV station and a newspaper in the same city. Two major deal makers - Samuel Zell, a Chicago investor who is leading the charge to take the Tribune Company (NYSE: TRB) private, and Rupert Murdoch, Chairman and CEO of News Corp. (NYSE: NWS) who has tried for years to change the rule so he can continue to control both the New York Post and the Fox television station in New York -- hope it happens soon. If the rules change for Zell, he'll be able to own TV stations and newspapers in five cities - New York, Los Angeles, Hartford and the Miami-Fort Lauderdale area.

Well they may get their wish if Federal Communications Commission Chairman Kevin Martin has anything to say about it, according to the New York Times. The Times reports that Martin plans to repeal the decades-old media rule forbidding companies from owning both a newspaper and a TV or radio station in the same city. Right now an $8.2 billion buyout of the Tribune Company is hanging in the balance. Zell wants to take the company from a public to a privately held company by its employees, but the rule is in the way of completing the deal.

Former FCC Chairman Michael Powell tried this a few years ago, and got shot down by the courts. Martin hopes the additional hearings and studies he's done since that ruling will be enough to satisfy the courts. In the earlier case, the FCC got more than three million comments against changing the rules, the most comments in its history. Opposition groups were diverse including the National Organization for Women, the National Rifle Association, the Parents Television Council and the United States Conference of Catholic Bishops.

Many are skeptical Martin will be able to pull it off, especially if he chooses to take short cuts to get this rule passed by the Commission by December, as he plans according to the Times. One Commission member who is adamantly opposed to the rule, Michael Copps, told the Times, "We shouldn't be doing anything without having a credible process and nothing should be done to get in the way of Congressional oversight and more importantly, public oversight. We've got to have that public scrutiny."

The Times noted that opposition is already lining up. One of the Congressional leaders of that opposition will be Senator Byron Dorgan (D-ND) who said at a hearing on Wednesday, "If the chairman intends to do something by the end of the year, then there will be a firestorm of protest and I'm going to be carrying the wood."

Those supporting the rule believe there has been enough of a change in the media to make the rule outdated, so it's time to repeal it. Companies, like the Times that own newspaper and radio station in the same city, did so before the rule went into effect in 1974. The rule was not applied retroactively.

Opponents believe there already is too much consolidation in media ownership in this country and are opposed to anything that would allow even more consolidation. They believe our news outlets are controlled by too few companies. Personally I agree. We don't want a few billionaires controlling most of the news we get.

Lita Epstein has written over 20 books including the Complete Idiot's Guide to the Supreme Court and the Complete Idiot's Guide to the Federal Reserve.

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