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Friday, October 24, 2014

How I recommend playing Ebola

Is the bull market about to perish? It's been a real scary month here in October. At the time of this writing we are down 6.0% in the Dow Jones Industrial average (NYSEARCA:DIA) and down 6.5% in the S&P 500 SPDR ETF (NYSEARCA:SPY) this month. The NASDAQ ETF (NASDAQ:QQQ) has been crushed, shedding 7.6% so far. Are we setting up for a real bearish end to the year despite all of the jubilant expectations that investors had heading into the fall? It may be too early to tell, but here are the facts. A large correction is what traders and investors are fearing after seeing the incredible fall in commodities. It started with precious metals, then coal and iron ore and now oil. They are all getting hammered. Demand in slipping. Profits are leveling in many sectors. But here is the icing on the cake. We have this whole Ebola situation that has markets spooked. While the former issues are simply the ups and downs of markets, the latter situation, Ebola, is causing irrational fear.

Ebola: Let's talk about the facts here

Let me wear my epidemiologist hat for a moment. I have been inundate with requests for how to......READ FULL ARTICLE

Wednesday, October 22, 2014


3d is getting crushed and I have just unloaded my sahres

The damn company announced today that it anticipates its third quarter revenue to be in the range of $164 million to $169 million and a sequentially growing order book of $42 million. This hurt. The company expects to report GAAP earnings per share in the range of $0.01 to $0.03 and non-GAAP EPS in the range of $0.16 to $0.19. These are preliminary results based on current expectations and are subject to quarter-end closing adjustments, actual results may differ.

Strengthening sales of the company's design, manufacturing and healthcare products and services were not enough to overcome the revenue shortfall from the continued manufacturing capacity constraints for its direct metals printers and delayed availability of its newest consumer products.

"We are disappointed that we failed to fully capitalize on the robust demand for our direct metal and consumer products during the quarter," said Avi Reichental, President and Chief Executive Officer, 3DS. "While we worked very hard to deliver these products sooner, achieving manufacturing scale, quality and user experience targets took significantly longer than we had anticipated."

At the end of the third quarter, the company brought online a second direct metal 3D printers' manufacturing line and began commercial shipments of its latest consumer printers.

"Now that we have closed these availability gaps, we expect our revenue growth rate to increase," continued Reichental.

The company expects to report that its materials' gross profit margins rebounded for the quarter and its Quickparts' gross profit margin expanded sequentially, despite greater drag from concentrated service bureau acquisitions in the quarter. Notwithstanding these gains, the company expects its consolidated gross profit margin for the quarter to remain sequentially flat as a result of the current sales volume and mix and the residual costs of manufacturing start up and ramp.

"Our accelerated investments in new products and acquisitions contributed to a record order book in every period of this year, but disrupted revenue generation and pressured our gross profit margins. Now that we are shifting our attention to fine-tuning these investments, we expect to leverage them into a valuable and sustainable first-mover advantage," stated Reichental.

Factoring in its third quarter revenue shortfall and outlook for the remainder of the year, management trimmed its previous guidance for the full year 2014. Management now expects revenue in the range of $650 million to $690 million, and GAAP earnings per share of $0.18 to $0.28 and non-GAAP earnings per share in the range of $0.70 to $0.80.

"The same decisive actions that pressured our short term performance also delivered a much stronger portfolio of self-developed and acquired products and services. In the aggregate, we believe this positions us well to achieve our long-term targets," concluded Reichental.

Thursday, October 16, 2014

Buying more RXi

RXi Pharmaceuticals (OTC:RXII) has just filed a form 4 with the Securities Exchange Commission. Recall that a form 4 refers to insider transactions at the company. Well, at RXi, there has been a wave of insider buying by CEO Geert Cauwenbergh over the last month ever since its large sell-off. The CEO now owns a substantial stake in the company. According to the filing, yesterday during the open market (10/13/14), CEO Geert Cauwenbergh purchased another 3,000 shares. The shares were purchased at the price of $1.6799. If we dig a little deeper we see that the shares bring his total stake to 44,000 shares, many of which have been purchase since the start of September. The purchasing has not done much to stop the shares from falling, although at $1.72 prices are stabilizing. At current price shares are at an opportunity level never before seen in RXi and it stems from small cap biotech weakness as a whole,

So what am I doing? I am buying more shares this week. Doubling position in the $1.68-$1.75 range

Friday, October 10, 2014

Tesla's D-Day

Tesla Motors (TSLA) CEO Elon Musk turned a product upgrade announcement into a major media event, building anticipation over the course of a week by dropping a few clues on social media and dancing around questions about "Unveiling the D".

Tesla's D-Day generated the kind of buzz every other automaker dreams of. For that, he deserves all the credit in the world. It's what every CEO would love to do.

That said, let's separate the hype from the reality.

1) Dual Motor All Wheel Drive

Hype: The dual motor AWD will improve efficiency of the Model S and win over buyers in cold weather states.

Reality: You can find this feature in most other luxury cars, and Tesla needed to offer it.

Will it drive major sales gains? Probably not.

"The drivers who will buy the 'D' wanted the Model S from day one. Tesla is simply responding to their needs. Adding all-wheel drive is the no-brainer way to capture those car shoppers," said Ivan Drury with

2) Auto Pilot Features

Hype: This technology, using a new suite of radars, GPS and a camera with image recognition is a game changer.

Reality: Yes and no.

The truth is some of the driver assist features Musk unveiled (adaptive cruise control for example) are already in many other cars.

That said, Tesla added a few wrinkles that make the S very unique.

Can your car open the garage door and park itself once you pull into the driveway? No, but the Model S will soon be able to do that.

Does your car automatically change lanes once you put on your turn signal? No, but the Model S will soon have that capability.

3) Tesla is best positioned to roll out the first autonomous drive car

Hype: The Tesla fans will tell you Elon Musk will soon have a self-driven car ready to roll.

Reality: Tesla will be ready when fully autonomous drive cars finally become a reality in the next ten to fifteen years.

However, Tesla won't be alone. Several other auto makers and tech companies will be ready with their own autonomous drive vehicles or technology for autonomous drive cars.

Musk summarized the development of autonomous-drive Tesla's: "We're not yet at the point where you can get in the car, fall asleep and wake up at your destination."

Overall, Musk's show in Southern California enhanced the reputation and allure of Tesla with an event that is unlike what we usually see from automakers.

Tesla unveils don't happen very often, but when they do, they have the feel of an Apple product reveal.

Even the way Musk describes features is far different than the button downed approach we often see from executives at auto shows.

Consider how Musk described the P85D version of the Model S on Thursday night?

"This car is nuts. It's like taking off from a carrier deck," he said. "It's just bananas. It's like having your own personal roller coaster."

Oceabn Biochem could crash

Another day and OBCI is up.

In a superb example of the exuberance of quick buck opportunists, traders are reacting to the Ebola news fire hose by bidding up thinly-traded nano cap Ocean Bio-Chem on a 4x surge in volume in the last week. Prices are skyrocketing and could crash.

The company makes a broad-spectrum disinfectant called Xtrem-A-Cide that contains chlorine dioxide. Supposedly, it will be effective in eradicating stray Ebola viruses deposited by infected patients.

Xtrem-A-Cide is now being marketed as Performacide. It can be found on the website.

Don't buy into the hype

Why Response Genetics is Soaring

Response Genetics is SOARING on triple the daily volume in the first half hour of trading. I think something may have leaked but lets not forget there has been some recent news that has not moved the stock including

For more read here....FULL ARTICLE

Wednesday, October 8, 2014

GT Advanced--Get out while you can

Look, I recently covered the drama surrounding GTAT. Its going bankrupt, CRUSHING investors. How? It got paid by AAPL.

GTAT's supplier agreement with Apple called for GTAT to produce sapphire for Apple on GTAT's own production equipment in an Apple owned facility in Mesa, AZ. Apple would provide $578 million in 4 prepayments (essentially a loan) for the sapphire with repayment commencing in 2015. As of the end of 2013, GTAT had already received 2 of the 4 payments totaling $225 million. But the company has BURNED cash dramatically and when it wasn't selected for the iPHONE, smart investors bailed out. Did the CEO mislead investors? YES and NO. I suspect there will be tons of lawsuits. For now. the stock had rebounded to almost $2.00 giving investors a chance to get out, but has now dropped back to almost a $1.00. Get out of this while you still can, because it is GOING TO BE WORTHLESS IN A FEW MONTHS

AT&T paying $105 million yikes

AT&T agreed to pay $105 million to settle claims that it allowed third-party companies to bill subscribers for millions of dollars in unauthorized charges, federal and state law enforcement officials announced Wednesday.

Federal Trade Commission and Federal Communications Commission officials alleged that until January, AT&T billed subscribers for “hundreds of millions of dollars” in charges from outside companies. The charges for services like ringtone subscriptions usually cost $9.99 a month and AT&T kept at least 35 percent of the money, federal officials said.

AT&T will pay $80 million to refund money to current and former AT&T customers who were hit with unauthorized charges. States participating in the settlement agreement will get $20 million from AT&T to settle the allegations and the federal government will get $5 million.

AT&T ran afoul of the FTC’s ongoing investigation into wireless cramming and the FCC’s truth-in-billing rules, which require companies to make it clear what consumers are being charged for on their monthly statements.

“Today’s settlement, while focused on the fast-growing mobile industry, underscores a time-tested principle of consumer protection. Consumers must not be charged for goods or services they did not authorize, whether on their mobile phone, shopping online, or in a brick-and-mortar store,” FTC Chairwoman Edith Ramirez said Wednesday.

AT&T subscribers can go to for information about the refund program, which the FTC will handle.

In a statement, AT&T said that while it had “rigorous protections in place to guard consumers against unauthorized billing” it also took steps last year to discontinue the practice. “This settlement gives our customers who believe they were wrongfully billed for [premium SMS] services the ability to get a refund,” an AT&T spokesman said.

AT&T’s decision to settle the government’s complaint, instead of fight the allegations like T-Mobile, comes as the company is trying to convince government regulators to approve its $48 billion deal to acquire DirecTV.

Wireless cramming happens when a third-party company places a charge on a subscriber’s mobile phone bill without authorization. These so-called “Premium SMS” charges are often for things like subscriptions to online horoscopes or celebrity gossip. A wireless carrier gets a cut of the take.

The practice has been happening for years but the FTC only began focusing on the issue after receiving hundreds of consumer complaints. Often it can be hard to find information about the charges or details about how to stop them, the FTC says.

The FTC sued T-Mobile in July, accusing the carrier of making hundreds of millions of dollars in fees by allowing known scammers to put fraudulent unauthorized expenses on subscriber bills. T-Mobile denied the charges.

The government’s lawsuit against T-Mobile and settlement with AT&T over wireless cramming charges suggests that Sprint and Verizon Wireless could be targeted next, as all of the major carriers allowed the practice. An FTC spokesman declined to comment. FCC Chairman Tom Wheeler suggested other wireless carriers may also face similar complaints. The AT&T settlement “is not the last time we will act jointly” on this issue, Wheeler told reporters.

In July, a report from the Senate Commerce Committee charged that the country’s largest wireless carriers have known about the problem since 2008 but haven’t done enough to stop it because they receive anywhere from 30 percent to 40 percent of the income, which means hundreds of millions of dollars.

Last year, AT&T, T-Mobile, Verizon and Sprint announced plans to phase out such third-party billing services except in the case of charitable or political giving.

The wireless industry’s trade group, CTIA, has argued that there have been relatively few consumer complaints about wireless cramming, just 373 in 2013, and companies have worked with law enforcement officials to shut down scammers.

Monday, October 6, 2014

HP announces split. I Dont know if shares should rise

I don't like HP here. Never have. Below is the announced split. My take will come in a follow-up post. Sound off. Do YOU think this is wise?

HP (NYSE: HPQ) today announced plans to separate into two new publicly traded Fortune 50 companies: one comprising HP's market-leading enterprise technology infrastructure, software and services businesses, which will do business as Hewlett-Packard Enterprise, and one that will comprise HP's market-leading personal systems and printing businesses, which will do business as HP Inc. and retain the current logo. Immediately following the transaction, which is expected to be completed by the end of fiscal 2015, HP shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The transaction is intended to be tax-free to HP's shareholders for federal income tax purposes.
Today's announcement comes as HP approaches the fourth year of its five-year turnaround plan. Over this time, the company has executed successfully against its turnaround objectives, keeping customers and partners at the forefront. HP has reignited its innovation pipeline, strengthened its go-to-market capabilities, rebuilt its balance sheet, and inspired its workforce and management teams. The company is now positioned to accelerate performance, drive sustained growth and demonstrate clear industry leadership in key areas.
"Our work during the past three years has significantly strengthened our core businesses to the point where we can more aggressively go after the opportunities created by a rapidly changing market," said Meg Whitman, Chairman, President and Chief Executive Officer of HP. "The decision to separate into two market-leading companies underscores our commitment to the turnaround plan. It will provide each new company with the independence, focus, financial resources, and flexibility they need to adapt quickly to market and customer dynamics, while generating long-term value for shareholders. In short, by transitioning now from one HP to two new companies, created out of our successful turnaround efforts, we will be in an even better position to compete in the market, support our customers and partners, and deliver maximum value to our shareholders";
Both companies will be well capitalized and expect to have investment grade credit ratings and capital structures optimized to reflect their distinct growth opportunities and cash flow profiles. The separation into independent publicly traded companies will provide each company with its own, more focused equity currency, and investors with the opportunity to invest in two companies with compelling and unique financial profiles well suited to their respective businesses.
Management Structure Meg Whitman, President and Chief Executive Officer of HP, and Cathie Lesjak, Chief Financial Officer of HP, will hold these positions with Hewlett-Packard Enterprise. When the separation is complete, Whitman will also serve on the Board of Directors of Hewlett-Packard Enterprise, and Pat Russo will move from Lead Independent Director of HP to Chairman of Hewlett-Packard Enterprise.
Dion Weisler, Executive Vice President of HP's Printing and Personal Systems business, will lead HP Inc. as President and Chief Executive Officer. Whitman will serve as non-executive Chairman of HP Inc.'s Board of Directors.
Hewlett-Packard EnterpriseHewlett-Packard Enterprise will have a unique portfolio and strong multi-year innovation roadmap across technology infrastructure, software and services to allow customers to take full advantage of the opportunities presented by cloud, big data, security and mobility in the New Style of IT. By leveraging its HP Financial Services capability, the company will be well positioned to create unique technology deployment models for customers and partners based on their specific business needs. Additionally, the company intends for HP Financial Services to continue to provide financing and business model innovation for customers and partners of HP Inc.
Customers will have the same unmatched choice of how to deploy and consume technology, and with a simpler, more nimble partner. The separation will provide additional resources, and a reduction of debt at the operating company level, to support investments across key areas of the portfolio. The separation will also allow for greater flexibility in completing the turnaround of Enterprise Services and strengthening the company's go-to-market capabilities.
"Over the past three years, we have reignited our innovation engine with breakthrough offerings for the enterprise like Apollo, Gen 9 and Moonshot servers, our 3PAR storage platform, our HP OneView management platform, our HP Helion Cloud and a host of software and services offerings in security, analytics and application transformation," continued Whitman. "Hewlett-Packard Enterprise will accelerate innovation across key next-generation areas of the portfolio."
HP Inc. HP Inc. will be a proven leader in the personal systems and printing markets with exciting new technologies on the horizon. The new company's strong profitability and free cash flow will enable investments in growth markets such as 3-D printing and new computing experiences. At the same time, HP Inc. will continue to execute against a well-defined and established strategic plan, ensuring continuity for customers and consistent value to shareholders.
"Since assuming responsibility for the Printing and Personal Systems Group, Dion and his leadership team have done an excellent job of building our relationships with customers and channel partners, segmenting the market and driving product innovation," added Whitman. "The creation of HP Inc. will only accelerate the progress the team has made."
"This is a defining moment in our industry as customers are looking for innovation to enable workforces that are more mobile, connected and productive while at the same time allowing a seamless experience across work and play," said Weisler. "As the market leader in printing and personal systems, an independent HP Inc. will be extremely well positioned to deliver that innovation across our traditional markets as well as extend our leadership into new markets like 3-D printing and new computing experiences -- inventing technology that empowers people to create, interact and inspire like never before."
Transaction DetailsThe separation transaction is intended to be tax-free to HP shareholders for federal income tax purposes. The transaction is currently targeted to be completed by the end of fiscal 2015, subject to certain conditions, including, among others, obtaining final approval from the HP Board of Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the transaction for federal income tax purposes and the effectiveness of a Form 10 filing with the Securities and Exchange Commission.
Goldman Sachs & Co. is serving as financial advisor and Wachtell, Lipton, Rosen and Katz is serving as legal advisor to HP.
Financial OutlookFor fiscal 2014, HP reaffirms its non-GAAP diluted net EPS outlook range of $3.70 to $3.74, and updates its fiscal 2014 GAAP diluted net EPS outlook to be in the range of $2.60 to $2.64.
For fiscal 2015, HP estimates non-GAAP diluted net EPS outlook to be in the range of $3.83 to $4.03 and GAAP diluted net EPS outlook to be in the range of $3.23 to $3.43.

UPDATE: GTAT Shares Crushed

UPDATE: Earlier I shared the news of GT Advanced Technologies bankruptcy filing (SEE BELOW. The verdict is in. Shares are down over 90% now, hovering above $1.00. This is an atrocity. I encourage all investors to join the lawsuits that will be coming. How could no analyst see this coming? My heart seriously goes out to the longs. This is devastating. Stay tuned for more updates.


Original Post:

GT Advanced Technologies Inc.announced today that it had, together with certain of its direct and indirect subsidiaries (collectively, GT), commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. GT expects the court will authorize the company to continue to conduct business as usual while it devotes renewed efforts to resolve its current issues and develops a reorganization plan.

GT indicated that as of September 29, 2014 it had approximately $85 million of cash. In addition, it is now seeking debtor-in-possession financing, which, once obtained, would provide the company with an immediate source of additional funds. These funding sources will enable GT to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of employee wages and other obligations.

As a result of the filing, and as is customary with public companies, NASDAQ may temporarily halt trading in the company's stock pending the receipt of additional information on the company's financial condition. The company is cooperating with NASDAQ and will be providing any requested information as promptly as possible.

"GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, president and chief executive officer of GT. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.

"We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses."

The company indicated that it expects to provide additional details with respect to the chapter 11 filing as soon as they are available. More information, including access to court documents, can be accessed at (court- appointed claims agent site); or, the official Bankruptcy Court web site.

Additional information can also be found by visiting the "About Us" section of the company's website at and clicking the link for "Restructuring Information."