Jamie Dlugosch
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Sirius Satellite (SIRI) Rumblings out of Washington and the FCC indicate that a decision on the merger is imminent. The stock was up nicely on Thursday, but more impressive was the 8% move higher during after hours trade. If approved, I expect SIRI to move higher, but I would not be surprised if the move is a dud. I'm more concerned about the long term and there I could not be happier. This is a huge deal for SIRI. No more cut-throat competition for talent, subscribers, and auto installation deals. Now if we can just get this economy on stable footing, we would be in good shape. For the long haul, SIRI combined with XM is poised for success. Enjoy the ride. Goldman Sachs (GS) Good timing for my stock of the week, Goldman Sachs (GS). On Friday Standard & Poor's cut the outlook for GS to negative. Citing market volatility the rating agency believes revenue and profit at the venerable investment bank could be lower than expected. The collapse of Bear Stearns, especially the rapidity thereof, has certainly spooked the market. The irony for me is that typically volatility leads to increases in trading revenues for investment banks. Obviously we are living through a very bizarre time in capital markets. I'll leave my opinion for this week's Bull/Bear article. Microsoft (MSFT) With the turmoil in the financial markets and a recessionary backdrop, Microsoft (MSFT) and its bid for Yahoo (YHOO) has been relegated to second fiddle status. Since YHOO rejected MSFT's $31 bid, there has been little talk about a counter offer. MSFT is taking the right approach with this deal. They have been quite patient while YHOO exhausts alternatives. In some ways it appears YHOO is wishing this deal would just go away. Keep dreaming. MSFT will ultimately prevail and the only question left is at what price. I'm pleased that MSFT hasn't been forced to raise their bid. My guess is that eventually a deal will be forged. I still think the deal gets done in the mid-$30's. The only question is when. Stay tuned. Bear Stearns (BS) The shock of the Bear Stearns (BS) collapse remains fresh for shareholders even though the stock managed some life late in the week. Whether or not this makes any sense is irrelevant. It appears that speculators may feel as if there is hope for a higher price. For certain, the stock, now tied to JP Morgan's (JPM) value, may explain why shares are trading well above that $2 headline. Whatever the explanation, there is no reason to stay here in my opinion. If you are long, take your medicine and move on. You may have recourse in a class action shareholder suit, but I just don't see how holding on makes any sense. Consider the extra $4 a bonus. Notes As a big fan of politics and history I am watching this year's presidential election with keen interest. In addition to reading as much as I can about all the candidates and issues, I particularly enjoy watching the Sunday morning political news shows. Today on Meet the Press, I was surprised to see first segment of the show dedicated to the economy and markets. Even more strange was seeing two CNBC commentators as guests. While I can appreciate the interest in cross promotion, the choice of these two as guests left me somewhat stunned. I mean, they are journalists and all, but we are on the cusp of recession with capital markets in complete disarray. Do we not deserve a bit better here? I mean I would have liked to have heard from experienced bankers, academics, or current/former Federal Reserve Governors. Instead we get the equivalent of People magazine. Listening to these two dolts tell me to stay calm with my portfolio doesn't quite work. I need a bit more please. I can appreciate the idea of not panicking, but there is something very unique transpiring and the fact that we get two CNBC talking heads is a fairly juvenile and cavalier approach to dealing with the situation. Anyway, I found it a bit odd. We are experiencing extraordinary circumstances in the economy that deserve a bit more. Jamie Dlugosch | ||
