Monday, June 19, 2006

Notablecalls - paperstand

According to The Wall Street Journal, Nokia (NOK) and Siemens (SI) agreed to combine their phone-equipment units into a joint venture with assets valued at about $30bn. Both co’s would contribute their network-equipment operations to the new venture, in which each would get a 50% stake.

Notablecalls: The deal comes just days after Nokia's new CEO, Olli-Pekka Kallasvuo,
took the co's helm. So, if you are an Nokia investor, it pays to keep eyes open for new CEO actions. Sometimes big M&A deals do not pay off. One long-term Nokia follower thinks that if joint venture succeeds, Nokia and Siemens will bring it public.

According to The WSJs “Heard on the Street” column Pearson’s (PSO) shares haven't kept pace with its recent improvements. Some big shareholders are pushing the co's mgmt to be more aggressive, which could give additional sizzle to the stock. Patrick Wellington, of Morgan Stanley, has proposed a "radical scenario" of share buybacks, increased debt and asset sales, which he calculates could increase earnings 51% in ’08.

The NY Times discusses video game industry, highlighting all recent concerns. "There are more industry concerns than ever, and that's what you're seeing in the stock prices," said Justin Post, of Merrill Lynch. And yet, underscoring the complexities of assessing the industry, Mr. Post has a Buy rating on shares of Electronic Arts (ERTS) and Activision (ATVI). Like many stock analysts, he argues that given long-term trends, the game business is destined to boom, and that the only question is when.

The NY Post discusses Napster (NAPS) positively. The piece highlights insider buying (and no selling), Google (GOOG) acquisition rumor and large cash position (and no debt). Anthony Marchese, of Monarch Capital Group, expects the stock to more than double in case of an acquisition. Barbara Coffey, of Kaufman, is also very bullish, she has a $5 tgt. She points to Napster's brand recognition and its new ad-supported site and expects revs to rise sharply over the coming years.

Notablecalls: Expect to see a minor pop in NAPS in pre market trading.

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