Tuesday, August 08, 2006

Notablecalls - Paperstand

The WSJ reports that Sprint Nextel (S) is expected to announce as early as today it is choosing WiMax to build a new wireless Internet network in the coming years. The move would mark a significant win for backers of the new technology, such as Intel (INTC) and Motorola (MOT), while it would be a setback for wireless pioneer Qualcomm (QCOM), which is behind a rival technology. WiMax is a technology that can spread a wireless Internet signal over several miles, a long-range version of the popular short-range Wi-Fi. Analysts say building a nationwide WiMax network could cost Sprint between $1bn and $4bn.

The WSJ's "Heard on the Street" column highlights Countrywide Financial (CFC) and its CEO Angelo R. Mozilo, who rarely misses a chance to remind ppl that he has been in the business for more than 50 years. Now he has a sobering message for investors about the near-term outlook for housing and mortgages: Buckle your seat belts. "I've never seen a soft landing in 53 years," Mr. Mozilo told. To minimize shocks, Countrywide is tapping on the brakes as the housing mkt cools and competition among lenders intensifies. This more cautious stance follows a growth spurt that increased Countrywide's annual home-mortgage lending to $491bn last year from $66.7bn in 2000. The 2nd-largest home lender, Wells Fargo (WFC), shows no sign of slowing. If current trends continue for another few quarters, Wells may regain the No. 1 mortgage spot it lost to Countrywide 2 years ago. Countrywide's fans take Mr. Mozilo's warning as a comforting sign that he won't chase growth at the expense of profit. "It's entirely appropriate to have a little more caution" on housing, said Mark R. Patterson, a managing director of NWQ Investment Mgmt. NWQ, which has about $32bn under mgmt, holds a stake of more than 4% in Countrywide. Mr. Patterson added: "Countrywide has demonstrated through many cycles that they can handle hard times as well as good times."

According to the Barron's Online, 7 execs and directors at Anheuser-Busch (BUD) grossed $29m by selling nearly 580K shares, of which 66% were acquired through options, in the open mkt. An additional 63K shares were sold to cover transaction costs. This is the highest level of selling by Anheuser-Busch insiders in the Q3 in the past 5 years. Michael Painchaud, managing director of research at Market Profile Theorems, says "your sense of awareness in changes in analyst behavior or changes in technical behavior should be heightened."

Sharesleuth.com posted yesterday its first investigative story. First victim is Xethanol (XNL), which bills itself as a biotechnology-driven ethanol co that can turn wood chips, corn stalks and paper sludge into cheap alternative fuel. But a Sharesleuth.com investigation found no evidence that Xethanol has produced significant quantities of ethanol from those raw materials. Combine that with Xethanol’s announcement that it’s poised to become one of the first co's to commercialize that technology, a sort of Holy Grail in the renewable-energy world, and you’ve got the type of inconsistency that Sharesleuth seeks to uncover with its stories. At Xethanol, Sharesleuth discovered that the shareholders whose names appeared in the co’s SEC filings over the past year and a half included no fewer than 8 current or former stock brokers who have been the subjects of disciplinary actions by the SEC, the NASD or other regulatory bodies. Sharesleuth also learned that one of Xethanol’s two conventional ethanol plants, a facility it once called its Biomass Technology Center, has been idle for more than a year and no longer has water or sewer service, two prerequisites for testing or production. Other things that caught attention include: The co’s minimal spending on R&D; An absence of scientists on its staff; The relatively low price it paid for the outside technology upon which its waste-to-ethanol dreams are based; Key alliances with 2 co's founded by the same person, a former stock broker who now functions as a financial consultant and promotor. Accordingt o the article, Mark Cuban is short in XNL stock and also short 25 000 shares of UTEK (UTK), because of its relationship to Xethanol.

Notablecalls: XNL dropped 5.93% yesterday in after hours trading. Because story is pretty ugly, I believe that shares trade even lower... much lower.

The WSJ reports that Martha Stewart agreed to pay $195K and accept a 5-year ban on serving as a director of a public co to settle civil insider-trading charges with the SEC. The settlement also forbids Ms. Stewart from involvement for 5 years in certain corporate activities at Martha Stewart Living Omnimedia (MSO), such as financial reporting and auditing. The SEC agreement ends a 5-year saga for Ms. Stewart and her co over her Dec'01 sale of ImClone (IMCL) stock.

Notablecalls: So, anyone know why she was in jail?

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