Paperstand

According to the WSJ's "Heard on the Street" column, Edward Lampert is sending clear signals that he is on the prowl for acquisitions now that Sears (SHLD) is on firmer footing. And that has Wall St. abuzz about potential tgts for Sears and Mr. Lampert's hedge fund, ESL Investments. Possible tgts being bandied about include Home Depot (HD) and Gap (GPS), among others. But Mr. Lampert has been trading shares of General Motors (GM) in the past year, well below the radar screen of most investors. It is a potential sign the hedge-fund honcho might want to play a role in the auto maker's future. "There are investors who figure something is coming," says Gary Balter, of Credit Suisse. "Wall St. is hoping that he buys a good franchise and a co that he can cut costs."

The WSJ's "Ahead of the Tape" highlights KFx (KFX), saying that lately, its shareholders might be feeling burned. On Sept. 1, KFx shares fell 5% after Pacific Growth analyst Michael Horwitz said he'd heard that one of KFx's industrial customers had rejected a delivery of coal b/c it didn't produce enough heat and its dust content was high and unsafe. The co fired back with a press release saying Mr. Horwitz's report was an "apparently malicious attempt to damage our stockholders" without "any attempt to verify the facts." The co said it had notified the SEC and that it would "seek appropriate remedies." Mr. Horwitz said in a research note he tried to contact KFx's mgmt prior to his comment. He wouldn't comment. In an email, KFx director of investor relations Karli Anderson says the co is "at a loss" to explain Mr. Horwitz's actions. Then last week, KFx's share prices fell even more after it announced a test run at a different customer, utility operator FirstEnergy. Investors felt the release was short on details, then in a follow-up, KFx said there had been excess dust in a delivery to FirstEnergy and that a few of the coal cars it shipped arrived with "elevated heat content." According to the article, short-sellers are smelling blood. One critic, Manuel Asensio, has posted videos and pictures on the Web purporting to document KFx problems. Right or not, it's a sign, perhaps, that the commodities boom is losing heat.

According to the Barrons' "Inside Scoop" section, analysts have encouraged investors to buy shares of ValueClick (VCLK) after the co issued an upbeat Q2 report, but its CEO James Zarley has seen the value in clicking the sell button on $5.4m worth of shares. Ben Silverman, of InsiderScore.com, says that "seeing a CEO sell near the end of the quarter at a co that's put together a couple pretty good quarters is something you want to keep an eye on," especially since expectations are high for ValueClick's Q3 performance.

The NY post reports that in a blow to ImClone (IMCL), a federal judge ruled yesterday that 3 scientists from Israel are the true inventors of a patent used for the co's blockbuster cancer drug, Erbitux, rather than 7 ppl whose names are now on it. Lawyers had predicted that the case could have significant effects on the future of Erbitux. In a '03 lawsuit, Yeda R&D sued ImClone, which has an exclusive license for the formula used in Erbitux to inhibit tumor cells, and its partner Aventis, claiming 3 of its researchers were the real inventors. During hearings this summer, plaintiffs' lawyer Nicholas Groombridge said ImClone could lose its exclusivity with the technique covered by the license if Yeda's scientists were credited. He said a ruling such as the judge's yesterday would free Yeda to license the patent to other drug co's, and ImClone would not have a license anymore.