Thursday, January 25, 2007

Paperstand (RIMM, LCC, FCX)

According to the WSJ's "Heard on the Street" column, since the day Apple (AAPL) showed off its new iPhone, shares of RIM (RIMM) have been taking a beating. The logic: iPhone, capable of sending and receiving email, could eat into the mkt for RIM's BlackBerry. But it is too early to count out RIM. Indeed, many investors say that RIM may still have some growing to do. Its corporate wireless email device and service are poised to expand in mkts outside N-America, and has become practically indispensable at many large corporations. And the co has opened a 2nd-front: the consumer mkt. Its first foray into that territory, a stylish wireless email phone with a built-in camera named the Pearl, is selling well and a new line-up of devices geared toward both business users and consumers is coming soon. Expected to be priced far below the iPhone's $499 starting price, the new and already available RIM devices serve a different mkt segment, investors say. The iPhone is expected to appeal to high-end consumers seeking to upgrade their iPods. Others may be put off by some of the iPhone features such as its touch-screen keyboard, limited battery life and camera, a feature often banned by corporations. What's more is that RIM has a cozy relationship with some 225 network operators globally, who make large profits selling BlackBerry service. By contrast, Apple has decided to work with a single operator in the US, AT&T's (T) wireless unit. Investors believe RIM's easy-to-use technology and solid brand awareness make it uniquely positioned to increase its mkt share on multiple fronts. "I am willing to give them the benefit of the doubt that they will continue to come up with competitive offerings on the consumer side and I think they have more room to grow even on the enterprise side," says Martin Hubbes, of AGF Funds.

The WSJ reports that a group of Delta Air Lines bondholders Wed urged negotiations to begin on US Airways' (LCC) $9.8bn hostile takeover of the airline. The ad hoc committee of unsecured creditors, an informal group formed in Nov largely in support of the merger, said Delta has inflated the risks in order to kill the deal and exit bankruptcy-court protection as an independent co later this year. The bondholders believe opening discussions with the carrier could yield a more lucrative offer and thus fatten the payout to all Delta creditors. US Airways has set a Feb. 1 deadline for its offer to expire unless it wins approval from the official Delta creditors committee to examine Delta's finances in order to fine-tune the offer. The official committee, comprised of the 9 largest holders of Delta claims, has the authority ultimately to approve the merger or the standalone reorganization plan submitted by Delta. "It is our view that the concerns voiced by Delta mgmt about antitrust, labor and consumer issues related to an US Airways deal are exaggerated, and we believe a transaction is possible," said a spokeswoman for the ad hoc group. "We urged the Official Creditors' Committee today to engage in discussions with US Airways."

Barron's Online "Inside Scoop" section reprots that a director of Freeport-McMoRan (FCX) has loaded up his biggy bank with $26.7M in the shares of the co, ahead of approval for the co to buy Phelps Dodge. Robert Day purchased 377K Freeport shares on the open mkt on Jan. 22 , and another 123K shares on Jan. 23. Day has been on Freeport's board of directors since '95. This week's shopping spree is Day's first reported purchase of Freeport stock on the open mkt in the 12 years he has sat on the board.

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