Tuesday, May 08, 2007

Paperstand (AA, X, GGP, ARUN)

The WSJ’s ”Heard on the Street” column out saying that investors have been betting that the deal-making in commodities isn't through. The rapid consolidation of co’s in aluminum, steel, mining and other commodities also illustrates the need for heft as co’s increasingly compete globally, something that investors predict could spur still more deals. Among those that could at some point receive takeover offers: Lonmin, US Steel (X), First Quantum and even Alcoa (AA). Rather than a sign of the top for commodity prices, some investors say the deal-making could help put a lid on supply and put even more pressure on a host of commodity prices, helping the profits of a number of these co’s. "I think this is going to continue," says John Ing, CEO of Maison Placements. "This has really snowballed to where no co is immune."

Barron’s Online “Inside Scoop” section reprots CFO of General Growth Properties (GGP), Bernard Freibaum, purchased $27m in shares of the co. The transaction increases his total stake to 7.16m shares, or approximately 2.9% of the co's outstanding shares. RBC analyst Rich Moore says, "It shows that mgmt has confidence. Any time you spend $27m on something you think there's value there."

DigiTimes reports that Aruba Networks (ARUN) expects its share in the global enterprise mobility solution mkt to nearly double to 20% in ‘08 from the current 10-12%, co CEO Dominic Orr said in Taipei recently. A maturing mkt for wireless network solutions from the business sector, together with Aruba's focus on establishment of wireless networks for large-scale enterprises will help drive up Aruba's mkt share, Orr indicated. Although some co’s have already launched business-use 802.11n-compliant devices, the mkt is not expected to see significant demand for 802.11n products from the business sector until ‘09, Orr stated.

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