Wednesday, May 30, 2007

Paperstand (ICE, MSFT, CG, ITY, HPQ)

The WSJ reprots that IntercontinentalExchange (ICE) has reached an agreement with the Chicago Board Options Exchange valued at about $665m that could help settle a longstanding dispute between the options exchange and its longtime rival CBOT (BOT). The agreement, expected to be announced as soon as this morning, is designed to give ICE a leg-up in its high-stakes battle with CME, which has the support of Board of Trade mgmt. The unusual agreement ICE has negotiated would only happen if the Board of Trade becomes part of ICE.

According to the WSJ, at a technology conference, Microsoft (MSFT) today will unveil the fruits of 6 years of research pushed by Chmn Bill Gates, a computer designed like a table with a touch-screen. The system, called Surface and aimed initially for use in hotels and casinos, includes features that allow users to buy tickets to events, wirelessly retrieve and display photos and play games. It goes on sale later this year. And Palm (PALM) co-founder Jeff Hawkins, plans to disclose what Palm calls a "new category" of mobile device. Though few details are known, one industry exec expects the gadget to be somewhat larger than Palm's existing products and to include wireless networking.

Barron’s Online discusses tobacco co’s, which have received private-equity offers recently. The signs indicate more deals are coming, benefiting investors in the right stocks. "When the music stops, there may be 5 or fewer major global players," says Charles Norton, of Vice Fund. Looking for new mkts to offset smoking restrictions and falling cigarette consumption in the US and elsewhere, cigarette makers are grabbing smaller rivals, taking advantage of a cheap credit mkt. Yet instead of chasing takeout rumors, the smart bet for investors is to focus on co’s with rising profits, cash flows and dividends, such as Carolina Group (CG), the tracking stock for cigarette maker Lorillard, a subsidiary of Loews, and Imperial Tobacco (ITY). The free cash and dividends that makes these co’s worthy takeover tgts also makes them attractive to common stock investors. "It's never a good idea to buy a stock just b/c you think it's a take-out," says Nik Modi, of UBS. "If you find a potential takeout tgt that first and foremost has good fundamentals and is undervalued, then it's potentially lucrative."

“Inside Scoop” section reports that H-P (HPQ) execs cheered to new highs of the co’s stock by enthusiastic selling, totalling $21.5m. 6 co execs sold stock from May 22 to May 25, including Chmn, CEO and President Mark Hurd and Executive VP and CFO Catherine Lesjak. The execs sold both existing stock and stock from options exercises. has new piece on Utek (UTK),
read here.

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