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On 08 December 2008, Companhia Vale do Rio Doce (NYSE:RIO) announced that it has shut down 2 more pellet plants in Brazil, in response to a significant fall in demand for iron ore and pellets. This is the latest in a series of production cutbacks (refer to our company news alert dated 05 December [...]
Magna International Inc’s (Magna) 3Q 08 sales underperformed our expectations, primarily due to lower than anticipated sales from its key segments, including North American Production Sales (NAPS) and European Production Sales (EPS). We expect Magna’s sales growth to remain subdued over the next 2 years, considering the anticipated subdued sales growth in its core [...]
UPDATE: So Microsoft (NSDQ: MSFT) won’t be implementing ACAP after all, at least in the foreseeable future, despite earlier speculation that it could become the first search player to back the publisher-friendly news indexing technology. The company’s lead counsel on intellectual property Tom Rubin told an AOP forum on copyright in London today that ACAP had the “potential to be an important element of more vibrant business models for publishers in the future”. But Rubin told me afterwards that Microsoft currently has “no plans to adopt ACAP into any of our products models”. The door may be somewhat open for the future—Rubin clearly doesn’t think the current robot.txt web crawler technology used index news stories is any good, likening the 15-year-old technology to “putting a Fiat engine in a Ferrari”.
-- No free lunch: So no ACAP, but Rubin had much else to say about online newspapers: he says the free, ad-supported online content business model almost every newspaper has adopted has simply not worked. “In the early 1990s, some leading internet pundits… implored content owners to give away content and monetise it through secondary means,” he says. “Well, here we are ten years later bombarded almost daily be announcements of newspaper lay-offs and closures.” For Rubin the evidence is in: the free approach not only doesn’t work, “it has been a disaster for almost all newspapers”.
-- Time for change: Like Obama, Rubin say’s it’s change we need—instead of accepting that content must be free and unregulated, publishers can seize control. Rubin cites the defeat of the grand-daddy of music P2P file-sharing site Napster (NSDQ: NAPS) by music labels and their copyright lawyers and Viacom’s successful $1 billion copyright action against YouTube as proof that original content can be protected and monetised. His parting shot to the free content evangelists and newspaper doom-mongers: “Don’t let anyone tell you that the choice is between Luddite resistance to new technology and passive acquiescence to the destruction of your industry.” Original post after the jump…
Original post: Could Microsoft be the first big search player to embrace ACAP, the internet search protocol designed to give publishers more control over their online content? IHT reports the company’s lead intellectual property lawyer Tom Rubin is expected to tell an AOP forum on copyright in London later today that he would work more closely with publishers on ACAP, which gives them more control over how search engines index articles than the existing 15-year-old robot.txt web crawler technology. According to the IHT, Rubin will say ACAP “has the potential to be an important element of more vibrant business models for publishers in the future.” That’s not a full endorsement, but it goes further than Google (NSDQ: GOOG) which has only said it would talk it over with ACAP.
Since its full launch a year ago ACAP has been a passionate cause of the World Association of Newspapers and its president Gavin O’Reilly, also COO of Independent News and Media. At first INM’s UK and Ireland sites and then The Times were the only British publishers to sign up but, according to a document released last week, ACAP now counts The Guardian, the Mail on Sunday, The Sun and Northcliffe Media’s local websites among its members.
Apple (NSDQ: AAPL) is talking to the three remaining major labels about adding more DRM-free, MP3 tracks, a year after EMI signed on. UMG, Sony (NYSE: SNE) BMG and WMG are still talking to Apple, and at least one is close to an agreement, this News.com report says. Meanwhile Amazon’s music store, Napster (NSDQ: NAPS), Rhapsody and other have already amassed on the MP3 deals with these labels, but no specific evidence yet that DRM-free has spurred the sales of song downloads in the last year. One evidence does point out that with price parity, users prefer DRM-free over DRMed songs...who wouldn’t?
Meanwhile, that persnickety MySpace Music CEO hasn’t signed on yet, has he?
After being out sick for the greater part of last week, I was browsing the financial news and blogs to see everything I had missed during my tryst with the tissue box, when I came across an article entitled “NoPod” with a picture of a trampled iPod lying on the ground. Since I have a personal affinity to Apple (Nasdaq: AAPL) – not their products and not even really the company, just the Apple-ites who are a little too ummmm… passionate about their tastes in technology – you can bet your bottom dollar that I pounced on the story right away. But that isn’t the only thing you can bet on… From Records To iPods The article’s premise was simple: due to the ever-changing nature of technology demands helped along by a strong dose of recession, the all-popular iPod is on its way to becoming less than supreme. And really, it’s got a[More...]
Much of the expected growth from emerging markets and technology has been scaled back in recent industry outlooks. Zacks senior technology analyst Abdul Saleh spoke with us recently to help reorganize our tech stock priorities.
Prior to the full-blown U.S. economic crisis, had the tech industry outlook been turning more positive?
The tech industry as [...]
XenoPort, Inc.?s (XNPT) lead candidate is Solzira (XP-13512), a Transported Prodrug of gabapentin. XenoPort is partnered with GlaxoSmithKline (GSK) for development and commercialization in the U.S. and select countries outside the U.S. The drug has comple[More...]
U.S. stock futures were lower this morning, indicating stocks could start the day with losses, a day after the worst session in years. While Goldman Sachs is set to release results, many eyes will focus on the Federal Reserve as it meets Tuesday. The market is betting on a rate cut soon, although perhaps not this meeting. Meanwhile, the Labor Department will release August Consumer Price Index. As global stock markets followed Wall Street's lead with losses of their own, oil prices took another dip to about $92 a barrel.
Goldman Sachs (NYSE: GS), one of the few independent brokers left after Lehman's demise and one that is now mentioned as a possible "next" will release its fiscal third-quarter earnings before the bell. Goldman's troubles have not been as deep as other financial companies, but no one expects Goldman to have stellar earnings.
And as expected, American International Group Inc. (NYSE: AIG) was hit by a wave of downgrades by credit-rating agencies. The new ratings are all still considered investment grade,but this only adds to the pressure on AIG as it seeks billions of dollars to strengthen its balance sheet. AIG stocks is sinking another 42% in pre-market trading.
Standard & Poor's also downgraded Washington Mutual (NYSE: WM)'s credit rating to junk status, citing the deteriorating housing market. WaMu shares are slipping yet another 15% in pre-market trading.
Staying with financials problems, General Electric Co. (NYSE: GE) shares hit a five and half year low on concern over its financial arm.
In other news, Hewlett-Packard Co. (NYSE: HPQ) said Monday it plans to cut 24,600 jobs over the next three years as it combines operations with Electronic Data Systems Corp., mostly within EDS.
Meanwhile, competitor Dell Inc. (NASDAQ: DELL) predicted "further softening" in demand this quarter and will record expenses to trim payrolls. DELL shares fell 7% in pre-market trading.
Best Buy Inc. (NYSE: BBY) is also reporting earnings today, a day after saying it is buying online music sharing business Napster Inc. (NASDAQ: NAPS) for nearly $127 million or $2.65 per share, nearly double NAPS Friday closing price. Best Buy will have to take on the leader in the digital music business, Apple Inc. (NASDAQ: AAPL). On Monday, Citigroup's analyst Richard Gardnersaid that "Apple's September quarter is tracking in line with his above-consensus revenue estimate of $8.3 billion "thanks to surprisingly robust iPod shipments and in-line PC shipments." The Street is looking for $8.1 billion.
Napster, Inc (NASDAQ:NAPS) hit $1.40 a share today and everyday they come closer to falling under $1. Their all new MP3 store couldn't distract investors from their Q4 report and a flat 2008 guidance. So, do you buy the 16 oz. Coke or a share of Napster?
That somebody happens to be Bear Sterns analyst Kunal Madhukar. Thanks to Madhukar, his upgrade last week sent shares of Napster Inc. (NASDAQ:NAPS) up 15%. With today's pullback, shares of NAPS are only up 6.5% since his upgrade to "Outperform" from "Underperform." Most of you know the Masters have talked up Napster in the past, but now Wall Street is onboard.
On Feb 11th, Bear Stearns analyst Kunal Madhukar wrote that Napster's disinterest, coupled with a trading imbalance that resulted from the company leaving the S&P 600 Small Cap Index in February, "has resulted in a compelling buying opportunity for investors who are willing to hold the shares for 12 (to) 18 months."
In the past year, the stock has traded between $1.60 and $4.46.
Madhukar, who has a $2.50 price target on Napster shares, noted Napster finished its third quarter in December with $69 million in cash and equivalents. Based on its 43.6 million outstanding shares - an additional 2.4 million are marked as restricted share awards for employees and will likely vest in the next few years - the company's market value is $71 million, and enterprise value is about $2 million, Madhukar said.
"At current valuations, in our view, investors are effectively buying the cash at face value, and getting the company for free," he said.
Madhukar wrote that the market is "more than discounting" risks to Napster's business, but that the company isn't getting credit for its brand, technology, portal, partnerships or for cash and tax-related net operating losses.
Fellow Masters, this is a long-term hold, but any other good news and you could bank 5 to 10% in a single day. Above all, NAPS is a stock to add to your watch list.
Article written by Ted Gottsegen
Contributor at TheStockMasters.com
Disclaimer: The Author does not hold any positions or shares in the securities mentioned in this publication.
Is Lars from Metallica’s dream of Napster going out of business finally coming true? Or will the ever-present underdog that is Napster (NAPS) come back swinging like Rocky Balboa vs Apollo Creed?
Napster shares just broke a new 52 week low today, down -6.44% to $1.89 a share.
Has anyone checked the company’s steadily improving balance sheet lately? Revenue and Net income are steadily increasing, while cash levels have improved significantly. Does this look like a business that’s going to close its doors anytime soon?
Financials (In millions of USD)
Income Statement
Quarterly
(Sep '07)
Annual
(2007)
Annual
(2006)
Total Revenue
31.62
111.08
94.69
Gross Profit
9.45
32.44
25.48
Operating Income
-5.35
-37.41
-61.54
Net Income
-5.08
-36.83
-54.95
Balance Sheet
Total Current Assets
73.84
74.45
111.39
Total Assets
118.06
121.73
155.54
Total Current Liabilities
36.48
33.41
36.99
Total Liabilities
40.57
37.02
39.77
Total Equity
77.50
84.71
115.77
Cash Flow
Net Income/Starting Line
-5.08
-36.83
-54.95
Cash from Operating
1.11
-28.63
-44.53
Cash from Investing
11.57
11.48
-28.37
Cash from Financing
0.05
0.00
-14.91
Net Change in Cash
13.26
-16.74
-88.60
Napster is looking severely undervalued at these levels. The stock price decline after releasing their best earnings ever just doesn’t add up. On top of that, their partnership with AT&T is still in an early stage – they just released their first mobile phone that supports Napster Mobile. Investors shouldn’t count the partnership out; it could lead to a major source of revenue for the company in the near future.
The Stockmasters think Napster is a potential Value Play and although it is a high risk trade, the potential gain, especially if they get acquired, is well worth the risk.
Article written by Eric Cheshier
Co-Founder of theStockMasters.com
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U.S. stock futures were lower this morning, indicating stocks could start the day with losses, a day after the worst session in years. While Goldman Sachs is set to release results, many eyes will focus on the Federal Reserve as it meets Tuesday. The 
ever-present underdog that is Napster (
er releasing their best earnings ever just doesn’t add up. On top of that, their partnership with AT&T is still in an early stage – they just released their 
Article written by Eric Cheshier 
Our price is only $45 for an entire 12 month subscription. Consider our newsletter as an affordable supplement to your stock research. We aren't trying to kill you with an outrageous annual fee and it will cost you less than a round of beers and shots for you and your crew. Make the right choices, be informed and have more money for flaming Dr. Peppers. Get our newsletter on sale at 
