Friday Morning Pre-Market News (11/18/11)


Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • China Housing Prices:Jim Chanos’ big bet on China housing could be playing out, average property prices in 70 Chinese cities posted their first monthly decline since Beijing began a campaign to cool the red-hot property market two years ago
  • Hedge Fund Piling Into WebMD: There has been some interesting hedge fund activity in WebMD (Nasdaq:WBMD) in the last few months
  • Government Supercommittee: Looks like the deal might not get voted through
  • Files $2bn IPO: In 2010 Yelp rejected a $500mn offer from Google, ever since they have been plotting for an IPO. This filing shows they could be valued close to $2 billion
  • Fund Flows: “High Grade funds had inflows of $1.7bn for the week ending Wed 11/16. Last week inflows were strong as well at $1.8bn. HY had light inflows of $153mm this week down from $1.1bn last week. Leveraged loans experienced a third consecutive week of outflows. This week there was $166mm of outflows vs. $43mm of outflows last week. Equities had $2.8bn of inflows compared with $8.2bn of inflows last week. Domestic equity had $3.3bn of inflows while Non-Domestic Equity had $479mm of outflows. Money Markets had another week of inflows” (JP Morgan Research)
  • HPQ Activist On Board: HPQ hires activist Ralph Whitworth to the Board
  • 2012 Political Elections: political forecaster Charlie Cook predicts the GOP potentially capturing all of Congress as well as the White House
  • Jefferies Update: Not as bad as once feared
  • UBS Layoffs: UBS is going through a 5th reorganization of its business since the 2008 crash
  • Autos Conference Takeaways: “essure on parts makers’ incremental margins means companies need defensible product positions or specific re-engineering opportunities to boost margins. With the market back to pricing in a 50% chance of a double-dip, Barclays’ thinks auto stocks look cheap across the board. Results should favor the better positioned players such as BWA and AXL, but beta plays should have more upside” (Barclays Research)
  • Founders Capital Read on the Market: Founders Capital is out with its Q3 2011 investor letter and gives its perspective on the the current market environment and potential bubbles that are brewing in today’s IPOs
  • NFLX Update: Irish Times reports NFLX “faces important copyright hurdles” before entering Ireland, UK. Paramount (VIA/b), Universal (CMCSA) and 20th Century Fox (NWSA) already have deals w/ Sky Movies (BSY LN) and they may note be interested in signing on w/ NFLX (UBS Research)

M&A Watch:

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  • Filtrona Plc signed an agreement to acquire Richco Inc for US$110 million in cash
  • Viridor Ltd, a subsidiary of Pennon Group Plc, acquired JWS Churngold Ltd for GBP14.25 million (US$22.5 million) in cash
  • Bayerische Motoren Werke AG acquire a 15.2% minority stake in SGL Carbon SE for an undisclosed amount
  • AHMC Central Health LLC, a subsidiary of AHMC Healthcare Inc acquired Central Health Plan of California Inc, for an undisclosed amount

Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.

Disclaimer:  The information, opinions, material, and any other content provided in this article is for informational purposes only and is not to be used or considered an offer or solicitation to buy or sell securities, investment products, financial instruments, or to participate in any particular investment strategy. The information, opinions, material, and any other content provided in this article does not constitute as a recommendation or as advice to buy or sell securities, investment products,  financial instruments, or to participate in any particular investment strategy.