Wednesday, June 20, 2012

This Morning: FB Slumps, Ciena Jumps, Leap’s Pre-Paid iPhone, RIM Options Dwindle

Here are some things going on this morning in your world of tech:

Shares of Facebook (FB) is bucking this morning’s broader market, just like it did yesterday. With the Nasdaq Composite Index off half a percenthave opened up 22 cents, or 0.8%, at $28.38, continuing pre-market gains of 28 cents, after the stock got yet another Buy recommendation this morning, from Topeka Capital’s Victor Anthony, who started the stock with a $40 price target.

Update:�No sooner had I written those words than Facebook took a sharp turn downward, now off 95 cents, or 3.5%, at $27.24.

Bloomberg’s Nina Mehta this morning offers up the view of some academics regarding the the Securities & Exchange Commission’s investigation into the problematic May 18th initial public offering of FB. The conclusion is there probably won’t be more than a fine for the Nasdaq, given it seems unlikely the SEC will find or be able to prove “real wrongdoing.”

Shares of Ciena (CIEN) are up 86 cents, or 7%, at $12.74, after the company this morning reported fiscal Q2 revenue head of analysts’ estimates, and a surprise profit per share. For the current quarter, the company projected revenue roughly in line with expectations.

Shares of U.S. pre-paid cellular operator Leap Wireless International (LEAP) are up 28 cents, or almost 5%, at $6.05 after the company this morning said it will start selling Apple‘s (AAPL) iPhone 4S on June 22nd for $499.99 with a $55-per-month all-you-can eat plan of voice calls, texting and data usage. The iPhone 4 is also offered, for $399.99.

In a note to clients this morning, ISI Group’s Brian Marshall, who covers Apple, calculates that Leap must be subsidizing the iPhone by about $150 to bring it to that price. He writes, “We believe this could gain some traction among U.S. customers depending on quality of service.”

And Citigroup’s Michael Rollins, who has a Buy rating on Leap stock, writes that
the “iPhone can be an incremental positive for its growth prospects with some near-term dilution to its OIBDA margin.” He thinks that if the iPhone were to reach 20% of Leap’s sales, it “could become accretive to OIBDA by the fourth quarter after launch given the likely ARPU accretion of around $10 over the average subscriber ARPU.”

Apple shares this morning are down $2.17, or 0.4%, at $577.

The chatter about�Research in Motion (RIMM) are still focused on the company’s announcement Tuesday night it will have several quarter’s of rough financial results as it awaits its next technology transformation for its BlackBerry handhelds.

An article by Hugo Miller of Bloomberg this morning surveys some fund managers who say they think a buyout of the company is RIM’s best option. One manager describes RIM as “a business that’s badly broken” but that has “assets that are worth something to somebody.”

As if to answer that, Will Connors of The Wall Street Journal this morning writes that some within RIM “still don’t understand how dire the situation is,” citing a single unnamed source close to the company. He says several sources say RIM is not trying to shop itself.

RIMM stock, however, is not doing so badly this morning, relatively speaking, off 4 cents, or half a percent, at $10.31.

No comments:

Post a Comment