Author Archives: Scalper1

Here’s How Apple Could Up Its TV Game With Skinny Bundle On Hold

Loading the player… Apple ( AAPL ) has put plans for its own “skinny” streaming bundle on hold, but the tech giant could expand its presence in the television space with the acquisition of DVR maker TiVo ( TIVO ), according to an analyst with Albert Fried. Reports surfaced in late March that TiVo was in talks to be acquired by Rovi ( ROVI ), a supplier of interactive program guides. While the analyst says that deal has merits, a TiVo acquisition by a consumer electronics company like Apple, Amazon ( AMZN ) or Microsoft ( MSFT ) is more attractive. That’s because consumer electronics firms “can better market and develop TiVo and TiVo’s ability to sell to roughly 80 million (subscribers) could be better exploited.” TiVo shares jumped 23% on the buyout rumors to retake their downward-sloping 200-day line. The stock is now looking for support around that level, rising nearly 1% on the  stock market today . TiVo is trading 20% below its 52-week high. Apple tried to retake its 200-day line in Monday’s session, but closed the day just below that level. The stock has now fallen back below the 110 price level, edging up 0.4% intraday. Shares are trading about 18% below their all-time high reached at the end of last August. Amazon rose 1.8% intraday, while Microsoft ticked 0.4% higher. Meanwhile, Starz ( STRZA ) announced Tuesday it’s launching its own over-the-top streaming service, joining Netflix, Time Warner ( TWX )-owned HBO, CBS ( CBS ) and others in the pursuit of capturing the cord-cutting audience. The $8.99-a-month Starz service undercuts that of Netflix ( NFLX ), which is raising its price by $2 to $9.99 in May for “grandfathered in” customers. Starz rose fractionally while Netflix dipped 0.5%.

Allergan Touts Future Without Pfizer; Teva Deal Still On Track

The leadership of Allergan ( AGN ) moved to reassure investors Wednesday of the company’s bright future after its huge buyout by Pfizer ( PFE ) was canceled in the wake of new tax regulations. Allergan stock was up 3.5% in afternoon trading, near 245. On a conference call with analysts Wednesday morning, CEO Brenton Saunders maintained that the Treasury Department’s action against tax inversions  will have no impact on the stand-alone Allergan, which redomiciled to Ireland through an inversion deal with Warner Chilcott three years ago. The company will retain its 14% corporate tax rate, he said, and it should also be free to deploy capital however it chooses. Saunders also said Allergan’s $40 billion sale of its generic unit Actavis to Teva Pharmaceutical Industries ( TEVA ) is unaffected by the spiking of the Pfizer deal  and is on track to close in June. The timeline for that buyout was delayed from its original Q1 closing date, as Teva works its way through a multi-country regulatory clearance process, but Saunders said the two companies are determined to get it done. “Teva is doing a lot of work,” said Saunders. “They’ve restructured their company; they have named their entire leadership through a few levels that include 200 Allergan executives moving to Teva. … This is a great deal for Allergan, but also a great deal for Teva.” Teva stock was up almost 3% in afternoon trading on the stock market today , near 56. The closing of the Actavis sale should also give Allergan a big wad of cash, so many of the analysts’ questions on the call related to what it will do with the money. Several seemed to be rooting for share buybacks, given that Allergan stock is trading near a 52-week low in the wake of the Pfizer breakup. Saunders said all options are on the table, but he emphasized that Allergan’s “growth pharma” model means that it’s constantly on the hunt for growth assets. He said that Allergan’s business-development team has stayed active since the Pfizer deal was announced, and if the right opportunity came along “we could announce it tomorrow.” A couple of analysts raised the name of contact-lens giant Bausch & Lomb, with which Saunders has a personal history. He headed the company from 2010 until 2013, when it was sold to Valeant Pharmaceuticals International ( VRX ) for $8.7 billion. Given Valeant’s recent spectacular crackup , many on Wall Street have speculated that B&L might again go on sale, with Allergan a suitable buyer not only because of Saunders, but also because of Allergan’s large ophthalmology business. Saunders’ response to this seemed to be a swipe at Valeant’s infamously opaque financial reporting. “It sold for $8.7 billion four years ago, with a late-stage pipeline of 30-some programs, and a strong organic growth profile,” he said. “I can’t tell that any of those things today are still true. Based on public information, it’s impossible to tell that it’s worth more than it sold for four years ago.”

Allergan, Pfizer Rise After Scrapping Merger Over Inversion Rules

Pfizer ( PFE ) and Allergan ( AGN ) confirmed Wednesday that they are ending their $160 billion merger agreement after the U.S. Treasury unveiled new rules to curb tax inversion deals Monday. Ireland-based Allergan rose 3.6% after initially selling off in pre-market trading on the stock market today . CEO Brenton Saunders told CNBC that Allergan has a bright future as a standalone firm. Allergan plunged 14.8% Tuesday to 236.55, hitting the lowest levels since late 2014, amid concerns that the new rules imperiled the deal. Pfizer rose 3.8% after gaining 2.1% to 31.36 on Tuesday. “Pfizer Inc. today announced that the merger agreement between Pfizer and Allergan plc has been terminated by mutual agreement of the companies,” the drug giant said in a statement . “The decision was driven by the actions announced by the U.S. Department of Treasury on April 4, 2016, which the companies concluded qualified as an “Adverse Tax Law Change” under the merger agreement.” U.S. companies have a strong incentive to redomicile overseas to reduce their exposure to America’s unusually high corporate tax rates and global reach. Pfizer’s board reported voted to scrap the deal given that there would no longer be tax benefits. Saunders said the new rules blindsided Allergan, and felt that they unfairly targeted his compnay, though it was not named specifically. The Treasury set restrictions on”serial inverters” — and Allergan has a history of inversion deals. Allergan is run from New Jersey, but has its official headquarters in Dublin. Pfizer will pay $150 million in merger-related expenses. Pfizer CEO Ian Reed said in a statement the drug giant may go ahead with a corporate split: “We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016” The Obama administration has become more aggressive going after big mergers. The Justice Department is suing to block the merger of  Halliburton ( HAL )– Baker Hughes ( BHI ), which said they’ll fight the DOJ’s action.  But Baker Hughes shares rebounded 8.9% Wednesday after sliding 5.1% on Tuesday on reports that the DOJ would take action. Halliburton popped 7% intraday  after climbing 0.2% Tuesday. Meanwhile, the FTC is in the midst of a court battle seeking to block Staples ( SPLS ) from buying office supplies rival Office Depot ( ODP ).