>>> US Gapping Up

Gapping up
In reaction to strong earnings/guidance: MCOX +19.7%, CBK +9.5%, TPLM +6.2%, ENZ +4.6%, LMNR +3.5%, BURL +3.3%, KANG +2.7%, HDS +1.8%, PBY +1.4%.

M&A news: CHS +15.6% (seeing reports that co is exploring going private), CLSN +12.1% (to acquire Egen; purchase price will be in exchange for cash and shares of Celsion totaling $14 mln - halted), ONNN +2% (to acquire Aptina Imaging for ~ $400 mln in cash; transaction is expected to be immediately accretive to earnings), MHR +1.6% (disclosed that it filed with the Australian Securities Exchange a notice of intention to make a takeover offer for Ambassador Oil and Gas).

Other news: RCPT +35.3% (reported positive Phase 2 results for RPC1063 in relapsing multiple sclerosis; Study met primary efficacy endpoint with statistical significance after 24 weeks of treatment), ACHN +32% (announces initiation of ACH-3422 dosing in HCV-infected patients and ability to resume sovaprevir clinical program for the treatment of chronic HCV), SPEX +11% (commences patent litigation against Huawei), AVNR +6.7% (announces positive outcome of Phase IIIb COMPASS Trial), INO +5.8% (initiates immune therapy trial for head & neck cancer caused by HPV ), SGMS +4.7% (IGT peer, names Gavin Isaacs as new CEO), ISIS +4.6% (earns $15 mln from AstraZeneca (AZN) for initiation of Phase 1 study of ISIS-AR Rx), CVA +3.9% (co announces cost saving initiative and intention to increase quarterly cash dividend to $0.25 per share from $0.18 per share), ONVO +2.2% (still checking), SAVE +1.7% (disclosed May 2014 traffic increased 18.7% year over year), NAVB +1.7% (reports data demonstrating potential of manocept platform to diagnose rheumatoid arthritis and kaposi's sarcoma), WRES +1.3% (increases in borrowing base to $175 mln under Senior Credit Facility, from $165 mln prior), CVEO +1% (Jana Partners disclosed 11.5% active stake in 13D filing).

Analyst comments: ENTR +3.9% (upgraded to Buy at Needham), S +2.3% (upgraded to Outperform from Neutral at Macquarie), JMEI +1.4% (initiated with a Buy at Goldman), IGT +1.3% (Wells Fargo sees potential sale of $15-17+/share), BUD +1.1% (tgt raised at RBC), RSG +1.1% (upgraded to Strong Buy from Mkt Perform at Raymond James ), AMCC +0.9% (initiated with a Buy at Canaccord Genuity), NFLX +0.7% (upgraded to Overweight from Equal Weight at Evercore), SWHC +0.5% (target raised to $21 from $18 at Northland Capital
)

>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance: RSH -14.3%, FRAN -9%, SURG -3.2%, CASY -3%.

M&A news: EGBN -0.8% (Eagle Bancorp and Virginia Heritage Bank announce merger agreement).

Select EU financial related names showing weakness: NBG -2.2%, SAN -1.3%, BBVA -1.2%, ING -1.1%, DB -0.9%, HSBC -0.5%.

Other news: DNDN -5.6% (CEO steps down for personal reasons), ROYT -5.5% (announced secondary offering of ~2.654 mln trust units by selling unitholders), BAS -4.5% (announced secondary public offering of 6 mln shares of common stock by DLJ Merchant Banking Partners III and related funds), VRNT -4.5% (announced proposed concurrent underwritten public offerings of 5 mln shares of common stock and $300 mln of convertible senior notes due 2021), BEAV -3.8% (announced plan to separate into two businesses, aircraft cabin interior equipment & distribution logistics), QIWI -3.2% (filed for offering of ~7.97 mln ADSs, with ~1.99 mln being sold by QIWI, 5.98 mln being sold by selling shareholdes), EBAY -1.5% (announced that PayPal President David Marcus is leaving the company on June 27 to lead Facebook's (FB) messaging products), TSLA -0.7% (Auto makers in Pennsylvania do not want TSLA to avoid franchise laws for retail stores, according to reports).

Analyst comments: WEN -2.3% (downgraded at Argus), COUP -1.7% (downgraded to Sell from Neutral at Goldman), LVS -1.6% (downgraded to Neutral from Buy at UBS), TSN -1.1% (downgraded to Underperform from Neutral at Credit Suisse)

>>> Allergan, Inc Rejects revised proposal from Valeant - filing


Allergan, Inc Rejects revised proposal from Valeant - filing
- Board unanimously determined that the revised unsolicited proposal announced on May 30, 2014 by Pershing Square Capital Management, L.P., and Valeant Pharmaceuticals International, Inc. substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of Allergan or its stockholders.

>>> RadioShack misses by $0.49, misses on revs --> -13% pre-mkt (110k traded)

RadioShack misses by $0.49, misses on revs

Reports Q1 (Mar) adj. loss of $0.98 per share, $0.49 worse than the Capital IQ Consensus of ($0.49); revenues fell 13.2% year/year to $736.7 mln vs the $766.92 mln consensus.
  • Comparable store sales were down 14% (estimates down ~10%) driven by traffic declines and soft performance in the mobility business. Consolidated gross profit was $268.7 million, or 36.5% of net sales, compared with $340.9 million last year, or 40.2% of net sales. The decline in gross profit and gross margin rate was primarily driven by aggressive price competition in our current postpaid and prepaid handset offerings.
  • CASH, LIQUIDITY AND CAPITAL SPENDING
    • The Company ended the quarter with total liquidity of $423.7 million at May 3, 2014, including $61.8 million in cash and cash equivalents and $361.9 million of availability under the 2018 Credit Agreement. This availability is net of letters of credit totaling $67.8 million outstanding at May 3, 2014. The Company's total debt was $614.5 million at May 3, 2014, which matures between 2018 and 2019. Subsequent to the end of the quarter, the Company drew on the 2018 Credit Facility for general corporate purposes. As of June 9th, we had outstanding borrowings of $35.0 million under the 2018 Credit Facility. We expect to further utilize the 2018 Credit Facility during the remainder of the year.
  • As previously announced, the co has aligned its fiscal year end to a traditional 52-week retail calendar, with the fiscal year ending on the Saturday closest to January 31st.
  • "Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter. In particular, our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers. This resulted in disappointing sales and gross margin performance... Even in this environment, we are making progress on our turnaround strategy."

(Topeka) AMC Networks (AMCX) as an acquisition candidate? Never say never

--> no p re-market yet

AMC Networks (AMCX) as an acquisition candidate? Never say never 

Topeka notes that with AMCX trading at an absurdly low 8.6x 2015 EBITDA on an EV basis, and a mere 12.7x consensus 2015 earnings, the latter an 8.7% discount to the S&P 500, they believe certain names within the large-cap Media set are eyeing AMCX (VIAB, DISCA, TWX, FOXA, SNI -- DIS and CBS also possible but unlikely) as a possible acquisition candidate, especially in the wake of the two major MSO mergers that have been announced within the last four months. Such bulk in buyer power could create head-aches for the large-cap set in future rate card negotiations if there is not the same response in terms of supplier power.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: RCPT +37%, ACHN +26.6%, MCOX +19.7%, CHS +14.2%, SPEX +10.4%, TPLM +5.6%, ENZ +4.6%, LMNR +3.5%, CVA +3.1%, BURL +2.9%, KANG +2.7%, SPCB +2.7%, ONVO +2.2%, ONNN +2%, SAVE +1.7%, PBY +1.4%, CVEO +1%

Gapping down: RSH -11%, DNDN -5.1%, BAS -4.7%, CRUS -4.3%, ROYT -4.1%, QIWI -3.2%, SURG -3.2%, BT -2.7%, NBG -2.2%, SAN -2%, CASY -1.8%, VRNT -1.6%, EBAY -1.6%, TSN -1.4%

FT : UberBay

An online service that matches buyers and sellers you say? Worth $18bn? Well, there are a lot of taxis in the world.
We have seen this one before though, so $18bn is entirely possible, if not necessarily sensible.
Consider this chart of the original dot com network effect superstar, eBay.
For context eBay has a $62bn market capitalisation after doubling revenues in the last five years to about $18bn. It trades on around 17 times the average forecast for earnings this year.
Back in 1998, when it took in just $30m in revenues eBay powered up to a market cap of $40bn. In the early stages of the second bout of dot com enthusiasm in 2004, at a time when eBay was doubling revenues just about every two years (see the next chart) the valuation peaked up around $80bn.
So could Uber be worth $18bn plus? It is growing faster than eBay did, one of its investors said last year. Which you would expect, given that the number of smart phones sold every day in the world is a multiple of the number of PCs sold in the late 1990s.
That ecosystem of users, app stores and cheap technology might also mean that an Uber competitor could grow quickly also, but hey, first mover status counts when you are attracting consumers. So purely on the basis that at various times in the past rational people paid irrational valuations for eBay, Uber stock could easily change hands for $18bn. This is nuts passim, etc.
As an eBay-like end point, though? Lets get a napkin to write on and optimistically say Uber could ultimately earn $2 from every taxi fare, robot car ride or parcel delivery. If we thought 40 times earnings was plausible, it would need to earn $450m, post-tax. Say a 30 per cent tax rate, and no debt, means operating profits of $642m. For very optimistic simplicity, lets say Uber ultimately makes a 50 per cent operating margin, so it needs $1.3bn of revenues (ten times what it was reported to have taken last year).
That works out to a ball park of 650m Uber trips a year. Say each customer uses Uber once a month, the company only needs about 60m regular users. Which doesn’t sound much in the smartphone app stakes, but is a lot judged by Urban taxi using people: it’s equivalent to the entire populations of San Francisco, Los Angeles, New York, Chicago, London, Washington DC, Paris, Toronto, Tokyo and Hong Kong combined.
Assume the valuation is 20 times earnings, or the operating margin is a more Google like 25 per cent, or the average user takes 6 Uber trips a year instead of 12, or Uber will make a dollar from each one, and the number of users needed doubles each time.
Or just assume that Uber might be a part of the robot car future. The numbers will take care of themselves.