>>> Speculation: Is GOOGL Closer To A TWTR Takeover?

Speculation: Is GOOGL Closer To A TWTR Takeover?


While Alphabet Inc. (NASDAQ:GOOGL) may be the most valuable company in the world, accounting for difference in cash balances between it and Apple, there is one area that Twitter Inc. (NYSE:TWTR) is able to compete with Alphabet Inc. and that is real-time communiques. It’s that unique space that Twitter holds that could make the company a takeover target for Alphabet.

The Story

This is a fascinating side-by-side comparison and a reveal of how powerful Twitter Inc. has become in just the last month. With that power may have come an impetus for Alphabet Inc. GOOGL to make the long awaited, or at least speculated, Twitter TWTR takeover.

Real Time Communiques

Twitter Inc. is now famously known for its unique ability to deliver real time communiques. With a sack full of new live streaming deals ranging from the NFL, NBA, MLB, MLS and Wimbledon to Bloomberg TV and college athletics, Twitter Inc. has turned things around. But there is one example of a head-to-head comparison between Twitter Inc. and Alphabet Inc. that is “apples-to-apples,” and we’re not so sure Alphabet Inc. wins this one. It’s that head-to-head competition that ratchets up the TWTR takeover speculation.

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The One Place Twitter Can Compete With Alphabet

Twitter Inc. announced a partnership to live steam the republican and democratic national conventions. That partnership delivered exactly what it reads like — live footage of the conventions surrounded by live tweeting. It was a wonderful experience and just the beginning of the newly defend Twitter Inc. identity.

Here’s what Alphabet Inc. did — these are snippets directly from the official Google blog:


So there we have it, a direct and equivalent competition for the same event and the same technology that is live streaming. While almost any other comparison between these two companies would likely swing wildly in Alphabet Inc.’s favor, we must ask ourselves if that is the case with this event.

And, if this is a legitimate competition for Alphabet Inc. (GOOGL) and its YouTube property for one live event, then perhaps Twitter Inc. (TWTR) is now a legitimate competitor more broadly with the most powerful company in the world in this one area.

Is Alphabet Going To Takeover Twitter?

The next logical step when we see a side-by-side competition between two companies that are in fact cooperating on a large scale through Google search and Twitter’s tweets, is to wonder if perhaps a takeover is due. While Twitter’s CEO, Jack Dorsey, plainly said that Twitter Inc. was not looking for a buyer at the most recent Twitter shareholder meeting, that doesn’t mean Alphabet Inc. isn’t interested in a takeover.

In this case, it’s a fair analytical question to pose, whether Alphabet Inc. is now more likely to make a bid to acquire Twitter Inc. (TWTR) since the two are competing directly, as opposed to a friendlier coopetition. Given Facebook’s dominance in the social media realm and Alphabet’s failure with Google Plus, we could list dozens of reasons for a takeover.

For a Friday afternoon, an Alphabet Inc. takeover of Twitter Inc. is a fun place to let our minds go. It might also be a good place to do further research.

Why This Matters

Twitter and Google generates nearly all of their business from advertising and they are both leading the way in the revolutionary new ad format that is online video which is growing so quickly that it will someday over take standard linear Television ads. It turns out that there is one technology company that will power this revolution, regardless of whether it’s Facebook, Google, Twitter, or whomever that will end up with the largest audience.

Thanks for reading.

>>> Under Armour on Conference Call- From prepared remarks in 8-K; Stock trading

Under Armour on Conference Call- From prepared remarks in 8-K; Stock trading near pre-market lows of $40.25, down approx 8%
  • Q2 gross margins decreased 70 basis points to 47.7% compared to 48.4% in the prior year's period. Sales mix negatively impacted the second quarter by approximately 130 basis points, primarily driven by the continued strength of footwear and international growth. Partially offsetting this negative impact were continued favorable product margins, benefiting gross margin by approximately 50 basis points.
  • Looking at cash flows, investment in capital expenditures was $149 million for the second quarter compared to $93 million in the prior year's period. Continue to expect to spend between $450 and $475 million for the full year, including investments in our global offices around the world including headquarters in Baltimore, distribution centers, SAP platform, and global Direct-to-Consumer.

>>> CNH Industrial reports EPS in-line, beats on revs; Co confirms its 2016 guid

--> +4.46%

CNH Industrial reports EPS in-line, beats on revs; Co confirms its 2016 guidance

  • Reports Q2 (Jun) earnings of €0.10 per share, in-line with the Capital IQ Consensus of €0.10; revenues fell 2.9% year/year to €6.75 bln vs the €5.86 bln Capital IQ Consensus.
  • Industrial Activities operating profit and margin increased year-over-year, led by improvements in Agricultural Equipment, Commercial Vehicles, and Powertrain segments: Agricultural Equipment profitable in all regions, with best-in-class operating margin at 10.7% Commercial Vehicles solidly profitable, with 3.9% operating margin
  • Agricultural Equipment's net sales decreased 7.5% for the second quarter 2016 compared to the same period in 2015 (down 6.3% on a constant currency basis), as a result of lower industry volume, unfavorable product mix in the row crop sector in NAFTA and unfavorable industry volume in the small grain sector in EMEA
  • Construction Equipment's net sales decreased 19.6% for the second quarter 2016 compared to the same period in 2015 (down 18.4% on a constant currency basis), due to negative industry volumes primarily in the heavy product class in all regions.
CNH Industrial is confirming its 2016 guidance as follows:
  • Net sales of Industrial Activities between $23 bln and $24 bln, with an operating margin of Industrial Activities between 5.2% and 5.8%
  • Net industrial debt at the end of 2016 between $1.5 bln and $1.8 bln excluding the European Commission settlement (~$500 mln).

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: NDLS -15.5%, (Noodles & Co announces management and Board changes, sees Q2 revs below consensus), SANM -9.9%, FCX -6.7%, EFII -4.4%, ORAN -4.2%, GILD -4.1%, MPWR -3.6%,CE -3.6%, GIG -3.3%, CDNS -3%, MCD -3%, BP -2.2%, BLX -1.7%, SPN -1.6%, CMP -1.5%, MMM -1.5%, VNOM -1.3%, (Viper Energy Partners announces a 7 mln common unit underwritten public offering), VZ -0.9%, CAT -0.9%, CVLT -0.8%,KEY -0.7%, JBLU -0.5%, MDXG -0.5%

M&A news: KLDX -3.4% ( to acquire the Hollister mine and the Esmeralda mine and ore milling complex located in Northern Nevada; discloses CAD $100 mln bought deal financing)

Select oil/gas related names showing early weakness: CHK -2.5%, MRO -1.9%, WLL -1.9%, RDS.A -0.6%

Other news:
  • TKAI -67.9% (announces clinical update; co to discontinue Phase 3 ARMOR3-SV trial of Galeterone in AR-V7 Positive mCRPC)
  • CRME -34.9% (announces proposed underwritten public offering of common stock)
  • MSTX -21.3% (Mast Therapeutics provides guidance on the anticipated timing for announcement of top-line data from the EPIC study, provided guidance on the anticipated timing for announcement of top-line data from the EPIC study)
  • SDLP -11.9% (reduces quarterly distribution to $0.10 per unit (from $0.25 per unit prior))
  • TCAP -4.7% (commences 6.25 mln common stock offering)
  • PRKR -3.3% ( files for ~1.44 mln share common stock offering by selling shareholders)
  • CELG -3.2% (announces the Lymphoma Academic Research Organisation reported initial data from a phase III REMARC clinical study; REMARC achieved the primary endpoint of a statistically significant improvement inPFS for patients receiving REVLIMID)
Analyst comments:
  • SC -2.2% (downgraded to Equal Weight from Overweight at Barclays)
  • WFM -2.2% (downgraded to Sell from Neutral at Goldman )
  • CMG -1.9% (downgraded to Sell at Stifel)
  • PNRA -1.4% (downgraded to Sell at Stifel)

(GS) Japan Strategy : History Lessons

TOPIX has rallied more than 8% from its post-Brexit low in anticipation of policy stimuli, in our view. Assuming monetary and fiscal stimuli are in line with our expectations (i.e. incremental BOJ easing and limited real fiscal spending), we believe history may repeat itself with the market giving back its gains post-announcements. 1Q3/17 earnings results peak on Jul 29, but we do not expect profit revision momentum to bottom until after 2Q results. For now, we emphasize themes such as: M&A, shareholder returns/buybacks, and stable growers.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: ALIM +29.2%, CRY +10.2%, EXAS +9.1%, EVER +6.8%, TXN +6.6%, CETV+5.4%, CR +5.3%, LVS +3.6%, MBLY +3.4%, AUDC +3.2%, CNC +3.2%, ATI +2.6%, CNXC +2.5%, ( elects not to pay a distribution to holders of subordinated units for Q2), CLGX +2.5%, KKR +2.4%, MAS +2.2%, ARLP +2%, AOS +1.5%, LLY+1.5%, SIRI +1.2%, FIS +1%, IPAR +0.9%, (Inter Parfums reports prelim Q2 sales above consensus; on track to achieve 2016 net sales guidance), DD +0.9%, UTX +0.8%, ESRX +0.5%

M&A news:
  • SWHC +2.1% (Smith & Wesson to acquire Crimson Trace for $95.0 mln, subject to certain adjustments, utilizing cash on hand; expects the acquisition to be accretive to its EPS in fiscal 2017)
  • BUD +1.3% (Anheuser-Busch InBev (BUD) revises offer to GBP 45/share in cash (from GBP 44/share prior))
  • P +1.0% (following late surge higher -- reports that the company hired advisor for strategic options)
Select metals/mining stocks trading higher: GFI +4.2%, DRD +3%, RIO +2.2%, AKS +1.8%, HMY +1.7%, KGC +1.7%,BBL +1.7%, AG +1.6%, GOLD +1.5%, BHP +1.4%

Other news:
  • VKTX +11.7% (announces 'positive' top-line results from a proof-of-concept study of VK0214 in a mouse model of X-linked adrenoleukodystrophy)
  • SGY +8.6% (announces estimated production for the quarter ended June 30, 2016 of ~29 MBoe (174 MMcfe) per day, slightly above the upper end of guidance for the quarter)
  • BEAT +6.7% (to join S&P SmallCap 600)
  • ANCB +6% (Anchor Bancorp engages investment banking firm to assist it in identifying and evaluating various strategic options and operating scenarios)
  • MPEL +5% (following LVS earnings)
  • BT +4.6% (makes governance changes to further increase independence for Openreach), GALE +3.9% (files for 3,658,012 share common stock offering by selling shareholders)
  • RAVN +3.9% (to join S&P SmallCap 600)
  • NFLX +3.7% (following Director J. Hoag's disclosure of purchase of 600K shares worth ~$51.9 mln (was disclosed last night, purchases made 7/21-7/25))
  • WYNN +3.1% (following LVS earnings)
  • NXPI +1.9% (following TXN earnings)
  • MGM +1.4% (following LVS earnings)
  • MBFI +1.2% (to join S&P MidCap 400)
  • MXIM +1% (following TXN earnings)
  • ADI +0.9% (following TXN earnings)
Analyst comments:
  • SFM +3.3% (upgraded to Buy from Sell at Goldman)
  • FMSA +2% (upgraded to Outperform at Cowen)
  • JWN +1.8% (upgraded to Overweight from Neutral at Piper Jaffray)
  • LYG +1.7% (upgraded to Hold from Sell at Berenberg)
  • XXIA +1.6% (upgraded to Buy from Hold at Stifel)
  • KR +1.4% (upgraded to Buy from Neutral at Goldman; added to Conviction Buy List)
  • ALKS +1.1% (upgraded to Outperform from Market Perform at Cowen)
  • SBUX +1% (added to Conviction Buy List at Goldman)

FT : Orange earnings dip amid stiff competition in France

Orange earnings dip amid stiff competition in France
Orange reported a slight fall in second-half core earnings as France’s biggest telecoms group continued to endure stiff competition in its domestic mobile market.
The country’s largest mobile operator by subscribers said that restated earnings before interest, taxes, depreciation and amortisation (ebitda) was €5.91bn during the first six months of the year — down 0.6 per cent compared with a year earlier.

The figure was slightly below the €5.92bn average of analysts’ forecasts. The restated ebitda margin was 29.4 per cent during the period, a decline of 0.3 percentage points compared with the first half of last year.
However, Orange confirmed its full-year target of a higher restated ebitda compared with 2015.
Stéphane Richard, chairman and chief executive, said on Tuesday that the results “again confirm the group’s positive momentum” though he said that the performance “was achieved in markets that remain highly competitive, particularly France, which experienced aggressive promotional activity”.
Orange shares were down 1.2 per cent at €14.16 in early trading.
The operator said that group operating profit during the first half was €2.14bn, a decrease of €123m compared with the first six months of last year. Revenues were €20.01bn, up 0.3 per cent — though these were flat during the second quarter after increasing 0.6 per cent in the first three months.
In France, its biggest market but where competition among the four principal operators has been fierce, revenue from mobile services fell 5.2 per cent in the second quarter. That was more than the 2.4 per cent decline Orange reported in the first three months to the end of March.
However, the fall in revenue from mobile was partially offset by a 4.4 per cent increase in revenue from fixed broadband services in France.
Orange has been seeking to compete in its domestic market, which accounts for almost half of group revenue, on network quality and services.
A failed bid to buy Bouygues Telecom, the country’s third-biggest operator by mobile subscribers, has removed any short-term hope of market consolidation and increased the likelihood that competition will remain fierce.

In Spain, Orange said that revenues increased 6.2 per cent during the second quarter after growing 1.8 per cent in the first, confirming the country’s continued recovery.
In Africa and the Middle East, growth slowed to 2.3 per cent during the second quarter after increasing 4.4 per cent during the first. Orange said that it had 108.5m customers in the region at the end of June, a decrease of 0.4 per cent on a year earlier. It attributed the fall to strengthened requirements to verify the identities of customers in most countries.

>>> Caterpillar beats by $0.13, beats on revs; co sees FY16 forecast closer to b

Caterpillar beats by $0.13, beats on revs; co sees FY16 forecast closer to bottom end of prior guidance
  • Reports Q2 (Jun) earnings of $1.09 per share, excluding non-recurring items, $0.13 better than the Capital IQ Consensus of $0.96; revenues fell 16.0% year/year to $10.34 bln vs the $10.13 bln Capital IQ Consensus.
    • The decrease was primarily due to lower sales volume resulting from continued weak commodity prices globally and economic weakness in developing countries. While sales for both new equipment and aftermarket parts declined in all segments, most of the decrease was for new equipment. Unfavorable price realization also contributed to the decline
    • Sales declined in all regions
    • Sales declined in all regions
    • Mining, oil and gas, and rail industries remain challenged
    • However, co does has strong balance sheet ­-- Maintained $0.77 per share dividend (announced June 8, 2016)
  • Co sees FY16 forecast closer to bottom end of prior guidance; sees EPS at $3.70, excluding non-recurring items, vs. $3.53 Capital IQ Consensus Estimate; sees FY16 revs of $40-42 bln vs. $40.29 bln Capital IQ Consensus Estimate
  • More specifically, co said, "The outlook for 2016 that we provided with our first-quarter financial results in April expected sales and revenues in a range of $40 to $42 billion. At the midpoint of that range, profit was expected to be $3.00 per share, or $3.70 per share excluding restructuring costs. Over the past quarter, economic risks have persisted and, as a result, our current expectations for 2016 sales and revenues are closer to the bottom end of that outlook range."
  • Co also said, "World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve. Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexit outcome and the turmoil in Turkey add to risks, especially in Europe."

>>> JetBlue Airways beats by $0.04, reports revs in-line; co also will expand it

JetBlue Airways beats by $0.04, reports revs in-line; co also will expand its Mint experience by bringing 30 additional A321 aircraft into its fleet; co also announces west coast expansion
  • Reports Q2 (Jun) earnings of $0.53 per share, $0.04 better than the Capital IQ Consensus of $0.49; revenues rose 1.9% year/year to $1.64 bln vs the $1.64 bln Capital IQ Consensus.
  • Revenue passenger miles for Q2 increased 10.3% to 11.6 bln on a capacity increase of 11.1%, resulting in a load factor of 85.0%, a 0.6 point decrease YoY. Yield per passenger mile was 12.87 cents, down 9.9% YoY.
  • Passenger revenue per available seat mile (PRASM) for Q2 decreased 10.5% YoY to 10.94 cents and operating revenue per available seat mile (RASM) decreased 8.2% to 12.09 cents.
  • Operating expense per available seat mile (CASM) for Q2 decreased 9.9% YoY to 9.78 cents. Excluding fuel and profit sharing, CASM decreased 1.0% to 7.48 cents.
  • Mint expansion: JetBlue announces today it intends to further expand its highly successful Mint experience by amending its purchase agreement with Airbus to bring 30 additional A321 aircraft into its fleet over seven years. The additional aircraft will allow JetBlue to capture an opportunity to position itself as the carrier of choice in transcontinental markets with a targeted approach that leverages its east coast strength. Airbus is scheduled to deliver 15 incremental A321ceos starting in 2017.
  • West Coast Expansion: As west coast travelers face reduced options and less competition, JetBlue is quickly moving to organically strengthen its presence on a national scale with a leading transcontinental franchise between the west and east coasts. JetBlue's targeted approach will give the airline increased frequencies in high-value west coast markets, including the Bay Area and Los Angeles, while leveraging the strength of its east coast point of sale. In addition to JetBlue's intention to expand Mint to grow its west coast presence, JetBlue is strengthening its Long Beach (LGB) focus city with new all-core service.
  • Outlook: For Q3, CASM excluding fuel and profit sharing is expected to grow between 1% and 3%. For 2016, JetBlue continues to expect CASM excluding fuel and profit sharing to grow between zero and 1.5%. In Q3, capacity is expected to increase between 5.5% and 7.5%. For the full year 2016, JetBlue continues to expect capacity to increase between 8.0% and 9.5%.