Mr. Sensitive

June 18, 2011

FSX Friday Update

Filed under: Uncategorized — lbej @ 08:00

Slight delay this week due to me being a little bit of a weepy baby.  Sorry about that.

Well, that was the quickest bubble I’ve ever seen.  The hoopla around social media looked like it was going to inflate a brand new bubble on the scale of the late ‘90s when, if you recall, having a website is what passed for a business model.  Two weeks ago when LinkedIn priced its IPO at $40, the stock opened for trading at $80 and closed above $100, valuing the company at more than $9 billion.  Early this week, news broke that the most recent private capital investments in social media goliath and scourge-of-humanity Facebook valued the company at more than $100 billion.  On Wednesday, the interactive internet radio company Pandora came public (with the audacious ticker symbol P, no less), having priced its offering at $16 after expecting to price at $8 as recently as last week.  The stock then opened at $20 and quickly moved up to $26, valuing this money-losing company at nearly $4 billion.  Then something amazing happened: investors balked.  Pandora traded steadily lower throughout the day, closing just above $17.  On Thursday, CNBC blew my mind by interviewing an analyst who actually had an aggressive sell(!) rating on the stock and a price target of $5.50.  When trading wrapped for the day, P was down more than 20% to $13.26.  Here’s what it means: the company and its underwriters thought they could get $8 for its shares last week; a speculator tempest allowed them to raise the price to $16, putting more than $230 million in the company’s bank account; investors who couldn’t get shares from their brokers at the IPO price flooded the market when the stock began trading, bidding it up to $26; minds that were lost were suddenly found; now every member of the public who bought shares of Pandora (and held them) is underwater.  Now are you excited about paying $100 billion for Facebook?  You still have to get in line, but that line is a good bit shorter now than just a few days ago.

The market still stinks.  While I admit that most of the economic headlines are negative, I find it increasingly amusing to check Bloomberg or CNBC to read the headline explanation for the market’s decline.  It’s ‘Stocks Down On Greek Worries,’ or ‘Stocks Struggle After Weak Housing Data,’ or ‘Stocks Down On Budget Impasse.’  What a load of crap that is.  The biggest negative for most stocks right now is the price of the stocks themselves—they’re too high.  Just once, I want to see the headline, ‘Stock Prices Decline On Declining Stock Prices.’

The S&P was volatile but unconvincing this week, up less than one point when all was said and done.  The Family Stock Index got out ahead of the broader market at the open on Monday and held a lead throughout, closing up 0.2% to 1205.60.  The internals were favorable as well, with advancers besting decliners 14 to 9.  We are now solidly above the 200-day MA and back into the green for 2011.  I wouldn’t jump in with both feet yet, but it does feel like we’re beginning to form a bottom.

Advancers

  • Dustin (DST) +7.1%.  Up as much as 25% earlier in the week, Dustin has backed off from near $60 to the neighborhood of $51-$53.  Speculation was rampant that he was a prime target for a buyout, given his decent growth prospects and a price-to-earnings multiple in the single digits.  Dustin has always been pretty inscrutable to me, but I feel safe saying that if the market is waiting for him to sell out, it’s going to be waiting for a long time.  Hence the quick realization among investors that DST isn’t likely to be on the auction block in the near future.
  • Jenny (LEN) +4.6%.  On some level, she cares.  But sometimes that level is lower (and thinner) than at other times.  I don’t know what Jenny is up to apart from what little Katie has said, and, unlike her sister, I doubt she will have any interest in bringing me up to speed.  Curse this vacationary estrangement!  Jenny is up solidly, though, so I can only assume the beach experience is pleasant enough.  I can only assume, of course, because my children don’t care to speak to me while they’re gone.  And if you think I won’t remember that, you don’t know me very well.
  • Zondro (ZRAN) +4.0%.  Zondro leapt 18% higher on Friday following news that the British firm that’s buying him is reducing the value of its offer by 30%.  Why is this good news?  Because the market had already lopped 45% off the stock price in the last two months, betting that the Brits would be even stingier, provided they didn’t call off the deal altogether.  From a furry standpoint, I would say that Zondro is enjoying his visit with Icarus more than he’s hating it, although it is strictly one or the other, and the balance is precarious.
  • Katie (CATY) +3.6.  I expect this gain is primarily pecuniary, as that was the point of this whole week in Hilton Head.  I like to think the Empress isn’t 5% happier without me.  I like to think that, and sometimes I actually do.
  • Mario T.Y. (SUP +2.5%) and Nicole L. (COL +2.7%).  Well this is embarrassing.  I get all my Mario scuttlebutt from Katie, and with no Katie, I have no idea what could be fueling the Mario rally.  With muted gains in the 2.5-3% range it seems unlikely that Mario won a new car in a raffle, but neither would I expect that he drove the car he has off a cliff.  Maybe he won some Hot Wheels cars in a raffle?  I used to love those things.
  • Charlotte (ICE) +2.0%.  The sparse Charlotte data I’ve been receiving from the beach suggested to me that my children are running Charlotte ragged.  That said, all the ragged running has been happening in a lovely place far away from Chicago.  Thus, the action in Charlotte has been to the upside all week, nieces notwithstanding.

Decliners

  • Brinkley (BCO) -2.4%.  Thank you for the gesture of solidarity, baby son.  I miss you too.
  • Ruby (RBY) -2.4%.  I’ll chip in for one of those hover chairs if she still can’t straighten up by next week.
  • LEE -5.3%.  If the pond or the fish therein had a stock in the FSX, that stock would be soaring this week.  Me, not so much with the soaring.  Still, there’s been less crashing than I feared, and this dreadful week alone will be over tomorrow.  It’s been really good to hang out with my little brother, but I’m lost without Katie.
  • Winston (HWD) -6.4%.  Every other animal in the FSX is here and it is a nonstop fur party.  Some of the fur is the fur of fury, but furious fur is better sometimes than lonely fur. I feel your pain, single dog, I really do.
  • Lucas (LEI) -12.7%.  This theme is nearly cogent enough to be investible.  Like Winston, unable to attend the dog party, Lucas was forced to sit out this week’s Machi grandkid beach shindig.  He’ll be in on the next one, but good luck getting me to hand over my son again anytime soon.  It’s probably just as well; three grandkids at one time has got to be near to capacity.
Name Ticker 6/17/2011 Change
Brinkley BCO $27.02 -0.67
Charlotte ICE $118.11 +2.32
Dustin DST $51.10 +3.38
Icarus FLOW $3.64 +0.06
Jenny LEN $17.46 +0.77
Justin WOLF $2.88 +0.01
Katie CATY $15.68 +0.55
Lee LEE $0.90 -0.05
Lisa LSI $6.75 -0.06
Lucas LEI $2.61 -0.38
Lulu LULU $93.38 +3.44
Marcus MCS $9.89 +0.09
Mario T.E. PBY $10.65 +0.04
Mario T.Y. SUP $20.25 +0.49
Marisa MOLX $24.95 -0.09
Nicole B. NI $19.50 +0.10
Nicole L. COL $60.25 +1.58
Reagan REGN $54.02 -0.56
Ruby RBY $3.98 -0.20
Wilson WILC $7.11 -0.08
Winston HWD $15.31 -1.05
Zero FRZ $2.85 +0.05
Zondro ZRAN $8.29 +0.32
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4 Comments »

  1. Your family is on the way home! Brinkley and I had a lot of good bonding time. I believe he’s the cutest baby ever. The girls spent most of their time with Grandpa and appeared to have a good time

    Comment by Ruby — June 18, 2011 @ 12:58 | Reply

  2. I don’t know where you were getting your data, but the girls didn’t run me ragged! I had an awesome time with them! We spent the entire time together, and I loved every second of it. I adore them. I’m not sure everyone understands my demeanor at times, and it’s important to remember that I’m almost always tired. The girls don’t make me that way. If you ask me, the ocean bumped up my stock a bit, because of course it did, but the main reason I was up this week was that I got to spend every day hanging out with two of my favorite people in the entire world.

    Comment by Sis — June 20, 2011 @ 11:04 | Reply

    • I’m pulling my data out of thin air, always. Sounds like you’re a little defensive, and that’s surprising to me, because I wasn’t aware that I had attacked (not this time, at least). Nobody thinks you didn’t have fun with J&R, and ragged is a perfectly respectable place to end up after wrangling those two for a week. I’ve been back on Brinkley duty for less than half a day, and I feel like I barely got a glimpse of ragged on my way to busted. I understand your demeanor better than you think, even if I convey that less effectively than I intend. I love you and you’re an awesome aunt. It’s just too bad you’re so fat.

      Comment by lbej — June 20, 2011 @ 11:25 | Reply

      • I think you understand my demeanor. I thought perhaps your spy on the inside didn’t, but now I see no such spy existed. I was only defensive because I just don’t want anyone for even a second to think that I don’t love every moment with my nieces, even the moments when they’re purposefully trying to annoy me.

        Comment by Sis — June 20, 2011 @ 12:30


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