Insiders' Blog

The Great Stock Hope (aka AIG) Gets a Lifeline Nov 10, 2009 01:20PM

American International Group, Inc. (NYSE: AIG) is higher today after comments from Moody's late yesterday which suggested that if markets continue to stabilize the company may be able to fully repay the government's senior secured loan and much or all of its preferred equity stake.

As would be expected, speculators have viewed this news as extremely positive. The thinking here is that if AIG can get out from under the government's thumb then the common shares could have some value. Until this report, speculation that the common would have value was based on just one thing - HOPE. Now that the hope is in writing, which gives it some credence. Something for longs to hold onto, nurture and cherish.

But analysts at Credit Suisse are saying not so fast. They claim the Moody's news is likely positive for AIG bondholders but that its not clear whether it is positive for the common equity. The firm claims that if AIG does have the wherewithal to payback the government, then there won't be much of an incentive for the government to restructure its deal with the company. Credit Suisse also highlighted Moody's caveat that the ratings could be lowered if they perceive a decline in realizable values.

Shares of AIG are up 4.45 percent to 37.72, but off the day's high of $39.35.

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Activision Blizzard's (ATVI) New "Call of Duty" Has Gamers Buzzing, But Stock Flat Nov 10, 2009 12:52PM

The gaming industry, specifically publisher Activision Blizzard Inc. (Nasdag: ATVI), got a boost today with the release of the highly-anticipated game "Call of Duty: Modern Warfare 2" to millions of eager fans.

The sequel to the 2007 Game of the Year hit is expected to be one of the biggest and fastest selling games of all time, set to rival the records set by the "Grand Theft Auto" series. The original game has sold over 13 million copies since its release.

The new first-person-shooter game could not come at a better time, as the video game industry has been hit hard by tough economic times, with sales of video games down in the U.S by 13 percent this year according to a report from Reuters.

The game is not expected to have the impact internationally that the GTA series did due to the first-person-shooter genre being popular in fewer regions. However the United States and the United Kingdom are expected to welcome the game with open arms.

"By all indicators, we anticipate Call of Duty: Modern Warfare 2 will be the biggest entertainment launch of all time. As of today, the number of pre-order reservations we've taken for the game is the highest for any title we've ever sold in our 6,200 store network," said Tony Bartel, Executive VP of merchandising and marketing with GameStop Corp. (NYSE: GME).

Activision Blizzard, who also publishes the popular Guitar Hero and World of Warcraft series, teamed up with more than 10,000 GameStop and Best Buy (NYSE: BBY) stores for a midnight release of the game.

The game comes out ahead of other industry charging titles next week, including Ubisoft's "Assassin's Creed II," and Valve's "Left 4 Dead 2."

All three of these potential holiday hits have been rated Mature for violence and blood. Also Nintendo's Wii will not support any of the titles, surely helping to push sales of Microsoft's (Nasdaq: MSFT) Xbox and Sony's (NYSE: SNE) PlayStation 3.

The release of Activision's new sure-thing comes the day after Electronic Arts (Nasdaq: ERTS) reported losses for its second quarter. EA plans to continue to restructure its business, including cutting 1,500 jobs by the end of March 2010. Shares of EA have decline 6.8 percent following the news.

Activision Blizzard has not seen an immediate positive impact from the big release as its shares are down 0.50 percent to $11.49 in midday market trading. Sony is down 1.36 percent to $29.09. Microsoft is slightly down 0.21 percent to $28.93.

Energy Conversion Devices (ENER) Shares Continue Lower as JPMorgan, Citi Downgrade Nov 10, 2009 11:14AM

Following its Q3 earnings, reported yesterday before the market opened, shares of Energy Conversion Devices (Nasdaq: ENER) sold-off in the last hour or so of trading, closing the session down nearly 5%. Today, the stock is continuing lower (down 3.2%) as we have several analyst firms which downgraded the stock this morning:

• JPMorgan lowered its investment rating on ENER from Overweight to Neutral, also cutting the price target from $26 to $15
  
• Citi moved its rating on the solar-company's stock from Hold to Sell, also lowered its price target from $12 to $7

With the stock around $10.56 today, JPMorgan's new price target represents potential upside of about 42%, while Citi's new target represents potential downside of about 33%.

To see all the market-moving upgrades/downgrades on shares of Energy Conversion Devices in real-time, visit our Analyst Ratings page.

Energy Conversion Devices, Inc. engages in the design, manufacture, and sale of photovoltaic (PV) products.

Moody's Suggests AIG (AIG) Could Repay the U.S. Nov 9, 2009 06:16PM

In a report out today on AIG (NYSE: AIG), following the bailed-out insurers third quarter results, credit rating agency Moody's suggested that if markets continue to stabilize the company may be able to fully repay the government's senior secured loan and much or all of its preferred equity stake.
While Moody's is making this surprising revelation, they warn that a material decline in the realizable values of AIG's assets could reduce the government's incentive to support other creditor.

Moody's is maintaining their current ratings and outlook on AIG, but said the ratings could be lowered if they perceive a decline in realizable values.

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Buffett's Berkshire To Sell 9.6M Share Stake in Union Pacific (UNP) and 1.9M Share Stake In Norfolk Southern (NSC) Nov 9, 2009 03:54PM

Reports from the Associated Press, Warren Buffett's Berkshire Hathaway (NYSE: BRK.a) will sell its stakes in Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) before it completes its $26.3 billion acquisition of Burlington Northern Santa Fe Corp (NYSE: BNI).

Berkshire owns 9,558,000 shares of Union Pacific and 1,933,000 shares of Norfolk Southern.

This was widely expected as the stakes would likely raise anti-trust concerns.