Microsoft, Yahoo, Motorola, Blockbuster, Zell And Icahn, Too
Read more articles on Movies, visual media and Investing.April 25, 2008
Posted by neillevine
April 25, 2008
Posted by neillevine
170 Views
There is good news coming soon for people who make money using capital. The Federal Reserve appears headed towards cutting interest rates a little bit more and those legendary three hundred dollar tax rebate checks that everyone has heard about, no matter what their opinion on the matter happens to be, are going to start going out next week to deserving poor tax payers and anybody else who happens to receive them.
This should mean good news for the stock market as more money in circulation should be stimulatory resulting in a rally based on improving economic data paid for with tax refund checks.
Unfortunately, for me, at the moment I am not analyzing a variety of individual stocks from the point of view of turning a profit. Rather I am analyzing financial stories to see where they are going, what they mean and what is the eventual profit potential.
The most interesting story is the Microsoft, MSFT, Yahoo, YHOO, potential merger dance. Since I view this as in Microsoft’s best financial interest, I would expect Bill Gates and Steve Ballmer to pursue their quarry with relentless business zeal until they achieve their ultimate goal of conquest and merger. Unfortunately, I think both stocks are fully priced so any gains from investing would have to be long term.
On the other hand, Carl Icahn continues to be an active investor. Motorola, MOT, appears ready to release new models, including one that easily morphs between phone and web surfing and video that sounds like it will attract a paying crowd. Then there is the Blockbuster, BBI offer for Circuit City, CC. Despite the skeptical remarks made by some experienced financial analysts I think the potential to sell some video devices in Blockbuster stores and whatever Blockbuster products can be moved in Circuit City stores has upside potential. I look at sales of one hundred dollar video players and thousand dollar television sets as a move into a more upscale market for the Blockbuster video chain especially compared to selling twenty dollar videos and five dollar rental discs.
Finally, Sam Zell’s strategy for making money with his Tribune acquisition appears to be to sell off the assets and reap capital gains profits. He has begun by selling Newsday, the Long Island, New York paper to News Corporation, owner of the New York Post. Soon to be sold will the Chicago Cubs, Tribune Broadcasting and the like as he did when he flipped Jacor to Clear Channel.
When watching the stock market it clearly pays to just follow the money. For purposes of comparison, I want to note that the Dow settled at 12,891. The Standard & Poor’s at 1,397 and the Nasdaq settled at 2,422.
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