What We're Reading

Having recommended DWA long earlier this month, I was thrilled to see this headline today.  Now we're beginning to see what Softbank will do with a portion of their profits from the Alibaba ($BABA) investment after their IPO last week.

According to Hollywood Reporter, Japanese conglomerate SoftBank is in talks to acquire DreamWorks Animation in a deal that would value the company at $3.4 billion, according to a source with knowledge of the situation. 

SoftBank has been in the news lately because of its $20 million investment in Chinese Internet giant Alibaba (BABA), a stake now worth a minimum of $60 billion. The sprawling company is considered undervalued and on Sept. 25, Jefferies Group LLC rated SoftBank as "a compelling buy opportunity."

DWA founder and CEO Jeffrey Katzenberg would sign a five-year contract to remain with the company, according to the source, who says the DWA board held an emergency meeting Thursday to consider the offer. SoftBank is said to have offered $32 a shar

When Jack Ma founded the Chinese e-commerce company Alibaba in 1999, one of his stated goals was to build a company that will last for at least 102 years so that it would span from the 20th to the 22nd centuries. Now with products, technology and marketing -- what Alibaba has done is a great combination of all three.

Chinese ecommerce giant Alibaba ($BABA) is expected to begin an eagerly awaited roadshow for what could be the largest ever IPO early in the week of September 8, and its shares could list as soon as September 18 or 19, according to a person familiar with the situation.

Expected to raise about $20bn when it lists on the NYSE rivaling the Agricultural Bank of China’s $22.1bn IPO from July 2010, currently the largest on record.

Alibaba’s ability to make a transition to mobile has been a focus of analysts and investors as China’s tech groups square off for customers glued to smartphones. Last week, the company announced a surge in mobile revenues for the second quarter.

A tenf

If you're one of the many waiting for Alibaba's IPO, you may wish to take a look at the latest recommendation from U.S. regulators when it comes to investing in Chinese names.

In May 2014, Alibaba, China’s leading e-commerce website, filed for a U.S.-based initial public offering (IPO) in what is expected to be one of the largest in U.S. history. The highly anticipated IPO will be just one in a recent wave of Chinese Internet companies launching IPOs in the United States. The trend has raised some misgivings among U.S. regulators about the corporate structures of these companies. To bypass Chinese government restrictions on foreign investment in the Internet sector, Chinese Internet companies use a complex and highly risky mechanism known as a Variable Interest Entity (VIE).

Read the FULL report

• MIT on unfilled job vacancies says “You do need skills, but they are within reach of most Americans.”  http://newsoffice.mit.edu/2013/mit-pie-conference-0924

• Analysts return from SPLK conference with high praise http://seekingalpha.com/news/1757723-analysts-return-from-splunk-conference-with-high-praise

• After Fridays' close CME changed margin requirements on Coal, Crude Oil, Electricity, Equity Index, Metals, and NGLs Outrights- Effective Friday, May 16, 2014 http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv14-192.pdf

• Iron ore prices drop below $100 as China cools it’s housing sector and focuses on it’s consumers http://www.bloomberg.com/news/2014-05-19/iron-ore-drops-below-100-for-first-time-since-2012.html

• Alibaba rep tells FOX they’re looking at July or August for their IPO

This day in 1825: One of the earliest buying frenzies for an American IPO is reported, as the Bank of Southwark goes public in Philadelphia. Investors hire muscular goons to sign their names into the subscription books that confer the right to buy shares, and “noses were smashed, hats jammed in, and the police court was at work over the wounded for weeks after.”  Source: Walter Werner and Steven Smith, Wall Street (Columbia University Press, New York, 1991), p. 223; James K. Medbery, Men and Mysteries of Wall Street (Fields, Osgood & Co., Boston, 1870; reprinted, Fraser Publishing Co., Wells, VT, 1968) p. 291. 

• For you "pirates" at heart, Bloomberg says treasure hunting is the worlds worst investment.
• Massive profit taking still being seen in previous momentum names.  As Kos said previously, she didn't think the "correction" was over for small caps and tech .  If anything Kos is hoping for a move higher to add to her shorts at overhead resistance levels.
• If feels good for actual short

1999: Priceline.com, ($PCLN) which had gone public at $16 a share exactly one month earlier, closes the day at $162.375 -- giving the tiny Internet company a one-month return of 914.8% and a total market value of $23 billion. It's probably the fastest and stupidest stock run-up yet recorded. But it's all downhill from here, as Priceline.com ends up losing 99% of its value by the end of 2000.

Fast forward 15 years and everyone books airfares and hotels online.  Everyone.  PCLN closing price yesterday was $1154.84 after reaching an all time high of $1378.96.  Oh to have bought that dip!

Was TWTR the tech top in the recent bull market?  Will we reach a new high and wait for Alibaba?  Are we in a Fed-induced bubble or as Einhorn states, only in select areas?  What are your thoughts?

Data courtesy of JasonZweig

• The SEC is investigating electronic bonds prices and why some are hidden from view.  Are customers truly receiving "best price"?
• Hands down the best explanation or deciphering I have seen on Fed policy, Yellen's statement and QE taper. (hat tip GT) CWS Market Review
• Marked weakness continues in biotech and technology names.  Rotation into financials and oil&gas names?  We think so.
• With hopes for SGR (Sustainable Growth Rate) reform dashed, physicians prepare for a 24% pay cut effective April 1, 2014.
• Bank stress tests are out and worst case scenario?  A mere $501 Billion in losses to the Fed.  What could go wrong?  They can always file Bankruptcy like everyone else.  *lol*
• Take Yahoo, minus out it's stake in Alibaba and Yahoo Japan and what's left.............is worthless. Ritholtz (click to enlarge image)
• If you do NOT feel the biotech bubble has burst and you merely feel this is some profit taking and rotation into other sectors, here's a list of the biggest biotech l