Thursday, July 21, 2005

Morning Update

"The difficulties and struggles of today are but the price we must pay for the accomplishments and victories of tomorrow." - William J. Boetcker

Morning News of Note:
  • MSFT: Microsoft to Pay Undisclosed Sum for FrontBridge Microsoft Corp. said it plans to buy closely held FrontBridge Technologies Inc., in a deal that furthers the big software maker's push into corporate computer security. Microsoft, Redmond, Wash., said yesterday that it expects the deal to close in the third quarter, following regulatory approval. Terms weren't disclosed. FrontBridge, which has developed technology for protecting and managing email, is based in Marina Del Rey, Calif., and has funding from Sierra Ventures and BA Venture Partners. The company, formerly called Big Fish Communications, was founded in late 1999 and has 160 employees. (Full Story) WSJ
  • Cell Phone Billing: Cellphone Firms Accused Of Billing for Unwanted Ads A California consumer group has filed a complaint with the state Public Utilities Commission alleging that Sprint Corp. and Cingular Wireless are improperly charging customers for cellphone messages they don't want. The Utility Consumers' Action Network, based in San Diego, told the state's Public Utilities Commission it had received complaints from consumers who said they had been billed by the companies for unwanted text messages, ringtones and advertisements. The group said it is trying to get regulators to stop the practice. (Full Story) WSJ
  • TTWO: Grand Theft Auto Videogame Is Handed Adults-Only Label In a major embarrassment for Take-Two Interactive Software Inc., the videogame industry's rating board slapped an adults-only rating on its popular Grand Theft Auto: San Andreas after the group found sexually explicit content hidden within the game. The Entertainment Software Rating Board advised retailers to pull the videogame off store shelves until Take-Two can place new adults-only ratings stickers on the game's packaging or release new discs without the objectionable material. As a result, Take-Two of New York sharply reduced its financial forecasts for its current quarter. (Full Story) WSJ
  • EBAY Conference Call: EBAY says that both U.S. and Germany generated accelerated gross merchandise volume, even though Germany total revs rose 21% vs. 24% in Q1 (co was pleased, considering G.M.V. was less than expected in Q1). Int'l revs rose 51% to $418.8 mln, with U.K. up 94% and Korea up 78%. Co adds that PayPal reported accelerated volume, net revs of $244 mln, up 51% vs. 47% in Q1. We note int'l revs rose 51% to $418.8 mln; int'l represented 52% of users. Co also notes launch of PayPal China, integration of that offering with NTES and TOMO. Analysts note transaction revs per listing that rose about 3% sequentially; co says almost all of the growth is volume-driven. Co notes increase in average selling prices, as well as "robust" conversion rates. Co also notes that its next-gen Magellan search technology will be rolled out over the next few mos, adding to conversion rates.
  • Yuan Revaluation: The timing of the announcement by China it would revalue the yuan away from just a dollar peg to a basket of currencies was a surprise. The impact makes Chinese goods into the US slightly more expensive and American goods less expensive for the Chinese. The move is in-line with market speculations but the reval itself is relatively small at about 2%. The key point is the yuan will move away from the dollar peg towards a basket of currencies, but a key question is what is the composition of this basket? The currency markets are clearly thinking the Chinese will include currencies from its trading partners which is the reasoning behind the moves in the Asian currencies and weakness in the dollar.


Market Comments: The market has opened slightly down this am, possibly due in part to the news of more bombings in London. eBay reported stellar results last night, and the stock is up big. FFIV and VRSN reported disappointing results, and their stocks are getting hit the hardest.

Companies reporting tonight include BRCM, GOOG, and MSFT. So look for more market moving news to come out of these earnings reports.

long BRCM, MSFT

1 Comments:

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