Wednesday, March 3, 2010

Intra-day action (NOVL,ETH, MDVN, PFE)

US indexes are up about a third of a percent, possibly driven by a better than expected ISM report on the service sector. The Institute for Supply Management's services gauge reading of 53 was higher than the expected reading of 50.5.

Among gainers today is software firm Novell (NOVL), up 27% on a "casual" buyout offer from 8.5% shareholder Elliott International. I explained why it seemed casual last night, and other analysts are skeptical of this deal as well.

Home furnishings firm Ethan Allen Interiors (ETH) "commented" on current business trends last night. They'll be meeting with investors March 9th at a conference, so wanted to update the entire investment community ahead of that. They said that "written sales" - a loose way to predict upcoming sales results - were up 25% in the first two months of 2010 compared to 2009, in part due to improvements in marketing campaigns. The current consensus revenue estimate for the March quarter is for a sales increase of just 2.7%, which is why the shares are flying 19.4% on the news...

Leading the losers is San Francisco-based Medivation (MDVN), down a disastrous 68% today. Shares are trading at 12.98, off from 40.25 yesterday, after the company released horrible results for phase 3 CONNECTION studies of their Dimebon Alzheimer's drug. Pfizer, their partner in the study, is off just 1%

“The results from the CONNECTION study are unexpected, and we are disappointed for the Alzheimer’s community,” said Dr. David Hung, president and chief executive officer of Medivation. “We are working with our colleagues at Pfizer to better understand the CONNECTION data and we plan to present these data at an upcoming medical meeting.”
The above quoted CEO, David Hung, is seeing a personal loss of $36million today, just based on his stock ownership, ignoring options exposure...

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