Thursday, March 11, 2010

Intra-day action



US stocks are flat with an hour and half left in the trading day.  Senator Chris Dodd plans to offer his own financial regulation bill ,after failing to find agreement with the GOP.  Bank stocks are not showing much of a reaction.


Satellite imagery firm GeoEye (GEOY) is up 16% today.  In order to be considered for a lucrative new contract with the National Geospatial-Intelligence Agency, GeoEye needed to be backed up with an ironclad letter of credit.  They received that in a transaction announced last night with Cerberus Capital Management, which also consisted of some warrants - to be expected.  Importantly, the warrant strike price is $30, about 20% above yesterday's close.  That compares favorably with other warrant-laden financings that peg the strike price far too low, essentially giving away stockholder cash.


Columbus Georgia-based Synovus Financial (SNV) gave a presentation today in which they said 2010 will see a return to profitability.  A good portion of the analysts following the company are still modelling in losses for this year, so investors are anticipating an uptick in earnings estimates.  Shares are +10.3%.




Houston oil and gas services firm Wilbros Group is off 13% today.  They missed earnings expectations by 6cents despite beating revenue by almost twenty million dollars.  The shares are also being pressured by the announced $480million acquisition of privately held InfrastruX Group.  Part of the transaction will consist of 7.9million yet-to-be-issued new Wilbros shares, which is the main reason for today's selloff.  The deal looks to be at about 1x sales, compared to Wilbros Valuation of  about .35x sales.  Ugly.


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