Ultimate Market Recap: Twitter Stalls on IPO in Wake of Facebook Folly, Big Lots in Big Turmoil

Wall St. Brief: Apple is BLEEDING Money, Cisco and EMC Are Falling APART

Apple (NASDAQ:AAPL) is paying large amounts for prosecuting against its Android rivals, such as its Motorola ITC dispute which has cost $32 million in legal fees while other large patent cases have hit $25 million. Apple’s South Korean global IP conflict with Samsung (SSNLF.PK) has ended with the ruling that Apple violated two patents and Samsung one; small damages had been awarded to each.

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Twitter is “reevaluating the timing” of its IPO after the Facebook (NASDAQ:FB) collapse, reported Fox. CEO Dick Costolo has suggested  Twitter is in not in a hurry to go public. Meanwhile, Facebook’s efforts to increase institutional support may be failing: Eyebrows have been raised after COO Sheryl Sandberg reportedly told an investor that Facebook’s $38 IPO price came from an effort to discourage short-term traders.

Salesforce (NYSE:CRM) shares have dropped 4.61 percent in premarket trading after announcing its fiscal quarter three earnings per share guidance was lower than consensus thanks to foreign exchange fluctuations and slowing European technology spending. Its investment in growth and price war with competitors may also affect margins. On a positive note, Saleforce’s fiscal second quarter earnings exceeded expectations with its widening $9.9 million losses, up from $4.3 million. Earnings per share was $0.42 with revenue increasing 34 percent to $731.6 million.

Cisco (NASDAQ:CSCO) and EMC (NYSE:EMC) keep saying the right thing but their relationship is unraveling, reported Reuters.  Their VCE joint venture hasn’t shown a profit and they are mulling whether to either buy or partner with rivals. This can be seen in Cisco’s $750 million deal to purchase Nicira while EMC’s VMware (NYSE:VMW) had outbid them.

General Growth Properties’ (NYSE:GGP) biggest shareholder, Brookfield Asset Management (NYSE:BAM) has said its neither interested in selling its 40 percent share in the company nor attempting to buy it. These comments came after Bill Ackman’s Pershing, which owns 10 percent of Brookfield, had said it had tried to purchase General Growth, and subsequently asked the firm to put up a for sale sign.

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Eli Lilly FALLS SHORT of Endpoint Goals and 4 Hot Stocks Driving the Market

salesforce.com, inc. (NYSE:CRM) revenue for the company’s full fiscal year 2013 is expected to be in the range of $3.025 billion to $3.035 billion, which is a 33 percent to 34 percent rise year-over-year. Shares of salesforce.com, inc. are trading 0.25% higher today.

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The Madison Square Garden Co (NASDAQ:MSG) reports a Q4 MSG Entertainment revenue totaling $50.8 million compared to $36 million. MSG Sports revenue totaled $131.2 million compared to $75.4 million. Shares of The Madison Square Garden Co are trading 5.07% higher today.

Eli Lilly & Co. (NYSE:LLY) announced that the primary endpoints, both cognitive and functional, were not reached in either of the two Phase 3, double-blind, placebo-controlled solanezumab EXPEDITION trials in patients suffering from mild-to-moderate Alzheimer’s disease. On the other hand, a pre-specified secondary analysis of pooled data across both trials indicated statistically significant slowing of cognitive decline within the overall study population of patients suffering from mild-to-moderate Alzheimer’s disease. Also, pre-specified secondary subgroup analyses of pooled data across both studies indicated a statistically significant slowing of cognitive decline in patients suffering from mild Alzheimer’s disease, but not in patients with moderate Alzheimer’s disease. Adverse events with an incidence of a minimum of 1 percent which occurred statistically significantly more in the solanezumab group than in the placebo group were lethargy, rash, and malaise in EXPEDITION1 and angina in EXPEDITION2. An ongoing, open-label extension study, EXPEDITION-EXT, has been fully enrolled and will continue as planned. “We recognize that the solanezumab studies did not meet their primary endpoints, but we are encouraged by the pooled data that appear to show a slowing of cognitive decline,” stated John C. Lechleiter, Ph.D., chairman, president and CEO, Lilly. “We intend to discuss these data with regulatory authorities to gain their insights on potential next steps.” Shares of Eli Lilly & Co. are trading 2.71% higher today.

The Hain Celestial Group, Inc. (NASDAQ:HAIN) shares jumped 16 percent to $66.11 during early Thursday following the organic foods marketer’s statement that it intends to purchase certain packaged food lines from U.K.-based Premier Foods PLC for nearly $318 million in cash and stock. The deal should close by October’s end, and could add nearly 25 cents a share to Hain’s fiscal 2013 earnings. Shares of The Hain Celestial Group, Inc. are trading 2.73% higher today.

Bank of America (NYSE:BAC): SEC member Luis Aguilar has decided to vote against new rules regarding money-market funds when he learned on vacation that that SEC Chairman Mary Schapiro’s office offered lawmakers a report concerning the risks of money funds that he thought were misleading, according to the Wall Street Journal. Shares of Bank of America are trading 0.27% higher today.

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Big Lots PLAGUED by Weak Outlook and 4 Hot Stocks Attracting Attention

Autodesk, Inc. (NASDAQ:ADSK) has been downgraded by Canaccord Genuity to “hold” from “buy,” after the software maker lowered its current-quarter sales outlook due to weak demand, and a minimum of two other brokerages reduced their price targets on the stock. Shares of the company were prepared to open 22 percent lower on Friday. The stock closed at $35.71 on the Nasdaq on Thursday. Shares of Autodesk, Inc. are trading 15.78% lower today.

Aruba Networks, Inc. (NASDAQ:ARUN), a maker of components for mobile devices, rose the most in a year following reports of its fiscal Q4 sales and profit which surpassed the company’s forecast and analysts’ estimates. The shares saw an 18 percent increase to $19.92 at 10:26 a.m. in New York, and earlier, reached $20.20 for the biggest increase since Aug. 26, 2011. Through yesterday, the stock had dropped 8.6 percent for the year. Shares of Aruba Networks, Inc. are trading 16.49% higher today.

General Growth Properties Inc (NYSE:GGP): Brookfield Asset Management (NYSE:BAM) has mentioned a Schedule 13D filing with the SEC that was made by Pershing Square referencing a letter sent by it to the Board of Directors of General Growth Properties, or GGP. Brookfield states: “Brookfield is not taking any steps to acquire GGP nor is it having any discussions with third parties in that regard. Brookfield has no interest in selling its stake in GGP. We are 100% supportive of the current management team of GGP and believe that GGP’s business plan has and will continue to create significant long term value for all stakeholders. When Brookfield was chosen as an investor in GGP, it was explicitly on the basis that we were a long term investor. We have invested considerable capital, time and attention to support management and the Board as they enhance the value of GGP for all concerned.” The results to date are a testimony to their success. Through the past 12 months, at the request of Pershing Square, Brookfield has both considered and discussed several possible transactions which would facilitate Pershing Square’s wish to maximize the value of and create liquidity for its interest in GGP. These discussions have ceased. Brookfield owns nearly 40 percent of GGP with a value of more than $8 billion. Shares of General Growth Properties Inc are trading 4.18% lower today.

Big Lots, Inc. (NYSE:BIG) reported disappointing earnings yesterday for its Q2 and a weak outlook for the year, which causes shares to fall nearly 21 percent. Additionally, the Columbus-based closeout retailer announced an executive shake-up, which is to include the return of its former merchandising executive to his old post and the acceptance of the resignation of its executive vice president of merchandising. Shares of Big Lots, Inc. are trading 2.60% lower today.

Alliance Data Systems Corporation (NYSE:ADS) stated that delinquencies and charge-offs dropped in July from the previous year for the private-label cards it oversees. The company operates loyalty-program and private-label credit cards, which oversee accounts for retailers including Victoria’s Secret, Ann Taylor and Pottery Barn. Charge-offs dropped to 4.7 percent, from 6.2 percent the previous year but were flat from June. The percentage of accounts more than 30 days delinquent was down at 4 percent versus 4.7 percent the previous year and in June. Shares of Alliance Data Systems Corporation are trading 0.77% higher today.

Apple Awaits its FATE and 4 Hot Stocks to Watch

Apple Inc. (NASDAQ:AAPL):  An epic patent battle involving the world’s two largest technology companies and some of the most popular gadgets on the market now rests with nine jurors in California. A verdict could come at any time, but given the case’s complexity, few expect a decision before the middle of next week. No matter how the jury decides, the fight won’t be over. The companies are virtually guaranteed to appeal the rulings they lost.

Facebook, Inc. (NASDAQ:FB):  According to the Wall Street Journal, United States mutual funds, run by Morgan Stanley (NYSE:MS), the lead underwriter in Facebook, Inc.’s (NASDAQ:FB) $16 billion initial public offering, have disproportionately high investments in the social-media company, leaving fund shareholders exposed to the stock’s decline.

AT&T, Inc. (NYSE:T):  Registration has opened for DevLab by AT&T, a one-day, hands-on programming workshop for developers, providing technical information about the latest services and tools for mobile application development. DevLab will take place September 25 at the Computer History Museum in Mountain View, California. Developers can learn more and register at http://2012devlab.com.

Nokia Corporation (NYSE:NOK):  Verizon Communications (NYSE:VZ) will be backing Nokia’s new Lumia, high-end  smart phone once they are released next month. They will be attending Nokia’s annual event on September 5, but will not actually be able to sell the phones for a few months, due to an exclusivity agreement between Nokia and AT&T.  After this occurs, however, sales in the United States sales can easily double. Verizon hopes to improve their margins by offering their subscribers different phones, and Nokia’s phones will provide them with much better margins than Apple’s iPhone.

Sprint Nextel Corp. (NYSE:S):  According to a report that was released this past Wednesday, research analysts at Piper Jaffray increased their target price on shares of Sprint Nextel (NYSE: S) to $6.00.

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