Ku6 ties up with Channel V, shares rise

Ku6 ties up with Channel V, shares rise

Stock Market Predictions

(Global Markets) - Chinese online video portal Ku6 Media Co Ltd (KUTV.O) said it signed an agreement with satellite television company Star China to launch Channel V's online channel on Ku6's platform, sending its shares up 18 percent in morning trade on Friday.

The company said the online channel will feature the international music channel's current and upcoming music entertainment programs in China. Ku6 will be responsible for non-content operations of the channel.

"This will strengthen our position in the online music entertainment area," Ku6 Chief Executive Jeff Shi said in a statement.

Ku6 shares were up 14 percent at $2.36 on Friday morning on the Nasdaq. They rose to $2.45 earlier in the session.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Don Sebastian)

Shire hit by bowel drug study failure

Shire hit by bowel drug study failure

Stock Market Predictions

LONDON (Global Markets) - Shire (SHP.L) was hit on Friday by the failure of a clinical study that could have opened up an important new market for its bowel drug Lialda, sending shares in the specialty drugmaker 4 percent lower.

Shire said a once-daily dose of mesalamine, the active ingredient in Lialda, failed to reduce the rate of recurrence of diverticulitis in a two-year Phase III clinical study. The medicine proved no better than placebo.

As a result, the company does not intend to submit mesalamine, which is already approved for ulcerative colitis under the brand name Lialda, as a treatment for diverticulitis.

Diverticulitis is a common digestive disease involving small, bulging sacs of the inner lining of the intestine that become inflamed or infected.

(Reporting by Ben Hirschler; Editing by Greg Mahlich)

Finish Line sees lower Q1 earnings; shares fall

Finish Line sees lower Q1 earnings; shares fall

Stock Market Predictions

(Global Markets) - Footwear retailer Finish Line Inc (FINL.O) forecast a plunge in first-quarter earnings as a shift in promotions and higher occupancy costs hurt margins, sending its shares down 8 percent.

The company, which sells brands from companies such as Nike Inc (NKE.N), Puma (PUMG.DE) and Adidas AG (ADSGn.DE), sees a decline of 30 percent in first-quarter earnings, implying a profit of 21 cents a share. Analysts had expected the company to earn 36 cents per share, according to Thomson Global Markets I/B/E/S.

Separately, Finish Line said Gart Capital Partners will invest $10 million in its Running Specialty Group to create the largest operator of specialty running shoe business in the United States.

The joint venture, which will be majority owned by Finish Line, follows the company's 2011 acquisition of an 18-store chain of specialty running shoe shops operating under The Running Company banner.

For the fourth quarter ended March 3, Finish Line posted earnings of $41.9 million, or 80 cents a share, compared with $34.2 million, or 63 cents per share, in the year-ago period.

Before items, earnings were 81 cents, in line with estimates.

Sales increased 18.6 percent to $456.3 million, beating estimates of $432.6 million.

Shares of the company, whose larger rivals include Foot Locker Inc (FL.N), were down 8 percent in trading before the bell on Friday. They had closed at $25.34 on Thursday on the Nasdaq.

(Reporting by Juhi Arora in Bangalore; Editing by Sriraj Kalluvila)

Analysis: Worried about stocks rally? Enjoy the peace and quiet

Analysis: Worried about stocks rally? Enjoy the peace and quiet

Stock Market Predictions

NEW YORK (Global Markets) - What if there was a rally, and nobody came?

The S&P 500 is set to close out its best first quarter in 14 years. The market is up about 30 percent since a low reached in October, but trading volumes are down more than 10 percent from last year, and measures of anxiety suggest little worry about the sharp advance.

The low participation in the rally and the subdued nature has convinced some that the market isn't just quiet, but too quiet. And therefore, a sizable pullback is in the offing.

But so far the S&P has only posted two down weeks in 2012, with the worst fall last week's mild decline of 0.5 percent.

Many investors are downplaying traditional omens of approaching declines and instead are accentuating the market's positives, which they say will keep bullish momentum in place.

"For a regular investor, low volume and volatility shouldn't be a factor," said Donald Selkin, chief market strategist at National Securities in New York, where he helps oversee about $3 billion in assets.

"Volume isn't a concern since if you own a stock, what difference does it make if goes up on high volume or low?"

For March, average daily volume on the New York Stock Exchange, the American Stock Exchange and Nasdaq has been about 16 percent below last year's average, on track for three straight months with a year-over-year dip of 10 percent or more.

While volume has been especially low so far this year, trading has in general been down since the financial crisis, the lead-up to which was marked by some of the most active days ever. Recoveries have historically been marked by light action, another sign that investors need not fear.

"Volume was very low in 2003, when we came out of that bear market, but it then ticked higher as we moved towards the top in 2007, with people throwing in the towel and doing anything to get into the market," said Todd Salamone, vice president of research at Schaeffer's Investment Research in Cincinnati. "Of course they came in at the wrong time."

In fact, 2012's average daily volume of about 6.8 billion shares for the combined NYSE, Nasdaq and Amex fits neatly in the trajectory of increasing volume for the 2000 to 2007 period - with the sharp increase in 2008-2010 crisis years as the anomaly. Daily volume peaked at 9.7 billion on average in 2009, before declining in 2009 and 2010.

Futures contracts suggest investors are hedging against rising concerns, and possibly higher volume, in coming months.

New tensions in the Middle East have called the stability of oil prices into question. World economies such as China are slowing, the U.S. election promises uncertainty, and earnings may be hit by higher fuel costs and reduced profit margins.

Still, there are fewer triggers for an outbreak in worry now when compared with 2008. Accommodative monetary policy from central banks around the world will persist, and for now, domestic economic data are improving.

Investors traditionally like to see volume rise as the market advances because it suggests more buyers - be they institutions or retail investors - are getting into the market.

But Steven Wolf, managing director of investments at the Westport, Connecticut-based Source Capital Group, said the low overall volume isn't the primary concern.

What would be more worrisome, he said, is expanding volume as markets decline. That's a sign of institutional selling known as a "distribution day," and it means large funds aren't confident enough in gains to hold them.

"In the past three weeks, we've seen maybe three or four distribution days, which isn't a terrible count," Wolf said. "We've seen about 10 accumulation days over the same period, suggesting we're not seeing a lot of signs of institutional selling."

LACK OF FEAR IS NOT A REASON FOR FEAR

The CBOE Volatility Index has recently neared lows not seen since 2007. When the VIX, considered a gauge of investor anxiety, approached these levels last year, it came right before a sell-off that turned into a bear market.

The difference is the rise in the VIX last year was due to news developments. Dramatic negotiations over the U.S. debt ceiling, the Arab Spring revolts and an earthquake in Japan created headwinds that are unlikely to be repeated.

"While the VIX could pop up the low level isn't too much of a cause for concern," said Randy Bateman, chief investment officer of Huntington Asset Management in Columbus, Ohio, which oversees $14.5 billion.

Waiting for a level of activity similar to previous years may be overthinking the rally. Bespoke Investment Group, a financial research firm, on March 13 published a report saying investors should "avoid low volume (rallies) at your own risk."

The firm noted that the S&P 500 had more than doubled in the three years since its post-crisis low in March 2009, with most of the gains coming as volume fell. "Without these days, the S&P 500 would currently be trading at a level of 128, which would be a decline of 81 percent."

"Say what you want about a rally on low volume," they wrote, "but gains are gains no matter how they happen."

AMR says still aims for negotiated labor deals

AMR says still aims for negotiated labor deals

Stock Market Predictions

(Global Markets) - AMR Corp (AAMRQ.PK), the bankrupt parent of American Airlines, on Friday said it remains in talks with its labor unions and prefers negotiated deals even after asking its bankruptcy court for permission to void the workers' contracts.

The company also has offered to outsource fewer jobs represented by the Transport Workers Union, AMR said in an update on labor negotiations. It did not give a figure.

"American is ready to continue talks with all its unions to bring these important negotiations to a successful conclusion," the company said.

American Airlines on Tuesday sought court approval to throw out labor contracts, a move that pressures pilots, flight attendants and other unionized workers to quickly agree to concessions.

The company filed for Chapter 11 on November 29, citing a need to cut its labor costs to better compete with profitable rivals. American has said it wants to slash overall costs by $2 billion annually. More than half of the savings would come from labor, including a plan to shed 13,000 jobs.

About 9,000 of those workers are members of the TWU, which represents seven work groups.

The union reaffirmed on Friday that it was committed to reaching deals with the airline.

American has about 74,000 full- and part-time employees and its regional carrier American Eagle has about 14,000 full- and part-time employees.

Also on Friday, AMR reported a net loss of $619 million for February, including $375 million related to its reorganization.

AMR said its operating revenue amounted to $1.8 billion for the month and it spent $682 million on fuel. The company said it spent $584 million on wages, salaries and benefits.

The company ended the month with $4.6 billion in cash and short-term investments.

(Reporting By Kyle Peterson; Editing by Gerald E. McCormick and Carol Bishopric)

Higher promotions, spending to hit Finish Line profit

Higher promotions, spending to hit Finish Line profit

Stock Market Predictions

(Global Markets) - Footwear retailer Finish Line Inc (FINL.O) warned that increased promotions and higher spending would eat into its first-quarter profit, spooking investors who sent the stock tumbling 16 percent on Friday.

Finish Line, which sells brands from companies such as Nike Inc (NKE.N), Puma (PUMG.DE) and Adidas AG (ADSGn.DE), is facing a shift in its promotional calendar this year, with a lot of activity moving from the second quarter to the first quarter.

The company is ramping up spending and promotions to stay ahead of its rivals, such as Foot Locker (FL.N) and Dick's Sporting Goods (DKS.N), as it vies for a larger slice of the athletic footwear market.

While most of the U.S. retail industry faced sluggish sales over the past few years, with shoppers scaling back spending in a weak economy, demand for athletic footwear, like running shoes, has stayed relatively strong.

Finish Line, which has posted higher earnings for the past five quarters, is increasing spending on its website and on in-store devices, such as tablets and handheld electronic gadgets that list its products, to make shopping more convenient.

It plans to spend about $85 million in fiscal 2013 on revamping stores, e-commerce, improving technology and new store openings.

The company, which is also facing higher occupancy costs, forecast a 30 percent plunge in first-quarter earnings per share, implying a profit of 21 cents per share. Analysts had expected 36 cents per share, according to Thomson Global Markets I/B/E/S.

In its latest reported quarter, the company's adjusted profit of 81 cents a share was in line with Wall Street estimates, even as sales comfortably surpassed expectations.

"Given the stronger reported fourth-quarter comps, we would have expected better flow through to earnings per share, yet Finish Line continues to reinvest much of its comps strength back into growing its e-commerce platform," Canaccord Genuity analyst Camilo Lyon said.

Sales rose 18.6 percent to $456.3 million, beating estimates of $432.6 million. <ID:ASA03WK0>

GART INVESTMENT

Finish Line also said Gart Capital Partners will invest $10 million in its Running Specialty Group, and the business will launch its Run.com website by mid-April to better tap the $1 billion running segment.

The division will be majority owned by Finish Line, which picked up the business with its 2011 acquisition of an 18-store chain of specialty running shoe shops operating under 'The Running Company' banner.

The business will be relocated to Denver, Colorado, with Gart Capital managing operations and new acquisitions.

Finish Line shares -- which had risen by nearly a third so far this year, excluding their losses on Friday -- were down 15 percent at $21.52 in afternoon trading on the Nasdaq. They touched a low of $21.24 earlier in the day.

(Reporting by Juhi Arora in Bangalore; Editing by Sriraj Kalluvila, Viraj Nair)

S.Africa's MTN slides on Iran corruption lawsuit

S.Africa's MTN slides on Iran corruption lawsuit

Stock Market Predictions

JOHANNESBURG (Global Markets) - Shares in MTN Group (MTNJ.J) slid on Friday after rival Turkcell (TCELL.IS) filed a $4.2 billion suit against the South African mobile operator, alleging it bribed officials and lobbied support for Tehran's nuclear program to win an Iranian license.

Turkcell, which lost the 2004 bid for the Iranian license to MTN, filed the suit in a U.S. federal court in Washington, accusing the Johannesburg-based firm of using its influence with Pretoria to arrange support for Iran's military.

The Turkcell case threatens to tarnish the reputation of both MTN - a black-run company widely seen as a post-apartheid success story - and the South African government, including former President Thabo Mbeki.

It comes at a time when countries around the world, including South Africa, are under strong Western pressure to halt oil imports from Iran and cut other trade.

MTN, Africa's top mobile operator, has said the claim is without legal merit and has accused Turkcell of attempting to extort money from it - an allegation the Turkish company rejects.

Turkcell's suit, backed by a collection of alleged MTN internal documents including emails, invoices, memos and presentations, accuses the South African firm of a "staggeringly brazen orchestra of corruption".

Turkey's largest mobile operator alleges that under a strategic plan code-named "Project Snooker", MTN used corrupt practices to win the license which had initially been awarded to Turkcell.

MTN owns 49 percent of local unit Irancell, from which it generates nearly 10 percent of its annual revenue.

"Upset by its loss of the open competition, MTN sought to obtain illegally what it could not obtain through honest competition," the Turkcell lawsuit said.

It notes Iran had initially announced Turkcell as the winning bidder for the Irancell license in February 2004, following a tender in which multiple companies participated.

POLITICAL INFLUENCE

"MTN used its high-level political influence within the South African government to offer Iran the two most important items that the country could not obtain for itself: 1) support for the Iranian development of nuclear weapons; and 2) the procurement of high-tech defense equipment".

Pretoria has denied the claims, saying its foreign policy is independent. Foreign ministry spokesman Clayson Monyela said: "We are not going to engage in (a discussion about) the merits of a case in which the government is not a respondent."

MTN's strong ties to the government are well documented: the company was set up with government help in 1994 as the first black-owned company after the end of apartheid.

MTN Chairman Cyril Ramaphosa, who is also mentioned in the suit, is a leading member of the ruling ANC.

Shares in MTN dropped 3 percent to 133.12 rand by 1235 GMT. The shares fell 1.5 percent on Thursday when Turkcell announced it had filed the suit.

The lawsuit could be damaging enough for MTN to reconsider its presence in Iran, said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.

"Especially since it's going via the U.S. there could be enough pressure for them to exit," he said. "It could be possible that they don't get a good price even if they do a deal with the Turks and sell it to them."

Turkcell said it had brought the suit in a U.S. court because it believed MTN breached international law.

The lawsuit says MTN promised Iran it could deliver South Africa's vote at the International Atomic Energy Agency (IAEA) and that it promised Iran defence equipment otherwise prohibited by international laws. It also accuses MTN of bribing government officials in both Iran and South Africa.

Turkcell alleges that MTN ultimately secured South Africa's abstention on a crucial decision at the IAEA on referring Iran to the United Nations Security Council.

According to the lawsuit, MTN arranged a private meeting between the then South African President Mbeki and Iran's national security advisor and nuclear negotiation chief, Hassan Rowhani.

MTN has set up an independent committee led by UK legal expert Lord Hoffmann to investigate the claims. It has said Turkcell refuses to cooperate with the committee.

(Additional reporting by Jon Herskovitz and Pascal Fletcher; Editing by David Holmes)

Liz Claiborne shares up on report of buyout talks

Liz Claiborne shares up on report of buyout talks

Stock Market Predictions

(Global Markets) - Liz Claiborne Inc (LIZ.N) shares rose as much as 21 percent on Friday after the Wall Street Journal reported that the clothier and retailer had held buyout talks with private equity.

Citing unnamed sources, the newspaper reported that in recent months Claiborne had held discussions with several private equity firms about taking the company private for $20 per share. That would value the company, whose brands include Juicy Couture and kate spade, at $2 billion.

Claiborne shares closed up 12.9 percent at $13.36 on Friday after reaching $14.32, their highest since October 2008.

The newspaper reported that no formal auction was taking place.

A source familiar with the matter told Global Markets on Friday that the company had been shopping itself last summer. It eventually sold most of its Mexx brand. The source said the company was not currently looking to sell itself.

The company said in a statement, "Our general policy is to not respond to rumors about our company. That said, in response to media reports today, there is currently no contemplation of any strategy for the company other than executing against the operating plan we have already discussed."

Even before the share price increase that followed the newspaper report, Claiborne's shares were expensive compared to those of rivals that are both manufacturers and retailers.

Based on Thursday's closing price of $11.83, Claiborne's shares were trading at 41.1 times estimated earnings, well above multiples of 11.2 for Jones Group (JNY.N), 15.3 for North Face parent VF Corp (VFC.N) and 20.8 for Ralph Lauren Corp (RL.N).

The companies have all benefited from a spike in consumer spending, with the most marked gains at their higher-end chains, such as Claiborne's kate spade and Jones' Stuart Weitzman.

The Wall Street Journal reported that buyout firms KKR & Co (KKR.N), Permira Advisers LLP and Warburg Pincus LLC had previously been interested in Claiborne and still were. Permira and Warburg declined to comment, while a KKR spokeswoman did not immediately respond to a request for comment.

In the last few years, Liz Claiborne has sold off many brands, including its namesake, which it sold to J.C. Penney Co Inc (JCP.N) last year, to decrease its debt and focus on brands it thinks have the most potential.

In November, the company broke a streak of 15 straight quarterly losses.

Improvements in its finances and sales gains at its kate spade and Lucky Brand chains have propelled Liz Claiborne shares in the last few months.

Still, sales fell 15.4 percent during the holiday quarter at Juicy Couture, its biggest brand. Chief Executive William McComb said last month that sales would improve in the second half of the year.

Claiborne, which is due to change its name in May to Fifth & Pacific Cos, has also made changes to its executive suite. Earlier this month, it named George Carrara, a former Tommy Hilfiger executive, as its new finance and operations chief effective April 2.

(Reporting By Phil Wahba and Greg Roumeliotis in New York; Editing by Gerald E. McCormick)

GasLog sinks on debut, rising LNG demand offers hope

GasLog sinks on debut, rising LNG demand offers hope

Stock Market Predictions

(Global Markets) - Shares of liquefied natural gas (LNG) carrier operator GasLog Ltd (GLOG.N) fell 12 percent in their market debut but rising LNG exports make the company a good bet.

On Thursday, the company priced its initial public offering of 23.5 million shares at $14 apiece. The Monaco-based company had expected to offer the shares priced $16 to $18 apiece.

As shale development increases domestic production and pushes natural gas prices way below global levels, U.S. producers are making moves to export LNG â€" a natural gas cooled to become a liquid so it can be shipped.

Buyers across the world are also lining up to buy the cheap American fuel.

LNG is one of the few profitable sectors in the shipping industry, large parts of which are struggling with oversupply and weak freight rates.

Freight rates for LNG are expected to stay elevated at least through 2014, shipping insiders said.

After its first day of trade, the company is valued at about $778.9 million.

GasLog plans to use the proceeds from the offering to make installment payments on its eight new LNG carrier construction contracts.

The company, which is controlled by Greek shipping magnate Peter Livanos, said it intends to pay a quarterly dividend of 11 cents per share commencing in the fourth quarter of 2012.

For 2011, GasLog posted a profit of $13.7 million on revenue of $66.5 million â€" 99 percent of which came from BG Group.

"Their big year is going to start in 2013 ... dividends look stable based on contracts but they are too far for investors to look. In the longer term, it will work for patient investors," said Francis Gaskins, a partner at IPODesktop.com.

Goldman Sachs, Citigroup, J.P. Morgan and UBS are lead underwriters to the offering.

Shares of the company closed at $12.40 on Friday on the New York Stock Exchange.

(Reporting by Tanya Agrawal, Ashutosh Pandey and Divya Lad in Bangalore; Editing by Supriya Kurane and Joyjeet Das)

Groupon revises 4th quarter results, shares fall

Groupon revises 4th quarter results, shares fall

Stock Market Predictions

(Global Markets) - Groupon Inc (GRPN.O) unnerved investors again after it increased its previously reported fourth-quarter net loss and cut its revenue, blaming higher-than-anticipated refunds on deals.

The company, which has been criticized for its unorthodox financial reporting in the run-up to a highly publicized 2011 IPO, said in its annual report filed on Friday that it has a "material weakness" in internal controls over its financial statement.

Shares in the company, the leader in the fast-growing Internet daily-deals space populated by rivals such as Amazon.com Inc (AMZN.O) and LivingSocial, fell more than 6 percent in after-hours trading.

As a private company, Groupon was one of the fastest-growing businesses in history and in November pulled off one of the largest Internet IPOs of the past decade, valuing the company at well over $10 billion.

However, it was criticized by some analysts and investors for aggressive accounting in the run-up to the IPO. Groupon changed the way it reported results under pressure from regulators.

"When you're a public company, there's a certain level of expectations for financial controls," said Herman Leung, an analyst at Susquehanna Financial Group.

"It's probably because it's such a fast growing business that it doesn't have all the systems in place. Maybe they don't have enough financial personnel."

The largest daily deals company said its previously reported net loss for the fourth quarter of 2011 increased by $22.6 million, while revenue was revised lower by $14.3 million.

The company's shares fell to $17.25 in after hours trading, down 6.1 percent from a close of $18.38 on the Nasdaq.

The net loss for the fourth quarter was revised to $65.4 million, or 12 cents per share, on revenue of $492.2 million, the company said in a filing with the U.S. Securities and Exchange Commission on Friday.

In February, the company posted a net loss of $42.7 million, or 8 cents per share, on revenue of $506.5 million for the fourth quarter. <ID:L2E8D8FTD>

Groupon said it is working with a global accounting firm to prepare a report by the end of 2012 on the effectiveness of its internal controls - something that is required in the wake of an IPO.

"The Company continues to implement process improvement initiatives and augment its staffing, and is expanding the accounting firm's engagement scope to address the underlying causes of the material weakness," Groupon added.

BIGGER DEALS = MORE REFUNDS

Groupon said its revision was mainly caused by an increase in the number of higher-priced deals the company ran in the fourth quarter.

The company found that larger deals increased the number and size of refunds customers requested.

Groupon used to account for customer refunds based on historical patterns. But now it will rely on forecasts of the rate and size of future refunds.

Groupon stuck to a previous forecast for first-quarter 2012 revenue of $510 million to $550 million and income from operations of $15 million to $35 million.

"We remain confident in the fundamentals of our business," Groupon Chief Financial Officer Jason Child said.

(Reporting by Edwin Chan; editing by Andre Grenon and Bob Burgdorfer)