Nasdaq Stock Market Inc. (NDAQ:NDAQ) shares fell $2.54, or 6.83%, before settling at $34.66 after only 0.6% of London Stock Exchange shareholders voted in favor of the Nasdaq's buyout offer. The number fell far short of the required 51% needed and puts the Nasdaq in a difficult position with it's 29% stake in the exchange, costing roughly $1.68 billion. Many investors are now skeptical as to whether or not the exchange can unload its shares without deflating the LSE's price significantly, which would cause large losses. Moreover, the Nasdaq also suffered a hit when its debt rating was cut to "junk" status since most of the LSE purchase was funded through bond issues.

Perhaps more troubling is the fact that the Nasdaq is now far behind the NYSE in terms of expanding their global reach. While the NYSE's $12 billion deal with Euronext has not officially closed, the two exchanges are already working together to buy stakes in Japanese and Indian exchanges overseas. The Nasdaq must now attempt to unload its LSE stake while talking with other exchanges to work out a possible deal. Many are now speculating that these exchanges could include those in Hong Kong, Madrid and Italy. Another possibility being discussed is Deutsche Boerse, who is most well-known for its attempted breakup of the NYSE-Euronext deal. Regardless, these developments leave a lot for investors to watch!

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Home Depot Inc. (NYSE:HD) shares moved up $0.45, or 1.1%, to $41.45 after the company said that it was evaluating alternatives for its HD Supply business. These strategic alternatives include a possible spin off of the division or initial public offering in a move to focus on its core retail business. According to the company, HD Supply is the wholesale distribution business of Home Depot, has nearly 1,000 locations nationwide and in Canada, and employs more than 26,000 people. "We are undertaking this action today because of our desire to increase our focus on our retail business," said the new Chairman and Chief Executive Frank Blake in a statement. "With annual revenues of approximately $12 billion, HD Supply is a healthy, growing and vibrant business, and we are undertaking this evaluation to determine whether there are strategic alternatives with respect to HD Supply that would optimize shareholder value."

Spin offs present excellent opportunities for investors to profit as they typically outperform the overall market by a wide margin during their first year. This is primarily attributable to the fact that spin offs are often companies that benefit from standing alone due to a lack of synergies with their parent company. Moreover, there is occasionally an opportunity to pick up spin off shares at a discount as parent company shareholders occasionally sell their stakes in a spin off immediately after receiving it. Any actions like this would also greatly benefit Home Depot, who would be able to receive a cash influx while unloading some of its debt onto the new entity. Combined, this makes HD a stock worth watching closely!

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WCI Communities, Inc. (NYSE:WCI) shares rose $1.17, or 5.66%, to $21.85 today after the company announced that it has hired Goldman Sachs to assist in a review of the company's operations and potential sale of the company. Jerry Starkey, President and CEO said in a press release, "During 2007, we expect our company to generate about $1 billion of free cash flow, in large part from the collection of our tower receivables, which will enable us to dramatically reduce our debt. We also are exploring the disposition of certain assets, which would further increase liquidity and reduce leverage. Once our receivables are collected and our debt is reduced, we believe our ability to enhance shareholder value through a variety of strategic alternatives, including additional stock repurchases and potentially the sale of our company, will be greatly improved."

In late January, billionaire investor Carl Icahn said he had acquired a 14.6% stake in WCI and said he wanted to engage the company in discussions on "how to unlock the inherent value of the shares." Shortly after, the company adopted a shareholder rights plan that would prevent any hostile takeovers of the company, until after February 9th, by diluting their shares. The company's excessive cash after the towers are sold, Icahn's participation in the process, and the company's willingness to explore strategic alternatives make this stock one that is definitely worth keeping an eye on! WCI is a leader in their market and should receive substantial offers in the event of a sale.

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