Amgen Inc. (NDAQ:AMGN)  shares dropped $0.79, or 1.55%, today after the company announced that it is weighing its cost cutting options designed to counteract the declining sales of its best-selling amnesia drug. The biotech company is consider, among other things, slowing its research and development programs, tighten capital projects, and a rumored layoff of 20,000 employees. Shareholders are hoping that such efforts can help the company turn itself around and jump the share price.

Amgen saw sales of its top-selling Aranesp amnesia drug drop 19% to $578 million in the second quarter from $713 million a year earlier. The company said it was taking action, however, to restore Amgen by adjusting their cost basis to be more in line with revenue growth, seeking efficiencies, and making "tough-minded" choices. Through trimming the growth of operating expenses and suspending some of its capital projects, the company hopes to improve.

In the end, if the company is able to reduce its operating expenses and jump its earnings per share enough to compensate for poor sales, it could mean significant share appreciation for shareholders. This makes AMGN a stock worth watching!

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Vonage Holdings' (NYSE:VG) cost cutting efforts may have helped it preserve some money during its intense legal battle, but the company's subscriber growth suffered substantially. The broadband telephone company announced a 55 percent reduction in its quarterly loss but suffered a 66 percent reduction in net subscriber growth. Shares gained over 10 percent on the news, however, as investors applauded the company's cost savings.

Meanwhile, Vonage's patent dispute with telecom giant Verizon Communications (NYSE:VZ) is not showing signs of letting up. Verizon recently received a favorable ruling that barred Vonage from adding new subscribers, which could be a potentially deadly turn of events for the new company. Vonage won a stay, however, while the case is being appealed. Unfortunately, the loss of the appeal could also lead to Vonage being forced to pay heavy fines to Verizon for patent infringement.

Many other investors are concerned about the perception that a legal battle will cast a negative shadow on Vonage's reputation with customers and shareholders. But this appears to be the smallest of the problems facing the company. Through cost savings, the Vonage hopes to stay afloat long enough to save its business and win its appeal against Verizon. Whether or not this happens remains to be seen, but this stock is definitely one to watch in the meantime!

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Countrywide Financial (NYSE:CFC) shares dropped over 20 percent yesterday after the company filed its quarterly 10-Q statement with the SEC containing a modified "risk factors" section. The regulatory filing indicated that the company was facing "unprecedented disruptions" in debt and mortgage-finance operations that could hurt future earnings and the company's financial condition.

The largest U.S. home mortgage lender by volume said that reduced demand from investors for its mortgage securities is causing them to retain more loans instead of selling them. Perhaps most interestingly, the company openly admitted that it has no idea where the situation is headed or how it could affect the company in the future. The reduced demand from investors means that prices are being pressured down despite fundamental valuation. As a result, it is nearly impossible to accurately value the mortgage portfolio.

As a result, Countrywide said that it transferred $1 billion of its subprime mortgages from "held for sale" to "held for investment" while also marking down the value of the loans to $800 million. Meanwhile, evidence is piling up supporting the notion that this market is in trouble. Payments that were 30 days late spiked to 20% from 14% last year while delinquency rates spiked to 3.7% from just 1.5% a year earlier.

In the end, if this credit crunch passes by and people end up continuing to purchase subprime mortgage loans, it could pay off nicely for Countrywide. However, predicting where the market is headed at this point is rather futile as the problems seem to continue to worsen.

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Cypress Semiconductor (NDAQ:CY) shares rose over three percent yesterday after Daniel Loeb's Third Point disclosed a 5.1 percent stake and demanded that the company address its undervaluation sooner. The activist investor insisted that the value of the company's semiconductor business has eroded an additional 15 percent and suggested that the company explore immediate options to unlock value.

Daniel Loeb believes that the company's shares are undervalued by as much as 50 percent, based on key metrics such as price-to-sales, price-to-earnings and free-cash-flow-yield as compared to its relevant semiconductor peers. Consequently, if the company were to take action to unlock this value, shares could rise as much as 25 percent in the near term.

Meanwhile, Cypress has already agreed to sell off its stake in Sunpower (NDAQ:SPWR) but set a timetable of no later than 2009. Daniel Loeb insists that there are tax-efficient ways of expediting this process to realize the value of this stake before 2009 and the company should immediately explore them. Since Sunpower makes up approximately 80 percent of the value of Cypress' stock, it is extremely important for them to find a way to effectively diversify their stake.

In the end, Cypress continues to be a great company dragged down by a chronic undervaluation. Shareholders are hoping that Daniel Loeb can successfully convince the company to sell its stake in Sunpower and unlock value for shareholders. This makes CY a stock worth watching!

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Shamrock Activist Value Fund, owner of 6.4% of Reddy Ice Holdings, Inc. (NYSE: FRZ), has released an open letter to shareholders arguing against a proposed buyout at $31.25 a share by GSO Capital Partners.

Reddy Ice is a manufacturer and distributor of packaged ice products in the U.S., most prominently bagged ice found in supermarkets and convenience stores.

The letter highlights what Shamrock claims are numerous "deficiencies" in the sale, most prominently a conflict of interest with company management:

"Shareholders should look closely at the motivations of management in pursuing this transaction. As recently disclosed by the Company, members of senior management may acquire an equity interest in the Company following the acquisition. Why would management seek to purchase an equity interest in the Company post-acquisition if, as disclosed by the Company, management and the Board of Directors, truly believes “that the $31.25 per share merger consideration would result in greater value to our shareholders than pursuing our current business plan?” If that statement is more than just hollow rhetoric, then it is hard for us to understand why management would invest in the transaction at $31.25."

Instead, Shamrock proposes a buyback of 15% of outstanding shares by the company at $33 a share, satisfying those that want to liquidate their position as well as shareholders who "believe in the company's future" and want to retain a stake in it.

The letter reminds shareholders that Reddy Ice has yet to realize the benefits of more than 20 acquisitions it has made in the last two years. Also, company management recently stated that "unusual" weather has negatively impacted recent financial results. In other words, the company is poised for growth and and better returns, making this the worst time to sell and the best time to buy - which is exactly why management is attempting to convince shareholders to sell so they can share in the upside of a purchase.

Finally, Shamrock says its own discounted cash flow analysis of the company values it at $42 to $44 a share, significantly more than the $29.60 it is currently trading for and the $31.25 GSO is offering. And this definitely makes FRZ a stock worth watching!

Borse Dubai, which was formed by the emirate's government and controls the Dubai Financial Market and Dubai International Financial Market Exchange, plans to buy at least 25% of Sweden's OMX AB, which operates European exchanges in cities such as Helsinki and Stockholm.

Nasdaq Stock Market, Inc. (NASDAQ: NDAQ), the operator of the NASDAQ Stock Exchange, was in the process of a takeover of OMX valued at $3.7 billion; however, Borse Dubai has already purchased almost 5% of OMX for 230 kronor per share, an 11% premium over the 208.1 kronor per share Nasdaq agreed to pay for the exchange operator. Also, Borse Dubai has entered into an option agreement to acquire another 22.5% of OMX at 230 kronor per share.

Nasdaq has asked OMX shareholders to ignore the Borse Dubai bid, but Nasdaq shares are actually up almost 5% on news as it is seen as creating the possibility of a larger deal between the three companies.

Any deal with Borse Dubai would but Nasdaq in a better position to compete with its biggest rival, the New York Stock Exchange, which has already inked a deal combining it with the large European exchange Euronext to form NYSE Euronext (NYSE: NYX).

Nasdaq recently failed in a takeover attempt of the London Stock Exchange that would have kept it competitive with NYSE in the European exchange market. Its $5.3 billion bid fell apart in the face of LSE management resistance. Many analysts feel that without a better foothold in Europe, any new attempt to by Nasdaq to purchase the LSE is also doomed to fail.

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Blockbuster Inc. (NYSE: BBI) announced today that it purchased movie download service Movielink, though terms of the deal were not disclosed.

Movielink was launched in 2002 by a collaboration between Metro-Goldwyn-Meyers Studios, Paramount Pictures, Sony Entertainment Pictures, Warner Bros., and Universal Studios. This stable of major film studio backers allow Movielink to offer some 3,300 movie titles available for legal download.

The deal can largely be seen as a response to Netflix Inc. (NASDAQ: NFLX) offering subscribers the ability stream movie titles from its website.

In an interview James Keyes, Blockbuster's CEO, said "We're taking a fresh look at the future of Blockbuster. The popularity of [online rentals] convinced us that customers are ready for more convenient forms of digital delivery that we think Blockbuster can successfully enter."

Blockbuster Total Access, Blockbuster's mail-delivery movie service in the mold of its main competitor Netflix, has less total subscribers than its rival but is growing much faster. In fact, in the second quarter of this year Netflix lost 55,000 subscribers - its first quarterly decline ever - while Blockbuster added 660,000 thanks to aggressive advertising and pricing.

Despite these numbers Netflix is still the clear leader of movies-by-mail with some 6.7 million subscribers to Blockbusters 3.6 million; however, both services see that the future almost certainly lies in digital content delivery.

Sources familiar with Blockbuster's purchase of Movielink say talks began in February for a cash-and-stock deal worth about $50 million, though an insider said yesterday that the deal was for all cash and worth significantly less than that figure.

The aggressive strategy to continue attacking Netflix on every front definitely makes BBI a stock worth watching!

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Brink's Company (NYSE:BCO) board member and activist investor Thomas Hudson of Pirate Capital demanded in a letter that the security services provider consider a tax-free split-up of the company. The news comes after Pirate Capital's long-publicized battle with the company to unlock shareholder value. Many are hoping that the large support for a break-up may finally do just that!

A survey of shareholders, conducted by D.F. King & Co., polled 90.17% of the outstanding Brink's shareholders and found that 49.4% of them wanted the company to pursue a split-up while 66.95% said that they would like the board to review the possibility of a split-up. Hudson was quick to point out that if management did not consider the possibility of a split-up by the next election, shareholders could put them out of a job.

"While a sale of the company, as opposed to a tax-free split-up, could be more lucrative to you under your change of control agreement with Brink's, potentially enriching you with millions of dollars, I believe the survey is conclusive as to the large shareholder preference for a split-up," Hudson said in the letter.

Hudson's Pirate Capital currently holds an 8.6% stake in the company and would stand to gain substantially from any measures intended on unlocking shareholder value. This makes BCO a stock worth watching!

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MercadoLibre Inc.'s upcoming initial public offering has been generating a lot of buzz lately, especially given its largest investor - eBay Inc. (NDAQ:EBAY). The Buenos Aires company owns and operates auction websites in several South American countries, including Argentina, Uruguay, Chile, Brazil, Columbia, Ecuador, Peru, Mexico and Venezuela. It is also launching portals in Costa Rica, the Dominican Republic and Panama.

MercadoLibre is expected to raise $270 million in its initial public offering. The company is expected to sell 2.6 million shares for between $16 and $18 each while stockholders will sell an additional 16 million shares. Interestingly, eBay does not plan to sell any of its 8.1 million share stake during the offering and will control around 19.7% of the company's outstanding shares. Since eBay didn't acquire the company outright, they clearly do not see a huge opportunity in Latin America yet enough to retain their stake and see where things go.

MercadoLibre reported 2006 net income of $1.1 million on revenues of $52.1 million. The first quarter of 2007 proved to be blockbuster for the company when it reported net income of $1 million on revenues of $16.5 million. Whether or not the company succeeds remains to be seen, but this is definitely a stock to watch as the situation unfolds!

MASSBANK Inc. (NDAQ:MASB) shares rose marginally after Lawrence B. Seidman disclosed a 5.83% and made several suggestions to the company aimed at unlocking value for shareholders. The activist investor recommended that the company consider (1) an accelerated share repurchase program, including considering a dutch auction, (2) a new management team capable of making proper loans, and (3) a sale of the company.

MASSBANK is clearly in need of change. A quick look at the balance sheet shows a clear dropoff in earnings. Total assets have gone down to 15 consecutive quarters, from $1 billion in September of 2003 to $817 million in June 2007. Net loans have declined for 7 consecutive quarters from $230 million in September 2005 to $197 million in the most recent quarter. And total deposits have gone down 15 consecutive quarters, from $899 million in September 2003 to $705 million in the most recent quarter.

Perhaps more troubling is the company's sloth-like response to market conditions and weak balance sheet. Amazingly, net loans only account for 24% of total assets. No other exchange-traded thrift has a ratio below 32% and most have somewhere around 71%. Meanwhile, cash and cash equivalents accounts for 27% of assets! This means a cash to loans ratio of 112%! This is beyond conservative and bordering sheet laziness on the part of management.

Seidman also disclosed a rather disturbing conversation that he had with management. The investor contacted Mr. Brandi - the President and CEO - to discuss MASB's strategic plans for transforming the balance sheet, improving earnings, and returning capital to shareholders. Mr. Brandi then insulted Seidman by saying there was no way he'd ever meet the board of directors. After quickly dismissing the request, Mr. Brandi then challenged Seidman to a proxy fight in 2008. The CEO insisted that the activist investor could never win because shareholders love him so much.

In the end, this company has several problems that need to be addressed as soon as possible. The proposals made by Mr. Seidman make sense and should be considered by the board of directors. Combined, these factors make MASB a stock worth watching!

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