Nautilus Inc. (NYSE:NLS) executives and board members may have to fight for their jobs after a large investor demanded that the sporting goods company hold a special shareholder meeting to consider a variety of proposals, according to a Schedule 13D/A filing with the SEC.

Sherborne Investors, which owns 23.5 percent of Nautilus, sent the company a letter last week indicating that it wants to hold a special shareholders meeting to remove the existing directors other than the Interim Chief Executive Officer, the Lead Independent Director, and the Chairman of the Audit Committee. Unfortunately, Nautilus responded by saying it would not be able to make a decision this week and gave no indication of when a decision would be made.

"The time required to complete a shareholder vote is, regrettably, quite lengthy and if such a vote were required, it would not be in anyone’s interest to delay it beyond year end," said fund manager Edward Bramson. "To stay on this timetable essentially requires that a meeting of shareholders be initiated now."

Why is the hedge fund so concerned? Well, Nautilus shares are off over 50 percent so far this year amid falling profits and margins. Meanwhile, the company's CEO stepped down in mid-August leaving the company in a very vulnerable position during a time that it is making some key changes.

"There are a number of uncertainties and major decisions facing Nautilus at the moment, including the debt position, the Land America transaction, and the appointment of a permanent chief executive with the appropriate qualifications and strategic outlook," said Bramson in a letter to the company. "I am sure you would agree that prolonged uncertainty is not good for the company or any of its stakeholders."

In the end, this company clearly has some issues that it needs to address very soon in order to preserve shareholder value. Many shareholders are hoping that Sherborne Investors will be able to step in and make some key changes to unlock value. Combined, these factors make NLS a stock worth watching!

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Billionaire activist Carl Icahn raised his stake in software maker BEA Systems (NYSE:BEAS) to nearly 10 percent, according to a Schedule 13D/A filing with the SEC. The activist investor first disclosed an 8.5 percent stake last week in a Schedule 13D filing in which he said shares were undervalued and that he planed to meet with management to discuss a possible sale of the company.

BEAS Systems has been a rumored takeover target for a great time and the company has repeatedly insisted that it is not for sale. Consequently, many analysts are skeptical as to whether Icahn will be able to force a sale of the company unless he takes a larger stake and installs his own directors to the company's board.

BEA Systems is provider of enterprise application and service infrastructure software. BEA has three primary families of products. The Tuxedo product family provides multi-language enterprise platform. The BEA WebLogic product family provides Java developers application infrastructure software for building Web applications, Web services, business processes and portals, and application integration.

In the end, there are several potential suitors for a company with products like these; however, the company has insisted that it wasn't for sale. It will be interesting to see whether or not Icahn will be able to force a sale and unlock value. This makes BEAS a stock worth watching!

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Nasdaq Stock Market (NDAQ:NDAQ) and Borse Dubai announced a three-way deal with OMX in which Borse Dubai will continue with its $4 billion cash bid for OMX and then subsequently sell OMX to Nasdaq in exchange for a 20% stake in the stock exchange along with a 28% stake in the London Stock Exchange, according to the Associated Press.

Nasdaq failed in its bid for the London Stock Exchange earlier this year and now has a chance to unload its stake in exchange for the the OMX stock exchange. Prior to this agreement, many were speculating the Nasdaq may have to sell off its stake at a substantial loss. Now, shareholders can be content with a smaller - but still significant - acquisition of OMX.

The new agreement marks a continued wave of acquisitions in the stock exchanges business following NYSE's purchase of Euronext and CME's acquisition of the CBOT. Regardless, this is great news for Nasdaq shareholders as it means it is one step closer to keeping up with the NYSE and was able to unload its LSE stake without incurring substantial losses.

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Goldman Sachs (NYSE:GS) surprised shareholders today with a 79 percent surge in fiscal third-quarter net income after sevearl of its segments reported record revenue, according an 8-K filing with the SEC. The financial services firm is one of the few banks not hit hard by subprime mortgage and credit issues.

"Given the difficult environment of the third quarter, many of our businesses were challenged," said Lloyd C. Blankfein, Chairman and Chief Executive Officer. "But overall, the quality of our franchise produced strong results as clients continue to look to us for advice and execution. The strength of our client relationships, the diversity of our businesses, and the talent and teamwork of our people continue to drive our performance."

Goldman Sachs now ranks first in worldwide announced mergers and acquisitions with its financial advisory segment reporting net revenues 64 percent higher than its previous record. Meanwhile, its brokerage business generated record commissions along with its fixed income, currency, and commodities trading segment.

The good news comes after three of Goldman Sachs' investment funds were hit last month with major trouble due to their quantitative trading system, including its flagship Global Alpha fund. As a result, the company announced that it would inject $3 billion into the troubled funds in order to preserve liquidity and help them weather the storm.

Clearly, the concerns about the credit crunch and hedge fund blow-ups were overdone when it came to Goldman Sachs. Given the strong insider buying across the financial sector, perhaps these problems aren't as great as investors had been expecting. Regardless, GS and other investment banks are definitely stocks worth watching!

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Prada SpA is reportedly interviewing advisors for an initial public offering that could value that company as high as $5.6 billion, making it the biggest luxury goods company in the world. Many investors are carefully watching the situation as Prada could become yet another hot IPO.

"Prada has cleaned up its balance sheet and is doing very well," said Armando Branchini, vice president of Intercorporate SpA in Milan, a consulting company that specializes in the luxury market. "Prospects are also good for the industry."

This isn't the first time Prada considered an IPO either. The first time the company considered an IPO was in 2001 when analysts estimated the company's value at closer to $10 billion; however, the September 11th attacks canceled those plans. Meanwhile, the company's June 2002 plans were also thrown off by plunging stock markets.

Prada continues to tread carefully, according to a company spokesperson, "We will look into the IPO process, but nothing has been decided yet. We are under no pressure to go."

Meanwhile, investor appetite for fashion companies remains extremely strong with companies like Ralph Lauren (NYSE:RL) performing extremely well. Now investors will just have to wait for the company to file its F-1 with the SEC before it can be traded as an ADR in the United States.

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VMWare, Inc. (NYSE:VMW) has certainly been the darling of Wall Street ever since its shares jumped 76% on its first day of trading. Indeed, the company's final IPO filing showed an impressive 125% jump in net income. But VMWare's latest 10-Q filing with the SEC left many investors running for the exits.

VMWare's latest 10-Q filing gives investors a look into the company's cash flows, which is always the most telling of the financial statements. We already knew that the company's revenues increased 90% with net income growing 125%, but this latest filing shows operating cash flows increasing only 43%.

Why the slow increase in cash flow? Well, it turns out the company's R&D budget jumped 120% while sales and marketing costs rose 83%. Meanwhile, the company's current valuation, standing at 231x earnings, certainly indicates that the stock is overvalued when compared to its peers.

So, why the jump today? It turns out that some analysts don't think all of this is a big deal. Jefferies & Co. issued a buy rating on the stock today and increased its price target from $74 to $89. This follows many others that have issued lofty valuations for one of the hottest stocks on the market.

In the end, investors should be careful when trading VMWare. The company is clearly betting that its advertising will pay off, but the lack of organic growth makes it much less of a "Google" stock. And so far, this stock seems to be mirroring Google's post-IPO life.

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Accredited Home Lenders (NDAQ:LEND) shares rose $1.78, or 18.2%, to $11.56 today after it finally reached an agreement to sell out to Loan Star at $11.75 per share, according to a statement released by both companies.

"This new agreement fairly settles our dispute and will expedite the completion of the merger with Lone Star," said Accredited chairman and CEO James A. Konrath in the statement. "We will now turn to the business of rebuilding Accredited for a brighter future with Lone Star."

The revised bid comes substantially lower than the previous offer, but just hours after the company released its 10-Q saying it lost $260 million in the first quarter and may not survive. The price jump also implies that the bid caught shareholders off-guard and came in higher than expected.

The agreement stipulates that Loan Star lend Accredited $49 million so it can pay down outstanding debt to one creditor and leave the company with $15 million in liquidity. Meanwhile, Loan Star would also deposit $295 million into an escrow that would be paid out to Accredited shareholders once the deal closes.

In the end, this is good news for Accredited shareholders who have been bracing for the worst case scenario. Clearly, the company was on the brink of bankruptcy before it was saved by Lone Star and at a price that isn't so bad. Combined, these factors make LEND a stock worth watching!

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Activist hedge fund Breeden Capital disclosed a 7.7 percent stake in Zale Corporation (NYSE:ZLC) saying it held discussions with the company's management, according to a Schedule 13D filing with the SEC. Shareholders are hoping that the fund - headed by former SEC chief Richard Breeden - can help unlock value for shareholders.

"Discussions to date have related primarily to the business, financial performance, operations, strategic plans and disclosure practices of the Company," said Richard Breeden. "As a result of [our] ongoing review and evaluation of the business, they may also communicate with the board of directors and/or other shareholders from time to time with respect to operational, strategic, financial or governance matters, or otherwise encourage actions that [we] believe in their discretion will enhance shareholder value."

Breeden has had success during his past pushes for changes in companies like Applebees (NDAQ:APPB) and H&R Block (NYSE:HRB) and many are hoping he can do the same here. Shares in the company jumped almost 4% today on the news as shareholder eagerly anticipate the activists involvement. After all, shares in Zale have fallen almost 20% over the past year amid falling same-store-sales numbers and earnings.

In the end, investors will have to wait to see what becomes of this situation. Clearly, with such a large stake built up, Breeden will do what it takes to unlock value and improve shareholder value. Combined, these factors make ZLC a stock worth watching!

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Indian Hotels Company purchased a strategic 10% stake in Orient-Express Hotels (NYSE:OEH) for $211.28 million in the open market, according to a Schedule 13D filing with the SEC. Shareholders are hoping that this move may spark a bidding war for the prized hotel chain.

"We have always recognized Orient-Express for its admirable range of ultra luxury hotels and resorts distinguished for their uniqueness and standards of excellence," said Vice Chairman Krishna Kumar. "A possible association between our two companies would bring unique competitive advantages to both companies."

Indian Hotels believes that a combination of the two companies would result in a geographically balanced presence with synergies in several complementary destinations. Moreover, Orient-Express would have a strong ally in the rapidly growing Indian market along with synergies in areas of marketing and strategic sourcing.

The company responded today in an 8-K filing, saying, "You should be aware that the Board of Directors of Orient-Express Hotels, after deliberation, does not wish to pursue the proposals mentioned in your letter. Accordingly, any meeting with you as shareholder would not include those proposals as topics for discussion."

Despite this, rumors are surfacing that many other large players like billionaire brothers David and Simon Reuben along with private equity firms like Quinlan Private and Starwood Capital may be building up stakes to mount competing bids. This could eventually spark a bidding war for a hostile takeover, which is not unheard of in the markets.

In the end, this is definitely a stock worth watching as the hotel chains assets aer clearly in demand. Whether or not anything comes of this stake remains to be seen, but it will be interesting to see what comes of the company's meeting with Indian Hotels.

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IKON Office Solutions (NYSE:IKN) may face some problems with activist investor Warren Lichtenstein's Steel Partners who believes the company's shares continue to trade well below intrinsic value, according to a Schedule 13D/A filing with the SEC. Shareholders are hoping that the activist investor can work to correct this gap in valuation and unlock value.

"As you know, I believe that the IKON shares continue to trade at a significant discount to their intrinsic value and I have made several recommendations on ways to unlock the value of the shares, including by way of a self tender or outright sale of the Company," said Lichtenstein. "I was excited for the opportunity to explore with you in further detail my recapitalization proposal in light of other strategic alternatives you indicated are currently available to IKON."

IKON recently backed down, however, by withdrawing its support for a required confidentiality agreement to proceed with the plans. It is uncertain as to whether this was due to some developments that prevented them from entering into such an agreement or simply a rejection of the hedge fund's proposals. Regardless, Steel Partners fired back by nominating its own John Quicke to the board of directors to head the exploration of strategic alternatives.

"As you know, Steel Partners is one of IKON's largest shareholders and Steel's position in the Company represents one of its largest investments in a domestic public company," said Lichtenstein. "I would like to reiterate that we are committed, long-term shareholders whose priority is to work with the Board - not against it - in doing what is best for all shareholders."

In the end, IKON is one of Steel Partner's largest holdings and with 10.2% of the company under his control it is likely that he will obtain a board seat. The success of this campaign remains to be seen, but if he is able to obtain a seat it will likely mean substantial returns for shareholders. This makes IKN a stock worth watching!

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