PDL BioPharma Inc. (NDAQ:PDLI) shares are down five percent today after Daniel Loeb's Third Point disclosed that they sold the rest of their stake in the company. Last month, the activist hedge fund announced that it cut its stake from 9.7 to 5.1 percent but noted that it was encouraged by the board's plan to sell the company - an effort that it spearheaded.

Many shareholders have sold out of PDLI as it made the WSJ's largest outflow of capital. The selling on strength suggests that some investors may be concerned that a potential deal may have trouble in today's markets. Several deals have fallen through after most banks have included clauses in their financing packages that let them get out of deal early if markets get worse.

PDLI minus their number one activist shareholder may now be tempted to abandon its sale process. This is especially true after the company announced narrowed losses in the third quarter. The company continues to lose money as a result of restructuring charges, but did manage to improve bottom line results. There have also been several layoffs and other efforts to reduce costs.

In the end, the situation may go downhill from here. Shares have rallied substantially since the hedge fund got involved and there may now be a sideways trading period after they exited amid a run-up. Whether or not the company will be sold remains to be seen, but this is still a stock that is definitely worth watching over the next few months!

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Wendy's International (NYSE:WEN) shares are up marginally today despite news that its pending sale process may be in jeopardy due to continued turmoil in the credit markets, according to an article in the New York Times. Buyers are reportedly concerned that any financing provided by major banks would be highly conditional and include several clauses that buyers may find unattractive.

The banks financing the deal sent term sheets to prospective buyers two weeks ago but have not yet made any formal commitments. One of the largest problems with the deal is a reported loophole that would allow banks to withdraw the financing if the credit markets deteriorate. Consequently, Wendy's said it may attempt to line up additional banks for its financing efforts.

Bids are due at 5pm EST today but some are predicting that the Wendy's sale may be forced on hold until the credit markets improve, which could be six months or longer. This may anger activist investor Nelson Peltz who had not only been hoping to purchase the company but is also one of its largest shareholders. In the end, this stock is definitely one worth watching!

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E*Trade Financial Corporation (NDAQ:ETFC) may become yet another victim of the subprime crisis after a Citigroup analyst downgraded the stock to a "Sell" and lowered his price target from $13 to $7.50. The analyst said that there's a 15 percent chance that E*Trade will declare bankruptcy and said management may be forced to sell loans and securities at significant discounts.

The Citigroup analyst expects the value of E*Trade's home mortgage holdings to fall significantly and lead to bigger-than-expected write-downs in the fourth quarter. It's $3 billion portfolio of asset-backed securities contains $450 million worth of collateralized debt obligations and second-lien securities. Meanwhile, the company is also facing a SEC informal inquiry related to issues with its loan and securities portfolios.

E*Trade responded this morning by saying that it can absorb an immediate write-down as high as $1 billion and still remain well capitalized. The company also acknowledged that "news in the market" will get worse before it gets better as the company takes "prudent measures" to manage its balance sheet. The company expects additional write-downs to this end.

The Citigroup analyst noted that this continued negative news flow about charges resulting from its mortgage and CDO exposure, an SEC inquiry, and continued deterioration of its financial condition, all increase the likelihood of significant client attrition. However, the company noted that its client base did increase by four percent during October.

In the end, this is bad news for shareholders that only promises to get worse before it gets any better. While the company may be safe from any liquidity issues, these combined problems may cause problems with customers and impact future growth. However, if the company can turnaround, this stock could end up becoming a great value play!

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