Cablevision Systems Corporation (NYSE: CVC) shares jumped sharply today after the media company announced that it is considering a range of strategic options to unlock shareholder value. Among other things, the Dolan-owned firm is considering a spin-off of its cable-television business, Madison Square Garden sports unit, or its Rainbow Media TV networks. The company also said that it plans to pay a quarterly dividend or buyback shares in an effort to boost the stock price.

Cablevision faced some harsh criticism this past year after it spent the earnings from its New York-area cable service by buy the Sundance Channel and Long Island's Newsday newspaper. Activist investors, including Gamco Investors, demanded that Dolan stop doing deals and share the proceeds with shareholders instead - advice that is finally being taken to heart. The move to spin-off certain segments may also make Cablevision cheaper for the Dolan family to acquire outright as they have attempted to in the past.

Cablevision operates cable programming networks, entertainment businesses and telecommunications companies. As of December 31, 2006, the Company served approximately 3.1 million basic video subscribers in and around the New York City metropolitan area. Through its wholly owned subsidiary, Rainbow Media, Cablevision owns interests in and manages numerous national and regional programming networks, the Madison Square Garden sports and entertainment businesses, and cable television advertising sales companies.

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Retailers may not get the boost they are looking for after reports surfaced that consumer spending increases were offset by higher prices. Inflation-adjusted consumer spending declined 0.2% in June, according to the Commerce Department. This means that companies like Wal-Mart Stores (NYSE: WMT) and Target Corporation (NYSE: TGT) may not have realized the benefits of the tax rebates, which have instead flowed into the hands of mining and energy companies behind the higher costs.

Inflation rose 0.8% this month, which is the largest increases since February 1981's reading of 1 percent. The problem the government now is that its tax rebate program is failing and the Fed may be forced to raise rates, which could further erode the credit problems in the U.S. The Fed is expected to keep rates unchanged, but pressure by the government to make the rebate programs work may force them to hike rates at least a little to ease inflation.

Retailers are now left between a rock and a hard place. A rise in interest rates would likely reduce consumer spending in the long-run because loans would be more expensive. However, it would enable them to enhance their profit margins since the cost of goods would presumably move lower. However, if interest rates do not rise, inflation will remain a pressure on margins and consumer spending may take awhile to turn around. In the end, it may be awhile before retailers recover.

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MiddleBrook Pharmaceuticals (NDAQ: MBRK) shares have dropped substantially from their highs earlier this year, but recently rebounded on news of a $100 million investment. The firm had been the center of buyout speculation for some time as they were in talks with several interested parties; however, the firm opted to take a $100 million capital infusion from Equity Group Investments. The move has many investors speculating the firm may be worth a lot more than it is trading at right now.

Under the terms of the agreement, MiddleBrook will issue EGI 30.3 million shares of common stock and a five-year warrant to purchase 12.1 million shares of common stock with an exercise price of $3.90 per share for an aggregate purchase price of $100 million. The move will bring MBRK's shares outstanding to around 86.31 million and should boost the market capitalization by $100 million to $224 million. This equates to an implied price of $2.60 per share, which pins the current discount at around 16% assuming the company can prove it is worth the same valuation as before the investment.

MiddleBrook will also receive a new chief executive officer that has a lot of experience in the pharmaceutical industry. The news may not be as good as a buyout for shareholders, but it does give new investors a chance to get in at a cheap price with management incentivized to push shares to at least $3.90 per share in order to realize the value of the additional warrants over time. Whether or not that happens remains to be seen, but MiddleBrook pharmaceuticals is definitely a stock to keep an eye on in the meantime.

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Bank of America Corporation (NYSE: BAC) continues to mount a near-parabolic recovery along with much of the banking sector. Investor sentiment has changed rapidly as the government rescued the two largest U.S. mortgage underwriters and signaled a possible end to the problems plaguing the sector - at at least a signal that the peak has passed. So, where are things headed from here?

Bank of America may not be as strong as the recent run-up in share price would have investors believe. The stock topped the list last week for stocks that rose in price but had the largest outflow of money. This means that the price increase that we’ve seen may not really be the vote of confidence that it seems. Meanwhile, Bank of America will also continue to struggle with the mortgages associated with its acquisition of Countrywide Financial.

The government’s bailout of Fannie Mae and Freddie Mac may provide would-be homeowners with more options, but it may not do all that much to stop the rising tide of foreclosures. In fact, just last week we saw a report showing that the rise in foreclosures is anything but over. Meanwhile, it will take awhile for consumers to gain enough confidence to start buying homes in order to increase property values - the other thing that could slow foreclosures.

Many analysts are also not so sure about Bank of America. Stifel Nicolaus & Co cut its full-year profit estimate on the bank, citing concerns about continued deterioration in its consumer loan portfolio. The nation’s second largest bank reported not long ago that its profit fell 41% in the second quarter on losses in its struggling mortgage operations, but still managed to top analyst estimates. However, it had to more than triple its loan loss provisions - that is, money set aside for bad loans.

Accelerating losses in its home equity, domestic credit card, residential mortgage and small business loan portfolio are creating problem for the bank. Meanwhile, cash is flowing out of the stock at a record rate. Only a rise in the stock price is causing investors to look the other way - a mistake that could cost them in the future.

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Garmin Ltd (NDAQ: GRMN) shares dropped more than 20 percent today after the company announced second quarter earnings that missed analyst expectations. The high-flying GPS maker also disappointed investors when it forecasted limited growth for the rest ofthe year and said it was delaying its entrance into the cellular phone market. Many investors are now questioning whether or not this GPS giant can be valued as a growth company in today's environment.

Garmin reported total revenues of $912 million, which is up 23% from $742 million in the second quarter of 2007. Gross margins remained solid at 45.8%, despite the economic slowdown, compared to 48.2% in the first quarter of 2008 and 50.5% in the second quarter of 2008. Operating margins were up 20 basis points sequentially to 26.2% in the first quarter, but were down compared to 32.5% in the second quarter of 2007. And finally, diluted earnings per share increased 21% in the second quarter.

"We are pleased with our financial results for the second quarter given the economic conditions facing the consumer electronics segment," said Kevin Rauckman, chief financial officer of Garmin Ltd. " We also generated $34 million of free cash flow in the second quarter of 2008, resulting in a cash and marketable securities balance of just over $1.0 billion at the end of the quarter." This number is a positive note, but not enough to convince investors...

The forecasts are where investors lost confidence. Garmin anticipates overall revenues in 2008 to hit $3.9 billion and earnings to hit $4.13 per share, including the $0.27 related to the tender of their Tele Atlas NV shares. The company also reiterated growth rates for all of its division, except for the marine segment, where it said that high fuel prices have led it to forecast flat revenues for 2008. Meanwhile, the firm also forecasted a drop in operating margins to 25% as input costs rise and selling prices lower.

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Merrill Lynch & Co., Inc. (NYSE: MER) shares fell sharply today after the troubled investment bank priced its share offering at $22.50. This pricing point suggests that they weren't able to sell shares at the current market price and raises questions about both dilution and the company's ability to maintain its share price. Shares fell sharply before recovering to $23.90 on the news today.

Merrill Lynch told investors yesterday that it would raise $8.5 billion by selling newly issued stock despite the fact that CEO John Thain repeatedly denied that the firm would need to raise more capital. In fact, back in January Thain was quoted as saying, "We're very confident that we have the capital base now that we need to go forward in 2008." Such comments had many investors convinced that such dilution wouldn't occur anymore.

In fact, on April 4th of 2008 he even commented: "In 2007, we lost 8.6 billion dollars after tax, but we raised 12.8 billion dollars in new capital. We raised significantly more capital than we lost. And we did that on purpose so that we could say to the marketplace that we raised more than enough capital. We replaced all the capital we lost. We have plenty of capital going forward, and we don't need to come back into the equity market. The goal is to maintain our current ratings. No more capital raising; I'm sure we have enough capital."

Merrill Lynch needs the capital after unloading more than $30.6 billion in repackaged debt at a fire sale price ealier this month in an attempt to reduce the risk on its balance sheet. Such news only underscores the fact that the financial sector remains exposed to losses that will require more loan loss reserves, more write-offs, and more capital to keep afloat. All of this is bad news for Merrill Lynch and others in the financial sector, except perhaps Goldman Sachs.

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Kraft Foods Inc. (NYSE: KFT) shares surged higher today after it reported strong second quarter earnings and forecasted a strong full year. The world's second largest food-maker announced higher profits thanks to commodities hedging, successful price hikes and the dollar's decline overseas. The news comes half way through the company's three year plan to restructure itself.

Second quarter income increased 3.5 percent to $732 million from $707 million a year earlier. Excluding items, profit beat analyst estimates by 8 cents per share. Meanwhile, revenues also rose some 21 percent to $11.2 billion from $9.2 billion a year earlier. Finally, Kraft now expects to earn at least $1.92 per share in 2008, which is 2 cents higher than its previous forecast and matches analyst estimates.

Kraft earnings benefited the most from a $150 million hedge in grain, which helped it lock in prices for the commodity. Price increases helped the company recoup costs in other areas, such as cocoa, sugar and transportation. Oil prices have climbed 61 percent in the past year, while wheat used in cookies and pizza has risen 27 percent. Some consumers have switched to less expensive brands after the increases, but Kraft still holds a commanding lead in its markets.

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Point Blank Solutions Inc. (OTCBB: PBSO) announced another delay in their annual meeting today, which has some shareholders furious and others grateful. The body armor manufacturer said they need to wait for the Army's IOTV contract award before completing their review of strategic alternatives, which includes a potential sale of the company to some 90 potential parties.

Point Blank has already been awarded with a bridge buy of 150,000 IOTV's for a total of $86.2 million while the Army finishes determining who will win the larger 736,000 IOTV contract. The latter could be worth around $200 million or more, which is more than Point Blank's current market capitalization. Obviously, the award would substantially impact PBSO's valuation to a potential buyer.

However, at least one activist investor is sick of constantly waiting around. Steel Partners, who has been involved with the company since its fraud charges, has been waiting for an annual meeting for over two years and is currently suing the company to hold it. Interestingly, the activist hedge fund is also holding a proxy contest to overtake the board.

"The postponement was a unilateral stunt pulled by a Board in fear of losing an election contest and was designed to block the democratic process, limit accountability and further entrench the Board and management team," said Steel Partners in a regulatory filing. "Ask yourself whether you believe this Board was truly serious about exploring alternatives to maximize stockholder value or whether the Board was more interested in disenfranchising stockholders?  We think the answer is obvious."

Supporters of Steel Partners believe that the hedge fund is simply trying to deliver shareholder value as quickly as possible. However, skeptics believe that they may be positioning themselves to acquire the company on the cheap before any major contract is awarded. After all, it is not uncommon for hedge funds to privatize a company during a turnaround when they are vulnerable and then re-IPO it later on and make bank.

Point Blank also faces problems with its former CEO David Brooks, who is facing criminal charges for fraud. Combined, Point Blank contends that it is facing adverse interests from both of these large shareholders and they say they are simply trying to protect the interest of the thousands of minority shareholders.

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