Spanish Broadcasting System Inc. (NDAQ: SBSA) shares have fallen over 80 percent since the summer began and is now in danger of being delisted from the Nasdaq. Once in the spotlight thanks to a quickly growing Spanish market, Spanish broadcasting firms are quickly losing ground thanks to the economic slowdown and advertising weakness. Analyst downgrades citing weak momentum with no upturn yet in sight hasn't helped the cause either.

Spanish Broadcasting shares have fell from a high of $20 per share in 1999 to just $0.24 right now. In the meantime, at least one activist shareholder has been trying to unlock value. Discovery Group has insisted that the company form a special committee to explore strategic alternatives, including a going-private transaction, sale to a strategic party, or at least the adoption of modern corporate governance practices.

Investors believe that Spanish Broadcasting may hold a number of properties that large media channels may be interested in acquiring. The company enjoys market leadership position, operating in a highly attractive geographic market and is situated in the most promising media genre. However, CEO Alacron has refused to entertain any offers that would involve him relinquishing control of the company. This includes offers that have already been made at a substantial premium.

According to a letter sent months ago:

"We now know this claim to be justified because we have direct knowledge of an important public media company (“XYZ”) that is interested in a potential transaction that could yield a substantial premium to the current SBSA stock price, yet Mr. Alarcon refuses to engage in an evaluation of this opportunity. During a meeting with Mr. Alarcon in December 2007 members of our firm presented the rationale for a combination with XYZ, to which SBSA would bring great strategic value and substantial, immediate cost synergies. Mr. Alarcon concurred with the analysis and suggested that we get the reaction of XYZ’s management to the idea.

"Our team met in January 2008 with XYZ’s Chairman/Chief Executive Officer and its Chief Financial Officer. We communicated to Mr. Alarcon that the XYZ officials were very enthused about the possible combination and wish to engage in a further dialogue directly with Mr. Alarcon. Mr. Alarcon is also in possession of detailed materials prepared by Discovery that outline a proposed structure for this transaction which yields a premium in excess of 100% to SBSA shareholders.

"Suddenly and without explanation, Mr. Alarcon refuses to discuss this opportunity. While Mr. Alarcon’s change in posture is consistent with his industry reputation, it is surprising nonetheless. Mr. Alarcon’s resistance in this case cannot be attributed to valuation because the proposed structure gives him the option to either remain invested or liquidate his shares. Rather, it appears that Mr. Alarcon fears a loss of control. That fear is interfering with Mr. Alarcon’s ability to act in the interest of all shareholders."

It is clear that there is a lot of value that can be unlocked if Discovery Group can successfully pressure Spanish Broadcasting into at least entertaining such offers. Moreover, a simple move to modernize governance practices would enable shareholders to more forcefully make demands designed to maximize value. In the end, this is a valuable company being held back by a poor management team, but Discovery Group aims to change all that.

Related Companies
Clear Channel Communications, Inc. (CCU)
Beasley Broadcast Group, Inc. (BBGI)
Entravision Communication (EVC)

Brooks Automation (NDAQ: BRKS) shares jumped higher after a large holder demanded that the company commit to an immediate and continuing substantial share repurchase program. The request was initially made by activist investor David Nierenberg on October 6th in a letter addressed to chief executive Robert Lepofsky. The letter called on the company to utilize free cash over the next three or four years to fund an aggressive share buyback program.

Nierenberg believes that Brooks has, and can generate, sufficient cash over the next three or four years to both fund an aggressive share repurchase program, which would nearly halve their share count relative to Brooks' 77 million shares before their first repurchase, and enable Brooks to roughly double its revenues relativel to their current revenue run rate, through organic growth and acquisitions. The activist urged them to act now while the share price is weak.

The program will enable Brooks to grow their earnings per share and increase return on invested capital by actively managing three variables: revenue growth, costs, and capital expenditures. Similar long-term programs have been used to successfully build shareholder value at Teledyne from 1972 to 1984, and for decades at Loews Corporation and Washington Post. At Teledyne the repurchase program enabled it to increase EPS nearly six times faster than net income.

Finally, Nierenberg provided an example: If Brooks were to repurchase 26 million shares at a hypothetical average price of $10 per share over the next several years, it would only require $260 million, which leaves $198.4 to $318.0 million for acquisitions in the future. The result would be a share price for Brooks of between $26.40 and $44.25 a piece at 15x earnings. Meanwhile, if money is tight, the company can monetize all of their real estate.

Related Companies
Asyst Technologies Inc. (ASYT)
MKS Instruments Inc. (MKSI)
Lam Research Corporation (LRCX)

INX Inc. (NDAQ: INXI) shares fell today after the company released news relating to its order book. The order book increased 47%  with September bookings increasing by 17% in total while the last two weeks saw bookings jump by 33% in total. However, this strong growth was met by concerns that orders may slow as the economy weakens.

INX noted, "While demand by customers has been healthy right up through the last two weeks of September, our sales staff are indicating that some customers are delaying moving forward with some large projects, and it is logical that the uncertainty of the last several weeks will cause some enterprise organizations to delay cap-ex expenditure projects."

INX is a provider of IP networked based solutions for enterprise-class organizations, such as corporations, schools and federal, state and local governmental agencies. The company's solutions consist of network infrastructure, IP voice and video communications systems, wireless network connectivity, network storage solutions, data center, and network and data security.

Shares of INX are down $0.29, or 4.61%, to $6.00 per share.

Related Companies
MTM Technologies, Inc. (MTMC)
Cisco Systems Inc. (CSCO)
Agilysys Inc. (AGYS)

The stock market may be struggling, but defense companies are still on their feet. Several contracts were announced today in this sector, indicating that defense spending is still going strong and some public companies are well-positioned to profit. TWo wars have done a lot to sustain spending, but some are concerned about at least one presidential candidate is interested in withdrawing troops and putting an end to the Iraqi conflict.

Lockheed Martin (LMT) announced a $41 million contract from the US Transportation Command to extend sustainment of Global Transportation Network command and control system. The sustainment contract brings the total value of the contract to $475 million. Kratos Defense & Security Solutions (KTOS) announced that its Madison Research Division had been awarded a $10.3 million contract from the U.S. Army on behalf of the Experimentation Division.

Recently, the Senate passed a military spending bill that includes a pay raise for military personnel. The bill will permit $612.5 billion in spending for military programs in 2009 with $70 billion for Iraq operations and Afghanistan. The pay increase for military personnel will be 3.9 percent. These new spending approvals will pave the way for future awards for these defense contractors and allow expansion in market share.

Related Companies
Northrop Grumman Corporation (NOC)
The Boeing Company (BA)
Alliant Techsystems Inc. (ATK)

Pharmacopeia, Inc. (NDAQ: PCOP) shares continued their decline today after the company received a delisting notice from the Nasdaq Stock Market. The company actually received the notice on September 30th indicating that it was not in compliance with the continued listing requirements because the market value of its listed securities was below $50 million for 10 consecutive trading days. This could spell bad news for shareholders as liquidity is greatly reduced upon delisting.

The company is currently involved in a deal to be acquired by Ligand Pharmaceuticals Incorporated (NDAQ: LGND) in a deal valued up to $70 million. The deal is based off of the price of Ligand shares, which have fallen sharply in recent days. The transaction is structured as a stock-for-stock exchange with an added kicker. Ligand willissue about 17.5 million shares, or 0.58 shares for each outstanding Pharmacopeia share. This will give Ligand 84% of the combined company.

Pharmacopeia is a clinical development stage biopharamceutical company dedicated to discovering and developing small molecule therapeutics to address medical needs. It has a portfolio of clinical and preclinical candidates under development internally or by partners, including eight clinical compounds in Phase II or Phase I development addressing multiple indications, including hypertension, diabetic nephropathy, muscle wasting, inflammation and respiratory disease.

Related Companies
Wyeth (WTE)
Cephalon, Inc. (CEPH)
Allergan Inc. (AGN)
Celgene Corporation (CELG)

Warren Buffett is well-recognized as a smart investor, which should be giving investors a clue. The billionaire investor has recently agreed to purchase shares in two institutions facing sharp declines: General Electric (NYSE: GE) and Goldman Sachs (NYSE: GS). Many investors are speculating that he was brought into these deals to calm fears, but he is not exactly playing on a level field. Under both of these deals, the billionaire receieved preferential treatment...

The billionaire purchased a $5 billion stake in Goldman Sachs last month, but it wasn't just common stock. The billionaire received $5 billion in perpetual preferred stock and 43.5 million warrants priced at $115 per share. These warrants give the investor a theoretical 16% stake in Goldman Sachs - one of the world's premier investment banks - for only $5 billion in investment. In fact, with shares trading at around $130 a piece, Buffett has already made $650 million in paper profits!

Buffett also managed to pick up cheaper than normal shares of General Electric. The billionaire invested $3 billion at a 9% discount to the stock's closing price Wednesday to buy up preferred stock that pays a 10% dividend. Buffett also stated that he would support measures to alleviate near-term liquidity concerns. Not only is the billionaire making a dividend on his investment, but he is also receiving a sharp discount.

So, before investors go believing that Warren Buffett's investments signal confidence - they should be sure to take a look at the terms of the deals...

Related Companies
Deutsche Bank AG (DB)
Credit Suisse Group (CS)
Friedman, Billings, Ramsey Group (FBR)

thinkorswim Group Inc. (NDAQ: SWIM) shares jumped higher after the company reported preliminary operating metrics for September 2008 early due to extraordinary price volatility, regulatory intervention and liquidity concerns. During this time period, thinkorswim delivered its 24th consecutive month of record growth by opening 8,550 new accounts, 3,400 funded accounts, executive 63,600 retail DARTs and maintaining client assets of approximately $3.2 billion.

Trading volumes at thinkorswim exceeded 96,000 retail trades in a single day during the month and now expects to outperform analyst consensus for the third quarter. Many brokerages have benefited from from the increased market activity as they have collected more in commissions. However, some brokerages have failed to offset these gains with losses from margin accounts that have defaulted.

thinkorswim Group Inc., formerly Investools Inc. (Investools) operates in two segments: Investor Education and Brokerage Services. The Company offers investor education and brokerage and related financial products and services for self-directed investors. Its Investor Education segment offers a range of investor education products and services that provide learning in a variety of interactive delivery formats.

Related Companies
Capella Education Company (CPLA)
Apollo Group, Inc. (APOL)
Strayer Education, Inc. (STRA)

Presidential candidates are gearing up for a good fight and environmental policy is near the top of the list of concerns. Many countries around the world are waiting to see whether or not the United States will sign the Kyoto Protocol this year that would require companies to reduce their carbon emissions between 2008 and 2012. This would put a relatively new, but growing carbon market into the forefront of the global financial system.

The carbon market represents an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. Countries bound by the Kyoto Protocol can use carbon trading as a way to meet their obligations to reduce carbon trading and therefore mitigate global warming. To date, carbon trading is seen as one of the most viable approaches to control global warming through economics.

EcoloCap Solutions (OTC-BB: ECOS) is developing an integrated development approach that focuses on both existing and needed infrastructure facilities to produce substantial new value in the form of tradable CERs while also maximizing alternative energy generation co-products. Partnerships with owners of facilities that generate harmful greenhouse gases as well as environmental project owners in developing countries will allow the company to capitalize on opportunities emerging in carbon trading.

To the owners of these projects, EcoloCap offers its expertise in the United Nations certification process, engineering, project management and capital in exchange for rights to the carbon credits that are generated over the life of the project. The company makes money by purchasing these credits for far less than they are worth when sold on the open market. Often times, this differential can be significant, especially when accrued over the life of the project.

As a result, one company to watch during the upcoming presidential elections may be EcoloCap Solutions. Any actions by the United States to join the Kyoto Protocol would result in a substantial boost to the carbon market in general and would in turn benefit companies like EcoloCap that sell carbon credits in the open market. After all, demand would increase while supply would remain the same, thus driving up the price of carbon credits and the value of EcoloCap's inventory. Investors interested in learning more can view a research report by clicking here.

Related Companies
TurboSonic Technologies, Inc. (TSTA)
First National Power Corp. (FNPR)
Donaldson Company Inc. (DCI)

Allied Capital (NYSE: ALD) is playing out by the book - that is, David Einhorn's book! Allied and David Einhorn have been involved in what some on Wall Street have regarded as an epic struggle between themselves, regulators, government officials, and several government organizations. In fact, Einhorn even wrote a complete book on the struggle called "Fooling Some of the People All of the Time". His premise is that Allied's loan portfolio (or that of its subsidiaries) has been impropertly valued - a thesis that may now prove to be true.

Allied Capital announced that Ciena Capital, one of its portfolio companies, voluntarily filed for bankruptcy protection today. The company said Ciena has continued to experience "significant deterioration" in the value of its assets due to the uncertainty of the financial markets and a reduction in the number of loan buyers. As a result, Allied said its unconditional guaranty of the obligations outstanding under Ciena's revolving credit facility may become due.

This is bad news for Allied Capital as it may be required to pay $320 million to the lenders in connection with the revolving credit facility. This is $150 million of the cash Allied gained on the sale of its good investments while it may have to borrow another $170 million of its unsecured revolving line of credit. Some believe that this could put the company's all-important dividend at risk - the dividend that so many investors have stayed in the stock to receive.

Allied Capital Corporation (ACC) is a closed-end, non-diversified management investment company that operates as a business development company. The Company’s investment objective is to achieve current income and capital gains. The Company is engaged in private equity business. ACC primarily invests in debt and equity securities of private companies in a variety of industries. From time to time, it may invest in companies that are public but lack access to additional public capital.

Related Company
Main Street Capital Corporation (MAIN)
PennantPark Investment Corporation (PNNT)
American Capital Ltd. (ACAS)
MACC Private Equities Inc. (MACC)