eSpeed Inc. (NDAQ:ESPD) shares moved up $0.19, or 2.07%, to $9.38 after WC Capital disclosed a 6.4% in the company and expressed their concerns about the company's valuation. The activist hedge fund said that their analysis has led them to believe that the range of the company theoretical valuation could be considerably higher than the current share price, which could result in a value 28% to 70% greater ($12 to $16 per share) than the current valuation of $9.40 per share. The move comes after another large shareholder, Chapman Capital, disclosed a 9.3% stake and made similar demands that the company immediately put itself up for sale. The problem facing both shareholders is the fact that 88% of the company's voting power is controlled by Mr. Lutnick and his affiliates due to a classified share structure in which Class B shares have 10 votes each.

Problems began in early 2004 when several investors began to recognize a significant divergence between the performance of the company's common stock and its publicly traded peers. Specifically, in 2004 the company stock plummeted 47% while that of its peers remained flat, and in 2005 the company's stock dropped 37% while its peers added 49%. Then in January of 2006 there was a glimmer of hope when The Daily Telegraph reported that Cantor Fitzgerald was preparing a stock market float of BGC Partners, its London-based brokerage business, in a move that was expected to lead to a merger with eSpeed, the Nasdaq-quoted broker also controlled by Cantor, to create a company worth between $500 million and $1 billion. However, this deal never materialized. Then, in a highly questionable December 2006 Form 4 filing with the SEC, Mr. Lutnick was granted, free of cost, 800,000 Class A common stock options - representing 3% of the company's outstanding shares! This upset many investors who feared the potential dilutive effects of the options. Finally, the last straw came in February of this year when the company issued a press release that disclosed its FY2007 financial outlook. Investors were outraged to find out that company projected nearly break-even operating performance due to approximately $152 million of non-GAAP operating revenues being consumed by $146 to $148 million of non-GAAP operating expenses, a level of spending which investors have thought unacceptable.

Now, WC has suggested that the board of directors immediately review several strategic alternatives for the company:

1. Sale of the company
2. Conversion of Class B shares to Class A shares
3. Return of capital to shareholders (one-time dividend/share repurchases)
4. Initiation of procedures and structures increasing eSpeed autonomy

Clearly there are changes that need to be made to this company and with two shareholders now expressing concerns, maybe the company will institute some changes. Regardless, this is definitely a stock worth watching!

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MoneyGram International Inc. (MGI)

Tower Automotive Inc. (OTC:TWRAQ) received a $1 billion buyout offer from Cerberus Capital Management to take it out of Chapter 11 bankruptcy protection. The company would be the latest in a series of automotive takeovers by private equity, which have included Delphi and DaimlerChrysler. The term sheet submitted to the U.S. Bankruptcy Court indicated that the Cerberus offer would pay off all of the outstanding obligations to debtors, pay off Tower's pensions, and provide "certain recovery" for unsecured creditors. These unsecured creditors would get $10 million in cash under a reorganization plan while Cerberus would put aside another $2 million in a liquidating trust for the unsecured creditors. The process would also allow for competitive bids; however, the bidding procedures would be $10 million above Cerberus' initial offer and will raise in $5 million increments, which is somewhat high for a bankruptcy auction. Consequently, it is likely that the Cerberus offer will be the final offer, especially considering the fact that many of the other large private equity firms that would compete have already taken stakes in other automotive companies.

Meanwhile, the company's common stock shareholders pushed the OTC shares up nearly 100% on the news until it settled at $0.06. It is uncertain as to whether or not common stock shareholders will be able to partake in the $10 million set aside for unsecured creditors. Remember, unsecured creditors include not only common stock shareholders but also preferred stock shareholders, trade creditors, and many others. Currently, the OTC shares price the company's common stock value at $3.92 million, indicating an assumption that almost 40% of the $10 million payout will be distributed to common stock shareholders. Will this happen? While nothing is certain, it is unlikely that this much will be set aside since there are many other unsecured creditors that must be paid off. Regardless, this development is certainly worth following as private equity continues to aggressively take over the auto sector.

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Electro Scientific Industries Inc. (NDAQ:ESIO) shares moved up $0.49, or 2.58%, to $19.51 today after Nierenberg Investment Management disclosed an 11.7% stake in the company and expressed their impacience with ESIO as its share price weakens. The activist hedge fund contends that the company continues to depress its return on equity (ROE) by failing to make its excess cash work harder and smarter for its shareholders. Nierenberg has communicated these concerns with the company in the past along with Third Avenue Management - another activist hedge fund pushing for changes. However, despite these communications, little seems to be changing despite the company's January 22nd press release affirming their commitment to shareholder value. Consequently, Nierenberg made an ultimatum saying that time is running out and the time for action is now. If management does not make some immediate changes, it is likely that Nierenberg will pursue board seats in what could become a proxy fight for contorl of the company. Given their large stake and support by Third Avenue Management and other shareholders, it is likely that they would succeed in such a battle.

Just how much cash is ESIO carrying? Well, in addition to to its cash reported on the cash and marketable securities lines of the balance sheet, they also have $1 million from an insurance settlement and $7 million in a litigation bond in Taiwan, which increases cash per shares to $7.73. If ESIO were to restore inventories and receivables to June 3, 2006 levels, and if the above-mentioned $8 million in cash were added, ESIO's total cash and marketable securities would be $8.21 per share - or over 40% of ESIO's share price! ESIO is profitable, cash flow positive, and debt-free... so why has it dropped through 2006 from $25 per share to $19 per share? This is the issue that the hedge funds are trying to address.

What measures is Nierenberg looking for to unlock value? Well, the hedge fund advocates a "tangible and substantial" boost to ROE via a (at minimum) six million shares repurchase with a plan in place to repurchase at least one million more shares annual from free cash flow, asset monetization, and cash reserves. Nierenberg said in a past filing that given the combination of organic growth, increased R&D investment, a number of promising new product releases, and possible acquisitions could enable ESIO to double its revenues over the next three to four years. Management has shared this goal with the public on sevearl occasions. Moreover, given the company's business model, such growth would drive earnings per share north of $2.00, and, in their view, ESIO's share price to $40, more than double its currently depressed level. This makes ESIO a stock worth watching!

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Online advertising firm DoubleClick Inc. is reportedly exploring a sale and is already in talks with Microsoft Corporation (NDAQ:MSFT) among others. The firm hired Morgan Stanley to help it explore strategic alternatives, including a possible sale or initial public offering. The company is majority owned by private equity firm Hellman & Friedman who purchased the business in 2005 for approximately $1.1 billion. The hedge fund hopes to get at least $2 billion for the company as potential bidders including Microsoft, IAC/Interactive Corp, and others. The acquisition could help Microsoft boost its edge in the competitive online advertising market dominated by Google's (NDAQ:GOOG) Adsense and Adwords programs and Yahoo!'s (NDAQ:YHOO) Overture. And with Microsoft's vast amounts of cash onhand, it could represent a new threat to Google's dominance in the online advertising market. This makes the situation one worth watching!

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The Blackstone Group recently announced its intentions to go public in what is quickly becoming a private equity rush to the public markets. Blackstone, the largest private equity firm in the world, is planning to offer 10% of its shares to the public for $4 billion in a move that is sure to spark interest on Wall Street. Many investors like the idea of a Blackstone IPO since the company has proven to be a cash machine. Since 1987 the firm has averaged an impressive 23% annualized return with its real estate division returning closer to 29%! Meanwhile, Blackstone's assets have grown from $14 billion to $78 billion in less than six years - that is, they have multiplied their assets more than five times in six years. These are impressive numbers that have many investors eager to put money in the private equity giant.

Some investors are speculating that this move indicates that the market may be overvalued. After all, if the market wouldn't assign a high enough premium to their shares why would they IPO? What concerns investors is the ease in which private equity and hedge funds are able to raise cash. Investors who know the market is fully valued are apparently willing to give their money to these firms that in turn feed the M&A mania. Moreover, is there a problem with the credit markets? The recent subprime fiasco combined with the fact that the credit markets have grown five times as fast as the GDP for the entire 21st century so far is certainly cause for hesitation. And what happens when the debt markets grow less desirable and equity is required to get deals done? It's simple, returns will fall. This makes the idea of investing in Blackstone less desirable. However, at least in the short-term, we can be sure that there will be plenty of interest in the IPO. Whether this is a sign of something more remains to be seen. Combined, these factors make Blackstone a company worth watching!

ASM International NV (NDAQ:ASMI) shares rose $0.48, or 2.21%, to $22.23 after Fursa Alternative Strategies disclosed a 8.9% stake in the company and requested clearance to purchase additional shares of the company's common stock. The request was mandated since, combined with their current holdings, the hedge fund's ownership would exceed the $100 million Heart-Scott-Rodino form notification threshold. This is good news for shareholders, as any further buying in open market transactions clearly provides a boost for the share price. While this is no guarantee, it certainly makes ASMI a stock worth watching!

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Crude oil prices surged above $66 a barrel Thursday, driven to a new six-month high by concerns that strained relations between Iran and the West could put oil exports in jeopardy as U.S. gasoline supplies wane and demand swells. 

Dealing a significant blow to Sprint Nextel (NYSE:S), the government on Thursday awarded the largest-ever federal telecommunications contract, a 10-year deal worth up to $48 billion, to its rivals AT&T, Qwest Communications and Verizon. The three contract winners will split $525 million, but beyond that they will have to compete with each other for the business of dozens of federal agencies needing to enhance the quality and security of voice, video and data technologies, the General Services Administration announced.

Shares of Qwest (NYSE:Q) rose $0.10 to close at $8.95, near the top of its 52-week trading range of $6.12-$9.22.

Shares of AT&T (NYSE:T) advanced $0.22 to end at $39.17, also close to the top of its 52-week trading range of $24.72-$39.86.

Verizon's (NYSE:VZ) stock price added $0.34 to finish at $37.57, just off the peak of its 52-week trading range of $30.10-$38.95.

Sprint (NYSE:S) climbed $0.49 to close at $19, settling in the lower half of its 52-week trading range of $15.92-$26.89.

United States Steel Corp. (NYSE:X) plans to buy Lone Star Technologies Inc., a maker of welded pipe used in oil fields, in a $2.1 billion cash deal that will make it North America's largest producer of tubular steel. Under the terms of the deal, U.S. Steel will pay $67.50 per Lone Star share, a total of about $2.1 billion and a roughly 39% premium over Lone Star's closing share price of $48.45 on Tuesday on the NYSE. Shares of Lone Star climbed $17.56, or 36%, to close at $66.01 after rising to a 52-week high of $66.50. U.S. Steel shares rose $3.61 to close at $101.22 on the NYSE after also setting a new 52-week high of $101.59.

RF Micro Devices Inc. (NDAQ:RFMD), which makes radio frequency components, warned that weaker demand from a major customer would hurt its first-quarter results. Shares fell $0.76, or 10.8%, to $6.31.

Circuit board maker Multi-Fineline Electronix Inc. (NDAQ:MFLX) said its Q2 sales and profit could decline from the Q1. The stock fell $1.95, or 11.2%, to $15.55.

Red Hat Inc. (NYSE:RHT) posted a profit decline of 25% and failed to meet analyst expectations for revenue Thursday, compounding earlier fears that larger competitors may bully the budding Linux provider. Red Hat earned $01.5 per share in the quarter ending Feb. 28, up from $0.14 last year, matching estimates from analysts polled by Thomson Financial. For the full year, Red Hat earned $59.9 million, or $0.29 per share, compared with the $79.7 million, or $0.41 per share, it earned in the last fiscal year. In part, that was due to higher operating expenses, particularly in sales and marketing. While the company was able to add at least 10,000 new customers and saw its revenue jump 41% to $111.1 million during the Q4, it fell short of analyst predictions of $112.5 million.

The electronics retailer Circuit City (NYSE:CC) plans to lay off about 3,400 store workers and replace them with lower-paid employees. The company also plans to eliminate 130 information-technology jobs at the corporate level. Circuit City Stores Inc. had shares up $0.35 at $19.23.

Beazer Homes USA Inc. (NYSE:BHZ) is under investigation by a host of government agencies for its mortgage-lending practices as well as other financial dealings. The company said it is complying with a request for documents from a federal prosecutor. The company’s shares were down $2.64 to close at $28.77.

Archer Daniels Midland Co. (NYSE:ADM), a producer of corn-based ethanol and corn syrup for foods, saw its shares up $0.91 at $36.84. The company is expected to benefit should corn prices fall amid an expected bump in supply.

Vyyo Inc. (NDAQ:VYYO), the maker of communications equipment, received $35 million in funding from Goldman Sachs & Co. Shares rose $0.97 to end at $8.44.

Syntax-Brillian Corp.’s (NDAQ:BRLC) shares rose $0.48 to $8.41. The maker of high-definition televisions sold 2.1 million shares for $15.5 million in a private transaction with two affiliates. The company plans to use proceeds in part to expand its manufacturing base and to market its Olevia brand televisions worldwide.

AtheroGenics Inc. (NDAQ:AGIX) had a decline in its shares, down $0.44 at $2.80. Analysts predict AstraZeneca PLC will end a partnership with the drug developer.

American Depositary Shares of eTelecare Global Solutions Inc. climbed Wednesday in their trading debut on the Nasdaq Stock Market. Shares of the Philippines-based outsourcing company rose $1.63, or 12%, to close Wednesday at $15.13. The IPO offering was priced at $13.50 per ADS for the 5.5 million of U.S.-traded shares. The IPO price was at the midpoint of the expected price range of $12.50 per ADS to $14.50 per ADS.

Programmable chip maker Altera (NDAQ:ALTR) lost $0.89, or 4.3%, to $20.05 after a Bear Stearns analyst lowered his 2007 earnings estimates for the company, partly based on weak business in Asia Network Appliance, a provider of network-attached storage systems, shed $1.60, or 4.2%, to $36.42.

Video game publisher Activision Inc. (NDAQ:ATVI) rose $0.88, or 4.9%, to $19.01 on the heels of a solid Q4 and full-year report from No. 1 game retailer GameStop Inc. Activision hit a 52-week high of $19.19 during the session.

Advancis Pharmaceutical Corporation (NDAQ:AVNC) shares dropped $0.16, or 6.32%, to $2.37 today after the company announced fourth quarter net losses of 44 cents per share on total revenue of $1.2 million in an 8K filing with the SEC. This compares to the company's four analysts who expected the company to report a loss of 39 cents per share on revenue of $2.31 million. The losses come as the company has been facing increased problems with its PULSYS approvals, having received a "refusal to file" letter from the FDA for its once-daily Amoxicillin PULSYS NDA last month. According to the company's CEO Edward Rudnic, "We achieved clinical and operational progress during 2006, and we look forward to continuing the advancement of our Amoxicillin PULSYS product following our NDA resubmission last week. However, as we look forward into 2007, completing a financing and providing necessary capital to fund our business is a primary focus."

Advancis also announced that it had authorized the company to evaluate various strategic alternatives to further enhance shareholder value. The company has since retained an investment bank focused on the life sciences industry to assist in the evaluation of a full range of strategic alternatives available to the company. These could include a possible sale of the company, execution of its existing strategies, partnering or other collaboration agreements, or a merger or other strategic transaction. Further, the company's policy is to not disclose and developments with respect to this process unless and until the evaluation of strategic alternatives has been completed. Given the company's difficulties obtaining financing and FDA approvals, the company may be forced to engage in some type of strategic transaction in order to finance their ongoing research. This is definitely a stock to watch as the company works to explore alternatives and get its products approved.

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Circuit City Stores, Inc. (NYSE:CC) shares moved up $0.59, or 3.13%, to $19.47 in early trading today after the company announced a broad restructuring plan to better position itself against rival Best Buy Co., Inc. (NYSE:BBY). The company said it would be dismissing about 3,400 store associates being paid well above the market-based salary range for their role and hire new employees that would be compensated at the current market range for the job. Circuit City also announced that its board authorized management to explore a possible sale of its InterTAN unit, which operates about 900 retail stores and dealer outlets in Canada. The company first purchased InterTAN in 2004 for about $284 million. Finally, the company said it will also outsource its information-technology infrastructure to International Business Machines Corp. (NYSE:IBM) in a move to cut about 16% of its IT expenses over the life of the seven-year contract.

The restructuring follows an unexpected loss of $16 million, or nine cents per share, incurred during the quarter ended November 30th. The loss was down from a year-earlier profit of $10.1 million, or six cents per share, and came as a result of a price war over flat-panel television sets. The company has already announced plans to close some stores and restructure its merchandising teams to improve financial performance; however, it believes that these new efforts will greatly enhance margins. However, the company is likely to record a pretax expense of about $144 million, including goodwill impairment, store closing and other restructuring costs. Clearly, Circuit City is in need of some restructuring efforts to improve its financials and clearly substantial reductions in employee compensation and IT expenses will contribute directly to the company's bottom line. Meanwhile, a sale of the InterTAN unit would provide the company with some spare cash to get the process rolling without substantially reducing earnings in the short-term. Overall, this is definitely a great stock to watch as they go through the restructuring process.

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Time Warner Inc. (NYSE:TWX) shares jumped Monday after there was speculation that the media giant may be able to unlock more value through restructuring and possible selling off its publishing unit. The speculation began after Bear Stearns analyst Spencer Wang upgraded Time Warner to "outperform" from "peer perform" explaining that the company could improve share value by speeding up its restructuring efforts over the next 12 to 18 months. One possible catalyst, according to the analyst, is a divesture or major restructuring of Time Warner's publishing division. This is a possibility since the company has already sold a number of its magazine and publishing assets recently. Wang believes that this move makes sense for the company since the division lacks synergies with other Time Warner business, which are video-centric. Moreover, the division has been somewhat of a drag on the company's growth rates and future prospects.

A leveraged spin-off of the publishing division would provide cash for Time Warner while giving shareholders a stake in the new entity - all through a presumably tax-free transaction. The transaction would not only result in an increased cash stockpile for Time Warner, but also a potential vehicle to unload some debt. It is also important to remember that spin-offs themselves tend to outperform the overall market in the first year or two after the separation. Combined, these factors make a potential TWX spin-off something worth following closely!

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Delta Air Lines Inc. (OTC:DARLQ) forecast an operating profit of $816 million this year and said that it would exit bankruptcy and re-list its stock in May after more than a year and a half in Chapter 11 bankruptcy reorganization. The deadline for creditors to vote on the company's reorganization plan is April 9th, with the bankruptcy court confirmation hearing set for April 25th. Meanwhile, a stock listing could come in the first week of May pending a decision on which exchange the shares would be listed on, which Delta is holding off on announcing publicly. This is good news for the company and its creditors as the company could finally put the bankruptcy case behind them and focus on improving its core operations.

Many analysts are also saying that the company could become a takeover target due to its largest asset - approximately $7.8 billion in net operating losses that it could carry forward to offset its taxable income in years ahead. Some are speculating that the airline industry consolidation will be one of the top issues for discussions by Delta's board once the bankruptcy case is behind them. Earlier this year, Delta fought off a hostile $9.75 billion bid from U.S. Airways Group, which definitely shows an interest in the company. This makes Delta a stock worth following.

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The BISYS Group (NYSE:BSG) shares moved down marginally after Mr. Ahmet Okumus disclosed a 10.14% stake in the company and expressed his interest in obtaining a seat on the company's board of directors in a Schedule 13D filing with the SEC. The Okumus Capital LLC President said that while he has the utmost confidence in the ability and intentions of the current board and management, he believes that his perspective as a financial professional and representative of a significant shareholder on the board would provide the board with practical insight and guidance in considering the company's strategic alternatives. Moreover, he believes that his experience in identifying undervalued assets, along with his knowledge of financial engineering and capital allocation could make an immediate positive impact to the board during this critical period.

This news followed speculation back in February that the company could be the target of a takeover bid. BISYS said in August that it had hired investment bank Bear Stearns to help it explore strategic alternatives, including a possible sale of the company. Since then, the company has resolved several of its problems with the SEC and other accounting issues. Then Murali Gupta, an analyst at investment bank Keefe, Bruyette & Woods, said that the company would likely be sold, adding that it would likely be to a private equity fund through a leveraged buyout. The valuation is estimated as being between $11 and $14 per share. Whether there is any substance to this rumor remains to be seen; but perhaps with the guidance of Mr. Ahmet Okumus, perhaps the company will have a better chance. This makes BSG a stock worth watching!

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Lennar Corp. (NYSE:LEN) found themselves with a 73% plunge in their Q1 earnings, following the trends of a slumping housing market. The company predicts that it is going to fall short of 2007 earnings goals. Since the start of February, homebuilders KB Homes, Hovanian Enterprises Inc. and Toll Brothers Inc. all reported falling profits. Miami-based Lennar reported that net income for the quarter ended Feb. 28 fell to $68.6 million, or $0.43 per share, from $258.1 million, or $1.58 per share, a year earlier. The results were in line with expectations of analysts. Revenue declined 14% to $2.79 billion from $3.24 billion a year ago, topping Wall Street's estimate of $2.49 billion.

Delta Air Lines Inc. (OTC:DARLQ) expects to emerge from bankruptcy protection April 30 with an eye on improving customer service and selling more assets to build shareholder value, it said Tuesday, raising the possibility it could shed feeder carrier Comair. Delta is projecting a pretax profit, excluding special and reorganization items, of $816 million in 2007. Delta is forecasting a narrower loss of $25 million to $50 million in the first quarter, which ends Saturday. He said Delta expects to get a positive vote of creditors on the airline's reorganization plan, which he said should be approved by the bankruptcy court after a hearing April 25.

Amylin Pharmaceuticals Inc. (NDAQ:AMLN) shares jumped off of a negative Wall Street outlook for possible future competitor ConjuChem Biotechnologies Inc. That company's diabetes drug candidate PC-DAC was not more effective than Amylin and partner Eli Lilly's Byetta in a recent study. Amylin shares gained $1.75, or 4.8%, to close at $38.27 on heavy trading volume. The stock has traded between $35.55 and $51.54 over the last 52 weeks.

Shares of GTX Inc. (NDAQ:GTXI) fell $1.12, or 5.4%, to $19.78, having traded between $7.70 and $23.40 over the last 52 weeks. Shares of Altus Pharmaceuticals Inc. shed $0.68, or 4.4%, to close at $14.94, having traded between $10.75 and $23.59 over the last year.

Three San Antonio area oil refiners won contracts with the Department of Defense totaling $339 million. Refinery Associates of Texas is a petroleum products trading company based in New Braunfels. The company has won a $172 million contract to supply the government with naval distillate from a refinery in Pasadena, Texas. The Defense Energy Support Center in Fort Belvoir, Va., is managing all the supply contracts, which will not expire until April 30, 2008. AGE Refining in San Antonio won a $92 million contract to supply the military with jet fuel. Tesoro Refining and Marketing Co., a subsidiary of Tesoro Corp., also won a $75 million contract for jet fuel. Tesoro will supply the government with jet fuel from its refinery in Mandan, N.D. A week ago, a Valero Energy Corp. subsidiary won a separate $499 million fuel contract from the government.

The U.S. Navy on Tuesday awarded an $8.9 million delivery order to General Electric Co. (NYSE:GE) for work on H-53 helicopter engines. Shares of General Electric fell $0.21 to close at $35.79 on the NYSE.

Shares of FuelCell Energy Inc. (NDAQ:FCEL) surged Tuesday after the company announced a lucrative deal to supply fuel cell power products to Connecticut. The deal is valued at $200 million, if all projects are approved. Shares of FuelCell surged $1.40, or 19.4%, to $8.60 on the Nasdaq Stock Market in midday trading. The stock spent most of 2006 in decline since hitting a 52-week high of $15 in April. However, shares have climbed 12% so far in 2007.

Morgan Stanley (NYSE:MS) offered additional details regarding its pending Discover Financial Services spin-off in a Form 10-12B filing with the SEC. The spin-off is expected to be a tax-free distribution of its common shares to Morgan Stanley shareholders. The new entity is expected to be listed on the New York Stock Exchange under the ticker symbol "DFS" in the third quarter of this year. The already-approved spin-off would follow Mastercard's successful recent IPO and come in just before Visa's anticipated IPO later this year.

Discover itself is a leading credit card issuer and electronic payment services company with one of the most recognized brands in the U.S. financial services. Since its inception in 1986, the company has grown to become one of the largest card issuers in the United States, with more than 50 million cardmembers and $45.7 billion in managed receivables as of November 30, 2006. They are also a leader in payment processing, as they are only one of two credit card issuers with its own U.S. payments network and the only issuer whose wholly-owned network operations include both credit and debit functionality. In 2006, the company processed mroe than 3 billion transactions through their own network and the PULSE network. Overall, Discover's revenues (net interest income plus other income) have increased over the last three years, from $4.5 billion in 2004 to $5.1 billion in 2006, making them a substantial player in their market.

Typically, investors look for several criteria when selecting stocks. Given Discover's market leadership, strong growth, solid entrenchment, and excellent prospects, many investors will likely be interested in this new spin-off. Moreover, spin-offs themselves offer unique opportunities due to their inherent structuring. Often times, parent company shareholders do not want shares in the new entity, so they immediately sell them. This selling pressure creates a temporary mis-valuation, which can be a great opportunity for enterprising investors to take early positions. The spin-off's proceeds will also generate a significant amount of cash for Morgan Stanley - but an amount that has yet to be announced. These are two great stocks to watch as the spin-off draws closer.

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Tribune Company (NYSE:TRB) shares moved up $0.46, or 1.5%, to $30.99 after the company's board of directors is said to be favoring a buyout offer from real estate mogul Sam Zell for $33 per share or $8 billion. Meanwhile, billionaires Ron Burkle and Eli Broad are saying that Tribune did not treat them fairly during the auction process. In particular, the two said they were not privy to information given to Sam Zell back in September when they made their bid for the company. The special committee of Tribune's board that is evaluating its strategic options has reportedly turned down several offers and is also reportedly looking at a "self-help" plan that would include a spinoff of its television stations, and borrowing enough money to pay a substantial dividend to shareholders. Currently, Zell's offer remains the highest at a nearly 8% premium to the company's current market price if approved. Either way, this is a great company to keep an eye on as the company mulls its options.

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Riviera Holdings (AMEX:RIV) shares moved up $2.46, or 9.66%, to $27.93 after an investor group led by Mr. Kanavos, Robert Sillerman, Brett Torino and Barry Sternlicht offered to acquire the company for $27 per share. The group said they are prepared to immediately enter into a merger agreement with Riviera on substantially the same terms as the April 5, 2006 merger agreement between their acquisition vehicles and Riviera. The offer represents a 13.5x 2006 EBITDA multiple, which the investment group believes is a substantial premium. They also said that their proposal has the support of other large stockholders who have reportedly contacted the company directly to confirm the same. Whether or not this transaction goes through depends on whether the board lifts several restrictions in order to make it possible - for this, the investor group has set a 5:00PM PST on March 30th. Given that the stock is currently trading above the buyout price, it appears that some investors may believe that the company is worth more. Regardless, this is definitely a stock to watch as this situation unfolds!

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Citigroup Inc. (NYSE:C) expects to have completed its corporate cost review by mid-April, company officials said Monday, as published reports suggested the nation's largest bank was considering cutting about 15,000 jobs. It is said that the cuts could result in a charge of more than $1 billion against earnings. Citigroup shares fell $0.18 to close at $51.54 on the NYSE.

Oil prices settled Monday at their highest level so far this year on tensions between Iran and the West following Tehran's detention of British naval personnel. Gasoline futures prices climbed above $2 a gallon to their highest level since last September as a new driving season nears. On the New York Mercantile Exchange, light, sweet crude for May delivery rose $0.63 to settle at $62.91 a barrel, the highest settlement for the front-month contract since Dec. 20. Earlier, the contract rose as high as $63.30 a barrel.

Northwest Airlines (OTC:NWACQ) can begin seeking creditor approval of a plan to exit bankruptcy that values the company at an estimated $7 billion, a judge ruled Monday. The decision puts the airline in the last stages of bankruptcy before it can emerge from court protection. Eagan, Minn.-based Northwest Airlines Corp. wants to cancel all existing shares in the company and issue 272 million new ones, with a stock offering to sell 27.78 million shares at $27 a piece.

Robust prescription drug sales helped drugstore chain Walgreen Co. (NYSE:WAG) earnings increase nearly 25% in the Q2. The nation's biggest drugstore chain by revenue earned $651.9 million, or $0.65 per share, for the three months ended Feb. 28. That's up from $523.5 million, or $0.51 per share, during the same period last year.

Upscale jewelry retailer Tiffany & Co. (NYSE:TIF) on Monday said Q4 net income was nearly flat, weighed by an impairment charge, flat sales in Japan and higher cost of metals. Earnings for the quarter ended Jan. 31 were nearly unchanged at $140.5 million, or $1.02 per share, from $140.3 million, or $0.97 per share, during the same period last year. Revenue grew 15% to $986.4 million from $858.4 million in the year-ago quarter. Analysts expected net income of $1.05 per share on revenue of $979.1 million.

Dell (NDAQ:DELL) shares rose 3.5%, or $0.79, to $23.62 on the Nasdaq after Goldman Sachs upgraded the computer maker's stock to "buy" from "neutral" amid calls on Wall Street for the company to cut jobs and improve profit margins.

Internet auctioneer eBay Inc. (NDAQ:EBAY) stock rose 4.4%, or $1.39, to $33.22 on the Nasdaq.

3M Company (NYSE:MMM) shares were the biggest drag on the Dow on Monday, down 0.76%, or $0.59, at $77.38 on the NYSE.

Microsoft Corp. (NDAQ:MSFT) said Monday it sold 20 million consumer copies of the new Windows Vista operating system worldwide in February, but analysts said the data shed little light on the program's popularity during its first month on the market. The analyst said 51 million PCs were sold to consumers worldwide in 2002; this year, the research group predicts 96 million consumers will buy a computer. Shares of Microsoft rose $0.20 to close at $28.22 on the Nasdaq.
 
Officials of Safeway Inc. are reportedly interested in buying additional stores. Safeway officials, along with officials from other nationwide supermarket giants like The Kroger Co. of Cincinnati and SuperValu Inc. of Edina, Minn., are said to have expressed an interest in buying stores operated by Roundy's Supermarket Inc., a Milwaukee-based company that owns and operates 155 retail grocery stores in Wisconsin, Minnesota and Illinois under the Pick 'n Save, Copps Food Center, and Rainbow Foods banners. It had sales of nearly $4 billion during fiscal 2006 and employs 22,000 workers. Pleasanton-based Safeway had fiscal 2006 sales of $38.4 billion and currently operates 1,761 supermarkets throughout the United States and Canada. That includes the Dominick's chain in the Chicago area, just to the south of Milwaukee, which Safeway purchased in 1998, and then tried unsuccessfully to sell off several years later when Dominick's was struggling in the nation's third-largest metropolitan area.

Raytheon Co. (NYSE:RTN), the world's fifth-largest defense company, closed on the sale of its aircraft operations Monday to Hawker Beechcraft Inc., with the new owners planning to bolster its international sales and service, the company said. The $3.3 billion dollar sale of Wichita-based Raytheon Aircraft to Hawker Beechcraft was first announced in December.

Redhook Ale Brewery Inc. (NYSE:HOOK) rose $0.10 to $7.52 in extended session trading after closing at $7.42 earlier on the Nasdaq.

First Solar Inc. (NDAQ:FSLR) added $0.99, or 2%, to $58 in the late session after a Banc of America analyst began coverage of the solar cell maker with a "Buy" rating in a client note released after the closing bell.

Vonage Holdings Corp. (NYSE:VG) said Monday the market had overreacted to a federal judge's decision that would bar the Internet telephone company from using technology covered by Verizon Communications Inc.'s patents. New York Stock Exchange-listed Vonage shares shed $1.05, or 26%, Friday to close at $3. On Monday, the shares rose $0.38, or 13%. The shares were first sold to the public in May for $17 each.

New Century Financial Corporation (OTC:NEWC) shares moved down $0.44, or 22%, to $1.56 after two of the company's major bank lenders took possession of loans previously used to secure their financing. The company disclosed in a regulatory filing Thursday that it had agreed to transfer is outstanding loans with both Barclays Plc and Morgan Stanley. Many analysts interpreted this move by the banks as a last-second attempt to salvage at least some value in these loans by auctioning them off themselves. While the company refuses to comment on the situation, many analysts are surprised that the company has not already filed for bankruptcy.

New Century first disclosed that bank lenders were pulling their funding two weeks ago when they received notices of default from Barclays, Bank of America, Citigroup, Credit Suisse Group, Goldman Sachs and Morgan Stanley. The problems themselves first arose after firms that purchased subprime mortgage loans from these lenders became more aggressive in kicking back dud loans stemming from poor underwriting practices. These actions forced them to repurchase loans, which have severely impacted their ability to keep lines of credit open. Whether or not this will result in an official bankruptcy filing for New Century remains to be seen; however, many people believe there may be no other way out. NEWC stock, however, continues to trade at $1.56.

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Tarragon Corporation (NDAQ:TARR) announced earlier this week that it would be spinning off its core homebuilding and real estate development divisions in order to shift its focus on the rental market - an area poised for steady growth as prospective home buyers wait out the residential real estate collapse. The company develops and owns multi-family housing in Florida, New York, Tennessee, and Texas. The spin-off, which is slated for mid-2007, would provide the company with additional funds and enable it to focus more strongly on its multi-family rental business. Tarragon will continue to operate its real estate services business, which provides asset and property management, leasing and renovation services to residential and commercial properties. Following the spin off, Tarragon will change its name to Sage Residential, Inc. while Tarragon's homebuilding and development business will be renamed Tarragon Corporation.

The company believes that the spin off will, among other things, provide both businesses with direct and differentiated access to financing and the capital markets, allow each company to grow through acquisitions appropriate to its business and provide each company with the opportunity to align management incentives with the performance of its business. Moreover, given the current weakness in the sector, the new spin-off may end up being severely undervalued when it makes its debut as an independent entity - creating a great opportunity for enterprising investors to get in at low prices. Regardless, this is definitely a company to watch as it attempts to rid itself of underperforming divisions and turn itself around!

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Bulldog Investors is a hedge fund founded by Philip Goldstein that specializes in activist situations. Mr. Goldstein is well regarded among activist hedge funds after he recent argued against the SEC's required 13F filings, which require a complete list of the hedge funds holdings. He argued that hedge funds' holdings should be considered trade secrets, as the primary activity of a hedge fund is to uncover undervalued companies that are not in the public's sight. Meanwhile, the hedge fund has also been subjected to a lawsuit by the State of Massachusetts after it allegedly offer unregistered securities to the public. Regardless of their current state, however, the hedge fund seems to be focusing on an interesting strategy during the last few months.

Specifically, Bulldog Investors seems to be focusing on closed-end mutual funds that are trading well below net asset value, seeking to unlock value through a restructuring. Simply put, closed-end mutual funds are publicly traded portfolios that do not trade on par with their assets. Rather, they can be overvalued or undervalued just like stocks. Bulldog Investors has recently targeted such funds trading significantly below NAV - such as MFS Government Markets Income Trust, AEW Real Estate Income Fund, Franklin Universal Trust, RMR Hospitality Real Estate Fund, and several other. The idea is that by converting these closed-end funds to open-end mutual funds (which are required to trade at NAV), they can immediately unlock a significant amount of value. Whether or not this strategy actually works remains to be seen; however, Bulldog Investors is certainly a hedge fund worth tracking!

KB Home (NYSE:KBH) shares moved up marginally on the day after the company filed its 8-K with the SEC. The document provided some additional information into just how hard these companies were hit with the subprime mortgage collapse. KB Home said that their first quarter results reflected a sharp downturn in the housing market that began in 2006 and that continues to pressure the sales and profit margins of domestic homebuilders. The company continued saying that their revenues and margins were being pressured by intense competition and pricing pressure among homebuilders and other participants in the marketplace. Moreover, they expect these conditions to continue through at least the remainder of 2007 adding that it would be hard to predict when the housing market will stabilize. Finally, commenting on the subprime collapse, the company noted that these recent problems in the subprime mortgage market combined with tightening credit requirements (now being discussed by lawmakers) could exacerbate the already-difficult conditions in the homebuilding industry. During a conference call, the company noted that about 13% of their mortgaes for the company's homes were financed with subprime loans. Meanwhile, the major concern is that many of the markets have a large overhang of resell inventory that hasn't cleared the market - these supply/demand issues have yet to be sorted out.

Federal regulators are just now cracking down on who's to blame for the subprime mess. Many people insist that while Federal regulators have tightened standards for making loans to subprime borrowers, standards still decline and the volume of loans has surged. Perhaps the main reason for this is the fact that approximately 52% of subprime mortgages originated from companies with no federal supervision - that is mortgage brokers and stand-alone finance companies. An additional 25% were made by finance companies that are units of bank holding companies, which are indirectly supervised by the Federal Reserve. In fact, only 23% of all subprime mortgages fall directly under Federal regulatory control.

Fed Reserve Governor Susan Bies told the Wall Street Journal, "What is really frustrating about this is [federal regulators] don't have enforcement authority to do anything with these state-licensed, stand-alone mortgage lenders." Meanwhile, industry supporters say that the system is working perfectly. Doug Duncan from the Mortgage Bankers Association commented, "Market discipline in this industry is swift, can be severe, and is more effective in changing lending practices than any potential changes in regulation." So, while this situation unfolds we'll have to wait and see exactly how subprime mortgage volume adjusts itself. But in the meantime, it appears as if housing companies will continue to suffer in the aftermath of these defaults.

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Warwick Valley Telephone Company (NDAQ:WWVY) shares moved up $0.39, or 2.41%, to $16.59 in early trading today after Santa Monica Partners demanded that the company immediately put itself up for sale in a letter to the company's board of directors. The 2.4% shareholder had sent letters to the company in the past recommending a similar course of action since the company clearly cannot compete with other well-funded cable and internet competitors with enormous economies of scale. Meanwhile, the company's senior management have all resigned along with certain board members while more than 20% of its employees have been laid off. Compounding the problem is today's late K-1 filing which further highlights the company's declining margins as losses continue to mount. Not only is there no plan in place to turn the company around, but only interim management available to implement any such plans.

The hedge fund then points out why a sale may be in the best interest of shareholders. Hector Communications, one of the company's competitors, recognized the competitive threat it faced and decided to put itself up for sale in November 2006. The company ended up being sold for $36.40 in cash, a gain of 160% from the $14 per share level at which the company's stock was trading at in November 2003. Surely a sale at a premium like this would be preferrable to the steady decline we've been seeing at Warwick for several years now. Santa Monica then urged the board of directors to remember its fudiciary duty to shareholders, even though they personally do not have much at stake in the company. If the board of directors decides to consider the possibility of a sale, it could mean significant share appreciation for investors - this makes WWVY a stock worth watching!

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Private equity giant Blackstone Group filed for a $4 billion IPO that would put a provide the company with new sources of permanent capital. While the firm hasn't yet disclosed ow many shares will become available or provide an estimated price range, they did say that public shareholders would have limited voting rights and will not elect the general partner or its directors. The hedge fund would be the second hedge fund ever to go through with an initial public offering.

Avery Dennison Corp (AVY) signed a definitive merger agreementw tith label and tag company Paxar Corp (PXR) for $30.50 per share in a transaction worth about $1.34 billion.

Bed Bath & Beyond Inc. (BBBY) acquired the privately held retailer buybuy BABY for about $67 million, net cash acquired, and repayment of debt of about $19 million. The company said that the acquisition allows it to provide merchandise to expectant parents and their friends, who are part of its current consumer base.

Activision Inc. (ATVI) said it has signed a multi-year agreement granting the company exclusive worldwide rights to develop and distribute video games on all platforms based on Live Nation's (LYV) Monster Jam Series. While financial terms of the deal were not disclosed, the first game in the series is expected to be available at retail stores this holiday season.

Capital City Bank Group Inc. (CCBG) said it has approved an additional buyback of up to 1 million shares.

IHS Inc. (IHS) said an existing shareholder has begun a secordary offering of 3.75 million shares; however, the company said it would not receive any proceeds from the offering.

Sauer-Danfoss Inc. (SHS) said it would be raising its quarterly dividend by 13% to 18 cents a share. The new dividend is payable to shareholders on record by April 2nd.

Pozen Inc. (POZN) said its amended reponse to an approvable letter for its migraine treatment Trexima has been accepted for review by the FDA. Pozen also said that the FDA notified the company that it expects a Class II review, which could result in a new deciison date of August 1, 2007. If approved, the drug could be available as soon as the second half of 2007.

Embarcadero Technologies Inc. (NDAQ:EMBT) founds itself in the cross hairs of Chapman Capital once again today as Robert Chapman demanded that Director Gary Haroian immediately resign from the company's board of directors. "Mr. Haroian has been compensated into the hundreds of thousands of dollars while acting out the part of a 'career director' on the boards of Embarcadero, Aspen Technology, Inc., Lightbridge, Inc., Network Engines, Inc., and Phase Forward Inc.," said Chapman in a press release. "In order to reinstate any semblance of obeying his responsibility to the owners of these public companies, Mr. Haroian should resign from whichever boards necessary to allow for his adequate attention and focus on the remaining issuers."

Chapman went on to say: "Public company directors hiding shamelessly and disingenuously behind a convenient but ignorant interpretation of Regulation Fair Disclosure, in order to shirk their fiduciary duties of due care and loyalty, are a plague being visited upon Wall Street. Instead of committing the time and effort to understand issuers' operations, financial condition, strategic positioning and management performance, these expensive substitutes for true corporate governors attempt to obfuscate their parasitic ineptitude behind the facade of Reg. FD compliance. There exists no section, guideline or other language within Reg. FD that restricts the discussion of material, public or immaterial, non-public information between public company directors and owners. At the risk of stating the obvious, the fact that public information being targeted for discussion had been disclosed previously makes Mr. Haroian's pretext for 'owner avoidance' patently absurd."

These harsh words come only days after the acitivist hedge fund demanded that Embarcadero immediately put itself up for sale. Further, Chapman said he would seek nominees to replace Class I directors Timothy C.K. Chou and Frank M. Polestra, and Class II directors Michael J. Roberts and Samuel T. Spadafora, should a sale of Embarcadero not be announced by March 30, 2007. This is a great stock to keep an eye on in the event that management folds to the pressure; after all, while proxy fights are rarely won by hedge funds, most companies bend under the pressure and institute at least a compromise.

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Feldman Mall Properties, Inc. (NYSE:FMP) was contacted by Mercury Real Estate Advisors LLC again on Tuesday after it failed to respond to their initial demands made on January 30, 2007. The activist hedge fund demanded once more, in a Schedule 13D/A filing with the SEC, that the company immediately hire an investment banker to explore strategic alternatives given the company's steep discount to liquidation value and several interested third parties. Further, Mercury notes that the continued pattern of delays in SEC filings, downward adjustments in reported FFO by 16.6%, and a reduction of earnings guidance by approximately 40% is extremely troubling. The hedge fund also added several other factors to its growing list of reasons the company should be sold:

1. The corporation has failed to match returns reflected by certain industry benchmarks. Since going public on December 15, 2004, the corporation has posted a total return of negative 4.79%. The MSCI US REIT Index has achieved a total return of positive 55.77% over this same period. This reflects substantial underperformance of 60.53%.
2. The corporation lacks the sufficient size required to operate as a public company. In our view, shareholders’ equity is being wasted on general and administrative expenses that are not commensurate with the size of the company. General and administrative expenses at the corporation totaled 13.6% of revenues during fiscal 2005 while the ratio of G&A to revenues in the Corporation’s Peer Group average 4.3%.
3. The corporation has suffered a series of earnings misses and downward revisions to guidance. The first downward revision of guidance came in November 2005 with regards to third quarter 2005 results. The corporation lowered FFO/share guidance 17% from a range of $0.28-$0.30 to $0.23-$0.25. Fourth quarter 2005 FFO/share guidance was also lowered from a range of $0.25-$0.27 to $0.17-$0.18. This is a 32% decrease from the guidance that was offered just a few months prior. In our view, management has lost credibility with investors as a result of being overly optimistic and not realistic on a number of occasions.
4. The corporation is an attractive acquisition candidate for a national or regional mall owner/operator. While we believe that the corporation is too small to generate economies of scale with its widely dispersed portfolio, several of the national or regional owner/operators could achieve operating synergies through an acquisition of the corporation. Further, we believe the corporation is trading at a significant discount to its intrinsic or liquidation value.
5. The company failed to file in a timely manner periodic reports required by the SEC, including its current Form 10-K, 2004 10-K, and various quarterly reports throughout 2005. Moreover, the company was forced to reschedule conference calls as a result of their inability to file on time.
6. The company revised its earnings lower several times throughout 2005 and 2006 resulting in a total reduction over six months of over 40%! Moreover, in 2006, it revised its FFO from A4 2005 lower by over 16%! Since the company hasn't filed its current financials, who knows if this is a trend that will continue through 2006 and 2007.

Mercury said that it had received numerous inquiries from well known and established, national and regional mall owners and operations interested in exploring a purchase of the company and its assets. The hedge fund insists that the board should not continue to let the opinion of its seemingly conflicted chairman, Larry Feldman, determine the right course of action for achieving and maximizing shareholder value. Rather, the board should act immediately and hire an investment banker to explore strategic alternatives. Finally, Mercury said that it would call the company later this week to schedule a time to discuss this matter in person - a move that will hopefully spark some actual response from management. This makes FMP a stock worth watching!

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Acme Communications Inc. (ACME) reported a fourth-quarter net loss of $1.63 million, or 10 cents a share, compared with $5.64 million, or 13 cents a share, one year-ago period. The company expects first quarter 2007 revenue for its continuing television stations to decrease in the low single digits quarter over quarter.

Affiliated Computer Services (ACS) confirmed it has received a $59.25 per share offer from Chairman Darwin Deason and Cerberus Capital Management L.P. to take the company private. The deal would be worth over $8 billion, including the assumption of ACS debt. The company said that a special committee of independent directors has been formed to evaluate strategic alternatives, including the proposal from Deason and Cerberus, and will reach a decision in due course.

Chubb Corp.'s (CB) board increased the share buyback program by 20 million shares. The company said the purchases may be made in the open market or in privately negotiated transactions.

The Job Network LLC, owned by Lee Enterprises (LEE), entered into a strategic partnership with Yahoo Inc.'s (YHOO) HotJobs unit. Financial terms weren't disclosed, but the partnership will allow the Job Network's members to post employment ads on the HotJobs website.

Ligand Pharmaceuticals Inc. (LGND) said that it plans to pay a dividend of approximately $253 million, or $2.50 a share, on April 19 to shareholders of record April 5. Ligand's board also authorized up to $100 million in share repurchases over the next 12 months.

Wells Fargo & Co. (WFC) said it has authorized a stock buyback of up to 75 million shares of its roughly 3.4 billion shares outstanding. Wells Fargo shares rose 2.5% to close at $35.48 on the news.

eBay Inc. (EBAY) shares added 2.1% today after its PayPal unit said it has 35 million accounts in Europe. According to analysts at Forrester Research, nearly a quarter of all European online shoppers use PayPal.

Google Inc. (GOOG) shares gained 2.5% after the company said a small number of advertisers are now testing out a new payment scheme it's calling "pay-per-action." The new model would allow advertisers to only pay publishers if the visitors completed an action - such as fill out a form or request promotional materials.

Palm Inc. (NDAQ:PALM) shares moved up $0.73, or 4.02%, to $18.87 today after Unstrung.com said that a Palm buyout could be finalized by Thursday of this week, citing sources close to the situation. The popular technology news source said that Nokia was the leading vendor bidder with Palms' management said to be the preferred private equity buyer. The deal reportedly includes bids from two private equity firms, two vender companies, and would top $20 per share. Many are also quick to note that Motorola may attempt to block any bids from Nokia in an effort to increase their pricing power with Palm's successful Treo line and quiet Carl Icahn who recently complained that Motorola was not utilizing its cash. Finally, a Motorola buyout would also block Nokia from taking control of the enterprise market. So, while we do not have sure bids yet, it is almost certain that PALM will be bought out by someone in the very near future - the question just remains by whom and for how much?

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Magic Software Enterprises Ltd. (NDAQ:MGIC) shares jumped 1.25% in early trading after the company announced that it has appointed Eitan Naor as its new President and CEO. Mr. Naor is an experienced turnaround CEO that previously assisted ECtel (NDAQ:ECTX) in its restructuring efforts. ECtel is a small cap telecom fraud prevention and revenue assurance company that fell dramatically between 2002 and 2004. Under his leadership, ECtel turned itself around and experienced nine consecutive quarters of revenue growth and improved financials while the stock priced soared from a low of around $2 per share to a high around $5 per share.

Magic Software is another small cap company that announced a major restructuring plan in the fourth quarter of 2006. Since then, the company has returned to profitability and now hopes that the Mr. Naor can help the company increase its profitability and make a complete turnaround. Given Mr. Naor's success at ECtel, MGIC may be a stock to keep an eye on as they continue forward with their plans.

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Lancaster Colony Corp. (NDAQ:LANC) shares moved up marginally after Barington Capital  disclosed an 5.2% stake in the company and expressed their concerns about the company's share price performance in a Schedule 13D filing with the SEC. Specifically, the hedge fund and its partners believe that the company should implement a number of measures to improve its profitability and share price performance, including:

1. The divesture of the company's Automotive, Glassware and Candles segments.
2. A reduction in corporate level expenses resulting from Lancaster's holding-company structure.
3. The implementation of several initiatives to return the Specialty Foods segment to historical levels of profitability with an operating income margin of at least 20%.
4. A debt-financed self-tender offer to repurchase at least $300 million of the company's outstanding common stock.

Barington noted that they have had discussions with members of the company's management team with respect to some of these measures which they believe will significantly improve shareholder value. The group now seeks to discuss these measures in further detail with the company's management team and independent members of the company's board of directors. If any of the above measures are implemented it could mean substantial upside for the company's shareholders. Specifically, a spin-off or sale of any or all of the above-mentioned divisions would provide the company with additional cash and (in the event of a spin-off) opportunities for shareholders to profit in a new issue. Meanwhile, a restructuring could save the company a lot of money which would provide a visible boost to the company's earnings. And finally, a $300 million share repurchase would represent about 20% of the company's outstanding shares - a substantial number by any measure. Combined, these factors make LANC a stock worth watching over the next few months!

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Business software maker Oracle Corp. (NDAQ:ORCL) posted quarterly profit and revenue on Tuesday that topped Wall Street forecasts as new software license sales rose. Oracle's fiscal Q3 net profit rose to $1.03 billion, or $0.20 per share, from $765 million, or $0.14 per share, a year ago.  Revenue rose to $4.4 billion from $3.47 billion as Oracle sold more software that helps companies manage everything from accounting to human resources to inventory management. New license revenue rose to $1.39 billion from $1.1 billion in the Q3 ended February 28. Sales of new software applications, including acquisitions, rose 57% while new database and middleware software license sales increased 17%. Oracle shares rose more than 4% to $18.28 in extended trade from a Nasdaq close of $17.55.

The chairman and chief executive of struggling movie-rental company Blockbuster Inc. (NYSE:BBI) got the company's board to give him a slightly bigger bonus for 2006, but not without agreeing to give up his job. John Antioco, who has been the CEO for nearly a decade, will leave the company by the end of the year, Blockbuster announced Tuesday. Shares closed down $0.25, or 3.5%, to $6.86 in trading on the NYSE, then lost another $0.06 in after-hours trading. When he leaves, Antioco will recieve a lump sum payment of $5 million, considerably less than the $13.5 million he would have been entitled to receive if he had been terminated without cause or had resigned for good reason at year's end.

An investment group that includes the founder and chairman of Affiliated Computer Services (NYSE:ACS) is offering $5.93 billion in cash to take the information technology services company private. Affiliated Computer Services Inc. Chairman Darwin Deason said Tuesday he has teamed with investment partner Cerberus Capital Management to make the $59.25 per share bid. That represents a 15.5% premium to ACS's closing price Monday of $51.29 on the NYSE. ACS shares rose above the offered price Tuesday, climbing $8.69, or 17%, to close at $59.98 on the NYSE. They have traded in a 52-week range of $46.50 to $63.61.

Adobe Systems Inc. (NDAQ:ADBE) reported flat Q1 sales but easily exceeded Wall Street expectations with a 37% surge in profit, prompting bullish executives to raise guidance Tuesday as the software company prepares its biggest-ever product launch. Net income for the three months ended March 2 was $143.9 million, or $0.24 a share, up from $105.1 million, or $0.17 a share, in the same quarter of last year. Adobe said it expects to earn $0.23 to $0.26 per share on revenue of $700 million to $740 million in the second quarter. The San Jose-based company, which employs 6,100 people and makes graphic design, publishing and imaging software, reaffirmed its annual revenue growth target of 15%.

The printing for the final Harry Potter book will not only be the biggest, but also the greenest. Scholastic Inc. (NDAQ:SCHL) announced Tuesday that it had agreed with the Rainforest Alliance, a conservation organization that works with the business community, on tightened environmental standards for "Harry Potter and the Deathly Hallows," coming out July 21 with a first printing of 12 million.The paper used to write the 784-page book will contain a minimum of 30% post-consumer waste (pcw) fiber. A "deluxe" edition of the new book, which has a first printing of 100,000, will be printed on paper that contains 100% post-consumer waste fiber. Scholastic would not say at the time how much recycled paper it used, but said it did not use paper from ancient or endangered forests on the other HP books. Sales, apparently, were not affected: "Half-Blood Prince" sold 6.9 million copies in the first 24 hours.

Capital One Financial Corp. (NYSE:COF) Chairman and Chief Executive Richard Fairbank received compensation the company valued at more than $18.1 million in 2006, almost all of it in options awards and roughly the same amount as the past two years, according to a regulatory filing made Tuesday. Fairbank, 56, received options awards with an estimated value of $18 million at the time they were granted, but did not receive a salary, a bonus or any other cash and equity-based incentives. In November 2005, Capital One bought New Orleans-based Hibernia Corp., which had branches in Texas and Louisiana, for $4.9 billion. In December, the company completed its $13.2 billion acquisition of North Fork, which operates banks in New York, New Jersey and Connecticut. The deals, which make Capital One the 11th-largest bank in the U.S. by deposits, drew mixed responses from Wall Street. The stock was flat for the first half of 2006, then plunged in the summer because of credit concerns, especially in the United Kingdom. Shares in Capital One closed up 57 cents, or 0.75 percent, at $76.21 on the NYSE. In the past year, the company's shares have traded in a range of $69.30 to $87.50.

Wal-Mart Stores Inc. (NYSE:WMT) claims that with "plenty of room" to grow in Canada, it is on track to open 29 discount and supercenter stores in the country this year.

Claire's Stores (NYSE:CLE) became the latest US retailer to go private as it accepted a $3.1 billion takeover from Apollo Management, the US buy-out group run by Leon Black. The deal caps an auction for the Florida-based jewellery and female accessories store chain that lasted about three months and included Apax Partners, the British private equity group, in the final round. Private equity groups have found fertile ground for investments in all corners US retailing, from luxury department stores to discount chains and specialty stores.

Genesco Inc. (NYSE:GCO) shares moved up $3.42, or 8.64%, to $43.02 today after Women's Wear Daily (WWD) reported that Foot Locker Inc. (NYSE:FL) was preparing a tender offer for Genesco in the $44 to $46 per share range, but could go as high as $48 per share. Citing financial sources close to both firms, the newspaper said that the bid is expected to be announced soon, perhaps as early as this week. Many analysts are saying that this is not an unusual move as the company had expressed interest in the cap business for some time. Genesco shares have not reached the buyout range due to the fact that the company is widely expected to rebuff any offers; however, Genesco shareholders clearly support the prospect of a buyout as they pushed shares up over 8% during today's session. It will be interesting to see just how devoting Foot Locker is to making this deal go through - it is likely that we could see a raised bid after the initial bid is rebuffed. Combined, these factors make GCO a stock that is definitely worth watching!

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Take-Two Interactive Software, Inc. (NDAQ:TTWO) shares moved up $1.48, or 7.1%, to $22.33 after the company announced that it would be delaying its annual meeting in order to review the proposed actions recommended by activist hedge funds earlier this month. The company also said that it was reviewing a number of its own strategic alternatives, including a possible sale of the company. Given that these hedge funds control approximately 46% of the company, it is likely that something will come out of this review, whether it be one of the company's suggestions or inclusion of the investors' board candidates on the proxy.

Take-Two has been troubled with poor results and accounting problems, with its former CEO having been indicted by the SEC for options backdating and later convicted. The company also had to restate years of earnings after it inaccurately accounted for stock option grants; the company ended up incurring $43 million in additional expenses. Clearly, change is needed here but what course of action the board decides to take remains uncertain. In the meantime, this is a great stock to watch as the company mulls its options.

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TLC Vision Corporation (NDAQ:TLCV) may find itself under increased scrutiny after Glenhill Advisors disclosed a 13.9% stake in the company and expressed their concerns about the company's under performance in a Schedule 13D filing with the SEC. In their letter to the company's board of directors, they stated that they are carefully monitoring the business, operations, and financial performance of TLC Vision. They are concerned that the company is currently under performing in a variety of respects and that if it continues on its current course, its business and financial prospects may be significantly negatively impacted. Interestingly, they also noted that the availability of any viable strategic alternatives may also be significantly limited as a result. The hedge fund said that it is exploring all of its options, including potential changes to the board composition.

Investors should also be aware that Sowood Capital Management, a 7% holder in the company, expressed similar concerns back in December of last year. The hedge fund changed its status from a passive 13G to an active 13D while noting that they intended to engage in discussions with management. Meanwhile, analysts recently noted that visibility into TLC Vision's performance going ahead remains weak, in spite of early signs of traction being shown by the LVC strategy - noting that there is scope for the company's fundamentals to improve substantially in 2008 and beyond. Whether or not Glenhill or Sowood take action remains to be seen; however, this is definitely a stock to watch in the meantime.

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Rambus (RMBS) shares rose 5.5% today after the company announced that the Federal Trade Commission (FTC) clarified that the company isn't restricted from collecting royalties for the use of some of its technologies in the past. The FTC also noted that Rambus isn't required to refund royalties already paid.

Egl Inc. (EAGL) shares moved up 1.7% after the shipping company accepted a $1.7 billion buyout offer. The company's CEO is leading the investor group planning to take the company private.

Systemax (SYX) shares dropped over 20% after hours today when the company announced that its operating income fell to $11.3 million from $18.5 million a year ago, mostly due to decreased gross margins in its discounted computers and consumer electronics products. The margins fell to 12.9% from 14.7% one year ago.

Cosi (COSI) shares fell 1.6% today after the company reported fourth-quarter sales of $31.8 million, up from $28.6 million a year ago, but below the $34 million analyst consensus. Meanwhile, their quarterly losses narrowed to 12 cents a share from 16 cents a share a year ago.

Agile Software (AGIL) dropped around 3% after hours after the company's fiscal third-quarter sales came in slightly below expectations at $33.2 million. meanwhile, its net loss for the period increased to $5.87 million or 10 cents a share.

Nortel (NT) shares lost 2.4% after the company announced lower estimates for its annual and quarterly results. the company said it expects FY2007 revenues to be flat to slightly down compared with 2007. The loss comes from a decrease in revenues from its sale of its third-generation UMTS radio-access business to Alcatel-Lucent.

Altria Group (MO) ended down slightly after a federal appeals court judge said Friday that a previous court ruling that banned "implied health messages" applied to the company's international businesses as well as its domestic operations. The courts ruled that the company couldn't sell brands that were marketed using health messages such as light or low tar in the USA.

Walt Disney (DIS) shares rose on news that the company finished a probe into stock option practices at Pixar that began prior to its acquisition by Disney. The probe found that while options were backdated, no one currently associated with the company engaged in any intentional or deliberate acts of misconduct.

Aeropostale (ARO) shares rose today after the cmopany said net earnings were $57.3 million while same store sales rose 2.2%.

Accredited Home Lenders (LEND) shares continued their volatility today after surging 56% during the regular session before dropping 10.4% after hours. The subprime mortgage lender said that it has received margin calls from its financial backers and was looking to raise capital to enhance liquidity.

Hypercom Corporation (NYSE:HYC) shares rose $0.33, or 6.4%, to $5.49 today after RLR Capital Partners and their affiliates disclosed a 5.1% stake in the company and expressed concerns about management's new strategy discussed in their March 7th conference call in which the company said they planned to use their excess cash in order to grow the company's terminal services business through acquisitions. The hedge fund believes that this strategy is the wrong use for the company's excess cash and instead believes that the company should use the cash to repurchase their own shares. Why? It's simple: The company's shares are trading at only 4.5x EBITDA, making its own shares the best value in the terminal services industry! RLR encouraged the company to repurchase a third of their outstanding shares using a combination of cash and short-term investments along with the after-tax proceeds of their sale of a building and land in Phoenix which could be immediately accessed by borrowing against the real estate. With this $86 million, the company could afford to repurchase approximately 18 million of the 53 million outstanding shares.

RLR also expressed concerns about the company's low margins compared to its peers; why is the company focusing on an acquisition strategy when its core businesses are still lagging behind the competition? Hypercom's margins are expected to approach 10% this year compared to competitors VeriFone and Lipman Electronics, who have seen 20% margins. Based RLR's projected 2008 revenue for Hypercom of at least $340 million, each incremental 100 basis points of margin improvement yields approximately $0.10 of incremental EBITDA per share, giving effect for the reduced share count from the buyback described in their plan above. Using a range of EBITDA multiples of 8 to 12 times (compiled from industry averages), each incremental $0.10 of EBITDA per share is worth $0.80 to $1.20 per share in valuation, which is quite significant given the company's current share price. So, if Hypercom can achieve margins similar to those of Lipman when it was acquired (i.e., 20% in 2008 vs. projected 10% in 2007), then the incremental 1000 basis points of margin improvement would yield an additional $1.00 per share of EBITDA, which would be worth $8.00 to $12.00 per share, or $280 to $420 million in total. These numbers represent a 45% to 118% premium to the current market price - certainly something worth considering!

Finally, RLR suggested that if the company found itself incapable of making improvements to its core businesses, it should consider exploring strategic alternatives, including a possible sale of the company. There is a history of successful acquisitions in Hypercom's industry and it is simple to see why a sale would make sense. In April of last year VeriFone (the #2 player in the industry) acquired Lipman Electronics (the #3 player in the industry) for $793 million in a deal that created a new #1 player in the industry. Lipman was acquired for 12x current year EBITDA and 10x forward year EBITDA in this transaction. Based on the these multiples, and using the lower Hypercom share count of 35 million, the company would have a value of $420 to $450 million, or approximately $12 to $13 per share in the event of a buyout. Certainly this is another option for shareholders that is worth noting!

Clearly, RJR has brought up some excellent alternatives to the acquisition strategy discussed by management. In the end, any acquisition strategy would be hard pressed to match the shareholder value potential seen in these estimates. Moreover, there is always a great amount of risk associated with any acquisition strategy. If the company expresses interest in utilizing RJR's plans or working with them to unlock shareholder value, it could mean significant upside from these levels. You can read their entire letter to the company's board and management by reading through their Schedule 13D filing with the SEC. However, this situation clearly makes HYC a stock worth following!

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Griffon Corporation (NYSE:GFF) shares moved up marginally after Barington Capital disclosed a 5% stake in the company and expressed its concern that the current stock price does not reflect the intrinsic value of the company's operating divisions. In particular, the hedge fund believes that the market has been undervaluing the company's telephonics subsidiary as well as what they view as the company's core businesses - garage doors and specialty plastic films. Barington made several recommendations aimed at helping the company move above its three year $18.50 to $28.50 range, which has led to significant investor concern recently.

Barington made five key recommendations aimed at unlocking value for shareholders in the company's struggling operating segments:

1. Unlock the value of the company's Telephonics subsidiary, which is trading at a significant discount to its peers. Based upon Barington's analysis of publicly traded defense electronics companies as well as recent M&A activity in the industry, the Telephonics subsidiary should be valued at 9-12 times EBITDA or approximately $400 million to $550 million. Unfortunately, the market current values the entire company at only 7 times EBITDA! While the company said it recognizes this discount, the hedge fund recommends that the company consider an IPO, tax-free spin-off, or an outright sale of the subsidiary so shareholders can fully realize its value.
2. Increase share repurchases by incurring additional debt. With a net debt/trailing EBITDA of only 1.4x, the hedge fund believes that the company is under leveraged. If the company increased its leverage to Barington's recommended 2.5x net debt/trailing EBITDA level, it would be able to raise approximately $110 million. Combined with its current $20 million in excess cash, the company would be able to repurchase approximately 15-20% of the company's outstanding shares. The hedge fund believes that if the buyback takes place at a premium to the going prices, it would be accretive to the company's earnings per share.
3. Pursue cost reduction initiatives to improve margins. Barington said that while it applauds the reduction of the Plastic subsidiary's workforce in 2006 that is expected to result in approximately $5 million in annual cost savings, they believe that further reductions in the company's cost structure are necessary. Given that the Garage Doors subsidiary has recently experienced pressures on revenues and earnings, they believe that the company should particularly focus on this business.
4. Divest installation services to focus on higher margin divisions. Barington notes that while most of the company's operating divisions are high market share, high margin businesses, the company's Installation Services division is an exception. Moreover, the hedge fund noted that the performance of this business is tied to the volatility of the housing market, which is obviously experiencing volatility these days. Consequently, Barington recommends that the company divest this segment to solidify earnings.
5. Improve corporate governance by declassifying the company's board of directors and separating the chairman and CEO positions. These are critical issues that need to be addressed in order to ensure that shareholders remain in control of the company.

Barington has a long track record of successfully working with the management teams and board of directors of publicly traded companies to develop plans to create or improve shareholder value. If they are able to get these five changes implemented, it could mean significant upside for GFF shares. Meanwhile, we know that the Clinton Group has expressed similar thoughts in the past when they said the company's shares could be worth between $31 to $35 per share. Combined, these factors make GFF a stock worth following!

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World Air Holdings, Inc. (OTC:WLDA) shares moved up $0.16, or 1.54%, to $10.56 today after the Clinton Group disclosed a 5.3% stake in the company and expressed its concerns regarding the company's poor shareholder communication and financial performance. The hedge fund said that rather than simply restating the steps they believe the company should take to maximize shareholder value, including pursuing a sale transaction, they again protest the utter lack of transparency in the company's dealings with shareholders, exemplified by the glaring lack of shareholder communication, an inability to timely provide SEC financials, and minimal guidance as to the evaluation of strategic alternatives by the company and its financial advisers, Legacy Partners.

The Clinton Group then recommended that the following steps at a minimum should be presented by the company for consideration by the shareholders at this year's annual meeting:

1. Stockholders are currently denied the right to call a special meeting. The by-laws should be amended to permit shareholders owning 15% of the outstanding shares to call a special meeting.
2. The charter and by-laws should be amended to eliminate the classified board and replace it with a single class of directors annually elected.
   
3. The by-laws should be amended to limit the board size to no more than 11 members.
   
4. The by-laws should be amended to permit shareholders to fill any vacancies on the board as a result of shareholder removal of directors whether with or without cause.

The majority of the provisions that the hedge fund is seeking to remove are "poison pills" aimed at protecting the company in the event of a hostile takeover. Classified boards enable companies to retain board control even if a hedge fund is successful by staggering election times. Meanwhile, companies also occasionally increase the size of the board to dilute any new hostile directors' influence over the company. And finally, by allowing shareholders to fill any vacancies on the board, it eliminates the need for an election by the company, which typically favor incumbent directors.

So, what does all of this mean? Well, the Clinton group has already said that it will be nominating three candidates to the company's board of directors at the company's next annual meeting. Their goal is to make sure that the most appropriate approach to maximize shareholder value is implemented - clearly, they will be pushing for a sale. If they are successful, it could mean significant upside for the company's shares, which have remained relatively stagnant during the past couple of years. Moreover, if the board implements the recommended changes, it would make it a lot easier for the hedge fund to launch a more direct campaign to take over the company's board of directors. Combined, these factors make WLDA a stock worth following!

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Loral Space & Communications, Inc. (NDAQ:LORL) is facing an increasing amount of pressure from a large hedge fund who is now seeking to investigate a recent share purchase agreement with a board member. Highland Crusader Offshore Partners LP, a 5% stakeholder in the company, demanded to inspect books and records of the company to investigate possible mismanagement, breaches of fiduciary duty, corporate waste, and improper influence and conduct with respect to the negotiation, execution, and approval of a Securities Purchase Agreement that enabled Loral's controlling shareholder - MHR Fund Management LLC - the exclusive right to purchase from Loral shares of two newly created series of convertible preferred stock for $300 million.

What was the problem with the transaction? Well, according to the hedge fund, a lot:

1. The transaction appears on its face to be a sweetheart deal for MHR. The aptly timed transaction not only took place without any competitive bidding but also appears to have been "spring-loaded" in that shortly after the announcement of the SPA, Loral announced a series of positive business developments that caused its stock price to rise from $27 per share to $51 per share. And what was the conversion price of the SPA shares? They were set below the intrinsic value of Loral set by the bankruptcy courts only 18 months earlier at $30.15 per share.
2. The terms of the transaction were unfair and oppressive to Loral and its non-participating shareholders. The transaction provides for the issuance of shares to MHR representing approximately 50% of Loral's current equity, giving MHR the opportunity to increase its equity stake from 35.9% to 56%! Moreover, Loral had no need to accept an insider transaction carrying such unfair and onerous terms. The company had ample cash available, no identified need for the $300 million of capital, and no identified exigency that would force Loral to agree to such a deal.
3. The transaction entrenches current directors by giving MHR an enormous number of additional votes when their SPA's convert to common stock along with triggering punitive financial consequences due to a "change of control" in the board's composition under the terms of the transaction.
4. The board can no longer remain independent now that three of Loral's eight directors are affiliated with MHR, including the non-executive vice chairman of the board. Moreover, with the enormous voting power now granted, it is unlikely that the board would offer much opposition to MHR demands.
5. The transaction was with Loral's controlling shareholder, which was a fact that was disclosed publicly. Additionally, the company has said that MHR exercises significant influence over Loral's operating subsidiary, Loral Skynet.

While the outcome of this investigation obviously remains to be seen, there is certainly some shady aspects of this deal. This case only further demonstrates the occasionally negative influences that activist shareholders can have on companies - something that investors much watch carefully when evaluating investment opportunities.

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Lenox Group, Inc. (NYSE:LNX) shares moved up $0.16, or 3.16%, to $5.23 today after the Clinton Group expressing its concern over previous management and the board's performance in guiding the company. As the second largest shareholder, the hedge fund urged the company to consult shareholders with respect to any material changes at the company, including (1) modification of the company's engagement of Carl Marks Advisory Group, (2) offers of employment for senior management positions, (3) capital structure and financing issues, and (4) any strategic transactions potentially being contemplated by the company. The Clinton Group also offered to help facilitate the company's turnaround and exploration of strategic alternatives by providing three director candidates for shareholder consideration. The Schedule 13D/A filing showed The Clinton Group holding a 10.9% stake through two of its Cayman Island-based funds. This large stake would give them significant leverage in any conflicts or negotiations with the company in the future. Notably, John Morgan and his affiliates (7% holders in the company) expressed similar dissatisfaction with management back in September of last year. This makes LNX a stock worth watching!

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eSpeed, Inc. (NDAQ:ESPD) shares moved higher yesterday after Chapman Capital disclosed a 9.3% stake and demanded that the company put itself up for sale in a Schedule 13D filing with the SEC. Problems began in early 2004 when the hedge fund begun to recognize a significant divergence between the performance of the company's common stock and its publicly traded peers. Specifically, in 2004 the company stock plummeted 47% while that of its peers remained flat, and in 2005 the company's stock dropped 37% while its peers added 49%. Then in January of 2006 there was a glimmer of hope when The Daily Telegraph reported that Cantor Fitzgerald was preparing a stock market float of BGC Partners, its London-based brokerage business, in a move that was expected to lead to a merger with eSpeed, the Nasdaq-quoted broker also controlled by Cantor, to create a company worth between $500 million and $1 billion. However, this deal never materialized. Then, in a highly questionable December 2006 Form 4 filing with the SEC, Mr. Lutnick was granted, free of cost, 800,000 Class A common stock options - representing 3% of the company's outstanding shares! This upset many investors who feared the potential dilutive effects of the options. Finally, the last straw came in February of this year when the company issued a press release that disclosed its FY2007 financial outlook. Investors were outraged to find out that company projected nearly break-even operating performance due to approximately $152 million of non-GAAP operating revenues being consumed by $146 to $148 million of non-GAAP operating expenses, a level of spending which Chapman Capital and other investors have thought unacceptable.

So, Chapman finally voiced his opinions during the company's February 14, 2007 conference call to discuss 4Q2006 earnings. Mr. Chapman commented, "Why not actually take the initiative, retain an investment bank, and actually try to find someone who can deliver immediate value to the owners? And it doesn't have to be a cash transaction. It can be a stock swap. If the transaction is as accretive as you might fear it to be for the buyer, i.e., that you think you might be selling the Company too cheaply, in theory, and it typically has worked out this way in the past, the acquirer shares that we'll be receiving as eSpeed holders will appreciate and make up for any discount you think we may have gotten in the transaction. Because being open minded and understanding a couple of cents per quarter in cost for growth is one thing. But the other side of the page is the opportunity cost. Had you years ago, with the benefit of hindsight, obviously, been able to see what could happen with the stock, with ICAP and some of the other competitive initiatives that have hurt the Company, we could be sitting on a $15, $20, $30 value now in another currency instead of eSpeed. So I would encourage you to be more than open minded. I think being much more proactive in this will be to the benefit of the owners. We want to stay constructive as owners of this Company. But the ownership base, seeing us on the 13F filings has been calling us and asking us to get much more aggressive in pursuing the Company to sell itself, and I hope that you'll see the light before we feel the need to do so."

Chapman Capital began contacting the company's peers to (1) broaden the understanding of the company's business, assets, liabilities, and competitive positioning, and (2) inform the company's peers of their interest in selling the company. The hedge fund also began contacting various past and present owners of the company in order to survey their views of the company. They found that the ownership base conveyed a nearly uniform desire for the company's value to be maximized through a change-of-control transaction. The problem is that approximately 88% of the company's voting power is controlled by Mr. Lutnick and his affiliates, despite owning a minority of the company's common stock. This is accomplished through the issuing of Class B shares, which have a higher voting power (10 votes each). Consequently, Chapman Capital demanded that the board of directors convert all Class B shares to Class A common stock. In the end, the hedge fund said that given Mr. Lutnick's failure to perform in his capacity as CEO, the company's long-term shareholder value should be maximized via a full scale auction of the company that is not limited to BGC as the sole negotiating counterparty. If this takes places, shareholders could see significant upside from these levels. This makes ESPD a stock worth watching!

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Cisco Systems (NDAQ:CSCO) said it will buy online videoconferencing company WebEx Communications for $2.9 billion as part of a strategy to sell comprehensive packages of communication products. The deal, worth $3.2 billion including WebEx's existing cash, would be Cisco's biggest acquisition since the network equipment maker bought cable set-top box maker Scientific-Atlanta for $7 billion last year. Cisco said on Thursday it will launch a cash tender offer for all outstanding WebEx shares at $57 each, a premium of 23% over their Nasdaq close of $46.20 on Wednesday.

A General Electric (NYSE:GE) unit and private equity firm Blackstone Group will jointly acquire mortgage and vehicle fleet management company PHH for $1.8 billion in cash, the companies announced Thursday. The $31.50-per-share purchase price is about a 13% premium to PHH's closing stock price of $27.81 on Wednesday. PHH shares jumped in trading on the NYSE. GE is paying sixteen times expected 2007 earnings of $1.95 per share, according to Reuters Estimates, which is based on one analyst's estimate.

Ameriprise Financial (NYSE:AMP) said on it plans to buy back as much as $1 billion in stock and increased its quarterly dividend to $0.15 to $0.11 per share.

The 159-year-old Chicago Board of Trade (NYSE:CBOT) found itself the target of a possible bidding war Thursday when electronic futures market IntercontinentalExchange Inc. made a surprise $9.9 billion all-stock bid, threatening its deal to merge with the crosstown Merc.Shares of CBOT jumped $28.86, or 17.4%, to close at $194.95 on the NYSE. ICE fell $3.83, or 2.9%, to $128.10, while CME shed $31.09, or 5.5%, to $532.88.

Bear Stearns Cos. (NYSE:BSC), Wall Street's largest underwriter of mortgage securities, reported Q1 rose 8%, despite turmoil in the subprime lending sector. Its profit after paying preferred dividends rose to $548.5 million, or $3.82 per share, for the three months ended Feb. 28 from $508.7 million, or $3.54 per share, a year earlier. Revenue rose to $2.48 billion from $2.19 billion last year.

The Topps Company, Inc. (NDAQ:TOPP) may face some strong shareholder opposition after it ousted two hedge fund managers from a committee built to evaluate possible rival bids to the company's standing $385.4 million buyout agreement with Michael Eisner's Tornate Co. The committee - which included Arnaud Ajdler from Crescendo Partners and Timothy Brog from Pembridge Capital Management - was initially setup by the company to seek better offers during the next 40 days after Topps was sued by a shareholder on March 8th who sought a higher sale price. Ajder and Brog, who collectively own 6.6% of the company, contend that the $9.75 per share offer was too low and expressed concern that the company did not show the company to all possible buyers (notably, director John Jones also opposed the bid).

Ajder fired back at management today in a letter attached to his Schedule 13D/A filing with the SEC. In the letter, he said that the company set a new low in corporate governance that would be taught in business schools as a clear illustration of poor corporate governance. Ajdler went on to note five concerns:

1. The board appointed two new people (who support the existing merger agreement!) with the power to monitor the day-to-day developments during the "go-shop" period and made it clear that the Ad Hoc Committee (of which Brog and Ajder were members) no longer had such authority. Why? The board reasoned that the two hedge fund managers could not adequately reprensent the best interest of shareholders!
2. The board created an Executive Committee consisting of all board members except Brog and Ajder. Instead of allowing them to voice their opinions in the company's board room, the company simply created a new committee to silence opposing views. Clearly this isn't in the best interest of shareholders.
3. The company failed to correct a statement that it made on March 7th to the WSJ in which it said, "'Over the past two years, we have been working with Lehman Brothers to examine all opportunities to deliver value, and no other superior proposals emerged in that time frame,' said a spokeswoman to the company." This statement gives the false impression that Topps was shopped or that alternative proposals were solicited before entering into a merger agreement at $9.75, which isn't true.
4. The board held a telephonic meeting in which none of the three directors who voted against the merger agreement were provided with an agenda. When a motion to have Topps issue corrective disclosure was duly made and seconded at the meeting, it was ruled out of order by the chairman because he said it wasn't on the agenda.
5. The company mischaracterized Ajder's comments opposing the deal as stemming solely from the fact that the process that led to the merger agreement was flawed because the board did not shop the company; however, the main reason was the inadequate offer price.

In the end, Ajder strongly urged the comapny to reconstitute the Ad Hoc Committee, to disband the Executive Committee and to make corrective disclosure. Topps continues to ignore the will of its shareholders and continues to be run as a private club, and according to the hedge fund, this must stop. If the company takes such corrective actions and additional bids are solicited, it could mean significantly higher offers for the company. This makes TOPP a stock worth watching!

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Metro One Telecommunications (NDAQ:INFO) shares moved up $0.12, or 5.91%, to $2.15 after Strategic Turnaround Partners LP (STEP) disclosed a 9.17% stake and expressed their concern over the current management and direction of the company in a Schedule 13D filing with the SEC. The hedge fund said that it has been supportive of the company's management and efforts to lower operating cost structure and respond to the loss of significant contracts; however, they now believe that the company's board and management develop an efficient and effective plan to realize the company's growth potential over the next year. Moreover, STEP said they read the 13D filing by Everest Special Situation Fund LP and agreed with the demands made to the company's board to maximize shareholder value, including bringing in an executive experienced in coporate restructurings. Finally, they asked that the company install one of its own nominees to the board of directors to help the company implement these changes.

Everest Special Situations Fund, an 8.1% holder, obtained board representation in April 2006, and has since been lobbying the board from within to take immediate action to restructure the company's operations and lower the company's cost structure in response to the loss of the company's largest customers and heavy operating losses. However, despite their efforts, the company has failed to take the immediate and aggressive measures necessary to make the company profitable. The hedge fund said that the company's chairman of the board, William Rutherford, has been slow to make important decisions and has not provided the leadership that the company needs to counteract these losses. As a result, Everest made three demands in a Schedule 13D/A filing that STEP now supports:

1. Call for the resignation of the company's chairman of the board, William Rutherford.
2. Elect a representative of one of the company's largest stockholders as a chairman of the board.
3. Hire a chief restructuring officer or similar executive who specializes in corporate turnarounds.

Finally, Everest said that it may seek to replace members of the company's board through a proxy contest at the next shareholders meeting if necessary. This is all good news for shareholders who have dealt with significant losses now for several years. The company's stock has dropped more than 98% since its highs in mid-2001, and the only way it is going to turn itself around is with a good turnaround team and confident leadership. Combined, these factors make INFO a stock worth watching!

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General Motors Corp. (NYSE:GM) fell 0.9%, even after the company returned to profitability in the fourth quarter, when it said that it is refunding $1 billion to its financing unit GMAC after selling 51% of the lending unit due to losses at its residential mortgage business.

Citigroup (NYSE:C) rose 0.7% after one of its executives said the bank won't lift its offer for Nikko Cordial any further. This is good news for investors after the company had already hiked its bid by 26% to $13.4 billion on Tuesday.

Google (NDAQ:GOOG) fell briefly today after Viacom (NYSE:VIA) filed a $1 billion lawsuit alleging that its YouTube unit used more than 160,000 of its videos without permission. Despite its prior successes, Viacom will likely face strong opposition by the well capitalized darling of Wall Street.

Accredited Home Lenders (NYSE:LEND) shares dropped over 65% after it said it is seeking more capital and exploring strategic options after paying about $190 million in margin calls since January 1st. This is the latest subprime lender that has been experiencing issues with the drastic increases in defaults.

New Century Financial (NYSE:NEW) shares were suspended today after the NYSE officially delisted their stock after shares fell by more than 50%. The company said that its obligations to Credit Suisse First Boston Mortgage Capital were $1.4 billion, up from the prior estimate of $900 million.

Boeing Co. (NYSE:BA) shares rose 1.9% after Continental Airlines increased a previous order of 20 Boeing 787 jets to 25.

Schering-Plough Corp. (NYSE:SGP) agreed to purchase Organon biosciences for $14.4 billion in cash from Holland's Akzo Nobel, which previously planned to sell part of the unit through an IPO.

Dollar General Corp. (NYSE:DG) jumped 25% after it agreed to be acquired by affiliates of buyout firm KKR in a transaction worth $7.3 billion.

Infospace Inc. (NDAQ:INSP) may face some shareholder criticism in the near future after Sandell Asset Mangement disclosed an 8.8% stake and expressed their concerns over the company's lack of definitive plans to return capital to shareholders and its apparent complacency on cost controls. Tom Sandell, the CEO and Senior Portfolio Manager of Sandell summarized the hedge funds stance best, stating, "We believe that InfoSpace shares are materially undervalued and the board and management should take immediate steps to improve that value. If the company and the board are unable or unwilling to take these steps, we think the company should be sold. As the company's largest shareholder, our interests are directly aligned with the rest of the shareholder base in seeing value maximized and we may seek representation on the board to protect those interests." Specifically, the hedge fund seems most concerned that the company's actions have obscured the profitability and cash flow strength from the company's search/directories segment and impaired the value of the company's largest asset - a NOL (net operating loss) carry-forward topping $1 billion.

Sandell insists that the company is undervalued due to several factors:

1. Cash - The market is not giving full value to the company's $12/share in cash due to fears that management may waste the cash on a dilutive acquisition to replace the growth engine lost at the mobile business. Sandell noted that they were encouraged, however, by the company's statements that the company intends to do no such thing.
2. Net Operating Loss Carry-Forwards (NOLs) - These are assets that are frequently missed by investors in many companies - they are losses from past years that can be carried over to offset income taxes in future tax periods. The share price of INSP reflects virtually no value to the more than $1 billion in NOLs. Sandell attributed this to the fact that many investors are uncertain as to whether the company will be run for profitability or growth. With its current revenue and asset mix, management's lowest risk strategy would be to focus on maximizing profitability and selectively adding profitable cash flowing businesses that compliment the search/directories business. However, without an unrelenting focus on costs, this asset will be almost worthless.
3. Online - Sandell said that it believes that the true value of the online segment is being clouded by the confusing segment reporting and excessive corporate costs, which mask the true earnings power of this business. Moreover, concerns over growth prospects after last quarter's revenue declines likely added to this fact. The hedge fund insists that with better segment disclosure and a return to positive top line growth should result in at least a 40% EBITDA margin if it were run at optimal efficiency.
4. Mobile - Sandell insists that the stock price implies that investors are assigning zero value to this business even though there is still a stable core business outside of the affected content/ringtone business. Further, they believe that this segment should be a very attractive acquisition candidate due to its strategic positioning with the major mobile carriers and believe that InfoSpace should investigate the possibility of divesting this business.
   

So, what exactly does the hedge fund suggest? Well, they outlined two key elements in their letter to the company's Board of Directors:

1. Reduce expenses by at least $15 million through the end of 2007, which should add up to $5 of incremental value to the stock. While the company is currently working on cost cutting in its mobile division, the hedge fund said it would like to see this applied to the entire enterprise. Specifically, many of the expenses present in these areas are likely legacy expenses inherited from a time when INSP was a much larger company.
   
2. Buy back $200 million of its common stock through a Dutch tender offer at a premium to the current market price along with a $100 million special dividend. Sandell believes that these actions would not have any negative impact on the company's ability to utilize their NOLs going forward. Moreover, they believe that the two actions would send a very positive signal to the market that the company feels the problems of the past year are behind it and that management and the board are focused on enhancing shareholder value.

Clearly, Sandell makes a compelling argument for taking action to unlock shareholder value. They estimate that the company could be worth around $35 per share in the event of a simply restructuring and up to $41 per share in the event of a breakup. Sandell also stated that if the company did not heed these changes, they should hire an investment banker to pursue other strategic alternatives, which could include a possible sale of the company's various divisions. Combined, these factors definitely make INSP a stock worth watching closely!

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Ceridian Corporation (NYSE:CEN) shares moved down $1.01, or 3.07%, to $31.86 after the company's Chief Financial Officer, Douglas Neve, resigned and Gregory Macfarlane was appointed to take his spot. Further compounding this loss was Pershing Square's press release in which they expressed concerns about the company's new CFO and the board's failure to retain key management personnel. The news comes amidst a proxy contest currently taking place between the company and Pershing Square and a recent lawsuit filed by the hedge fund seeking the release of certain letters related to communications between the company's board and management.

What problems did Pershing Square find with this CFO replacement? Well, the hedge fund first highlighted Mr. Neve's career in which he has been widely credited with re-staffing and rebuilding the company's finance and accounting organization, restoring investor confidence in the company's financial statements (after an SEC investigation and five restatements!), and driving Ceridian's HRS division margin improvement program. Clearly, he is a man that will be missed by analysts and investors. Then Pershing questioned the appointment of a division-level finance executive as CFO - someone who lacks experience with public companies. They questioned how the company concluded that this was the right hire at the right time. Moreover, they question why the board remains not only unconcerned about the departure of several high-profile executives but also the recent influx of former GE employees who have little experience in the markets in which Ceridian operates.

Clearly, there is reason for concern when several important executives leave the company. Pershing concluded their statement by saying that the board of directors should act with appropriate care regarding long-term employment commitments they extend throughout the company's senior ranks. If the hedge fund is successful in their proxy contest, we can be sure that greater care will be taken to retain key personnel necessary to orchestrate a turnaround and spin-off. Whether or not they are successful in their proxy contest remains to be seen, but for now, this is definitely a great stock to watch!

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The Pogo Producing Company (NYSE:PPP) said today that it agreed to add two members to its Board of Directors from Third Point LLC, effective immediately, expanding the Board's size to ten members from eight. In return, the activist hedge fund agreed not to solicit proxies in Pogo's 2007 annual meeting or take certain other hostile shareholder actions. The news comes after many investors, including Third Point and Third Avenue Management, had expressed concerns about the company's valuation and management's inability to unlock value. The hedge fund had encouraged the company to sell the company in whole or part in the past, threatening a proxy fight if the company didn't heed its demands.

So, what does all of this mean? Well, according to the company's press release, Pogo and its financial advisors, Goldman, Sachs & Co. and TD Securities Inc., are actively exploring strategic alternatives, including the sale or merger of Pogo. In addition, the company said it will continue to simultaneously pursue the potential sale of significant assets including its Canadian, Gulf of Mexico or other properties. Knowing Daniel Loeb's past successes, we can be sure that something will be done to unlock value. These factors make PPP a stock worth watching even more closely during the next couple of months!

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U.S. health regulators have approved GlaxoSmithKline's (NYSE:GSK) pill, Tykerb, for patients with advanced breast cancer after other treatments have failed, the company said on Tuesday. Glaxo shares recovered earlier losses after the late afternoon news and closed down $0.75 at $55.25 on the NYSE.

Qualcomm (NDAQ:QCOM) raised its forecast for fiscal Q2 earnings and revenue, citing stronger-than-expected worldwide demand for products based on its CDMA mobile phone technology. Shares rose 3% on the news, which followed an update from bigger rival Texas Instruments the night before. TI narrowed its forecast range for the quarter but kept the midpoint steady. Wireless chip and technology license supplier Qualcomm forecast quarterly earnings of $0.48 to $0.49 a shar, compared with its previous estimate of $0.42 to $0.44 a share. It raised its revenue outlook for the quarter ending April 1 to $2.1 billion to $2.2 billion, up from its previous estimate of $2 billion to $2.1 billion.

Billionaire investor Carl Icahn said on Tuesday that he would launch a tender offer for home builder WCI Communities (NYSE:WCI) in which he has about a 14.6% stake, at $22 per share. He said he would ensure the assets are properly managed through the current housing industry downturn. Icahn has agitated for change at many companies and is currently also seeking board seats at Motorola and Temple-Inland. Shares of WCI soared nearly 15%.  

Real estate investment trust Spirit Finance (NYSE:SFC) said has accepted a takeover bid from a consortium led by Macquarie Bank for approximately $1.6 billion in cash, or $14.50 per share. The purchase price represents an 11% premium over Spirit's closing price of $13.05 on the NYSE Monday and a 15% premium over its 90-day average closing price. Including about $1.9 billion in assumed debt, the deal is valued at $3.5 billion. In addition, the consortium agreed to buy about 6.15 million shares of Spirit common stock at $12.99 each, or $79.9 million. Spirit will use proceeds from the private placement to fund real estate-related activities.

Goldman Sachs Group Inc. (NYSE:GS), the largest Wall Street investment house, on said  its Q1 profit rose 29% to a company record on robust trading gains and investment banking fees. New York-based Goldman reported earnings applicable to common shareholders rose to $3.15 billion, or $6.67 per share, for the quarter ended Feb. 23, compared to $2.45 billion, or $5.08 per share, in the year-ago period. Revenue rose 22% to $12.73 billion from $10.43 billion in the year-ago period. Results surpassed Wall Street projections for earnings of $4.97 per share on $10.69 billion in revenue, according to analysts polled by Thomson Financial. However, Goldman's shares fell $3.52, or 1.8%, to close at $199.08 on the NYSE, which was in line with a selloff in the broader market.

Oil prices fell Tuesday to settle under $58 a barrel, as a decline in the stock market stirred worries about the economy and demand for energy.

Embarcadero Technologies Inc. (NDAQ:EMBT) shares moved up $0.09, or 1.37%, to $6.66 after Chapman Capital issued a press release reiterating its demand that Embarcardero's Board of Directors maximize shareholder value via a change-of-control transaction. The activist hedge fund, which owns a 9.3% stake in the company, also said that it would seek nominees to replace several Class I and II directors.

The company first attracted buyout interest back in September 2006, when it announced it had entered into a definitive agreement to be acquired by an affiliate of the Thoma Cressey Equity Partners in a cash transaction valued at $8.38 per share of common stock. Problems arose in November, however, when the company failed to file on time and eventually uncovered an options backdating problem. This caused Thoma Cressey to terminate their merger agreement on December 18th. Chapman Capital then decided to take an active stance in the company again and began contacting shareholders. By February 28, 2007, Chapman Capital’s research led to the conclusion that there was virtually unanimous sentiment amongst the company's shareholders that the most suitable strategic course of action for the Issuer was to resume the auction process conducted by Morgan Stanley & Co., as compared to the arguably higher risk spend-for-growth strategy that has crippled numerous sub-$100 million technology companies in the past. Particularly in light of the company's February 16, 2007, disclosure regarding the company's ongoing NASDAQ delisting risk, declining license revenue, and option-scandal related inability to announce full earnings results for the fourth quarter ended December 31, 2006, the company's ownership base conveyed a uniform desire for the company's common stock value to be maximized through a change-of-control transaction. 

"Embarcadero's Board of Directors is virtually ownership-free, with only one director recently possessing a mere $65,000 in Embarcadero shares vs. funds advised by Chapman Capital owning over $15 million of this $170 million-in- market-capitalization company. The Board, with no meaningful 'skin in the game,' shall not be allowed to 'play venture capitalist' with the hard-earned money of a shareholder base held hostage by weak corporate governance," said Mr. Chapman. "Morgan Stanley & Co., the financial adviser still retained by the Board, is in possession of a signed merger agreement and germane fairness opinion that with minor modification could be applied expeditiously to a revised merger proposal. In a period of record merger and acquisition activity driven by a multitude of cash-flush financial and strategic buyers, Morgan Stanley shall not be exculpated for failure by using the pretext of a shareholder base that is openly willing to sell."

Combined, these factors make EMBT a stock worth watching! If Chapman Capital is able to convince the company to put itself up for sale, it could mean significant share appreciation for investors. Typically, when threats of a proxy fight are issued, the company will at least respond to the demands in an attempt to prevent the costly process from occurring. So, the next thing to look for is either a communication from the company or a DEF14A proxy solicitation.

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Ceridian Corporation (NYSE:CEN) shares moved up $0.57, or 1.79%, to $32.38 today after the company appointed a new Chief Financial Officer. It was also revealed late Friday in a DEF14A filing that the company was being sued by activist hedge fund Pershing Square. In the lawsuit, the hedge fund demanded that the company make two letters available for inspection and copying by the hedge fund. Ceridian had admitted the existence of these two letters which were sent by senior executives of the company to the company's board of directors. Pershing Square believes that these letters include discussions of the senior executives' concerns about the management of the company, including concerns about the board of directors' oversight responsibilities and/or the performance of the prior chief executive officer. Yet, Ceridian has refused to provide the hedge fund with access to those letters for potential use in a proxy contest, even though they are directly relevant to the question of whether shareholders should vote for the new nominees proposed by Pershing Square or those proposed by the incubant directors. What did the company have to say? According to a spokeswoman for Ceridian: "We believe this lawsuit is completely without merit and we intend to defend ourselves vigorously."

Meanwhile, the company announced the appointment of a new chief financial officer today. "We are extremely pleased to have someone of Greg's caliber joining Ceridian," said Kathryn V. Marinello, president and chief executive officer of Ceridian. "Greg demonstrated his financial expertise during his years at GE by continually improving the business units in which he worked. I worked with Greg closely in the past at GE's Partnership Marketing Group and was consistently impressed by his knowledge of finance and leadership capabilities. The Board and I are delighted to welcome Greg to our senior management team and are confident that he will be an important contributor to Ceridian's success as we focus on creating value for our shareholders." The new CFO is good news for shareholders, who will also be watching this court fight closely to see if they can get a better glimpse into the company's management team and board of directors. And in the end, if Bill Ackman's Pershing Square is able to take over the company's Board of Directors, it could mean significant upside for shareholders! This makes CEN a company worth watching!

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UnitedHealth Group (NYSE:UNH) said today that it agreed to acquire Sierra Health Services, Inc. (NYSE:SIE) for approximately $2.6 billion, giving the health insurer a larger marketshare in the quickly expanding Southwest region and boosting its senior health-care capabilities. Sierra shares rose over 15% on the news, while UnitedHealth shares moved up fractionally.

Boston Scientific Corp. (NYSE:BSX) said its Board of Directors has authorized management to explore an initial public offering of a minority stake in its endosurgery group. The medical device maker said an IPO would involve selling approximately 20% of the endosurgery group, which would remain a majority owned subsidiary.

Wireless Facilities Inc. (NDAQ:WFII) said it plans to delay its 2006 annual report as it continues to investigate possible options backdating. The company is expected to record a $9.2 million charge related to the accelerated vesting of all of its employee stock options, an $18.3 million goodwill impairment charge, and a $3.4 million asset impairment charge.

Several changes were announced to the S&P500 index. Host Hotels and Resorts (HST) will be added to the index on a date to be determined, replacing Phelps Dodge Corp. (PD), which is being acquired by Freeport-MyMoRan Copper & Gold Inc. (FCX). Also, the S&P said it would be adding Option Care Inc. (OPTN) to the SmallCap 600 index after the close of trading March 15th. This company will replace Hancock Fabrics, inc. (HKF).

Cosi Inc. (COSI) said that its Chief Executive Kevin Armstrong has resigned for health reasons. The company named Robert Merritt, one of its directors, as interim CEO, effective immediately.

Netease Com Inc. (NDAQ:NTSE) said that its Board of Directors OK'ed a new buyback program that would enable the company to repurchase up to $100 million ADRs.

Merck & Co., Inc. (NYSE:MRK) said that it plans to appeal the Humeston Vioxx verdict, where a N.J. jury awarded $20 million to plaintiffs.

Texas Instruments Incorporated (NYSE:TXN) said that its inventory correction was "winding down" while its customer inventory levels were improving. Consequently, the company expects growth to resume again in Q2.

CVS Corporation (NYSE:CVS), seeking to thwart rival suitor Express Scripts sweetened its offer on Thursday for Caremark to $54.12 a share, plus a higher, one-time dividend of $7.50 per share in cash after the deal closed. The dividend previously was $6 per share. CVS also said if the deal is closed, the combined company will make a cash tender offer of $35 a share for 150 million, or about 10%, of its outstanding shares.

Frank Stronach, CEO of Canadian auto parts giant Magna International (NYSE:MGA), confirmed that his company could be interested in taking a stake in DaimlerChrysler's Chrysler division. Stronach said it was vital that Magna be involved in a possible sale of Chrysler to protect itself and help its biggest customer, which carried the first public comments by Magna owner since Chryslers Feb 14 announcement that it would cut 16% of its employees.

Shares of Yahoo (NDAQ:YHOO) tumbled Friday amid reports that the Web portal's deal with AT&T to sell high-speed Internet access may be on shaky ground. The companies reported to be negotiating potentially sweeping changes that could scale back their partnership, according to the Wall Street Journal. The potential fraying of the alliance deals an unexpected new blow for Yahoo, which gets roughly $210 million to $290 million in subscription and advertising revenues annually from AT&T, according to Goldman Sachs analyst Anthony Noto. Yahoo shares fell $1.64 to $29.07 in early afternoon trade on Nasdaq. They had risen around 13% so far this year, prior to Friday's decline. AT&T shares firmed $0.11, or 0.3%, to $36.62 on the NYSE.

Coca-Cola (NYSE:KO) said that it is reorganizing its North American business to better reflect its strategic focus and creating three new business units for its sodas and other beverages as part of the change. In a note to employees, Coke North America President Sandy Douglas said the new operating model has been designed "to transform our business and win in the marketplace."

A second U.S. investment firm dismissed Citigroup's (NYSE:C) $10.8 billion buyout offer for Japanese brokerage Nikko Cordial as far too low, pressuring the U.S. bank to sweeten its bid. Nikko's stock rose to trade 4.4% above Citigroup's offer price after Tennessee-based Southeastern Asset Management, Nikko's third-biggest shareholder, said the brokerage was worth at least 48% more.

Strong demand for corn from ethanol plants is driving up the cost of livestock and will raise prices for beef, pork and chicken, the Agriculture Department said. Meat and poultry production will fall as producers face higher feed costs, the department said in its monthly crop report. Ethanol fuel, which is blended with gasoline, is consuming 20% of last year's corn crop and is expected to gobble up more than 25% of this year's crop. The average price of corn, unchanged from last month, is $3.20 a bushel, up from $2 last year.

Procter & Gamble Co. (NYSE:PG), maker of Tide detergent, Crest toothpaste and numerous other consumer products, reaffirmed its Q3 earnings guidance. The company expects earnings of $0.72 to $0.74 a share for the quarter ending later this month. P&G said it expects sales growth of 7% to 9% in the quarter. Shares rose $0.10 to $62.41 in morning trading on the NYSE. Shares have traded in the range of $52.75 to $66.30 in the past year.

New Century (NYSE:NEW) shares lost a quarter of their value, plunging 25%, or $1.29, to $3.87 on the NYSE. After the closing bell, the stock fell an additional 2.6 % to $3.77 in electronic composite trading.

Financial stocks moved up today: Bear Stearns (NYSE:BSC) shares added 1.8%, or $2.69, to $152.06 on the NYSE while Goldman Sachs (NYSE:GS) rose 2.2%, or $4.35, to $199.94.

Retail stocks recovered on optimistic economic news: Target (NYSE:TGT) climbed 1.8%, or $1.09, to $61.69 and J.C. Penney (NYSE:JCP) shares rose 4.1% to $80.86, both on the NYSE. Department store operator Bon-Ton Stores Inc. (NDAQ:BONT) shares shot up 15.8%, or $7.56, to $55.36 on the Nasdaq.

Steel maker Nucor Corp. (NYSE:NUE) jumped 5.3%, or $3.17, to $63.12 on a strong forecast and helped other stocks in the sector. U.S. Steel Corp. (NYSE:X) gained 3.2%, or $2.81, to $90.51.

Phone company AT&T (NYSE:T) was the top-weighted gainer in the Dow and the S&P 500 following a European bond issue and an upgrade by A.G. Edwards. AT&T shares climbed 3.1%, or $1.08, to end at $36.51 on the NYSE.

Weyerhaeuser Company (NYSE:WY), which has moved up well over 40% since the middle of 2006, is now considering making changes to its centuries old corporate model. Many activist shareholders have been pushing the lumber giant to sell everything but its timberland operations and restructure itself as a Real Estate Investment Trust (REIT) in an effort to save millions with the new tax structure. The company initially resisted the idea, however, opting to maintain its current corporate structure while pushing for federal legislation that would make it cheaper to operate its timberlands. But recently, the company announced that it would explore all of its strategic options, including a possible restructuring.

Why the commotion? Well, Weyerhaeuser first caught the attention of investors after a series of transactions in the timberland sector gave some insight into the value of their real estate holdings, which some estimate as high as $3,000 per acre. And given the company's 5.7 million acres of land in the Pacific Northwest, the valuation of their timberland operations becomes a huge number! Investors speculate that the company could be valued at around $83 per share if the company's divisions were split up or sold off and as high as $108 if it converted itself into a REIT without a big tax penalty. Investors also stand to gain substantially if the company's proposed legislation (sponsored by Artur Davis) passes, which would cut the company's tax rate by 60% to about 14% - roughly the same as an REIT would pay. Now that the company is officially exploring these strategic options, WY is definitely a stock to keep a close eye on!

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Applebee's International, Inc. (NDAQ:APPB) moved up $0.06, or 0.24%, to $25.23 today after Breeden Capital the company's offer for two seats on the Board of Directors. Breeden Capital had been seeking four seats in what has been a long standing battle with the company. We first began covering this story back in December when Breeden Capital expressed disappointment with the company's operating results and valuation. Specifically, the hedge fund pointed out APPB's chronic under-performance compared to other company's in its peer group. They noted Applebee’s performance was 113.3% worse than Darden, 51.7% worse than the S&P 500, and 47.4% worse than the 75th percentile of the casual dining peer group. Moreover, they pointed out the company's deteriorating fundamentals by showing declining same-store sales (5.2% to -1.0%), declining operating margins (16% to 12.4%), and declining return on capital invested (16% to 10%). Clearly, there is cause for concern at Applebees!

So, what does the hedge fund plan to do about it? Well, they outlined several changes that they would make in a past letters to the Board of Directors:

1. Significantly reduce the number of company-owned restaurants by re-franchising a substantial number of restaurants in a multi-year program.
2. Cease all further capital expenditures to open new company-owned restaurants, and minimize capital expenditures to renovate company-owned restaurants pending their sale.
3. Reduce overall expense levels, especially in corporate level overhead, and dispose of non-core assets.
4. Use excess cash generated from these steps and improved performance to increase the return of free cash flow to shareholders.
5. Improve various governance practices, including reducing the number of insiders on the company's board, precluding former CEOs from continued board service, strengthening independence requirements, eliminating the personal use of corporate aircraft and abolishing your staggered board.
6. There should be a moratorium on any incentive compensation for any tier one executives so long as TSR remains negative. Similarly, incentive compensation should be zero if the company remains in the fourth quartile of relative performance in generating TSR.
7. A large proportion of incentive compensation (such as 50-75%) should be based on relative measures of performance compared to the company’s publicly traded casual dining competitors.
8. Growth in average per restaurant royalty fees from franchise operations should be included as an incentive target for relevant executives (including the CEO and CFO), since franchisees represent 73% of the company’s system.
9. The level of free cash flow would be a healthy measure for some portion of incentive opportunities, especially for the CEO and CFO.
10. Minimum relative performance in generating TSR or EVA (such as being in the top 20%) should be a significant part of every executive’s target incentive eligibility. All executives should have a vital stake in the company outperforming its peers.
11. Personal use of corporate aircraft should be banned. Tax gross-up payments made during the last three years should be repaid to the company.

So, what happens now? Well, since Breeden Capital has rejected the two board seat offer, it is up to the company to either produce a counter-offer of four seats or face a possible proxy fight. The first step to watch for that would indicate a proxy fight would be an official declaration by Breeden asking for the company's shareholder records so they could mail proxy materials - which would be found in a future DEF14A filing with the SEC. Meanwhile, if the hedge fund's nominees are elected to the company's Board of Directors, it could mean significant share appreciation over the long-term for the company's shareholders. This makes APPB a stock worth watching!

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Stonepath Group, Inc. (AMEX:STG) will face some shareholder opposition to its proposed restructuring plan after a group of shareholders owning a combined 32% of the company's outstanding shares voiced their concerns in a Schedule 13D filing with the SEC. The hedge fund syndicate include Strategic Turnaround Equity Partners, Galloway Capital Management, Gary Herman and Bruce Galloway.

The company announced an agreement with Mass Financial in February whereby they would acquire Stonepath's entire credit facility from Laurus Master Fund, Ltd. and provide the company with a $20 million line of credit. Shareholders are angry with this agreement for two reasons. First, Mass Financial had to purchase Stonepath's entire credit facility from Laurus Master Fund, to which Stonepath will be required to issue 3.5 million shares of common stock or 7.9% of the current number of shares outstanding! Secondly, under the terms of the agreement, the credit line will be convertible into Stonepath stock at a conversion price of 85% of its value. This would enable the finance company to purchase twice the Stonepath's current number outstanding shares at an 85% discount! Combined, this "hyper-dilution" of common stock could dramatically reduce share value, which is why the group of investors sent a letter to the Board of directors indicating their concern and urging them to explore a structure that is not as dilutive to common stock shareholders.

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Tribune Company (NYSE:TRB) said that it plans to keep its remaining newspapers after announcing the sale of The Advocate and the Greenwich Time to Cannett Co. earlier this week. The company first announced that it was considering the sale of some or all of its company last September, under pressure from Chandler Trusts. Since then, it received a number of offers from the Carlyle Group, Eli Broad and Bon Burkle among others but turned each one of them down. Recently, the special committee assigned with exploring strategic alternatives was reportedly leaning towards a restructuring that would involve a spin-off of the company's television stations and a large special dividend payout with the proceeds. The committee was also rumored to be looking at a buyout bid for the entire company from billionaire real estate mogul Sam Zell. Regardless, Tribune is definitely a stock worth watching as they explore options for the company.

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Ford Motor Company (NYSE:F) shares jumped $0.31, or 4.07%, to $7.93 today after the U.K. Daily Telegraph reported that the company would sell its Aston Martin division by Friday at the opening day  of the Geneva Motor Show. The sale will be made to a consortium of business interests from the U.S. and Middle East, headed by Prodrive founder and world rally champion owner David Richards. The price is rumored to be near GBP500 million, which is roughly half of what Ford originally asked for six months ago. The transaction should prove to be a boost for the struggling automaker's cash position, which makes Ford a stock to watch.

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Friendly Ice Cream Corporation (AMEX:FRN) share moved up $1.87, or 15.71%, to $13.70 today after the company announced that it retained Goldman Sachs to assist the Board of Directors in exploring strategic alternatives to enhance shareholder value, including a possible sale of the company. We first began covering FRN back in November and again in December when we noted that the Lion Fund had established a stake in the company and sought to unlock value through a possible sale. Since then, the stock has risen more than 30% including today's 15% gain as the company finally agreed with the company. Now, many investors are betting that the company will put itself up for sale with Mr. Biglari of the Lion Fund being a potential bidder.

This story was one of the more interesting fights we've seen between shareholders and management. Shareholders first established a group to fight the company, complete with a website: http://www.enhancefriendlys.com. Shortly thereafter, the shareholders took things even further by putting up billboards near the company's headquarters publicizing the fact that their company needed fixing. The giant billboards claimed that two board candidates they proposed are "Good for Employees, Franchisees, Shareholders". This campaign - designed to target ordinary investors - was clearly designed to cut into day-to-day operations. And while the campaign wasn't unprecedented, it was certainly unusual by any standard! Regardless, FRN continues to be a stock worth watching as the company mulls its options.

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Take-Two Interactive Software, Inc. (NADQ:TTWO) shares moved up $2.86, or 16.24%, to $20.47 after several investors collectively holding 46% of the company's outstanding shares reached an agreement with the company to vote in a new slate of six directors, according to a Schedule 13D filed today with the SEC. The investment group consists primarily of OppenheimerFunds, SAC, Tudor Investment, DE Shaw Valence and ZelnickMedia. The new nominees for the Board of Directors include former BMG Entertainment CEO Strauss Zelnick, former News Corp executive Benjamin Feder, Jon Moses, Michael Dornemann and Michael Sheresky. Many analysts and investors are predicting that the proposed management change would have a positive impact on the company, after it suffered losses for the past four quarters.

What does the group aim to accomplish? Well, they started by asking the company to grant them the power to replace the current Chief Executive Officer and review the current Chief Financial Officer. Secondly, the group setup a "Management Agreement" whereby ZelnickMedia will receive a monthly management fee of $62,500, an annual bonus of up to $750,000, an option to purchase 2.5% of the company's common stock on a fully diluted basis, and shares of restricted stock. Not to mention the company will be forced to reimburse ZelnickMedia for all expenses related to the Management Agreement and other related transactions. Will the costs be worth it? Well, given the poor performance we're seeing from current management along with the recent options backdating scandal, many investors are willing to take the chance. TTWO is definitely a stock worth watching as the new management team attempts to turn around the company!

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THQ Inc. (THQI)

Cost-U-Less, Inc. (NDAQ:CULS) announced yesterday that it entered into separate letter agreements with two activist hedge funds that have been pushing for changes. Delafield Hambrecht and Chadwick Capital Management reached an agreement with the company whereby the company would nominate and support John D. Delafield for election to the company's Board of Directors in 2007 and submit a proposal to remove the requirement that a business combination be approved by holders of at least 2/3 of the oustanding common stock under certain circumstances. Meanwhile, the two hedge funds agreed to support the slate of directors nominated by the company and not propose any other business or conduct a proxy solicitation at the 2007 annual shareholders meeting.

We first took note of this company back in December when Monarch Activist Partners suggested that the company put itself up for sale in a Schedule 13D/A filing with the SEC. About a month later Delafield Hambrecht issued a similar demand in their own Schedule 13D/A filing, reasoning that CULS is worth at least $12 per share. Delafield even hinted that they would be a potential bidder in the event of a sale, although admitted that a strategic buyer would likely be willing to pay more. Shortly thereafter, the company responded by saying that it had contacted several investment bankers and other advisors in order to help them explore strategic alternatives. Interestingly, the latest advisor that they hired happens to be Cascadia Capital - a Seattle-based investment bank with a nationally recognized M&A advisory practice. With a fresh new seat on the Board of Directors and less stringent business combination requirements, the odds of a sale taking place just greatly increased! This makes CULS a stock worth watching closely!

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Digital video recording service provider TiVo Inc. (NDAQ:TIVO) posted a narrower Q4 loss Wednesday, beating Wall Street expectations. The Alviso-based company reported a quarterly loss of $18.7 million, or $0.19 per share, for the three months ended Jan. 31. In the same period last year, TiVo's net loss was $21.1 million, or $0.25 per share. Net revenues climbed to $77.6 million from $60.1 million a year ago.

Capitalizing on the popularity of social networks and online worlds, Sony (NYSE:SNE) will launch its own virtual universe and another 3-D game built almost entirely by players. "Home" is a real-time, networked world for the PlayStation 3 in which players create human-looking characters called avatars. They can buy clothing, furniture and videos to play on a virtual flat-screen television in their virtual apartments. Sony will launch a beta version in April and officially debut in the fall as a free download on the PlayStation online store.

Martek Biosciences Corp. (NDAQ:MATK), which makes nutritional oils to supplement baby food, said it expects a Q2 net income between $4.8 million and 5.8 million, or $0.15 to $0.18 per share. Analysts expect earnings of $0.17 per share, and revenue forecasted at $73.7 million in revenue. Martek is expecting revenue between $73 million and $74 million. As well, the company released that their Q1 profit fell 32% due to higher operating costs.

Biotechnology company OncoGenex Technologies Inc., which has been trying to launch its initial public offering in a week of stormy trading on the world's stock markets, withdrew its IPO. Plans to begin trading later in the week were not realized, and the IPO was pushed into this week. Last Thursday, the company lowered its estimated IPO price range to $7.50 to $8.50 a share, from $10 to $12 in an amended filing with the SEC. The underwriters also increased the size of the offering to 5 million shares from 4.5 million shares. OncoGenex is attempting to commercialize new cancer therapies that address treatment resistance in patients.

Athletic shoe retailer Foot Locker Inc. (NYSE:FL) said it expects its Q1 and full-year earnings to fall short of Wall Street expectations. The company is projecting quarterly earnings of $0.34 to $0.37 per share. In the year-ago quarter, Foot Locker earned $0.37 per share. Analysts expect higher earnings of $0.41 per share. For the full year, the company expects earnings of $1.55 to $1.65 per share, while analysts are looking for earnings of $1.74 per share.

Polypore, Inc. (PPO) today announced net sales of $124.9 million for the three months ended December 30, 2006, representing a 23% increase over Q4 2005.

Mamma.com Inc. (NDAQ:MAMA), a Montreal-based Internet search engine, reported a Q4 profit, reversing a year-ago loss, as the company expanded distribution and signed new clients. Net income totaled $420,175, or $0.03 per share, from a loss of $762,555, or $0.06 per share, a year ago. Q4 revenue more than doubled to $3.6 million from $1.6 million a year ago.

Express Scripts Inc. (NDAQ:ESRX) announced it has increased its bid to acquire Caremark Rx Inc., but company officials said they expect closer scrutiny from federal regulators over the proposed deal. Express Scripts' offer is to acquire all outstanding shares of Caremark for $29.25 in cash and 0.426 shares of Express Scripts stock for each share of stock in Nashville-based Caremark. The St. Louis-based pharmacy benefits manager said it will now pay additional cash consideration of nearly 6% per annum on the $29.25 cash portion of its offer.

Citigroup Inc. (NYSE:C), which earlier this week announced that it was bidding on a major Japanese brokerage, also is looking to purchase a Taiwanese bank. Citigroup, the largest bank in the United States, has agreed to pay $424 million to acquire the Bank of Overseas Chinese in Taiwan.

Discount carrier JetBlue Airways (NDAQ:JBLU) named a new chief operating officer on Wednesday, shoring up its management team just weeks after suffering a major service meltdown. Russell Chew, former chief operating officer at the U.S. Federal Aviation Administration, will assume the COO role at JetBlue on March 19. Oversight of JetBlue's daily operations was previously handled by President David Barger to whom Chew will report.

DaimlerChrysler AG (NYSE:DCX) shares moed up $1.78, or 2.71%, to $67.58 after Cerberus Capital Management executives met with the struggling automaker this week to discuss a potential bid. This news comes as the Blackstone Group is also set to meet with management later this week, according to the Detroit News. Interestingly, some investors are also speculating that GM could also be a potential suitor. Multiple interested parties is definitely good news for shareholders as there is potentially room for a bidding war, which we know from Equity Office Properties (NYSE:EOP) can be extremely profitable!

Shares of the GermanAmerican manufacturer hit a seven-year high last month when CEO Dieter Zetsche put "all options on the table", opening up the possibility of a sale of the company. The stock has seen significant volatility due to speculation, having moved from a low of around $45 per share in mid-2006 to a high of $74.53 before retracing to around $67 per share. Meanwhile, CEO Tom LaSorda stated last month that any official word on the buyout speculation could be months away. So, what's the next move for investors? Well, many investors are waiting to gauge the interest of the two parties in Chrysler before taking a stake; however, if the two parties turn out to be interested, it would mean significant share appreciation for shareholders! This makes DCX a stock worth watching!

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Inter Tel, Inc. (NDAQ:INTL) shares moved up $0.20, or 0.87%, to $23.27 today after Steven Mihaylo filed a Schedule 14A to solicit proxy materials and nominate his slate of five directors to the company's Board. Mr. Mihaylo, a 19.4% stakeholder, first contacted the Board of Directors on January 19, 2007, when he sent a letter expressing hope that the two parties could develop a plan of action to lead the company forward with a renewed focus on enhancing shareholder value in the near and longer term. On January 22, 2007, Mr. Mihaylo received a response letter from the company expressing appreciation for the constructive tone and indicating that the company would contact him shortly to discuss the ideas raised in the letter. Following this exchange, Mr. Mihaylo and the company held several discussions in an attempt to resolve the differences between the two and avoid a proxy contest. However, these discussions were unsuccessful.

What changes does Mr. Mihaylo want to make? Well, his January 19th letter outlined nine major changes:

1. Consider reducing the size of Inter-Tel's Board from 11 to 10 members, with the Board consisting of (a) the Chief Executive Officer, (b) Dr. Puri, Mr. Urish and me, (c) three other existing outside members of the Board, and (d) three new independent directors mutually acceptable to the Board and me. Alternatively, in order to save costs and facilitate the scheduling of Board meetings, I would be amenable to a 7 member Board, consisting of (a) the Chief Executive Officer, (b) Dr. Puri, Mr. Urish and me, and (c) three new independent directors mutually acceptable to the Board and me.
2. Retain a financial advisor to advise the Board on the feasibility and financial impact of a Dutch-auction self tender offer to repurchase between $200 million and $250 million of the Company's common stock.
3. Disband the Special Committee, thereby eliminating all of the costs associated therewith.
4. Direct management to (a) undertake an intensive cost-benefit analysis of (i) discontinuing product development on the Axxess and (ii) redirecting the engineering effort to "gateway" products and "hosted services" offerings, including the necessary billing platform for hosted services, and (b) report the results of that analysis to the Board. I believe these actions will produce significant cost savings and provide significant sales opportunities.
5. Consolidate the Company's multiple engineering facilities into the Chandler location. This will reduce overhead and improve productivity, while encouraging new and better ways to speed up product development.
6. Explore the sale of the Company's Irish subsidiary, unless its performance significantly improves within a set period of time. This would enable management to concentrate on more profitable opportunities, as well as raise additional cash to offset the costs of the self tender offer.
7. Explore ways to better utilize the Company’s 15 acre campus in Reno.
8. Undertake an evaluation of the recommendations in the consulting report that the Mihaylo/Vector Group provided to Inter-Tel as a result of the Settlement Agreement executed in May 2006.
9. Defer implementation of the proposed by-law amendments until the foregoing issues are actively considered.

Many of these changes would create immediate value for shareholders while others are focused on improving the company's longterm prospects. Stock repurchases tend to increase the stock price while the sale of the company's Irish subsidiary would likely generate a substantial amount of cash. Meanwhile, the other cost cutting measures outlined could help boost earnings per share in future quarters. Combined, these recommendations make a lot of sense (and we have no communications from the company explaining the issues they had with them). And with Mr. Mihaylo's 19% stake in the company, a proxy contest could have some traction. This makes INTL a stock worth watching!

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Citigroup (NYSE:C) launched a $10.75 billion takeover bid for Japanese brokerage Nikko Cordial, offering cash to the scandal-hit firm's shareholders in a deal designed to transform its business in the world's second-biggest economy. Citigroup, the largest U.S. bank but a small player in Japan outside of corporate investment banking, said it would pay a premium to Nikko's closing price on Tuesday to lift its stake in Japan's third-largest securities firm from just under 5% percent to at least 50%.

CBS (NYSE:CBS) it is buying back about 47 million shares of its Class B stock for $1.4 billion through an accelerated repurchase transaction. The cost of the repurchased shares is subject to adjustment.

U.S. box office revenue reversed a three-year slide in 2006, with sales rising 5.5% to $9.49 billion, according to an industry group. The 607 films released in 2006, which include both major motion pictures released by MPAA members and smaller, independent releases ,marked an all-time high for a single year and an 11% increase over the 549 movies that hit theaters in 2005. Globally, box offices tallied $25.8 billion in sales, up 11% from $23.3 billion in 2005. International distribution and home entertainment sales account for a significant portion of major U.S. films' revenue.

Koch Industries, the world's second-largest private company, plans to team up with private equity firm Blackstone Group to join the bidding for GE Plastics, according to sources close to the process. The auction for GE Plastics, a unit of General Electric, comes amid concern that the profitability of the unit is eroding, and that the price tag on any deal is shrinking.The four leading bidders for GE Plastics - Apollo Management, Blackstone, Carlyle Group and Kohlberg Kravis Roberts & Co. - have signed agreements promising not to team up with each other, according to two sources involved in the process. GE Plastics recorded revenue of $5 billion for the first nine months of 2006, and profit of $560 million.

Strong earnings reports from apparel retailers and an online payment processing company boosted shares in Tuesday's after-hours electronic trading session.
Chico's FAS Inc. surged $1.17, or 5.7%, to $21.59 in the extended session, after the apparel maker and retailer beat Wall Street revenue expectations with its Q4 results, despite heavily discounted merchandise. Higher expenses dragged down quarterly profit, for the Fort Myers, Fla.-based company, however.

Payless Shoesource Inc. (NYSE:PSS) climbed $1.97, or 6.2%, to $33.40 in the late session, after the discount shoe retailer said it swung to a Q4 profit.
Canadian electronic payment processing equipment maker Optimal Group Inc. rose $0.99, or 12.7%, to $8.79 in the extended session.

Avalon Pharmaceuticals Inc. (NDAQ:AVRX) shot up $1.27, or 27.4%, to $5.90 after the Germantown, Md.-based company said it is collaborating with Merck & Co. to develop inhibitors for an undisclosed target, focusing on cancer.

CV Therapeutics Inc. (NDAQ:CVRX) plunged $3.20, or 26 %, to $9.10 in the after hours session, after the biotech said its angina drug ranolazine, or Ranexa, failed to meet its goal in a late stage study.

The Topps Co. (NDAQ:TOPP), maker of baseball cards and Bazooka bubble gum, has accepted a $385.4 million takeover offer from a buyout group that includes former Disney CEO Michael Eisner. The buyout group, which includes The Tornante Co. LLC, founded by Eisner, and the Chicago-based private equity firm Madison Dearborn Partners LLC, has agreed to pay $9.75 for each Topps shares, which represents a premium of 9.4% over the stock's Monday closing pricing of $8.91 on the Nasdaq Stock Exchange. In a sign that some investors think the bidding could go higher, Topps shares rose $0.90, or 10%, to close at $9.81 on the Nasdaq Stock Market. Its shares have traded between $7.50 and $10 over the past 52 weeks.

The DJ Wilshire Pharmaceutical Index jumped 1.2% to close at 2325.03 and the DJ Wilshire Biotechnology Index rose 1.1% to close at 3013.76. Novartis AG was the big mover among the large pharmaceutical players, its stock advancing 6% to close at $56.85. Intermune Inc. shares plunged 21% to $22.15. The biotech group is discontinuing a Phase III clinical trial for its pulmonary drug candidate Actimmune due to poor interim results. Pozen Inc. shares leapt 10% to $15.70. The drug developer announced favorable results from an early-stage clinical study of its aspirin product PA 325. The drug candidate combines aspirin and a proton pump inhibitor drug to combat gastrointestinal bleeding, a known side effect of aspirin.

Shares of RadioShack Corp. (NYSE:RSH) took back a week's worth of losses, finishing up 4.2% at $25.45, a 20-month closing high.

Circuit City (NYSE:CC) shares bounced off 15-month lows to settle at $17.96, up 2.8%. Share of Best Buy Co., the nation's largest electronics retailers, added 2% to $46.52.
Shares of Ann Taylor Corp. were higher by 3.5% at $35.31. The shares got a boost after Banc of America upgraded them to a buy from neutral with a $42 a share price target.
shares of Warnaco Group Inc. jumped 11.4% at the close to $27.58. Morgan Keegan & Co. raised its rating to outperform.

Alltel Corporation (NYSE:AT) is reportedly seeking a buyer but may experience some difficulty, according to reports from the Wall Street Journal. The WSJ reported that Alltel had already approached AT&T, Verizon Communications, and Sprint-Nextel regarding a possible sale of the company. However, a potential deal-breaker lies in the company's high market valuation, which currently stands at around $22 billion. Some analysts think this number could get as high as $30 billion in the event of a buyout, which could be too much for any one buyer to pay. If the buyout efforts fail, many investors believe that the company's shares could trend towards a lower valuation.

What makes Alltel a potential buyout target? While the company only has about a fifth of the customers of AT&T and Verizon, they do operate the nation's largest wireless network geographically. As a result, the company has many "roaming" agreements that allow customers from larger carriers to roam beyond their coverage areas without incurring large roaming fees. As a result, if AT&T decides to pursue an Alltel deal it could spur a competition with Verizon, who would likely seek to prevent a deal. Why? Well, if AT&T purchased Alltel it would jeopardize the roaming agreements that Verizon has in place. This makes AT a stock worth keeping an eye on over the next couple of months.

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PDL BioPharma, Inc. (NDAQ:PDLI) shares moved up $0.73, or 4%, to $18.99 after Daniel Loeb's Third Point disclosed a 7.5% stake in the company and expressed disappointment and concern over the company's high rate of spending and significant underperformance. The Schedule 13D filing contained a letter urging the company to cut costs and not pursue additional acquisitions. Daniel Loeb also offered to work with the company to streamline the company's cost structure and asset base in an effort to allow the cash generating ability and value of the company to be developed and made apparent to shareholders.

Here's a sampling of what Daniel Loeb wrote in his lengthy letter to management:

We believe that the significant value inherent in the Company's product line, royalty revenues and R&D pipeline has been obscured by excessive overhead and apparently undisciplined research spending. We at Third Point have had substantial experience working strategically with healthcare companies to enhance value and we would welcome the opportunity to share our views and work constructively with you to help put the Company on the right track. We believe that, with our timely input, the Company should be able to reverse its significant underperformance.

I am certain that you and the Board share our consternation that since January 1, 2004, the Company's share price has remained flat versus a 50% increase in the biotech index (BTK). This is particularly troubling given that the Company has received approximately $400M of royalty revenues over this time period, largely attributable to several of biotech's fastest-growing products, including Genentech's Avastin and Herceptin. By comparison, Genentech shares have doubled over this time period.

Underlying our approach is our strongly held belief that PDLI's shares are significantly undervalued due to the market's worry that the Company is squandering valuable cash flow on undisciplined R&D spending as well as its concern that the Company will make another acquisition. We estimate that between now and the end of 2014, PDLI will generate close to $2.2B in revenues from its royalty stream. Discounting this back at the current cost of capital, we calculate that this revenue stream is worth $1.8B today, just slightly below PDLI's current market capitalization. In addition to these royalties, specialty pharmaceutical revenues should approximate $200M in 2007 and the Company has other valuable assets: an exciting, albeit slowly-progressing, product pipeline; undisclosed royalties that extend beyond 2014; approximately $430M in net operating loss carry-forwards; real estate and other assets that can be monetized; and a valuable antibody technology platform that should continue to generate new compounds over time ... Our preliminary analysis shows that PDLI should, with some cost-cutting, be able to earn $1.00 per share in 2008 and to increase that to $1.50 per share in 2009.

Many other investors have also expressed concern, recently recommending that the company put itself up for sale. This led to the company's implementation of a poison pill, preventing any hostile takeover of the company. Daniel Loeb said he understood the rationale behind the poison pill and reassured the company that he was not interested in pursuing a sale, but rather helping the company turn itself around through internal improvements. Third Point has a rich history of actively unlocking value in many of its investments, so this move makes PDLI a stock worth watching!

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New Century Financial Corporation (NYSE:NEW) shares moved down $8.26, or 56.38%, to $6.39 today after several analysts agreed that the nation's largest subprime mortgage lender would likely face liquidation or bankruptcy. The troubled company had already been experiencing a large increase in subprime defaults when it announced late Friday in a 12b-25 filing that it is technically in default with several lenders and that federal regulators have begun an investigation. While the company said it received waivers from six out of the eleven lenders, deals remain uncertain with others. Meanwhile, the company disclosed that the U.S. Attorney's Office was conducting a federal criminal inquiry into trading of NEW securities as well as accounting errors. Finally, the company revealed that it would be unable to file its 10-K annual report by the March 1, 2007 deadline because it needed to correct errors that it discovered relating to the financial reporting of loan repurchase losses.

Many analysts now believe that the company will likely face liquidation or bankruptcy. Consequently, investors must now attempt to evaluate how much they would receive in the event of a liquidation or bankruptcy. It is important to remember that common stock shareholders are at the end of the bankruptcy line; all lenders and preferred stock shareholders must be paid off in full before anything is distributed to common stock shareholders. Moreover, the company's primary assets are mortgage securities, which are notoriously difficult to value - especially with no guidance from the company. Despite this difficulty, some analysts have created an estimate. Bear Stearns analysts believe that the liquidation value should be close to $8 to $9 per share, down from their previous forecast of $10 to $11 per share.

Many traders are also watchful of the high short interest in the stock. When someone short sells a stock, they are essentially borrowing shares that they must buyback at a later time. Therefore, when there is a high short interest and the stock jumps up in value (generating a loss for those short selling) some are tempted to buyback their shares. This buyback adds even more steam to the bullish rally, potentially causing even more short sellers to cut their losses and buyback shares. This is known as a "short squeeze" among traders, and some consider it a possibility in this scenario.

Regardless, this is certainly a stock to watch. There are clearly problems with the company that carry a lot of risk; however, there may turn out to be opportunities to buy based on liquidation value and/or a potential short squeeze. While there isn't enough information to do anything but speculate now, there will be much more information available when the company is able to file their 10-K annual report with the SEC later next month.

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Palm, Inc. (NDAQ:PALM) shares moved down $1.05, or 5.74%, to $17.25 after it was downgraded by JPMorgan analyst Paul Coster. The move follows recent speculation that the company may be interested in putting itself up for sale, which helped jump the stock price over 10% on Friday. Those rumors were somewhat confirmed today after the Wall Street Journal reported today that the company is working with Morgan Stanley to evaluate its options, citing people familiar with the matter. There is speculation that these options could include a sale to Nokia Corporation (NYSE:NOK) or a private equity firm. But Palm has been considered a buyout target for years, is now finally time?

Many investors believe that Palm is an attractive buyout target for several reasons. The obvious reason is the fact that Palm owns Treo, which is the second best selling smart phone behind Research in Motion Limited's (NDAQ:RIMM) Blackberry. The Treo is carried by 85 different carriers around the world, which gives it a huge advantage over new market entrants. The lesser known reason why Palm is a good target involves its financials. Palm currently generates $15 of sales per share, which gives it a price to sales ratio of one compared to RIMM's P:S ratio of ten. Meanwhile, Palm is also sitting on $500 million in cash and an additional $500 million in NOLs (net operating loss carry-forwards), which can offset taxes in any acquiring company. And finally, there would be a lot of synergies between Palm and other players in the market. When company's look at possible acquisitions, they look at how they could leverage their existing infrastructure to reduce costs in their acquisition. In Palm's case, many investors are betting that a buyer could cut at least 20% of their operating costs through economies of scale, which equates to a $1/share gain in cost savings alone!

So, if Palm were to be acquired, how much would a buyer pay? Many analysts believe that given the company's ownership of the Treo, NOLs, cash on hand, and other intangible assets, Palm could sell for as much as $25 per share. Remember that speculation of a Palm sale has been going on for years now, so don't get too excited. But this is definitely a stock to keep on the radar as the company mulls its options with Morgan Stanley!

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Great Atlantic & Pacific Tea (NYSE:GAP) plans to buy rival grocer Pathmark Stores for $678.6 million, creating a larger company to compete in the U.S. Northeast. The deal, which the companies had signaled in late February, will create a 550-store, $11 billion supermarket chain operating in the New York, New Jersey and Philadelphia areas, as well as in Maryland, Michigan and Louisiana. The combination marks the latest merger in the quickly consolidating grocery-store industry.

Advanced Micro Devices (NDAQ:AMD) the No. 2 maker of microprocessors, said it does not expect to meet its previous first-quarter revenue forecast, sending its shares lower. The company, which trails Intel in the market for computer chips, said revenue would fall short of its earlier quarterly target of $1.6 billion to $1.7 billion.Wall Street analysts, on average, had expected revenue of $1.65 billion.

The Seminole Tribe of Florida completed its $965 million purchase of the Hard Rock cafes, hotels, casinos and music memorabilia from The Rank Group PLC (LON:RNK) through a combination of a bond offering and an equity contribution from the tribe. In a Rank Group earnings report filed Friday, Hard Rock International reported operating profits increased 18.7% to $74.8 million, from $63 million the year before. It saw continued growth and improvement in all four business divisions comprising company-owned cafes, franchise cafes, and hotels and casinos.

Shares of InterMune Inc. (NDAQ:ITMN) crumbled Monday evening after the biotech firm announced its decision to discontinue a clinical trial, while shares of ADC Telecommunications Inc. gained after the company said it swung to a quarterly profit on higher sales. InterMune shares dropped 19% to $22.70 after the company said it has discontinued a Phase III clinical trial evaluating its Actimmune drug in patients with idiopathic pulmonary fibrosis.

ResCare Inc. (NDAQ:RSCR), which provides residential and therapeutic services to people with developmental disabilities, released that its Q4 profit rose sharply on higher revenue and a more favorable tax treatment. The company posted net income attributable to common shareholders of $7.7 million, or $0.28 per share, from $505,000, or $0.02 per share, a year ago. Adjusted income from continuing operations totaled $0.34 per share. Q4 revenue increased 24% to $337.1 million from $270.9 million in the year-ago period. Analysts had expected $340.6 million in sales.

Universal Power Group, Inc. (AMEX:UPG), a leading provider of third-party logistics and supply chain management services and a global distributor of batteries, security products and related portable power products, announced its financial results for the Q4 and year ended December 31, 2006. For the three month period ended December 31, 2006, UPG reported revenue growth of 15.3% to $24.6 million, compared to $ $21.3 million in the prior year period.

Copano Energy, L.L.C. (NDAQ:CPNO) announced its financial results for the three months and year ended December 31, 2006. The company’s net income increased by 16% to $16.5 million, or $0.86 per share, for the Q4 of 2006 compared to net income of $14.3 million, or $0.84 per share, for the same quarter the previous year.

Private equity group Vector Capital plans to acquire information security company SafeNet (NDAQ:SFNT) for approximately $634 million. The $28.75-per-share price represents 12% premium over SafeNet's average closing share price during the 30 trading days ended last Friday.

Great Wolf Resorts, Inc. (NDAQ:WOLF) shares moved up $0.18, or 1.36%, to $13.37 today after Jason Ader demanded that the company maximize shareholder value by immediately putting itself up for sale in a Schedule 13D/A filing with the SEC. The 7.78% shareholder continues to believe that management is simply unable to unlock shareholder on its own and expressed its disappointment with management's refusal to explore a possible sale. This comes after they made similar recommendations to the company back in August.

Why should the company be put up for sale? According to Mr. Ader, the company's management is simply unable to effectively capitalize on a growing market that is attracting more and more private equity and investment interest. While WOLF once dominated the indoor water parks market, there are now new, better capitalized and savvy developers. Mr. Ader noted that: the company just took large, non-deductible write-offs for goodwill impairment at two of their major resorts, development and construction costs are increasing (together with competition), and the company's prospects as a stand-alone aren't materially brighter today than they were last year. Meanwhile, the market continues to ignore and undervalue the company despite four analyst buys with a $16.50 target. According to Mr. Ader, "I continue to believe there is intrinsic value in the business, but I don't have confidence that current management or the current board can - on their own - unlock this value for shareholders.  I find it irresponsible that Mr. Emery simply refused to return any follow-up calls from the UBS bankers - and has not begun any alternative sale process. Now is not the time to continue to wait for performance to bail you out.  As I said last August, it's not happening."

Mr. Ader attached two charts to his filing to illustrate the company's failure:

Here it is very clear that WOLF started out by outperforming its peer group, but quickly deteriorated to its current levels. And a comparison with the overall market is no better:


Clearly, WOLFs shares have been underperforming both their peers and overall market averages. In the end, Mr. Ader believes that other large shareholders share his sentiment, and that there would be significant interest within the private equity community - or among the strategic players - in a transaction involving WOLF. Consequently, he is again demanding that the company at least hire an investment banker to explore possible strategic alternatives. If the company refuses, it will be interesting to see if Ader would consider going as far as a proxy fight to unlock value. Alternatively, we could see additional institutional shareholders voice their support for these ideas. Either way, if the company agrees, we could see significant share appreciation. This makes WOLF a stock worth keeping an eye on!

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Berkshire Hathaway's (NYSE:BRK) Warren Buffet released his annual letter to shareholders yesterday, announcing a $16.9 billion gain in net worth. Many investors consider the Oracle of Omaha's annual letter to shareholders required reading, as Buffet offers his views on the economy and general market outlook. What does Buffet think about the future of our economy and stock market prospects? Let's take a look...

On the economy, Buffet commented:

As our U.S. trade problems worsen, the probability that the dollar will weaken over time continues to be high. I fervently believe in real trade – the more the better for both us and the world. We had about $1.44 trillion of this honest-to-God trade in 2006. But the U.S. also had $.76 trillion of pseudo-trade last year – imports for which we exchanged no goods or services. (Ponder, for a moment, how commentators would describe the situation if our imports were $.76 trillion – a full 6% of GDP – and we had no exports.) Making these purchases that weren’t reciprocated by sales, the U.S. necessarily transferred ownership of its assets or IOUs to the rest of the world. Like a very wealthy but self-indulgent family, we peeled off a bit of what we owned in order to consume more than we produced.

The U.S. can do a lot of this because we are an extraordinarily rich country that has behaved responsibly in the past. The world is therefore willing to accept our bonds, real estate, stocks and businesses. And we have a vast store of these to hand over.

These transfers will have consequences, however. Already the prediction I made last year about one fall-out from our spending binge has come true: The “investment income” account of our country – positive in every previous year since 1915 – turned negative in 2006. Foreigners now earn more on their U.S. investments than we do on our investments abroad. In effect, we’ve used up our bank account and turned to our credit card. And, like everyone who gets in hock, the U.S. will now experience “reverse compounding” as we pay ever-increasing amounts of interest on interest.

I want to emphasize that even though our course is unwise, Americans will live better ten or twenty years from now than they do today. Per-capita wealth will increase. But our citizens will also be forced every year to ship a significant portion of their current production abroad merely to service the cost of our huge debtor position. It won’t be pleasant to work part of each day to pay for the over-consumption of your ancestors. I believe that at some point in the future U.S. workers and voters will find this annual “tribute” so onerous that there will be a severe political backlash. How that will play out in markets is impossible to predict – but to expect a “soft landing” seems like wishful thinking.

On executive compensation, he noted:

You’ve read loads about CEOs who have received astronomical compensation for mediocre results. Much less well-advertised is the fact that America’s CEOs also generally live the good life. Many, it should be emphasized, are exceptionally able, and almost all work far more than 40 hours a week. But they are usually treated like royalty in the process. (And we’re certainly going to keep it that way at Berkshire. Though Charlie still favors sackcloth and ashes, I prefer to be spoiled rotten. Berkshire owns The Pampered Chef; our wonderful office group has made me The Pampered Chief.)

CEO perks at one company are quickly copied elsewhere. “All the other kids have one” may seem a thought too juvenile to use as a rationale in the boardroom. But consultants employ precisely this argument, phrased more elegantly of course, when they make recommendations to comp committees.

Irrational and excessive comp practices will not be materially changed by disclosure or by “independent” comp committee members. Indeed, I think it’s likely that the reason I was rejected for service on so many comp committees was that I was regarded as too independent. Compensation reform will only occur if the largest institutional shareholders – it would only take a few – demand a fresh look at the whole system. The consultants’ present drill of deftly selecting “peer” companies to compare with their clients will only perpetuate present excesses.

Clearly, Buffet offers some valuable insight here that can be applied to far more than just Berkshire Hathaway. I encourage you to read his full letter here, as it contains far more information on different sectors, governance, advice on valuing securities, different ancedotes, and much more. It is definitely required reading for all long-term value investors.

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Hilton Hotels (NYSE:HLT) has agreed to sell the Scandic Hotel chain to European private equity group EQT for about $1.1 billion as it seeks to reduce debt. Hilton is targeting an investment grade credit rating after taking on debt to buy Hilton International in February 2006 in a $6 billion deal. Scandic was part of the Hilton International deal and was put up for sale in August. Hilton expects the sale of Scandic, the largest hotel operator in the Nordic region with 132 hotels, to reduce 2007 recurring earnings by $0.10 a share.

Britain's EMI Group (NYSE:EMPIY) rejected a $4.1 billion cash takeover proposal from Warner Music Group, saying the price was inadequate and not in the best interests of its shareholders. The world's third-largest music company held a board meeting on Friday after getting a non-binding proposal from Warner which indicated it might be prepared to make a bid at 260 pence per share. EMI has also been in talks with private equity firms including One Equity Partners, a unit of JPMorgan Chase, as potential alternatives.

Gen-Probe (NDAQ:GPRO) has won U.S. approval to sell its Procleix blood test to detect the West Nile virus, a Food and Drug Administration spokeswoman said Friday. The test is designed to screen donated blood, tissue and organs for the virus.

Bristol West Holdings (NYSE:BRW) shares jumped 36% Friday after the company agreed to be acquired by Zurich Financial for $712 million in cash, or $22.50 a share. That's a 39% premium to Bristol's close on Thursday.

Shares of Dendrite International (NDAQ:DRTE) jumped 21% after Cegedim S.A. agreed to acquire the company for $16 a share in cash. The deal values Bedminster, N.J.-based Dendrite, a provider of sales and marketing products and services to the pharmaceutical industry, at roughly $751 million.

Methode Electronics (NDAQ:METH) shares rose 12% after the company said Q3 sales rose to $105.4 million from $95.1 million a year earlier. Quarterly net income for the global maker of electronic components and subsystem devices was $4.7 million, or $0.13 a share, compared with $2.8 million, or $0.08 a share, a year earlier.

Shares of Palm Inc. (NDAQ:PALM) jumped 11% amid a fresh media reports that the maker of handheld wireless devices might be acquired by Nokia Corp.

Scottish Re Group Ltd. (NYSE:SCT) shares rose 11% after the company said the company's shareholders approved proposals relating to an investment of $300 million each by MassMutual Capital Partners LLC and an affiliate of Cerberus Capital Management L.P.

Advocat (NDAQ:AVCA) shares tumbled 28% Friday after the Brentwood, Tenn.-based health care services provider reported Q4 net earnings of $2.28 million, or $0.37 a share, down from $12.9 million, or $1.99 a share, in the year-ago period. Revenue rose 3.8% to $55.8 million from $53.7 million. The company expects 2007 results in a range of a loss of $0.08 a share to a profit of a penny a share on revenue of $221 million to $228 million.

AMN Healthcare Services Inc.'s (NYSE:AHS) shares fell 15% after the company reported that their Q4 net income jumped 44% to $10 million, or $0.29 a share, from $6.98 million, or $0.21 a share, a year earlier. The San Diego company's revenue grew to $283.5 million from $221.4 million.

Atlantic Tele-Network (NDAQ:ATNI) shares fell 11% after the company said it doesn't expect organic growth in earnings for 2007 to be as strong as it was in 2006 although it does expect to grow consolidated profits. The company posted earnings of $23.2 million, or $1.70 a share, for the year, on revenue of $155.4 million.

Credence Systems Corp. (NDAQ:CMOS) shares tumbled 25% after the company reported a Q1 net loss of $11,000, or breakeven on a per-share basis, compared with a net loss of $4.05 million, or $0.04 a share, during the year-ago period. The Milpitas, Calif.-based semiconductor-testing-equipment company posted revenue of $118.8 million versus $121.8 million.

Delta Air Lines Inc. (OTC:DARLQ) shares lost 6.9% after the company said its loss in January was $109 million, compared with a $300 million loss in January 2006. Delta's consolidated passenger unit revenue rose 3.7% in January over the same month in 2006. The Atlanta-based airline said its monthly operating expenses "remained essentially flat" despite a capacity increase of 2.9%. Delta is currently in Chapter 11 reorganization and is expected to exit bankruptcy in the coming months.

Gulf Island Fabrication (NDAQ:GIFI) shares tumbled 25% after the Houma, La.-based maker of offshore drilling and production platforms reported Q4 net earnings of $3.73 million, or $0.26 a share, up from $2.7 million, or $0.22 a share, in the year ago period. Revenue rose to $76 million from $41.4 million.

Leapfrog Enterprises (NYSE:LF) shares sank 8.4% after the company reported a Q4 loss of $46.0 million, or $0.73 a share, on sales of $182.8 million. In the same period a year earlier, the educational products developer earned $14.4 million, or $0.23 a share, on sales of $248 million.

OmniVision Technologies Inc. (NDAQ:OVTI) shares sank 7.2% after the company reported Q3 net earnings of $4.13 million, or $0.07 a share, down from $29.6 million, or $0.53 a share, during the year-ago period.

American Strategic Income Portfolio, Inc. (NYSE:BSP) is yet another mortgage-related closed-end investment company being targeted by hedge funds because they are trading well below net asset value (NAV). These hedge funds are attempting to unlock this "hidden" NAV by either converting them to an open-end fund or by establishing a real estate investment trust (REIT). Unlike closed-end funds, open-end funds are tied to NAV by definition. Meanwhile, REITs provide additional tax benefits and flexibility, which would theoretically make it easier for company's to realize the value of their assets. However, actually assigning numbers to these assets can be exceedingly difficult, as mortgage-backed securities are one of the most complex financial instruments in the marketplace.

Sit Investment Associates a 14% holder that is attempting to make such changes at BSP, according to their Schedule 13D/A filing with the SEC. On January 28, 1998, the hedge fund sent a letter to company's management team making several proposals that were eventually carried out two months later. These proposals eventually led to the company repurchasing 10% of its outstanding shares at NAV in an effort to bridge the gap between market price and intrinsic value. Later, SIA proposed that the company reorganize as a REIT, which was approved but never carried out. Now SIA is seeking to obtain the adoption of policies or strategies by the company that would tend to reduce or eliminate the discount at which the shares of the company will trade in the future, such as the re-purchase policies discussed above, or that would otherwise enable shareholders to liquidate shares of the company at the company's net asset value. If SIA is successful in obtaining any adoption of these policies, it could mean significant share appreciation from the company's current levels. This makes BSP a stock worth watching over the next few months!

Motorola, Inc. (NYSE:MOT) shares jumped $0.61, or 3.29%, to $19.13 today after the company issued a press release confirming that Carl Icahn and his partners are planning to purchase more than $2 billion worth of additional shares. The large transaction could potentially leave Icahn with a 4.4% stake in the company, making him the second largest institutional shareholder. The 1.6% holder was required to inform the company of this pending purchase under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which will also require him to wait an additional 30 days before buying more stock.

It is already well known that Carl Icahn is seeking representation on the company's Board of Directors and wants to unlock shareholder value through a massive share buyback program. Given his many prior successes in unlocking shareholder value through similar strategic alternatives (most recently the Temple-Inland breakup), it is very possible that he will succeed in generating value. Moreover, he should not have trouble gaining support for his proposals with many investors somewhat irked over the company's excessive cash on hand. Combined, these factors make MOT a stock that is definitely worth watching over the next few months!

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Dell (NDAQ:DELL) posted net income for its fiscal Q4 ended Feb. 2 of $673 million, or $0.30 a share, and revenue was $14.4 billion. In the same quarter last year, Dell reported net income of $1.01 billion, or $0.43 a share, on revenue of $15.18 billion.

American International Group (NYSE:AIG), the world's largest insurer by market value, said Q4 earnings rose sharply from a year ago. Net income was $3.44 billion, or a $1.31 share, compared with $444 million, or $0.17, a year ago. AIG also expanded its stock buyback plan by $8 billion. AIG says it intends to buy $5 billion worth of common stock during 2007.

Berkshire Hathaway (NYSE:BRK) reported higher full-year profit, helped by gains in its core insurance operations -- a welcome relief from two years of billion-dollar payouts for hurricane claims. Buffett said the company's net worth rose by $16.9 billion, or 18.4%, in 2006. While Geico had a blockbuster year, Berkshire’s non-insurance businesses also did well, with earnings up 38%.

Struggling apparel giant Gap Inc. (NYSE:GPS) said that their Q4 net profit fell 35% on lower or flat sales at its two main casual clothing chains and dependence on holiday season discounts. The global retailer, which is searching for a new chief executive after the January departure of Paul Pressler, said net income dropped to $219 million, or $0.27 a share, from $337 million, or $0.39 per share, a year earlier.

Motorola (NYSE:MOT) said it received notice that Carl Icahn and three of his entities have filed to buy more than $2 billion, or 4.4%, of the company's common stock, potentially making the financier Motorola's second biggest institutional holder. Motorola has a market capitalization of $45.56 billion, based on Wednesday's closing share price of $18.52.

Business software maker Oracle (NDAQ:ORCL) will buy Hyperion Solutions for $3.3 billion in cash, renewing a shopping spree aimed at toppling rival SAP. The deal announced Thursday will give Oracle an arsenal of Hyperion products that are widely used by SAP's customers. Santa Clara-based Hyperion represents the largest prey to be devoured by Oracle since it gobbled up Siebel Systems for $6.1 billion a little over a year ago. Redwood Shores-based Oracle will pay $52 per share for Hyperion. The price represents a 21% premium above the most recent closing price of Hyperion's stock, which has traded between $26.65 and $45.18 during the past year. Hyperion shares surged $8.69, or 20.3%, to $51.53 in afternoon trading on the Nasdaq Stock Market, where Oracle shares gained $0.39, or 2.4%, to $16.83.

Retailer Kohl's (NYSE:KSS) reported higher Q4 profit as sales were aided by new stores and goods sold exclusively at the chain. Earnings rose 29%, coming to a total of $484.6 million, or $1.48 a diluted share for the quarter ended Feb. 3, compared with $374.9 million, or $1.08 a diluted share, a year earlier. The earnings topped analyst consensus forecasts, which had projected a quarterly profit of $1.43 a share.
 
Sears Holdings (NYSE:SHLD) reported higher Q4 profit, helped by property sales and higher operating income at its Sears and Kmart divisions. The Hoffman Estates, Ill., company said earnings rose 27%, as margins improved despite weaker sales at established stores. Earnings for the quarter ending Feb. 3 totaled $820 million, or $5.33 a share, from $648 million, or $4.03 a share, in the same period last year.

Shares of Constellation Brands (NYSE:STZ) fell to a two-year low after the company provided a weak fiscal-year 2008 forecast, citing ongoing challenges in the U.K. retail environment and an oversupply of Australian wine. The world's largest wine maker by volume estimates fiscal 2008 earnings before items of $1.30 to $1.40 a share, or net income of $1.21 to $1.31 a share. Sales are expected to decline 12% to 14%, hurt by a change in the way it reports its Crown Imports joint venture. Constellation shares fell as low as $18.92, setting a two-year low for the stock. Previously, the stock fell as low as $19.65 in November 2004. The stock was among the biggest moves in the market on Thursday.

Swiss Re said General Electric (NYSE:GE) would divest its stake worth around 3.5 billion Swiss francs ($2.9 billion), selling half to Swiss Re and placing the other half in the market. Swiss Re had waived a lock-up period on the shares, which General Electric had received as part of the payment for its reinsurance units, which it sold for $7.4 billion to the Swiss reinsurer last year.