Bankrate Inc. (RATE) added 5% to $40.37 today after the company was initiated with a buy rating at American Technology Research with a price target of $48.

Ceragon Networks Ltd. (CRNT) shares jumped over 16% after the Israeli wireless provider reported first-quarter net earnings of $2.62 million, or 9 cents per share, up from $228,000, or one cent per share, a year ago. Revenues rose to $33.9 million from $21.3 million a year ago. Analysts were expected 9 cents per share on revenues of $32.4 million.

Datawatch Corp. (DWCH) shares rallied 25% after the enterprise information management applications provider reported second-quarter earnings of $424,000, or 7 cents per share, up from $227,000, or 4 cents per share, a year ago. Revenues rose 14% to $6.1 million for the year.

Ionatron (IOTN) shares jumped 21% after the U.S. Navy posted a notification on the Federal Business Opportunities Web site about the award of a sole source contract regarding the company's Counter IED technology. Ionatron disclosed the posting of the contract which is worth about $500,000.

Sigma Designs (SIGM) shares dropped 12% after the company was downgraded to sell from neutral at American Technology Research.

Rigal Pharmaceuticals (RIGL) dropped 6.2% after the company said that it plans to sell five million shares under an existing shelf registration statement with an over-allotment option for an additional 750,000 shares to the underwriters.

Citigroup (C) management is reportedly concerned that the company could become an activist takeover target, according to a report by the Financial Times. The executives are concerned that the company may represent an attractive breakup opportunity, while many dismiss the rumors on grounds of its size.

Merrill Lynch (MER) said it would buyback $6 billion in shares.

Dominion (D) agreed to sell its Gulf of Mexico assets to Italian energy group Eni (E) for $4.8 billion.

Hexcel Corporation (NYSE:HXL) shares jumped $0.77, or 3.61%, to $22.11 today after O.S.S. Capital Management disclosed a 5.1% stake in the company and expressed their concern over the company's recent under-performance in a Schedule 13D filing with the SEC. The hedge fund first contacted the company on March 9, 2007 when it sent a letter expressing concern regarding the company's operating performance relative to its peers and management's lack of concern regarding the gap in performance. O.S.S. also noted that one member of the company's board of directors was stepping down and suggested a candidate for his replacement.

The letter cited the company's operating margins - which stand near 10% now - as being the primary issue. While the company has increased this number from 7% in 2002 to 10% now, Cytec Industries' Engineered materials segment is now generating operating margins of 18% while Toray Industries' is even higher. Had the company achieved 17% operating margins on its 2006 revenues, the company would have earned an additional $78 million in operating income. And by applying the current 17x multiple of EV to operating income, this difference would result in a value increase of more than one billion dollars. This equates to more than $14 per share above the current share price! The hedge fund blames this inability to achieve proper valuation on poor management, which it believes needs to be replaced.

The next move came on April 9th when Hexcel Corporation's CEO visited O.S.S.'s offices to discuss these matters more deeply. But these talks seemed to have gone no where after the hedge fund reiterated its concerns shortly later and requested that a committee of independent directors be formed and that the committee retain an independent investment bank to advise as to how shareholder value could be best maximized. The hedge fund simply stated that the company is under-earning, management is not addressing the shortfall in earnings, and the shareholders are suffering. Therefore, an evaluation of strategic alternatives may be the only way for changes to take place. Whether or not this process happens smoothly depends largely on the company's board of directors. If they oppose, we could be in for a battle. However, if they agree, it could mean significant upside for the company's shareholders. This makes HXL a stock worth watching!

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Yahoo! Inc. (NDAQ:YHOO) announced the acquisition of privately held Right Media today for $680 million just a week after Google Inc.'s (NDAQ:GOOG) well-publicized acquisition of DoubleClick. Right Media is a privately held company that enables publishers to buy and sell online ad placements in real time through an auction system - a system very similar to that of DoubleClick. The move will give Yahoo the ability to sell and broker ads outside of its own network of websites and diversify its revenues to better compete with Google.

The move marks continued consolidation in the highly-competitive online advertising market as giants Yahoo, Google, AOL and Microsoft compete to broaden their audience. Notably, Microsoft (NDAQ:MSFT) and TimeWaner's AOL (NYSE:TWX) have yet to obtain a presence in the more traditional banner advertising market to compliment their existing contextual search business. Clearly, both of these companies are interested in such acquisitions since they were involved in the bidding for DoubleClick before Google's blockbuster bid. So, what are some other potential targets for continued consolidation? Well, three key players have emerged: aQuantive (NDAQ:AQNT), ValueClick (NDAQ:VCLK) and 24/7 Real Media (NDAQ:TFSM). Right now, several of these names are down since Yahoo!'s acquisition involved a private company, suggesting that these players are somewhat overpriced. However, given Microsoft's large cash reserves and AOL's need to establish itself in the market, the buyout possibilities for these firms remains strong.

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International Securities Exchange Holdings (NYSE:ISE) shares jumped $18.84, or 41.21%, to $64.56 today after Deutsche Boerse AG said it is in talks to acquire the company for $2.8 billion, or $67.50 per share. The company confirmed that it was in advanced discussions regarding a business combination while Deutsche Boerse said its board will recommend the transaction to its supervisory board. The acquisition would make Deutsche Boerse a large player in the U.S. options trading business.

Many other stock exchanges are also looking to combine or expand their businesses into other financial products that have higher profit margins than simply stocks. Perhaps the most visible company seeking an acquisition is the Nasdaq, which recently lost its bid for the London Stock Exchange. Many investors expect the company to buy its way into the options and derivative businesses through an acquisition like the Chicago Board of Trade. Deutsche Boerse's move places increased pressure on the exchange to act more quickly to secure its own spot in the international marketplace. The acquisition of ISE puts the exchanges in a renewed takeover spotlight, particularly companies like the Chicago Mercantile Exchange (NYSE:CME) and CBOT Holdings Inc. (NYSE:BOT)!

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General Electric Company (NYSE:GE) shares rallied $0.99, or 2.76%, to $36.84 today after Citigroup (NYSE:C) analysts recommended that the company spinoff NBC Universal, GE Money and the real estate division. The analysts suggested that GE's size and complexity is working against investors in the stock and has contributed to further value erosion. The move by Citigroup analysts follows similar suggestions from other analysts during the past few weeks. An analyst from Prudential Equity Group Inc. even suggested that Google (NDAQ:GOOG) may be interested in acquiring its NBC Universal division to compliment its YouTube media offerings.

Just how much could this move yield for investors? Well, some analysts like Jeffrey Sprague from Citigroup are pegging the breakup value at around $46 per share. Moreover, streamlining the company's operations would help give investors a greater understanding of the company and perhaps enable it to command a premium instead of trade at a discount. Clearly, these moves also have widespread support from the company's shareholder base who expressed concerns about the company's valuation at the last annual meeting. Whether or not the company heeds this advice remains to be seen, however, this is definitely a stock to watch in the meantime!

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ABN Amro Holding (NYSE:ABN) shares moved up $0.55, or 1.11%, to $50.08 today after a consortium led by the Royal Bank of Scotland said it would go ahead with plans to launch a hostile bid for the company in a move aimed at breaking up the friendly existing bid by Barclay's Bank. "The banks continue to believe that their proposals offer materially higher value for ABN Amro's shareholders and benefits to customers and employees compared with the recommended offer from Barclays," the banks said in a joint statement. Obviously, shareholders are also interested in seeing this new offer. The Children's Investment Fund - the activist hedge fund that owns 2% of ABN Amro and originally called for the breakup - welcomed the consortium's plan and described it as "compelling." Whether or not the board of directors agrees to review this new bid remains to be seen; however, this is definitely a stock to keep an eye on in case a bidding war breaks out.

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Applebees International Inc. (NDAQ:APPB) shares rose $1, or 3.89%, to $26.84 today after the company announced that it has received preliminary takeover offers and would begin a second round of due diligence with bidders before taking final offers. The company also said that it was exploring a recapitalization of the company as a possible alternative to a buyout. The moves come after Applebees settled with dissident shareholders Richard Breeden and his Breeden Capital Management LLC who threatened a proxy fight over board seats. As part of their settlement, the company agreed to explore strategic alternatives back in February. We covered this story in several past articles that outline the hedge funds problems and recommendations for changes at the company.

Now that the company has potential bidders on its doorstep, we can assume that it comes in at a premium higher than the current share price. After all, Applebees is a national chain that both financial and strategic buyers may be interested in turning around. The company was quick to note, however, that it was too early to comment on the likelihood or value of a recapitalization or sale, saying that there was no guarantee that a transaction would occur. Regardless, this is definitely a stock to watch as the company explores its options!

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Universal Power Group Inc. (NYSE:UPG) shares remained about even today after 3V Capital Management disclosed a 12.6% stake in the company and expressed their concern about UPG's stock price, which has fallen 33.6% since the IPO last December. The hedge fund said that it believes the stock is grossly undervalued at this price and that the company's board should work to create shareholder value in the most effective and expeditious way and do what is possible to ensure the market is reflective the fair value of the business as consistently and often as feasible. Consequently, 3V requested that it be able to express its ideas and views on ways to enhance shareholder value with representation on the company's board.

What exactly does the hedge fund want to accomplish? Well, according to their letter 3V has an excellent relationship with senior management and they intend to work closely with them and the board to help refine and better communicate their business strategy and operating plans to the investment community. Given the hedge fund's ties to institutional investors and the analyst community, it could help make the company much more known in the market. 3V also clued us into some other possibilities in Item 4 of their Schedule 13D filing where they noted that they may recommend transactions specified in clauses (a) through (j) of Item 4, which could mean a sale of the company, acquisition of other companies, changing of strategies, adopting or destroying anti-takeover measures, and restructuring the company's capitalization or dividend policy. In the end, there are clearly a lot of things that 3V could do, and with such a large stake in the company they should not have any trouble getting things done! This makes UPG a stock worth watching over the next few months!

Cerus Corporation (NDAQ:CERS) shares moved up $0.27, or 3.52%, to $7.94 after the company announced that it was evaluating strategic alternatives for its immunotherapy vaccine businesses. Cerus has three immunotheraputic product candidates with one in early stage human clinical trials and another for which an investigational new drug application is slated to be filed in mid-2007. The products are designed to stimulate immune pathways to target and attack cancer cells and infectious diseases. These strategic options could include a sale, merger, spinoff, or partnership with another company. Some investors had voiced concerns over the units valuation in the past and this move will enable the company to unlock the value for shareholders. This makes CERS a stock worth watching!

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MAIR Holdings, Inc. (NDAQ:MAIR) shares rose $0.32, or 4.43%, to $7.07 today after Shultze Asset Management disclosed a 5.9% stake in the company and expressed their disappointment over the company's plan to pursue acquisitions that may be outside of the airline industry using shareholder cash. The hedge fund believes that the company's best course of action would be to distribute any and all cash remaining after the reorganization to shareholders as soon as possible in a tax-efficient manner.

Shultze also suggested that the company initiate efforts to sell its Big Sky subsidiary by immediately retaining a nationally recognized investment banking firm. In the end, the hedge fund believes that the company's shares are undervalued based on the amount of cash that would be distributed to shareholders if the board implements its suggestions. Finally, Shultze said that it would not be adverse to seeking representation on the board if necessary in order to pursue its objectives. Combined, these factors make MAIR a stock worth watching!

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Alcoa Inc. (NYSE:AA) shares jumped $2.19, or 6.45%, to $36.14 after the company announced that it would explore strategic alternatives for its packaging and consumer business. The company said it would consider all options available including joint ventures, a spin-off, or sale of the business. In 2006, these businesses generated revenues of about $3.2 billion - or 10% of Alcoa's income. CEO Alain Belda said, "Our packaging and consumer business is improving and strengthening. However, now is the right time for us to explore whether these businesses may provide more value on their own or as a part of another company."

Separately, Alcoa also announced that it would explore strategic alternatives for its electrical and electronic solutions unit and its automotive castings business. These businesses had revenues totaling $1.6 billion in 2006, although they were only marginally profitable. The company said the process of reviewing these alternatives would be completed by the end of 2007. Many analysts see the move as beneficial for shareholders as it would unlock the value in these segments while allowing the company to focus more on their core competencies. There have also been rumors that Alcoa may be a buyout target, and selling off these divisions would make the company substantially cheaper. Whether or not anything amounts from this analysis remains to be seen; however, this is definitely a stock to watch!

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Emmis Communications Corporation (NDAQ:EMMS) shares moved up marginally after Martin Capital Management disclosed an 8.4% stake in the company and recommended that the company sell WQCD and possible KMVN, WKQX, and WLUP. CL King & Associates analyst James Boyle said that the station could be worth as much as $150 to $200 million. Moreover, the other stations listed by Martin Capital in Chicago and L.A. would also go for similarly high amounts. Combined, these transactions could help unlock significant value for shareholders.

According to Martin Capital, "the company would certainly have an opportunity to monetize valuable assets that are not contributing to cash flow in appropriate proportions to their private sale value". The hedge fund also speculated that these sales were the motive behind last years management buyout offer that was rejected by the board of directors as inadequate. While Emmis Communications refused to comment on any buyout rumors, this is definitely a stock to watch!

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Bausch & Lomb Inc. (NYSE:BOL) shares dropped $2.49, or 4.02%, to $59.44 retaining most of their gain from yesterday's speculation that the company could be a buyout target. The stock, options, and credit securities of the company continue to be very active today as investors continue to bet on the possibility of an LBO. But is there any merit to these rumors? Well, the company is down significantly from its 2006 highs around $80 per share after the company was forced to recall 1.5 million bottles of its ReNu MultiPlus contact lense solution and guided lower for the quarter. While the company continues to struggle with turning itself around after that setback, it has made the company's shares cheap given their market dominance and large portfolio. Perhaps this is why people are looking at the possibility of an LBO. Regardless, this is definitely a stock to keep an eye on!

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Genesco Inc. (NTSE:GCO) shares rose $0.88, or 1.76%, to $50.86 today after the company rejected Foot Locker's $1.2 billion - or $46 per share - offer for the company. We first noted the possibility of this bid back in March, when GCO shares were trading at $42 per share. Chairman and CEO Hal Pennington said, "Our board unanimously rejected the proposal and concluded that it did not reflect the long-term value of Genesco, including its strong market position and future growth prospects." Interestingly, the CEO also commented on Foot Locker CEO Matthew Serra's comments stating that his company would be willing to pay $48 to $50 per share and were willing to go higher. Finally, Jefferies & Co. confirmed in a note to clients that Foot Locker can be a higher price and still see benefits from the deal. After all, the purchase would lower the company's reliance on Nike Inc., which currently supplies half of the shoes it sells.

So, is a deal still on the table? Well, clearly there is interest by the purchasing party and Genesco at least took the time to officially review the bid before rejecting it. These actions suggest that Foot Locker may come out with a higher bid for the company, perhaps above $50 per share ceiling that was mentioned. Clearly this is what shareholders are banking on as the company's share price approaches $51 per share! Whether or not this goes through remains to be seen; however, GCO is definitely a stock to watch in the meantime.

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Encore Capital Group, Inc. (NYSE:ECPG) shares $0.80, or 7.43%, to $11.56 in early trading after the company announced that an investor group agreed to take a 25% stake in the company. The investor syndicate consisting of J.C. Flowers & Co. and FPK Capital will acquire the shares through privately negotiated transactions and become the company's largest shareholder. Encore is expected to invite representatives from J.C. Flowers, FPK Capital and Red mountain to join its board next month while several existing board members will step down.

Investors see this new group as a welcome change to a board and management team that has driven the stock down from almost $15 a year ago to its current levels around $11. However, the investor syndicate's Schedule 13D filing with the SEC outlined no clear plans on how it plans to unlock shareholder value. Moreover, the company has already explored strategic alternatives back in June of last year and was unable to produce tangible results. Whether or not the new investor syndicate can help shareholders remains to be seen, but meanwhile this is definitely a stock to watch!

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Google Inc. (NDAQ:GOOG) reported first-quarter profits that surged on increased advertising revenue from its search segment, which continues to outperform rivals Yahoo and Microsoft. Total revenues rose 63% as the company announced its plans to expand into new products and types of advertising. This has resulted in increased spending, however, which rose from $336.6 billion in the fourth quarter to $596.9 billion in the first quarter of this year. Moreover, shareholders will have to deal with the $3.1 billion acquisition of DoubleClick earlier this month, although Google believes this will immediately begin adding to their bottom line.

In an interview CEO Eric Schmidt speculated that Google's growing efforts to broker advertisements that appear in newspapers, radio, and television would become a significant portion of their overall revenues starting in 2008. Many analysts have suggested that Google needs such a boost in order to sustain its momentum, as the company's rate of growth continues to slow. This quarter's 63% growth compares to 67% in the fourth quarter and 79% in the first quarter of 2006. But for now, the company's continued dominance in the search market (controlling 55.8% of all search queries) continues to keep investors happy. The question is: just how long?

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Griffin Land & Nurseries Inc. (NDAQ:GRIF) shares moved up marginally today after Mario Gabelli disclosed a 31.1% stake in the company and expressed his concerns that the company's share repurchase plan was not moving along quickly enough. Gabelli said that he realizes it's due to options exercised, but at a minimum the company should have bought enough shares back to offset the dilution. Moreover, he noted that the value of the company is materially above where the stock is selling, so he remains somewhat miffed at the glacial speed of the company's share repurchase. The letter also says that Gabelli "looks forward to discussing the notion of harvesting our real estate assets". What this means remains to be seen. Meanwhile, if the company meaningfully increases its share repurchase plan, it could mean significant value being returned to shareholders. This makes GRIF a stock worth watching!

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eSpeed Inc. (NDAQ:ESPD) shares moved down 7.66% today after the company released a statement saying that it sent a letter on April 19, 2007 to Terry Smith of Tullett Prebon plc stating that the board of directors has been formed by its controlling stockholder, Cantor Fitzgerald, that it is not interested in selling its controlling interest in the company to Tullett, in terminating its arrangements with eSpeed on terms proposed by Tullett in recent letters, or in proposing alternative terms to Tullett. More, the company said it is not in a position to pursue Tullett's acquisition proposal because such a proposal cannot be consummated without the consent of Cantor Fitzgerald - the company's controlling stockholder.

The company also commented on other demands made by activist shareholders. They stated that they cannot take any of the following actions without Cantor's express approval: (1) convert Cantor's Class B common shares into Class A common shares, (2) undertake any business combination with another entity, or (3) terminate the perpetual clearing, technology and other arrangements with Cantor and its affiliate BGC Partners. While the board is fully aware of its fudiciary duties, it has determined that it is unable to do anything without Cantor's approval. This leaves few alternatives for activist investors who continue to hold large stakes in the company, including WC Capital and Chapman Capital. They can put additional materials on the proxy, but with Cantor controlling the majority of the votes, it will be very difficult to make any meaningful changes. At this point, all shareholders can do is wait for a response from the hedge funds or perhaps another higher offer by Tullett that would be high enough for Cantor to consider.

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The Topps Company, Inc. (NDAQ:TOPP) shares moved up marginally beyond the company's buyout premium amid shareholder and director criticism over its merger agreement with Tornate at $9.75 per share. Today, board director and 6.4% stakeholder Arnaud Ajdler reiterated his beliefs in a March 14th letter that the existing proposed merger is not in the best interest of the company's stockholders because the per share merger consideration is wholly inadequate and does not provide full and fair value to the company's stockholders.

The board director also let shareholders know of a part of the story that nobody else outside of the board knew. First, Topps did not solicit comments from Timothy Brog, John Jones, or Ajdler (board members opposing the proposal) or make available to them drafts of the merger proxy before filing it with the SEC. Secondly, there was a third bidder for the company (Bidder C) that proposed a purchase price that was $1 per share more than the current offer, not contingent on financing, had the potential to be raised even higher since this company was a strategic buyer. Third, the board of directors opposed a share buyback or special dividend to instead opt for a sale, stating it would be the best way to maximize shareholder value. Yet, the most recent share buyback program that was approved by the board had a top price of $10.62 per share. How can management and the board recommend paying up to $10.62 per share, but then approve a merger for $9.75 saying that it maximizes value? Finally, the company did not adequately shop itself as it suggested in its press releases. The merger proxy indicates that it only approached three financial buyers before entering into a deal with Tornate. The statement also makes it clear that Topps never approached Bidder C - its main competitor that had expressed interest in the company even before the announcement of a transaction with Madison Dearborn and Tornante.

Overall, it appears as if the company's board has violated its fudiciary responsibilities by ignoring superior bids and failing to maximize shareholder value. With the current stock price trading above the buyout premium, it appears as if most investors are hoping that the merger will fall though and other bids will be examined. This makes TOPP a stock worth watching!

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eSpeed Inc. (NDAQ:ESPD) shares moved up $1.13, or 11.71%, to $10.87 today after the company's takeover offer for Cantor was rejected. Meanwhile, Chapman Capital disclosed a 9.3% stake in the company and demanded consent to replace eSpeed directors at the company's 2007 annual meeting. The hedge fund also reiterated its demands that the board immediately retain an independent auditor to review the Joint Services Agreement, compel the conversion of all Class B common shares into Class A common stock, and engage an investment bank to maximize shareholder value via an auction of the company.

Robert L. Chapman, Jr., Managing Member of Chapman Capital, commented, "Chief Executive Howard Lutnick's three-kingdom reign over Cantor Fitzgerald, eSpeed and BGC Partners appears so infested with potential conflicts of interest and incestuous inter-company transactions that a completely new set of corporate governors may be required to exterminate any vermin from eSpeed's board room. Chapman Capital finds it astonishing that Mr. Lutnick may believe he retains the residual credibility necessary to bedazzle a new group of investors in the proposed BGC Class A concoction after stupefying eSpeed Class A shareholders with years of underperformance and apparent disrespect."

Regarding Chapman Capital's demand for the immediate auction of eSpeed, Mr. Chapman stated, "The non-return of 24 straight business days of telephone calls from eSpeed's largest Class A owner is something one might have expected from multi-kingdom conflicted tyrants such as Hollinger International's Conrad Black, but not someone as conscious of his public reputation as Mr. Lutnick. Moreover, today's disclosure of the seemingly impulsive rejection of Tullett Prebon Plc's premium acquisition proposal has done nothing but heighten our concerns that Napoleonic behavior continues to be condoned by eSpeed's director fiduciaries."

In the end, if the hedge fund is successful in obtaining seats on the company's board of directors, it is likely that there will be some kind of a process to explore a sale of the company. Until then, investors and shareholders have to wait to see if the company will take action to eliminate some of the barriers to making this happen. Regardless, this is definitely a stock worth watching!

View past eSpeed articles

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Marsh & McLennan (NYSE:MMC) shares continued their rise today moving  up an additional 1.78% after jumping 3.5% yesterday on rumors of a private equity bid. The WSJ said, however, that a person familiar with the company's thinking said nothing is in the works. Notably, the company is in the process of turning itself around after CEO Michael Cherkasky cut costs and restructured the business since taking over in October 2004. As part of this turnaround, the company sold off its Putnam Investments division for $3.9 billion late last year and reported healthy earnings last quarter. But despite these changes, the company continues to trail the S&P 500 index even after its move this week. This has caused many investors to remain skeptical as to the company's long-term ability to provide predictable returns to investors. While a buyout is nothing more than a rumor at this point, MMC is definitely a stock worth keeping an eye on!

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EBay Inc. (EBAY) announced that its quarterly earnings and sales came in higher than expected by Wall Street, pushing the company's shares up nearly 3%.

Spansion (SPSN) shares dropped 20% after the chipmaker posted a wider quarterly loss and outlined a restructuring plan. The company said it would be facing weaker prices for its flash chips due to competitive pressures.

Novellus Systems Inc. (NVLS) shares dropped 2.8% after the company forecast second quarter earnings of 42 cents to 45 cents per share.

E-Trade Financial Corp. (ETFC) cut its 2007 forecast due to a reduction in customer trading amid market volatility. The company forecast FY2007 earnings of $1.55 to $1.75 compared to analyst estimates of $1.62 to $1.78 per share.

Gilead Sciences Inc. (GILD) shares moved marginally higher after the company announced first-quarter results that surpassed analysts' expectations. The company also backed its 2007 product revenue and earnings forecast.

Avici Systems Inc. (AVCI) shares fell 27% after the company said it was transitioning away from core router development to focus on its new product iniative. The company also said that it swung to a quarterly profit and declared a special cash dividend of $2 per share.

Yahoo Inc. (YHOO) shares dropped 11.8% on triple the normal volume after the company's profits dropped 11% on higher operating costs as it spent more to compete with Google. The results disappointed analysts and investors who expected better profit and sales figures in light of a new upgraded ad feature known as Panama.

ASML Holding (ASML) shares moved up 5% after the company said first-quarter profit nearly doubled as it shipped more machines used to make chips for mobile phones and iPods.

Carrington Laboratories (CARN) shares rose almost 8% today after the company announced supply and patent license agreements for at least 10 years with Primus Pharmaceuticals Inc.

Avanir Pharmaceuticals (AVNR) shares rose over 300% after the company announced positive top-line results from its Phase III clinical trial evaluating the investigational drug Zenvia in diabetic neuropathic pain.

Claxson Interactive Group, Inc. (OTC:XSONF) shares moved down 4.26% today after Black Horse Capital Advisors disclosed an 8.4% stake in the company and revealed the disturbing details of a March 23rd proposed transaction in which Claxson and its controlling shareholders indicated their desire to purchase the remaining minority shares at $10.50 per share - below the current price of $11.25.

The problem arises when we see that Claxson announced the sale of certain Pay TV assets to Turner Broadcasting for $235 million along with the sale of Ibero American Radio Chile to the Prisa Group for $75 million. The hedge fund noted that the closing of these two transactions and the interim cash flow generation will likely produce a net cash position (afer paying all the remaining holders of company debt) that will significantly exceed the offer price. Furthermore, the proposed transaction does not compensate minority shareholders for Claxson's remaining valuable assets. These amount to an even higher price well above the $10.50 per share offer price. Consequently, the hedge fund recommended that the Special Committee in the board of directors should reject the offer as inadequate. If the offer is rejected and a higher offer is made, it could mean significant appreciation for shareholders. this makes XSONF a stock worth watching!

Point.360 (NDAQ:PTSX) announced yesterday that it had entered a merger agreement with DG FastChannel, Inc. (NDAQ:DGFC). Under the terms of the agreement, DGFC will acquire Point.360's spot advertising distribution business, and Point.360 will spin off its remaining businesses to its shareholders. DGFC will also be assuming up to $7 million in Point.360's debt while providing it with $3 million in cash for the working capital of the other business.

As a result of the spin-off, Point.360 shareholders will continue to own shares in the New 360, which focuses on high definition and standard definition mastering, sophisticated computer graphics, data conversion and video, film and media asset management services. The existing Point.360 senior management will stay with the new company that will be basically debt free and generating revenues of about $45 million to $50 million with EBITDA around $4 million to $6 million during the next 12 months. This is great news for shareholders as they will not only receive a payment from DGFC, but also shares in a new spinoff - which tend to outperform the overall market in their first year. This makes PTSX a stock worth watching!

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BCE Inc. (NYSE:BCE) share moved up $1.98, or 6.17%, to $34.05 today after the company announced that it began discussions with a group of Canadian pension funds in connection with its review of strategic alternatives. The announcement confirmed rumors that have already brought the stock up about 26% since March 29th. Many analysts warn that any buyout may not come at much of a premium to the current market price while the downside if a deal falls through could be quite steep.

The company confirmed that it was in talks with the pension consortium consisting of Canada Pension Plan Investment Board, Caisse De Depot et Placement Du Quebec and Public Sector Pension Investment Board; however, the company restated its dismissal that it was working with KKR or private equity funds on a possible deal. Overall, BCE may not be the best stock to purchase right now as the premium is too high; however, it could be a shorting target if a deal falls through or a buyout target if other bidders surface that would be willing to push up the price. Either way, this is a stock that is worth watching!

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BCE Inc. (BCE) rose 6.3% after the company said it entered into talks with three major institutional investors and a large private-equity firm about a potential buyout.

Black & Decker Corp (BDK) shares moved up 4.4% after the company raised its first quarter profit target amist strong international demand for power tools and other accessories.

Commerce Group (CGI) shares added 8.7% after the company was assigned to the S&P MidCap 400 index, replacing Adesa Inc.

East West Bancorp (EWBC) moved up 11% after the company reported first quarter earnings of 68 cents per share, up a year ago from 55 cents per share. The company also raised its guidance from $2.52 to $2.60 for the FY2007.

InsWeb Corp (INSW) shares more than doubled today after the company reported net earnings of 10 cents per share, compared with a net loss of 41 cents per share a year ago.

Lithia Motors (LAD) shares rose 7.2% after the company was selected to joing the S&P SmallCap 600 Index, replacing MapInfo Corp.

Nanogen (NGEN) shares rose 4.9% after the company submitted a 510(k) application to the FDA for its cystic fibrosis kit and NanChip 400 microarray system.

Telik (TELK) shares rose 9.2% after the company announced results from a Phase II clinical trial of the combination of Telcyta, carboplatin and paclitaxel in the first-line treatment of advanced non-small cell lung cancer.

Fair Isaac Corp (FIC) shaers lost 8.6% after the company cut its fiscal second quarter and 2007 forecasts.

Google Inc.'s (NDAQ:GOOG) buyout of DoubleClick Inc. is fueling speculation that there may be consolidation in the online advertising sector. Online advertising companies aQuantive Inc. (NDAQ:AQNT), 24/7 Real Media Inc. (NDAQ:TFSM), and ValueClick Inc. (NDAQ:VCLK) all moved up significantly on the news after investors and analysts suggested that they could become the next buyout targets. Meanwhile, others suggest that large players will likely seek more reasonably priced companies in the private sector instead of going after any of the larger public targets. Regardless, these are definitely stocks to keep a close eye on following Google's blockbuster acquisition!

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Atmel Corporation (NDAQ:ATML) shares rose 1.19% in early trading after George Perlegos announced the filing of a definitive proxy statement with the SEC in connection with his planned solicitation of proxies at the company's next annual shareholders meeting on May 18th. The founder and former president, CEO, and chairman of the company hopes to replace the company's current board with his own nominees and appoint an additional three candidates that he feels are highly qualified.

If successful, the 5.2% holder proposed several initiatives designed to unlock shareholder value:

• Promptly hiring a new, highly qualified and experienced CEO to replace the current underperforming one who had only 10 weeks of public company CEO experience before joining the company!
  
• Spinning-off Atmel's Smart Card business to its shareholders in order to convert the company to a microcontroller pure-play and deliver value to shareholders. We know that spin-offs tend to outperform the overall market in their first year!
  
• Selling Atmel's automotive business in Germany, which Mr. Perlegos believes can be sold for $400 to $500 million - a far better option than the current proposal to sell the company's wafer business in Germany.
  
• Divesting non-core assets, such as the company's NOR-flash business. This furthers the company's move to become a microcontroller pure-play and provides it with the cash to fund a share repurchase.
  
• Initiating a $500 million to $1 billion share repurchase program designed to boost the company's share price and unlock value for shareholders.
  
• Removing the current poison pill in accordance with the highest standards of corporate governance.

Clearly all of these proposed initiatives would be greatly beneficial to shareholders. The company's stock has already dropped close to 20% since the beginning of 2007 after the company announced further sequential decline in revenue of up to 8% for the first quarter. Obviously changes are needed and perhaps George Perlegos is the one to bring them; after all, he did successfully create and run the company for nearly 20 years! Combined, these factors make ATML a stock worth watching...

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ABN Amro (NYSE:ABN) shares moved up $2.49, or 5.44%, to $48.28 today after the Wall Street Journal reported that the Royal Bank of Scotland officially made a bid for the company. Up until now, the merger talks surrounding the company included only Barclays with mere speculation that there could be others in the mix. The Royal Bank of Scotland is supposedly teaming up with Fortis and Banco Santander Central Hispano to buy ABN and carve it up. It has been widely speculated that other suitors would be willing to pay more than Barclays - especially in the event of a breakup bid.

While ABN management may not be too enthusiastic about these additional bids, a bidding war is certainly in the best interest of shareholders as evidenced by today's jump. We know that one activist investor, The Children's Investment Fund, already announced that it would support the consideration of the RBoS consortium saying: "As ABN Amro shareholders, we believe that the fiduciary duties of the supervisory and management boards require that the Royal Bank of Scotland consortium is allowed to proceed immediately with due diligence on a basis equivalent to Barclays for there to be a fair and transparent process which maximizes shareholder value". Clearly the situation makes ABN a stock worth watching!

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Monster Worldwide Inc. (NYSE:MNST) shares rose over 3% today after the company announced that Sal Iannuzzi would replace William Pastore as Chairman and CEO of the company in the second management shakeup in six months. The CEO switched has led to speculation that Monster may be interested in putting itself back on the block, especially given Iannuzzi's past roles in high profile deals.

Many analysts believe that if the company did put itself up for sale, it could potentially be a target for Yahoo! or eBay who are looking to take market share from Google in areas outside of search. The company could also be a target for newspaper chains or private online recruiting companies like CareerBuilder.com. Given the company's strong market position, solid financial performance, and large number of potential bidders, many analysts are predicting that the company could see more than $60 per share or almost 20x projected 2007 EBITDA. While no deal is certain, there is definitely a possibility for M&A in what has become a strange story on Wall Street. This makes MNST a stock worth watching!

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