LDK Solar Co., Ltd. (NYSE: LDK) shares may be surging higher, but at least one short seller sees problems ahead. Asensio noted accounting irregularities at the company after an employee accused the company of making misrepresentations on its accounting of inventories. LDK's most recent financial statements show questionable entries, including its "inventories to be processed beyond one year" numbers. The 87% jump in inventory and 828% increase in accounts receivables are also suspect.

Asensio also questioned today's press release stating that LDK signed a contract to supply 440MW of solar wafers to Hyundai Heavy Industries over a seven-year period, from 2009 to 2015. However, LDK's press release from February 22nd stated that LDK signed a contract to supply 450MW of wafers from late 2008 to 2015. The only differences between the two releases are slight changes in the start date and amount of wafers. Interestingly, there is no reference to the prior announcement and makes it look like a new contact.

Asensio ends by stating: "LDK investors with questions on the company's accounting will not find many answers in its quarterly releases. LDK continues not to release the standard financial statements expected of companies trading in the US. The company apparently does not feel compelled to create greater transparency for investors. LDK only issued quarterly statements in the form of a press release, and even then it did not bother to include a basic cash-flow statement."

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Orange 21 Inc. (NDAQ: ORNG) shares are trading at a discount after a large holder made an offer to acquire the company in a Schedule 13D filing with the SEC. Costa Brava, a hedge fund that owns a 9.6% stake in the firm, offered to purchase the company's remaining shares for $3.90 per share, which represents a 6.8% premium over the current market price. The offer comes at a 30% premium, however, to the August 19th close, and also offers shareholders liquidity not available given the low trading volume.

The proposal is subject to performing satisfactory due diligence on the company and the execution of a mutually satisfactory definitive purchase agreement. Costa Brava indicated that they are available to start due diligence immediately and are prepared to conduct negotiations on a definitive purchase agreement in tandem with the due diligence. Notably, the purchase agreement would not be contingent on any financing, which gives it a higher probability of going through.

Orange 21 has yet to respond to the issues, but many shareholders are hoping that the process will move forward. Others are hoping that the company will hold out for a potentially higher offer that could give shareholders an even larger premium in the event of a buyout. However, it is uncertain whether or not Costa Brava would in fact issue a higher price. The risk of course is that they walk away from the merger and shares return to their $3.00 valuation.

Orange 21 Inc. designs, develops and markets products for the action sports, motorsports and youth lifestyle markets. The Company’s principal products, sunglasses and goggles, are marketed primarily under the brands, Spy and SpyOptic. These products target the action sport and power sports markets, including surfing, skateboarding, snowboarding, ski, motocross, and the youth lifestyle market within fashion, music and entertainment.

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IKON Office Solutions, Inc. (NYSE: IKN) shares are up sharply this week after Steel Partners' Warren Lichtenstein got his wish. The office repair company finally agreed to sell itself to Japan-based Ricoh Co. Ltd. for $1.6 billion after being pressured by the activist hedge fund for some time. Officially, the $17.25 a share deal was the result of the company's "strategic planning process", but the pricing made it a huge win for its largest investor Steel Partners.

Steel Partners is one of the most aggressive hedge funds in the world with a tendency to force changes upon companies. The firm owns about 1/8th of Ikon and paid around $10.50 per share for its stake. That makes this latest deal worth $6.75 per share in profit, which is a healthy gain even when spread over a few years. The news also comes just after Steel Partners won control of Point Blank Solutions (OTC: PBSO) in a hostile takeover attempt.

IKON Office Solutions, Inc. (IKON) is an independent channel for document management systems and services. IKON integrates copiers, printers and multifunction product (MFP) technologies from manufacturers, such as Canon, Ricoh, Konica Minolta and HP, and document management software from companies like Captaris, Kofax, eCopy, EFI, EMC (Documentum) and others, to deliver solutions implemented and supported by its team of global services professionals.

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Sparton Corporation (NYSE: SPA) executives may find themselves in hot water soon after an activist hedge fund built up a stake. Lawndale Capital Management disclosed a 9.9% stake and a series of demands to the board in a Schedule 13D filing with the SEC. The activist hedge fund demanded four new independent directors be installed, requested the board hire an experienced turnaround management team, and reiterated their request that the company explore its strategic alternatives.

With only the recent announcement of current management tasked to implement 'recommendations' of consultants and no mention of reputable outside advisors exploring strategic alternatives, we can only presume the Board is not pursuing obvious steps, preferring instead to remain unaccountable and entrenched," said the hedge fund in its letter. "Lawndale cannot sit idly by while a discredited board relies upon a discredited management team to extricate Sparton from a morass of their own creation."

Lawndale believes that the current management has been given more than enough time to effect a turnaround and it's time for new blood. The hedge fund proposed its own slate of four new directors that could add independence to the board and work to build long-term sustainable shareholder value. The hedge fund also warned that if the board turned a blind eye to its proposal, it would pursue a hostile takeover of the board. The deadline it set was August 29th.

"After years of dissipating shareholder wealth, further improper voting of the Sparton shares held in the employee pension plan and any improper influence over voting of employee 401K plan holdings may potentially expose you all to very costly liability," said the hedge fund. "It is time for Sparton's Board to turn over a new leaf and embrace a more enlightened approach to corporate governance and work with us."

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Cleveland Cliffs Inc. (NYSE: CLF) is fighting an activist hedge fund and seeking support from... shareholders? Harbinger Capital is currently the company's largest shareholder with a 15.57% stake, but it is seeking to increase its stake to as much as 33.33%. The move could damage the firm's plan to purchase Alpha Natural Resources for $8.1 billion, which Harbinger has ademantly opposed for quite some time. With a 2/3 majority required to approve the buyout, a 1/3 stake by Harbinger could be problem.

Recently, Harbinger requested that Cleveland Cliffs hold a shareholder value, required under Ohio law, that would allow the hedge fund to increase its stake to between 20% and 33.33%. The vote is scheduled for this Friday and may lead to the rejection of the $8.1 billion buyout bid. As a result, Cleveland Cliffs has been reaching out to shareholders in an effort to derail the attempt to gain approval - a move that is quite atypical for activist situations.

Today, Cleveland Cliffs came one step closer to buying out the firm by gaining anti-trust approval by the Federal Trade Commission. However, the vote on the proposed buyout is scheduled for October 3rd, giving Harbinger another month to build and prepare its stake to oppose the merger that it sees as a bad move for the company. So far, few other large shareholders have voiced their opinions on the merger, which makes it a situation certainly worth watching.

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99 Cents Only Stores (NYSE: NDN) may be getting more than they bargained for with one large investor. Akre Capital Management disclosed an 11.26 percent stake in the discount chain and recommended that it explore strategic alternatives to unlock shareholder value in a Schedule 13D/A filing with the SEC. These alternatives may include discontinuing certain businesses, repurchasing shares with excess cash and refocusing on maximizing profitability rather than expanding.

Akre Capital Management focused its message on 99 Cents Only Stores' Texas market, which has experienced substantial problems. The hedge fund recommends that the company reconsider maintaining a presence in Texas and asked two key questions for management to consider:

1. What existing Texas operating data can be referenced as evidence that this new strategy will be successful, what capital will remain actually invested in the market, what profits are expected, and how will this strategy be executed?
2. Why does the company believe that expanding finite management resources on a small opportunity in Texas make sense when the remaining 90%+ of the business remains distressed and offers much greater potential?
   

"We acknowledge that the company has begun to address shareholder concerns about a turnaround plan, store growth rate, and use of excess cash," said the hedge fund in a letter to the board of directors. "We are hopeful that these actions mark the beginning of an effort by the company to be more transparent about how it plans to create per share value."

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TransAlta Corporation (NYSE: TAC) directors are facing increasing pressure to sell after a popular activist hedge fund added its voice to a chorus of dissident shareholders. The Children's Investment Fund Management, known as TCI in the investor community, filed its Schedule 13D with the SEC last week showing a six percent stake and demanding some changes. The activist hedge fund wants the company to consider an auction or stragic partnership to boost shareholder value.

Here's a transcript from the letter to the board:

TCI believes  that the public  proposal by LS Power  Equity  Partners and Global Infrastructure  Partners  published  on 21 July 2008 to  acquire  TransAlta  for Cdn$39 per share, significantly undervalues the company.

TCI urges the Special  Committee to immediately  undertake a review of strategic alternatives,  complete  this  expeditiously  and  take all  necessary  steps to maximise value for shareholders.

Further, TCI agrees with the  representations  made to you by Seneca Capital in its  public letter dated 22 July 2008.

TCI  would  welcome  an open and  direct  dialogue  with the  Special  Committee throughout the strategic review process.

TransAlta is a wholesale power generator and marketer focused on the western regions of Canada and the United States. The company owns, operates and manages a contracted and geographically diversified portfolio of assets, and has capability in generation fuels, including coal, natural gas, hydro and renewable energy. Approximately 70% of its capacity is contracted under government-mandated power purchase agreements or long-term contracts.

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Cablevision Systems Corporation (NYSE: CVC) management may find themselves in hot water after an acitivst hedge fund built up a substantial stake in the cable operator. Harbinger Capital disclosed an 8 percent stake in the company and demanded changes in a Schedule 13D filing with the SEC. The activist hedge fund suggested that shares of Cablevision are undervalued and the company must take certain actions to unlock value.

Traditionally, activist hedge funds aim to force companies to unlock value through a variety of so-called strategic alternatives. These can include a sale or breakup of the company, a change in capital structure, a share buyback or a special dividend. Companies that aren't open to taking these actions will typically face an expensive proxy fight, which involves the activist hedge fund nominating its own directors to the company's board.

Harbinger Capital has experience in this industry as well. Media General and The New York Times were both subjected to demands from the activist hedge fund. Representatives from the hedge fund won three seats on the board of MEdia General while the New York Times agreed to nominate two of its directors after it threatened a proxy fight. So far, Cablevision has agreed to institute its first-ever dividend and is holding meetings with shareholders to discuss other ideas.

Cablevision shares are trading up marginally on the news, moving to $32.47 per share in mid-day trading. It will be interesting to see how many changes Harbinger can force upon Cablevision to unlock value, or whether they will be forced into a proxy battle to overthrow management and institute them themselves.

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HSN, Inc. (NDAQ: HSNIV) complted its spin-off from IAC Interactive (NDAQ: IACI) today as a part of Barry Dillar's move to unlock value for shareholders. HSN is a leading multi-channel interactive retailer with some of the most dynamic brands and experiences in the retailing industry. As an independent company, investors are hoping that shares will be valued much higher than it was as a part of IACI. However, some experts aren't so sure that value will be unlocked...

Traditionally, spin-offs have outperformed the S&P 500 by a wide margin during their first three years as a public company. The reason is simply because parent company shareholders often have little appetite for the new spin-offs while they are also loaded with debt and have no fall-back. This combination of factors often lead to a sell-off during the first year that leaves room for enterprising investors to jump in and realize substantial gains as the stock returns to a fair value.

Chief Financial Officer Tom McInerney said in an interview that the value of the new companies should be much more than it is now and he hopes that it will be very obvious in a year. However, some analysts aren't so confident in additional value being unlocked. HSN was considered the division that was most undervalued, but analysts insist that HSN's problems are significantly worse than expected. Other businesses under the IACI umbrella are also continuing their decline early on.

In the end, these spin-offs may present opportunities to shareholders, but not in the obvious way. Many believe that the shares of these new companies, like HSNi, will fall substantially early on. Only after this initial fall will investors have a good entry point to get in and profit. The reason? Parent company shareholders will likely sell the new spin-offs while the performance of the companies continues to deteriorate in these tough markets.

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Epicor Software Corporation (NDAQ: EPIC) may be in for a shake-up after an activist hedge fund unveiled a sizable stake in the software firm. Elliott Associates disclosed a 9.9% stake in the company and is inquiring about possible strategic alternatives in a Schedule 13D filing with the SEC. The hedge fund has been steadily purchasing shares since June, but acquired the majority of its stake during the past month. So, is this a stock investors should watch?

Activist hedge funds like Elliott Associates are known for pushing companies to pursue strategic alternatives to unlock value for shareholders. Strategic alternatives refer to efforts designed to sell all or parts of a company, spin-off business divisions, change the capital structure, or pursue a share buyback or special dividend. All of these efforts are designed to return immediate value to shareholders like Elliott Associates and YOU!

Epicor Software Corporation designs, develops, markets and supports enterprise application software solutions and services primarily for use by mid-sized companies and the divisions and subsidiaries of larger corporations worldwide. The company's products include back office applications for production management, supply chain management, retail management and financial accounting, as well as front office customer relationship management and service management.

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Pershing Square's William Ackman is well known on Wall Street for being an agitator for change. His controversial views on bond insurers made him billions on the short-side while a recent well-timed bet on Longs Drug Stores (NYSE: LDG) netting him several hundred million in mere weeks. Earlier this week, Pershing Square reported its most recent holdings in a Schedule 13F-HR filing with the SEC, which details each of its holdings.

Ackman's largest purchase was in Dr Pepper Snapple Group (NYSE: DPS) in which he acquired over 21 million shares at an average price of $24.70 per share. The activist investor also nearly doubled his stake in the troubled Wendy's (NYSE: WEN) restaurant chain at an average price of $27.10 per share. And finally, many investors are now well aware of Ackman's well-timed purchase of Longs Drug Stores at an average price of $43.50 just weeks before its acquisition by CVS was announced.

Ackman also reduced his holdings in Cadbury Plc and Target Corporation (NYSE: TGT), but still holds a total of nine stocks with a total value of $2.4 billion through his Pershing Square Capital Management hedge fund and has returned over 30% annually. The hedge fund currently holds, among other things, Barnes and Noble, Sears Holdings Corp, Borders Group, and a short position in MBIA Inc. Investors looking to piggy-back on this legendary investor may want to consider purchasing some of his recent holdings like Wendy's or Dr Pepper.

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The Security and Exchange Commission has used one tool to help investors find SEC filings since the 1980s. Its name was EDGAR and it was considered by many to be crude and difficult to use. The SEC announced on Tuesday that it would be introducing a new system, dubbed IDEA, to replace EDGAR as a tool to help investors find the information they need from regulatory filings.

IDEA will supplement EDGAR to start and eventually replace it altogether. SEC Chairman Christopher Cox said at a press conference that the new system will give investors faster and easier access to key financial information about public companies and mutual funds. Unlike EDGAR, IDEA will use data-tagging software to sort financial data.

“This is not just a new name for EDGAR, this is a fundamental change in the way the SEC collects, manages and distributes information,” Mr. Cox told a news conference on Tuesday. Mr. Cox has been well known for embracing new technologies in an attempt to update the SEC's databases and make them more accessible for investors.

The move comes after the SEC's push for public companies to begin reporting under the so-called extensible business reporting language, or XBRL, protocol. This protocol uses digital tags attached to each piece of financial data to allow investors to easily find and compare key figures. The largest public companies may be forced to file in XBRL in early 2009, according to the SEC.

IDEA will be provided free of charge to the public, like EDGAR, and is expected to be available starting later htis year. Meanwhile, the SEC said that EDAR filings will continue for the indefinite future.

Target Corporation (NYSE: TGT) shares fell despite announcing higher-than-expected second-quarter earnings. Earnings for the quarter came in at $0.82 per share on $15.47 billion in revenues, while its retail segment rose 5.7 percent. The catalyst behind the decline is likely the continued talk of a weak and soft sales environment. Moreover, investors were less than comforted with a drop in gross margins and a fall in the profitability of its credit card operations.

Target's net income fell on lower clothing and home goods sales as the government rebate checks begin to wane. The retailer fell behind Wal-Mart Stores (NYSE: WMT) once again as consumers continue to see bargains. Customers that are struggling with higher food and fuel prices, rising joblessness and the worse housing market since the Great Depression are quickly switching their spending from high-class Target stores to discount Wal-Mart stores.

Target may be a good bet over the long-term as the U.S. economy recovers, but until then, Wal-Mart may continue to be the smart bet on retailing. Wal-Mart, Costco, Sam's Club, and various dollar stores have all posted higher than expected sales as consumers rush to spend rebates at their stores. Meanwhile, Target and other higher class retailers are experiencing problems. Shares of Target dropped $0.22, or 0.44%, to $49.82 during today's trading session.

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Take-Two Interactive Software, Inc. (NDAQ: TTWO) shares dropped sharply after Electronic Arts Inc. (NDAQ: ERTS) dropped its $2 billion hostile bid and instead opted to pursue private talks with the company. Shares fell during today's trading on concerns that EA would walk away entirely or come back with a lower bid. However, on the upside, analysts now believe that a deal will be more probable with friendly talks in the works.

Many analysts believe that EA is going to take a second look at the buyout since Take-Two's blockbuster "Grand Theft Auto" game will come out before any takeover could take place. After all, the original purchase price was predicated on the distribution of that game during Christmas of this year. As a result, the new offering price, if it is negotiated, may be lower than many investors expect. Others insist that the game will add value to the Take-Two takeover.

Many experts believe that GTA IV has already been priced into Take-Two's stock price. The video game has already sold some 11 million units and pulled in revenues of $500 million in its first week. As a result, the company has increased its estimates for fiscal 2008 revenues from a range of $1.4 billion to $1.5 billion from $1.25 billion to $1.4 billion. Take-Two has refused to sell the company before its release, although some analysts now believe a takeover should be closer to $28 per share.

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Timminco Limited (TSE: TIM) shares fell sharply earlier this week after the company reported lower-than-expected sales and made some questionable statements to investors. Short-seller Asensio has been making a bear case on the stock for some time, and it now appears like many of their predictions are coming true. Shares fell sharply after the news hit the market.

Timminco's 221 million tons of solar silicon shipped fell short of expectations due to contamination issues previously brought up by Asensio's research and denied by CEO Heinz Schimmelbusch in a May 30th article that appeared in the Globe and Mail. Earlier this week, the company elected to hold back 70 tonnes of silicon due to higher-than-expected phosphorous levels.

Asensio's issues with Timminco deals with its accounting for returns in sales recognition. A report on July 22nd issued by the short-seller questioned statements made by company officials that Timminco's customers were declining to return even highly contaminated parts of ingots for "extra credit offered by Timminco".

The big question going forward is whether or not the average selling price would decline due to returned material. CFO Rober Dietrich reiterated that there were no returns in the quarter, but did not shed any light on statements made by other executives mentioned above. As a result, Asensio believes there exists a possiblity of fraud within the high-flying company.

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The internet has become the new operating system with many companies moving many of their operations online. Microsoft Corporation (NYSE: MSFT) holds the monopoly on desktops and had the lead on web browsers until recently when competitor Firefox took a large share of the web browser market. So, how much is Firefox worth and should Google Inc. (NDAQ: GOOG) consider looking at Firefox?

How much does Firefox make? SpreadFirefox.com indicates that 622,003,431 people have downloaded the Firefox web browser with experts estimating that the firm makes $1 per download from the Google search box in the corner. The numbers suggest that the company is making between $100 million and $200 million per year in gross revenues with solid growth rates.

Additional revenues could be easily realized through other browser add-ons, default homepage ads, and other techniques. Since the Mozilla Foundation is more of a non-profit organization, revenue-generating activities have been kept relatively simple and limited in scope. Moreover, changes may alienate some users. Regardless, there is ample opportunity for increases.

Next, expenses must be considered. Mozilla's employee count is estimated at around 90 with more hiring planned in the future. Assuming that the firm has 100 full-time employees at $100,000 per employee, plus $50 million a year in other equipment/service costs, total expenses are around $60 million per year. This pegs the annual gross profits at around $40 million to $140 million.

Public companies also face additional costs that must be included in the net profit calculation. Sarbanes Oxley compliance costs around $5 million a year with taxes taking out an additional chunk of change. This would leave the firm with around $40 to $90 million in net income after all is said and done.

Investors know that public companies all trade at earnings multiples based on growth rates. Given the market growth, investors could expect a minimum price-to-earnings ratio of 25x earnings, which implies a valuation of around $1 billion to $2.2 billion. This is relatively conservative given the recent valuation of Facebook by Microsoft and acquisitions by Google.

Of course, Mozilla has repeatedly insisted that it would not go public. However, growing pressure on Google to find new revenue growth streams may force them to take a look at the company (Microsoft wouldn't have a chance) while the increasing valuations may be too much for some to resist.

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Deere & Company (NYSE: DE) shares continued their declines after it announced disappointing results in the third-quarter. Sales managed to grow an impressive 18% year-over-year - helped by a 35% growth in agricultural equipment - to $7.07. However, the most wasn't enough to impress Wall Street analysts that were expecting $7.23 billion. Operating margins also decreased a full percentage point to 13.2%, which is always a bad sign despite higher revenues.

The big concern surrounding Deere & Company its costs would increase and put pressure on its margins. Agricultural commodity prices have moderated and put some pressure on revenues, but the real problem is the cost of raw materials. The company's financial services operations also saw operating profits fall 21 percent to $111 million because of higher expenses, an increase in leverage, and a higher provision for credit losses.

Deere & Company, through its subsidiaries, operates in four business segments. The agricultural equipment segment manufactures and distributes a line of farm equipment and related service parts, including tractors; combine, cotton and sugarcane harvesters; tillage, seeding and soil preparation machinery; sprayers; hay and forage equipment; integrated agricultural management systems technology, and precision agricultural irrigation equipment.

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LDK Solar Co., Ltd. (NYSE: LDK) shares surged higher after the solar-maker reported better-than-expected second-quarter results in a 6-K filing with the SEC. Revenues surged 89.2% to $441.7 million after total wafer shipments increased 60.8% during the quarter. Meanwhile, gross profit margins ended up at 25.4%, meaning it didn't sacrifice profits for revenues. LDK Solar also upwardly revised its outlook for the year as it retains a bullish sentiment on the industry.

"We experienced substantial revenue growth during the second quarter as our wafer capacity expansion exceeded our expectations," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "We are pleased with our continued success of executing our growth strategies. In addition to our wafer capacity expansion, tremendous progress has been made to date on the construction of our polysilicon plants and the project remains on schedule."

The Chinese solar maker now expects revenues between $486 million and $496 million on shipments of between 210 megawatts and 220 megawatts of wafers in the third quarter. The company also lifted its full year guidance to between $1.65 and $1.75 billion compared to between $1.08 and $1.18 billion earlier. Meanwhile, analysts expected only $1.16 billion, which is why we saw the dramatic jump in today's trading when shares soared more than 26% briefly.

Despite the dramatic move, LDK Solar remains well below its 52-week highs of $76.75 per share. This is because the primary driver downwards was a reduction in growth estimates for the industry, which forced down PE multiples. Currently, LDK Solar trades at just 26x earnings, which is far below its prior valuations of closer to 50x earnings. This mirrors much of the rest of the industry that has also seen multiple contraction.

In the end, if solar companies like LDK Solar can continue to outperform like they have yesterday, we may see an increase in the multiples that could justify a higher share price on two levels. Earnings per share will be greater and the multiple will grow larger. However, if the rest of the industry shows signs of weakness, then investors have have to count on only one part of this equation to profit.

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Pilgrim's Pride Corporation (NYSE: PPC) shares rose sharply after the company announced that it would stop production at two of its chicken-processing plants in a move to rein in losses. The painful actions are deemed necessary by the company in order to position it to emerge from the down cycle as a much stronger and more efficient competitor.

The news comes after Pilgrim's Pride announced a third-quarter loss of $52.8 million after posting a $62.6 million profit just a year earlier. The results come on the heels of higher feed and commodity costs that are quickly eating into profit margins. Meanwhile, the chicken industry is also facing pricing pressures as a result of over-supply.

Pilgrim's Pride stock is far below its 52-week high of $41 per share on such problems. Oil prices may have subsided in recent days, but it is the feed costs that has many concerned. Meanwhile, there are no signs that chicken prices will recover as consumers purchase less and supply continues to grow.

The hope is that today's job cuts will at least reduce costs in an effort to boost the bottom line. Whether or not this effort will be pay off remains to be seen, but at least it is a step in the right direction, and that's what shareholders were looking for today...

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Bronco Drilling Company (NDAQ: BRNC) shares continued their decline after ISS Governance Services recommended a vote against the proposed merger with Allis-Chalmers Energy. The shareholder advisory service concluded that given the relatively strict sales process, increase in EBITDA estimates for the peer group, and a valuation analysis of the company, shareholders should vote against the proposed transaction.

The announcement by ISS Governance is a welcome message for Third Avenue Management - an activist shareholder that has been fighting the merger since its announcement. The 23.4% shareholder expressed its belief that the offer was undervalued several times in Schedule 13D filings with the SEC and may now have enough support to prevent the merger. Supporters include 12.8% holder Wexford Capital and 6.1% holder Alpine Associates.

Bronco Drilling Company provides contract land drilling and workover services to oil and natural gas exploration and production companies. As of February 29, 2008, the Company owned a fleet of 56 land drilling rigs, of which 45 were marketed and 11 were held in inventory. Bronco also owned a fleet of 59 workover rigs, of which 49 were operating and 10 were in the process of being manufactured. The Company also owned a fleet of 70 trucks used to transport its rigs.

Shares of Bronco Drilling dropped $0.09, or 0.56%, to $15.86 per share.

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Time Warner Inc. (NYSE: TWX) sharesholders are growing increasingly impatient after the company announced yet another sharp drop in second quarter earnings. Net income at the media company fell 22 cents per share, while sales rose 5.2 percent to top analyst estimates.

AOL housed the majority of the problems this quarter. The internet service provider lost 604,000 web access subscribers while ad sales rose just 2 percent to $530 million. AOL shifted its focus on ad sales as the dialup ISP market began to shrink. Unfortunately, the move came just as online advertising peaked and now growth is hard to come by in the industry. Luckily, the unit's third-party ad network and revenue partnership with Google offset much of the losses.

AOL's publishing group also came up short this quarter. Time Inc. reported a 9 percent drop in advertising revenue as print advertising moves towards the online markets. In fact, the only bright spot in the quarter was the cable teleivion and film businesses that managed to drive growth in the quarter. All of this has investors wondering just when the company will be broken up so that true value can be unlocked.

CEO Jeff Bewkes recently announced his plans to get rid of Time Warner Cable and focus on TV and film instead. The executive merged the Warner Brothers and New Line studios to lower costs and said he was open to selling AOL back in May. Since then, parties like Microsoft have expressed interest, but there have been no late-stage conversations. The ability to sell off the cable division stake along with a sale of AOL should generate enough cash to satisfy shareholders.

Time Warner shares dropped sharply lower at open before recovering for a small profit.

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

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

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

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

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

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

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

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

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

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