***Official*** 2010 Stock Market Thread

[eLiu]

FDA might still approve it due to it met first goal and the drug is pretty safe, and there isn't a drug for lupus for a looong time. I am totally out of HGSI, but might buy back later. I am just playing with GNVC, PPG lately.

I don't think the 76-week failure is really that bad. If you look at the results, they're pretty similar to the 52 week results. While having extra-promising 76 week results would have been nice, my understanding is that this study is just extra, and as long as the 52 week results were maintained, there should be little to worry about. i.e., the primary (52) endpoint was successfully obtained and the secondary was not--so the drug, while being good enough, failed to be extra-awesome?

I mean they'd really only have to get unlucky a handful of times (with say flare-ups) to kick that p value up into the range of "statistical insignificance." And it's not a "range" either; it's like if p = 0.04999, you're good. But if p = 0.0500001, you fail.

*shrug* I'm still happy with money in HGSI. Sucks losing 6% today, but what can you do. If I had more cash on hand, I'd probably buy more shares to be honest.

 

[KDKPSJ]

Hmm... DNDN downgraded by Lazard, the great guys who downgraded HGSI a month before leap and upgraded right after. Hope the same thing happens to DNDN! (lol)

 

[Azurik]

Rambus reports record first quarter earnings and profits - sees pivotal CAFC decision coming at the end of May.

Rambus Inc. (NASDAQ:RMBS), one of the world’s premier technology licensing companies, today reported financial results for the first quarter of 2010.

Revenue for the first quarter of 2010 was $161.9 million, up 425% sequentially from the fourth quarter of 2009 and up 492% from the quarter a year ago, primarily due to the agreements signed with Samsung during the first quarter of 2010.

“The Samsung agreement was a transformational event driving record revenues this quarter,” said Harold Hughes, president and chief executive officer at Rambus. “This agreement, along with the AMD license renewal, reflects a recognition of the ongoing value of our portfolio of patented innovations and demonstrates the momentum of our licensing efforts.”

Samsung is expected to make payments to the Company totaling approximately $900.0 million over a five-year period in connection with the settlement agreements, which include the purchase of 9.6 million shares of Rambus common stock for $200.0 million. In the first quarter of 2010, the Company received cash consideration of $425.0 million from Samsung, recognized as follows:

Revenue of $137.1 million
Gain from settlement of $95.9 million
Contingently redeemable common stock and stockholders’ equity of $192.0 million related to the 9.6 million of common stock issued to Samsung
The remaining $475.0 million is expected to be paid in successive quarterly payments of approximately $25.0 million (subject to adjustments per the terms of the license agreement), concluding in the last quarter of 2014.

 

[Dacalo]

One more month for CAFC decision! Great day for RMBS.

http://www.reuters.com/article/idCNN2110496520100422?rpc=44

* Q1 revenue $161.86 mln vs Street view $50.14 mln
* Shares up 2.6 percent after hours (Recasts with comments about lawsuits; updates shares)
SAN FRANCISCO, April 22 (Reuters) - Chip designer Rambus Inc (RMBS.O) said it expects to see progress in a series of legal disputes against chipmakers such as Nvidia Corp (NVDA.O) and Micron Technology Inc (MU.O), with some cases possibly reaching judgments soon.
Rambus executives on a conference call with investors said they expect a final determination by the International Trade Commission (ITC) in its case against Nvidia by May 24.
The ITC in March said it would investigate a January decision that graphics chip designer Nvidia violated three of five Rambus patents, potentially leading to a ban on imports of some Nvidia products into the United States.
"We are confident in our arguments and look forward to the outcome," said Rambus General Counsel Tom Lavelle.
The company expects a result in the coordinated appeals of cases against Hynix Semiconductor Inc (000660.KS) and Micron to come down "sooner than usual," possibly at the end of May, Lavelle said.
In the separate San Francisco antitrust case against Micron and Hynix, Lavelle said the pre-trial process continues to move forward as lawyers examine issues that remain after Rambus signed a settlement and licensing deal with Samsung Electronics Co Ltd (005930.KS) in January. [ID:nN1999727]
Rambus on Thursday posted a quarterly net income and revenue that beat Wall Street forecasts on Thursday, boosted in part by gains from its settlement with Samsung.
Revenue rose 492 percent to $161.86 million from $27.33 million in the previous year.
The company, which designs and licenses high-speed memory chips, reported income of $150.90 million, or $1.28 per share, compared with a loss of $17.43 million, or 17 cents per share, a year ago.
Analysts covering Rambus on average expected revenue of $50.14 million and a loss of 1 cent per share for the quarter, according to Thomson Reuters I/B/E/S.
Shares of Rambus were up 2.6 percent at $24.15 in after-hours trade after closing at $23.53 on the Nasdaq. (Reporting by Ian Sherr, Editing by Robert MacMillan)

 

[Azurik]

Hmm... DNDN downgraded by Lazard, the great guys who downgraded HGSI a month before leap and upgraded right after. Hope the same thing happens to DNDN! (lol)

Jim Cramer is even worse. He was trashing DNDN when it was at $2-$4 rising to $7. He was negative on the ride up to $20. There were some talks that he had "financial interest" in DNDN not being successful because he was involved with another bio company sorta competing with DNDN.

In the last few weeks, he turned bullish on DNDN after the ride had been turned.

RMBS at $24.50 with CAFC decision soon, and DNDN over $40+ awaiting May 1 decision makes Azurik happy happy

 

[jessieqwert]

RMBS is jumping

 

[HopJokey]

RMBS just crossed the 25 mark. Hopefully a short squeeze will follow.

 

[Blueychan]

Wow RMBS jumped $0.25 in about a minute.

 

[KDKPSJ]

Yay, as soon as Rambi hit $ 25, it jumped another 1% or so with volume. Guess short squeeze triggered!

 

[TheNinja]

I don't know if it's been discussed, but what do you guys think of CEL. That Israeli telecommunications company. Paying 9$ dividends and jumped from 22-32 in a year.

 

[cheezy321]

Sold a majority of my RMBS stake today @ $25.

Holding onto another ~100 shares for the long term. Hopefully these trials end soon (with positive results)

 

[JS80]

I'm holding until Azurik tells me to sell. I kid. Kind of.

 

[Capt Caveman]

I'm glad I held onto my Visa shares.

 

[Jassi]

E*Trade (by far my largest bet) is kicking ass for me.

 

[Azurik]

I'm holding until Azurik tells me to sell. I kid. Kind of.

I chuckled Thanks for some humor on a Monday morning!

 

[Azurik]

DNDN has a May 1 deadline. I honestly don't see how they could ramp up facilities, go on a hiring frenzy and plan commercial launches without having a fair amount of confidence that this time, they're going to get the green light. Stock has been reacting as such, jumping a couple percentage points everyday.

RMBS surprises me that the CAFC will decide so soon. It's usually a 6-month window, but I had stated it should be sooner because of the pending retirement of one of the judges. RMBS is pretty confident with an end of May (or thereabouts) decision, as the company has been citing that timeframe in their court documents too.

BTW, over the weekend Barron's created a feature article on RMBS. The writer seems aware of some issues, but she doesn't have a firm grasp on the history or current events, and chooses to focus heavily on the AT case. Linked below:

Boxcars or Snake Eyes, Rambus Is Dicey
By JACQUELINE DOHERTY
Chip-technology specialist Rambus could win big -- or lose big -- in pending litigation. How to play the odds.
http://online.barrons.com/article/SB127207366442882053.html#articleTabs=article

 

[tuffgong]

I really don't know how to work the Market. Got in on Ford at 1.86. I placed a stop loss order at 14 yesterday thinking it could only go up with profits announced today. Instead it went down to 13.50...ugh! I should have left it alone.

 

[FelixDeCat]

I am watching the Goldman testimony. Those guys were so dirty, but I can understand the tempation was too great not to pass up on the opportunity at the time to take down what they KNEW at the time was simply outright fraud by borrowers. Sell it LONG at all costs to "suitable, knowledgeable investors" (without disclosing every "little" detail, details that might actually KILL a deal) and then take short positions on those SAME deals, with more accurate knowledge, to make a windfall profit of several billion dollars.

 

[Jassi]

I am watching the Goldman testimony. Those guys were so dirty, but I can understand the tempation was too great not to pass up on the opportunity at the time to take down what they KNEW at the time was simply outright fraud by borrowers. Sell it LONG at all costs to "suitable, knowledgeable investors" (without disclosing every "little" detail, details that might actually KILL a deal) and then take short positions on those SAME deals, with more accurate knowledge, to make a windfall profit of several billion dollars.

I don't care how much my portfolio drops short term, these guys get deserved to get hanged as an example. They rigged the game.

 

[epidemis]

I am watching the Goldman testimony. Those guys were so dirty, but I can understand the tempation was too great not to pass up on the opportunity at the time to take down what they KNEW at the time was simply outright fraud by borrowers. Sell it LONG at all costs to "suitable, knowledgeable investors" (without disclosing every "little" detail, details that might actually KILL a deal) and then take short positions on those SAME deals, with more accurate knowledge, to make a windfall profit of several billion dollars.

No doubt they are double-dealing, let them fry.

 

[LegendKiller]

I am watching the Goldman testimony. Those guys were so dirty, but I can understand the tempation was too great not to pass up on the opportunity at the time to take down what they KNEW at the time was simply outright fraud by borrowers. Sell it LONG at all costs to "suitable, knowledgeable investors" (without disclosing every "little" detail, details that might actually KILL a deal) and then take short positions on those SAME deals, with more accurate knowledge, to make a windfall profit of several billion dollars.

There's really 3 categories of what could have happened here....


1. They structured CDOs from on-bs collateral and had to retain a portion of the position OR structured, underwrote, and distributed and had to retain a portion AND they hedged the position.

2. They structured and underwrote CDOs from other collateral and sold 100% of the position AND bought CDS for the specific asset.

3. They bought CDS to hedge broad-risk and/or speculated that the housing market would go down.

Now, 1&3 are OK. Hedging a position AND taking speculative and/or broad hedges are what investment banks do, especially if they are a MM and retain some exposure. In fact, would go as far as saying they had a fiduciary duty to their OWN shareholders to hedge and/or utilize institutional knowledge to make money.

2 is absolutely wrong and does constitute double dealing.

HOWEVER...

Purchasers AFAIK of CDOs have to be QIBs, they should have known the deals, especially if the deals were concentrated in AZ/CA/NV/FL. It IS buyer beware and most institutions, including IKB, were scrambling for assets that would pay a premium.

 

[Jadow]

Goldman wasn't selling these investments to joe schmo on the street, they were selling them to other professionals, a guy on tv said today it was sharks vs sharks, both trying to outsmart each other. Goldman won, so be it.

 

[The-Noid]

The problem securities although normal non-agency mbs/abs were bad was in the synthetic space. No one the panel today and even most people in the investment field have no idea how a synthetic CDO works, so to say that professionals that run pensions/endowments/grants/regional banks with cash ... had any idea what they were buying is a joke. Most of the time they take what is out of inventory because they have worked with their broker for years.

Synthetic CDO's only have treasuries or agencies as the collateral.

The senior tranche (usually 80-90% of the deal) sells CDS based either on an index or other derivative instrument (MBS/ABS) to the junior/equity tranche who in turn buys the CDS and pays the premium.

i.e. a 500 million dollar synthetic CDO will have 450 million notional in the senior tranche and will collect the income from the CDS premium they have written as well as the income off the agency MBS. In the good times you were collecting 200-300 bps over with very little risk supposed risk. The investment banks threw in an interest rate swap as well so you even switched fixed for floating and you really felt good about your investment.

The 50 million notional junior tranche only makes money should there be a credit event in the senior tranche CDS short portfolio, which in turn pays the junior tranche and since they were cash settled, the junior tranche holders didn't even have to mess with delivery they just took the equivalent of the treasuries/agencies in the amount of the credit event.

What ended up happening is as defaults happened the senior tranche went to <10 and the junior tranche which being long it is equivalent to being short mortgages ended up with all the money.

The good thing about synthetic CDO's is you can make them on anything whereas a normal derivative cash based CDO, I actually need to buy the collateral, that is often times to cumbersome and takes significantly more work to put together. Synthetic CDO's take an hour and I can reuse the documents and charge 3% of notional to group buyers and sellers, as well as a bid/ask spread for the 10 minutes this product sits on the desk.

 

[LegendKiller]

The problem securities although normal non-agency mbs/abs were bad was in the synthetic space. No one the panel today and even most people in the investment field have no idea how a synthetic CDO works, so to say that professionals that run pensions/endowments/grants/regional banks with cash ... had any idea what they were buying is a joke. Most of the time they take what is out of inventory because they have worked with their broker for years.

Synthetic CDO's only have treasuries or agencies as the collateral.

The senior tranche (usually 80-90% of the deal) sells CDS based either on an index or other derivative instrument (MBS/ABS) to the junior/equity tranche who in turn buys the CDS and pays the premium.

i.e. a 500 million dollar synthetic CDO will have 450 million notional in the senior tranche and will collect the income from the CDS premium they have written as well as the income off the agency MBS. In the good times you were collecting 200-300 bps over with very little risk supposed risk. The investment banks threw in an interest rate swap as well so you even switched fixed for floating and you really felt good about your investment.

The 50 million notional junior tranche only makes money should there be a credit event in the senior tranche CDS short portfolio, which in turn pays the junior tranche and since they were cash settled, the junior tranche holders didn't even have to mess with delivery they just took the equivalent of the treasuries/agencies in the amount of the credit event.

What ended up happening is as defaults happened the senior tranche went to <10 and the junior tranche which being long it is equivalent to being short mortgages ended up with all the money.

The good thing about synthetic CDO's is you can make them on anything whereas a normal derivative cash based CDO, I actually need to buy the collateral, that is often times to cumbersome and takes significantly more work to put together. Synthetic CDO's take an hour and I can reuse the documents and charge 3% of notional to group buyers and sellers, as well as a bid/ask spread for the 10 minutes this product sits on the desk.

This is incorrect. A senior tranche holder doesn't end up paying out if there is a credit event. The junior tranche holder pays IN since they are short CDS (equiv. to being long a junior tranche of mortgages, absorbing the first losses), normally they've paid in cash to begin with and were getting paid premiums + GIC income from the cash/asset deposit. As the credit losses mount eventually the senior positions pay on the CDS, into the CDO.

Why would a junior tranche survive losses compared to a senior tranche? That's impossible.

 

[FelixDeCat]

There's really 3 categories of what could have happened here....


1. They structured CDOs from on-bs collateral and had to retain a portion of the position OR structured, underwrote, and distributed and had to retain a portion AND they hedged the position.

2. They structured and underwrote CDOs from other collateral and sold 100% of the position AND bought CDS for the specific asset.

3. They bought CDS to hedge broad-risk and/or speculated that the housing market would go down.

Now, 1&3 are OK. Hedging a position AND taking speculative and/or broad hedges are what investment banks do, especially if they are a MM and retain some exposure. In fact, would go as far as saying they had a fiduciary duty to their OWN shareholders to hedge and/or utilize institutional knowledge to make money.

2 is absolutely wrong and does constitute double dealing.

HOWEVER...

Purchasers AFAIK of CDOs have to be QIBs, they should have known the deals, especially if the deals were concentrated in AZ/CA/NV/FL. It IS buyer beware and most institutions, including IKB, were scrambling for assets that would pay a premium.

I wonder how this is all going to shake out in the end. More disclosure? Perhaps. Buried in boilerplate? Most likely. I just hope that telling someone that they may or may not believe that you are buying crap and they will happily bet against you because they believe you may or may not lose money on a deal they want YOU to take the sucker side will suffice. And if so, if it will be like a Truth in Lending type form with a bottom line:

*House bets with you.

*House bets against you.

That is what needs to happen if you want full disclosure. Not some damn "may or may not" boilerplate crap. :thumbsdown:

Also you need seperation of powers. You cant be a market maker and also seek to profit on your trades with insider information (like the fact they knew most of loans - up to 90% - that made up the product was second lein liar loan aka stated income crap). That is like shooting fish in a damn barrel!