Through The Fly's Eyes: Rumor Mill
from Tedd Cohen of Theflyonthewall.com
Friday the 13th. Superstitious? If you are, don't read any further.
But hey, you're in the market, aren't you? You know what this game's all about. Then read on, because you never know what's around the next corner, do you? Just be careful not to walk under any ladders.
ADVANCED MICRO DEVICES INC (AMD)
On Monday the chip maker announced that it would report first quarter revenue of $1.23B, about $300M below what was expected, and said it would immediately look to cut costs. So much for those rosy sales forecasts. And it may not get any better any time soon. No matter what, these guys need a cash infusion really badly. So the next thing you know, the rumors began to fly that a private, and friendly, equity partner would emerge from the shadows to help out. While the stock reacted positively to the retrenching news, there's another possibility to consider: management will sell the company. Down route 82 in Santa Clara, meanwhile, Intel Corporation (NASDAQ: INTC) was said to be smiling broadly.
CIRCUIT CITY STORES INC (CC)
Repeat after me: "They hired Goldman Sachs Group Inc (NYSE: GS) to help them look at strategic alternatives." Okay? They've said it's to help them sell those 900 stores they have up in Canada. But they're closing stores in a lot of places, aren't they? They're also firing all those hard working execs who make too much, and will continue to trim the f-a-t, especially that unnecessary spending. Many analysts feel good vibes, focusing on a future they think will be blessed with a long-term upswing. That said, the stock smiled. Repeat after me: "Goldman's not there just to shut the doors on some Canadian stores." Okay? The competition -- think Best Buy Inc (NYSE: BBY) -- isn't going to back off. And word about is that they may go private. That'll keep the stock afloat for now, but then what?