Back in 2001, Concur Technologies, Inc., (NASDAQ: CNQR) hit a low of 31 cents per share. At that time, investors had lost all confidence in the Internet. What's more, Concur was in an un-sexy space; that is, a provider of software to help companies with travel expenses.
But the company's CEO, Steve Singh, was still a believer and thought the market opportunity was huge.
Well, as of now, things are starting to pay off. In fact, this week, Concur announced that it received a $251 million strategic investment from American Express (NYSE: AXP) at $39.25 per share. There is also a warrant to purchase an additional 1.28 million share (see more of today's earnings news).
Minyanville's top dog, Todd Harrison, dares to ask in public what Wall Street types quietly consider in private. For more insight and ideas, visit www.minyanville.com.
Lot's going on today as I juggle the end of June. With time constraints on both sides of this screen in mind, I humbly offer the following thoughts:
I covered the incremental "fade" exposure in Google (NASDAQ: GOOG) (put out near the opening) and I'm now in watch mode.
It's tough to tell how much of the big beta action is quarter-end proppage and how much is legitimate demand. As I covered my American Express (NYSE: AXP) earlier--and continue to have exposure in Wachovia (NYSE: WB)--I'm leaving it on for the time being (and yes, subject to change).
And yeah, I'm trading around that ugly duckling--nibbling under $15 and trading the swings. There's no putting lipstick on that pig--using it as my vehicle of choice has thus far been wrong. It ain't over till our interns sing, however, so I'm fighting the good fight.
That sorta brings up the question du jour: Are we gonna see quarterly inflows... or quarterly outflows?
The upside seems begrudging. Of course, after the decline we've seen, you'd be grudging too if you were Hoofy.
Somebody call Armond Goldman! l I'm starting the South Beach Diet on Monday, lest anyone wonders what is happening to my sense of humor.
The scariest thing on my screen? The VXO is down 6% today. I repeat, the VXO is down 6% today. Ruh roh...
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.
In the battle for "cool history," American Express (NYSE: AXP) wins this one hands down. The company was started in 1850 as an express delivery service. At the time, the U.S. Postal Service was slow and unreliable, and sending anything important or valuable was ill-advised. The American Express Company was known for its "expressmen," who delivered valuable packages all over the country, usually on horseback or with stagecoaches.
After establishing a strong reputation for delivery service, the company later decided to phase out deliveries and move into financial services. They had delivered countless documents for banks, and the money business was appealing. American Express first offered money orders in 1882, followed by travelers cheques in 1891. The travelers cheque business was the main focus of the company for many years.
In 1958, the company gave in to market pressures and issued its first charge card. For almost 30 years, though, the card was not to be used as a "credit" card. All balances were to be paid in full each month. In 1987, that changed as American Express finally issued a card that allowed revolving balances.
Blank-check IPOs have been on the rise recently. There are companies that conduct initial public offerings for the sole purpose of raising capital to acquire other companies. American Apparel (AMEX: APP) recently went public in this manner.
Historically, Nasdaq listing standards have barred these companies from the exchange, which has been a big boon to the otherwise-struggling AMEX. Now the Nasdaq is proposing a new rule to the SEC that would allow SPACs to list on its exchange.
In the press release announcing the plan, Nasdaq Senior Vice President Bob McCooey said that "Acquisition vehicles are an increasingly common capital-raising device. We believe that listing them on Nasdaq, subject to these important investor protections, will benefit investors and issuers alike."
Maybe this is the right move, but it's interesting that Nasdaq was willing to stand by its principled objection to these entities until the amount of money they raise (and fees/trading volume they can generate) grew too big to ignore.
But I still think investors should be very skeptical of investing in these situations. How exactly do you research an investment in a company when you don't yet know what the business model is?
NYSE Euronext, Inc. (NYSE: NYX) shares are rising on news that the company will purchase the American Stock Exchange for $260 million in stock. The deal will give a second U.S. license for an option exchange, and make it the nation's third-largest player in the $1.3 trillion options marketplace. An analyst at Jefferies & Co. said that the deal allows NYX both to increase its electronic trading business and remain in a traditional trading model, where it has excelled. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NYX.
After hitting a one-year high of $106.81 last January, the stock hit a one-year low of $64.26 in August. NYX opened this morning at $72.97. So far today the stock has hit a low of $72.66 and a high of $75.20. As of 10:35, NYX is trading at $72.44, up $3.35 (4.7%). The chart for NYX looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just one month as long as NYX is above $55 at February expiration. The NYSE would have to fall by more than 25% before we would start to lose money.
NYX hasn't been below $64 at all in the past year and has shown support around $70 recently. This trade could be risky if the company's earnings (due out on 2/05) disappoint, but even if that happens, this position could be protected by the support the stock might find around $70 where it bottomed in the late summer.
Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in NYX.
MOST NOTEWORTHY: European chipmakers, Select Comfort and American Express were today's noteworthy downgrades:
Credit Suisse downgraded European chipmakers to Market Weight from Overweight to reflect the slowdown in the economy this year and the decline in the value of the dollar against the euro. The broker downgraded STMicroelectronics (NYSE:STM) to Neutral from Outperform.
William Blair downgraded shares of Select Comfort (NASDAQ:SCSS) to Market Perform from Outperform, as they believe weak consumer demand for large-average-ticket discretionary goods in 2008 will impact prospects of a turnaround.
Friedman Billings lowered its rating on American Express (NYSE:AXP) to Underperform from Market Perform following the company's Q4 pre-announcement.
OTHER DOWNGRADES:
JMP Securities downgraded Juniper (NASDAQ:JNPR) to Market Perform from Market Outperform.
ABN Amro downgraded Groupe Danone (GDNNY) to Sell from Hold.
Daimler (DAI) was downgraded to Hold from Buy at Merck Finck.
The quarterly numbers for American Express (NYSE: AXP) were mediocre. Net income was $1.06 billion, or $0.88 a share, vs. $945 million or $0.76 a share a year in the same period a year ago. Revenue, net of interest expense, rose 9% to $7.13 billion. But that was shy of the $7.49 billion that Wall Street wanted.
The company tried to put a good spin on things: "Spending on American Express cards rose 15 percent, and we added more than 2 million cards during the last three months." But that didn't offset a nagging concern. The company said that provisions for losses increased 85 percent, reflecting higher loan volumes and an increase in write-off and delinquency rates from the unusually low levels a year ago.
It is that "low levels a year ago" that is a bit troubling. Provisions for losses are never considered a good sign, and 85% is a big number.
The figure may just be a blip on the radar. But, the stock did not move up after hours, so on balance, the company's news was not greeted with glee. Shares traded down 2.24%. Someone ought to watch those provisions for losses.
The Wall Street Journal reported that Apollo Management is considering a private sale of 10% of the firm that would raise $1.5B.
Carl Icahn has offered WCI Communities Inc (NYSE: WCI) $22 a share, 55 cents higher than its closing price yesterday, and equal to $920M, reported the Wall Street Journal.
OTHER PAPERS:
The U.K. Times reported that Goldman Sachs Group Inc (NYSE: GS) is set to advise Royal Bank of Scotland on a potential counter-bid of GBP40B or more for ABN Amro Holdings (NYSE: ABN). Other bidders for ABN Amro include Barclays plc ADS (NYSE: BCS), which is currently in exclusive talks with ABN.
The New York Post has learned that the American Stock Exchange, which is looking at "strategic options," has at least one "high-profile suitor" exploring the possibility of an investment, Susquehanna Investment Group.
After a couple of quarters of weakening growth, it appears the seeds are now in place for growth to return at CheckFree Corporation (NASDAQ: CKFR). The CSP business, CheckFree's bank channel business, jumped back to 7% sequential growth -- an important metric for this company.
The 7% CSP jump brings the business to a growth level that has attracted a lot of investor interest in the past and is a metric that led to strong stock performance. During the past six months that growth figure dropped to just 3%.
In addition to the jump in the CSP business, CheckFree is also beginning to sign up some huge customers. The company began discussing its new deal with American Express, which could be a big windfall for them. Also, CheckFree added Wal-Mart Stores (NYSE: WMT) for its walk-in pay product.
These new customers wins and the 7% sequential CSP growth mean investors will have to get back into CheckFree's stock. I say go along for the ride.
While the takeover battle between the NASDAQ and the London Stock Exchange rages on, the lesser-known American Stock Exchange (AMEX) has hired Morgan Stanley to begin the process of demutualization, presumably setting the stage for an initial public offering (IPO). The IPO comes after numerous exchanges/trading companies have gone public in recent years including the Chicago Mercantile Exchange, New York Stock Exchange and, regrettably, Refco.
The AMEX is definitely the least-respected of the major exchanges. I once mentioned a company to an older stock broker friend and asked him what he thought of the company. The first thing he said was "Ah! The AMEX! That's where bad stocks go to die." The AMEX will also continue to face competition for listing from the OTC market and even the Pink Sheets, where it is taking steps toward greater transparency and scrutiny of companies, perhaps setting the stage for a better reputation. The Pink Sheets is widely known as a great place to find penny stock pump and dumps.
In addition, the high costs of Sarbanes-Oxley will, in my opinion, lead more companies to seek private funding, leading to fewer IPO's in the future. The AMEX may do great, but it's not an IPO I'll be buying into.
Today, the American Stock Exchange (AMEX) announced that it has hired Morgan Stanley (NYSE: MS) as its investment bank. AMEX plans to demutualize the exchange -- which means turning it into a for-profit organization.
In other words, it looks like the AMEX wants to do an IPO.
In light of the success of other exchange IPOs -- such as the NYSE Group (NYSE: NYX) -- it is certainly a smart move. Although, given its small size, it may mean that the exchange will ultimately merge with a bigger play.
In the meantime, why not pick-up some easy cash from the public markets?
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
Back in 2001, Concur Technologies, Inc., (NASDAQ: CNQR) hit a low of 31 cents per share. At that time, investors had lost all confidence in the Internet. What's more, Concur was in an un-sexy space; that is, a provider of software to help companies with travel expenses.
Minyanville's top dog, Todd Harrison, dares to ask in public what Wall Street types quietly consider in private. For more insight and ideas, visit 
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