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Garmin (GRMN) falls as TomTom-TeleAtlas deal nears approval

Brent Archer — Tue, 22 Apr 2008 15:25:00 EST

Filed under: Deals, Bad News, Industry, Options, Technical Analysis, Garmin Ltd (GRMN)

Garmin Ltd. (Nasdaq: GRMN) shares are falling on news that chief competitor TomTom is expected to win regulatory approval from the European Commission to acquire its main supplier, TeleAtlas. TomTom beat out Garmin for TeleAtlas in a bidding war last year. The move could hurt Garmin, who receives some mapping data from TeleAtlas. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GRMN.

After hitting a one-year high of $125.68 in October, the stock hit a one-year low of $42.01 in April. This morning, GRMN opened at $44.89. So far today the stock has hit a low of $43.72 and a high of $44.90. As of 2:05, GRMN is trading at $43.65, down $1.46 (-3.2%). The chart for GRMN looks bearish and steady, while S&P gives the stock its highest 5 STARS (out of 5) strong buy rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $60 range. A bear-call credit spread is an options position that combines the purchase and sale of call 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 two months as long as GRMN is below $60 at June expiration. Garmin would have to rise by more than 37% before we would start to lose money. Learn more about this type of trade here.

Continue reading Garmin (GRMN) falls as TomTom-TeleAtlas deal nears approval

Garmin (GRMN) falls as TomTom-TeleAtlas deal nears approval originally appeared on BloggingStocks on Tue, 22 Apr 2008 15:25:00 EST. Please see our terms for use of feeds.

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Option update: Garmin volatility up on abandoned bid for Tele Atlas

Paul Foster — Fri, 16 Nov 2007 12:20:00 EST

Filed under: Options, Garmin Ltd (GRMN)

Garmin (NASDAQ: GRMN) announced it is dropping its $3.3 billion bid for Tele Atlas. TomTom had bid $4.2 billion for Tele Atlas. GRMN, a designer and manufacturer of navigation, communication and information devices, is recently up $20.00 to $104.12 in pre-open trading. GRMN overall option implied volatility of 62 is above its 26-week average of 50 according to Track Data, indicating larger price movement.

Jack in the Box (NYSE: JBX) is recently trading at $30 in pre-open trading, above its close of $27.08. JBX reported Q4 EPS of 43 cents vs. consensus estimates of 38 cents. JBX full year same-store sales increased 6.1%. RBC Capital Markets says "JBX offers EPS guidance above estimates." JBX overall option implied volatility of 65 is above its 26-week average of 32 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update: Garmin volatility up on abandoned bid for Tele Atlas originally appeared on BloggingStocks on Fri, 16 Nov 2007 12:20:00 EST. Please see our terms for use of feeds.

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Garmin out, TomTom wins Tele Atlas takeover

Tom Barlow — Fri, 16 Nov 2007 11:05:00 EST

Filed under: Deals, Nokia Corp. (NOK), Garmin Ltd (GRMN), Technology

After a last-minute bid to snatch GPS map info provider Tele Atlas (AMS:TA) from competitor TomTom (AMS:TOM2), Garmin (NASDAQ:GRMN) has dropped out of the bidding, according to Bloomberg. The company had jumped TomTom's friendly takeover offer of under $30 a share with a bid of $35.48. TomTom then responded with a jump to $43.44, or $4.2 billion, a 81% premium on the stock at that time.

This was apparently too rich for Garmin's blood. With Tele Atlas, a premier vendor of GPS map data, in its fold, look for TomTom to expand its family of GPS-specific devices as well as licensing the data for other technologies such as cell phones. Since TomTom was already a Tele Atlas customer, that portion of its expenses will now remain in-house, as well.

Tele Atlas is one of only two large providers of this data. The other, Navteq, was recently purchased for $8.1 billion by Nokia (NYSE:NOK). Garmin, a Navteq customer, just extended its contract with that company for another six years.

The deal would have made sense for either company, but the question is, at what cost? Perhaps the fact that both TomTom and Tele Atlas are based in Europe will help them streamline operations and thereby justify the expense. With the pace of evolution in this market, though, the time frame to leverage the purchase is not long.

Garmin out, TomTom wins Tele Atlas takeover originally appeared on BloggingStocks on Fri, 16 Nov 2007 11:05:00 EST. Please see our terms for use of feeds.

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Garmin (GRMN) soars on Navteq (NVT) deal

Michael Fowlkes — Fri, 16 Nov 2007 10:10:00 EST

Filed under: Before the Bell, Deals, Good news, Consumer Experience, Competitive Strategy, Nokia Corp. (NOK), Garmin Ltd (GRMN)

Shares of Garmin Ltd. (NASDAQ: GRMN) have been struggling lately as the company has been involved in a bidding war for Dutch digital mapmaker Tele Atlas NV. That has all changed this morning with the news that Garmin has pulled out of the bidding for Tele Atlas and instead signed a deal with Navteq Corp. (NYSE: NVT) for mapping services through the year 2015.

The stock has been soaring in premarket trading, up over 20% on this morning's news. Wall Street has been pretty tough on Garmin lately as investors worried about where the company would get its mapping services. Earlier this year, Nokia Corp. (NYSE: NOK) made an $8.1 billion bid for Navteq, and concerns mounted that Garmin would be unable to continue to get its mapping needs from the company.

After the Nokia offer for Navteq, Garmin had entered into a bidding war to acquire the only other major mapping provider, Tele Atlas, the other bidder being TomTom NV. TomTom has recently upped the ante for Tele Atlas to $4.2 billion, which was well above what Garmin was willing to pay for the company.

Today's announcement comes as great news to Garmin investors and the stock will be rewarded nicely in today's market.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

Garmin (GRMN) soars on Navteq (NVT) deal originally appeared on BloggingStocks on Fri, 16 Nov 2007 10:10:00 EST. Please see our terms for use of feeds.

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Garmin, TomTom in turf war over Tele Atlas

Tom Barlow — Wed, 07 Nov 2007 13:27:00 EST

Filed under: Deals, Garmin Ltd (GRMN)

A new front has opened up in the GPS wars as TomTom (AMS: TOM2) and Garmin (NASDAQ: GRMN) are vying to relocate GPS data provider Tele Atlas (AMS: TA) within their company holdings. In July, TomTom announced a friendly buyout of Tele Atlas for slightly less than $30 a share, at that time a 32% premium.

Last week, however, Garmin tossed its hat in the ring with a counter offer of $35.48. Tele Atlas gave TomTom five days to respond to the sweeter deal. TomTom has indeed responded with a revised offer of $43.44, or $4.2 billion, a whopping 81% premium on Tele Atlas' July stock price. The offer is even more noteworthy in light of Tele Atlas' lack of profitability. It is expected to lose another $7 million this year.

Tele Atlas is a provider of mapping information to TomTom, MapQuest and many other GPS systems, and is used in over 90% of U.S. 911 calls. The U.S. Dept. of Transportation uses Tele Atlas data, as do governments in many of the 64 nations for which it has compiled map data. Both Garmin and TomTom could benefit from integrating these geographic data products with their hardware business.

Tele Atlas shares continue to climb on the Amsterdam board, suggesting investors expect Garmin to respond to TomTom's latest offer.

Garmin, TomTom in turf war over Tele Atlas originally appeared on BloggingStocks on Wed, 07 Nov 2007 13:27:00 EST. Please see our terms for use of feeds.

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Garmin falls on TomTom's Tele Atlas bid

Brent Archer — Wed, 07 Nov 2007 12:30:00 EST

Filed under: Deals, Bad News, Options, Technical Analysis, Garmin Ltd (GRMN)

Garmin Ltd. (NASDAQ: GRMN) stock is sinking today as the company is reviewing its options regarding the acquisition of Dutch mapmaker Tele Atlas, according to a spokesman for Garmin. Garmin's main competitor TomTom NV (TOM2) raised its proposed offer for Tele Atlas to €30 a share earlier today, significantly trumping Garmin's previous offer of €24.50 per share. It is reasonable now to expect Garmin to come back with a higher offer, which is why the stock is down today. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on GRMN.

GRMN hit a one-year high of $125.68 in October and has been rising almost all year, with its one-year low of 45.75 last November. This morning, GRMN opened at $96.14. So far today the stock has hit a low of $93.49 and a high of $96.68. As of 11:00, GRMN is trading at $93.15, down $7.41 (-7.3%). The chart for GRMN looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bearish hedged play on this stock, I would consider a December bear-call credit spread above the $130 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. This particular trade will make a 5.3% return in 7 weeks as long as GRMN is below $130 at December expiration. Garmin would have to rise by more than 38% before we would start to lose money.

Continue reading Garmin falls on TomTom's Tele Atlas bid

Garmin falls on TomTom's Tele Atlas bid originally appeared on BloggingStocks on Wed, 07 Nov 2007 12:30:00 EST. Please see our terms for use of feeds.

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TomTom's beating for TeleAtlas purchase

Tom Barlow — Tue, 24 Jul 2007 16:31:00 EST

Filed under: Deals, Products and Services, Competitive Strategy

While sexy companies like Garmin Ltd. (NASDAQ: GRMN) and TomTom (AMS: TOM2) sell technology that makes finding your location on a map as easy as pushing a button, the foundation of the business is in the maps themselves. In 2006, over half of all internet map searches referenced the products of just one company, TeleAtlas (AMS: TA).

Now, Amsterdam-based TomTom has announced plans for a friendly buyout of TeleAtlas for just under $30 per share, a 32% premium over market value. This is quite a bold vote of confidence by TomTom, since TeleAtlas consistently loses money, including an expected $7 million this year. The total cost of the purchase will be in excess of $2.5 billion.

TeleAtlas is a provider of mapping information to TomTom, MapQuest, and many other GPS systems, and is used in over 90% of U.S. 911 calls. The U.S. Dept. of Transportation uses TeleAtlas data, as do governments in many of the 64 nations for which they have compiled map data. TomTom is the world leader in portable GPS devices, with 52% of the European market and 25% of the U.S.'s.

The acquisition will allow TomTom to vertically integrate its product offerings and give it access to a much more diverse book of business. I expect the company to leverage their technology to offer seamless hardware/data products to the many customers already enjoying TeleAtlas's mapping services. Given the price paid, however, the sales pace had better be brisk, or TomTom will need more than a GPS unit to find its bottom line.

TomTom's beating for TeleAtlas purchase originally appeared on BloggingStocks on Tue, 24 Jul 2007 16:31:00 EST. Please see our terms for use of feeds.

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