Today's headlines could have read, "Rally on Financial Write-Downs, Go Figure!" Last night we saw a $3 billion preferred offering out of Lehman Brothers Holdings, Inc. (NYSE: LEH) that became a $4 billion offering. Shares were down on the news but after the dust settled the market decided this was a net-net good and shares rose almost 18% to $44.34. Even UBS AG (NYSE: UBS) rallied a sharp 14% to $33.01after it said it was going to take a $19 Billion additional writedown charge and its chairman left the company. Go figure.

The Institute for Supply Management said its index of national manufacturing activity rose to a reading of 48.6 in March, which is still a contraction but not as bad as estimates of about 47.5 from economists. There may be hope that the de-leveraging being seen by financial firms and tightened trading standards may be taking some steam out of the greatly inflated commodities. Crude oil fell $0.74 to $100.84/barrel, but briefly each barrel traded back under the $100 mark. Even gold dropped back below $900.00/ounce level after having seen north of $1,000.00 just last month. Below are the unofficial closing averages for US market index readings:

• DJIA 12,654.36 (+391.47; +3.19%)
• S&P 500 1,370.16 (+47.46; +3.59%)
• NASDAQ 2,362.75 (+83.65; +3.67%)
• 10YR-TBond 3.545% (+0.113)
• 52-week lows, there are always some

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.

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.

MOST NOTEWORTHY: Cavium Networks Inc (NASDAQ: CAVM), Travel Centers of America LLC (AMEX: TA) and MetroPCS Communications Inc (NYSE: PCS) were today's noteworthy initiations:

• Cavium Networks was initiated with a Strong Buy rating and $25 target at JMP Securities. The firm's checks indicate significant momentum for Cavium's products and cites good visibility. Cavium was also initiated with a Market Weight rating at Thomas Weisel, which finds shares fairly-valued at current levels, with a Buy rating and $25 target at Needham, with an Equal Weight rating and $22 target at Lehman Brothers, with an Equal Weight rating at Morgan Stanley and with a Buy rating and $26 target at Deutsche Bank, which expects over 50% revenue growth from 2006-2009 due to the growth in the company's network processor product line.
• TravelCenters of America was initiated with a Buy rating and $54 target at Ferris Baker Watts and with a Buy rating and $70 target at BWS Financial, as the firm is positive on TA's earnings power and valuation.
• Citigroup initiated shares of MetroPCS with a Buy rating and $40 target. The firm believes the company's coupled with deepening penetration in its core markets should produce revenue and FCF growth that exceeds the maturing industry average.

OTHER INITIATIONS:

• IntercontinentalExchange Inc (NYSE: ICE) was initiated with an Outperform rating at Credit Suisse.
• Janco initiated shares of Foundry Networks Inc (NASDAQ: FDRY) with a Buy rating and $19.50 target, as the firm believes the company's new products put it in a position to gain market share.
• CIBC World Markets initiated shares of Accuray Incorporated (NASDAQ: ARAY) with a Sector Underperformer rating and $19 target.