Monday, May 18, 2015

Worth It or Not:Inside the Verizon-AOL Deal

Telecom titan Verizon Communications is buying media platform company AOL for 4.4 billion dollars in an all-cash deal expected to close this summer,pending regulatory approval.
AOL has once again become a digital trailblazer,and we are excited at the prospect of charting a new course together in the digitally connected world,said Verizon Chairman and CEO Lowell McAdams.AOL's advertising mode aligns with this approach and the advertisng platform provide a key tool for us o develop future revenue streams.*
AOL CEO Tim Armstrong and other leadership will stay on the job when AOL becomes a Verizon subsidiary.Mr.Armstrong described the combined company as deeply growth oriented and aimed directly at the platform shift that video and mobile are offering the world-today and 20 years from now.*
Verizon will get:
1.AOL's 2.2 million subscriber dial-up Internet business;
2.publications The Huffington Post;Engadget;and TechCrunch;
3.One,the automated cross-media ad-buying platform;
4.the video ad platform Adap.tv;and
5.the HuffPost Live streaming video network.
Verizon is acquiring AOL with the strategy of building the biggest media platform in the world,Armstrong said.Verizon will propel AOL and comes to the table with over 100 million mobile consumers,content deals with the likes of the NFL,and a meaningful strategy in mobile video.AOL will oversee AOL,s current assets plus additional assets from Verizon that are targeted at the mobile and video media space.The deal will give our content businesses more distribution and it will give our advertisers more distribution and mobile-first features.The deal will add scale and it will add a mobile lens to everything we do inside our content,ads and video strategy.*
AOL has over 30,000 business partners;while Verizon,born of the 2002 merger of telecom heavyweights Bell Atlantic and GTE,is the largest US wireless communications service provider.The name "Verizon" is derived from "veritas," the Latin word for "truth," and "horizon." Verizon had 125.3 million wireless service customers as of September 2014,along with residential and small business services customers that are provided with phone service,Internet access and TV via copper wire or fiber optic cable.It is in the process of transitioning wireline customers to its more economical FiOS fiber optic cable.*
Verizon stock has a 4.43% dividend yield.*
Verizon Communications Inc (VZ),AOL Inc (AOL)

Monday, May 11, 2015

Hedge Fund Founder Disses Pioneer Resources

David Einhorn,founder and president of the Greenlight Capital hedge fund,has bitterly criticised shale oil extractor Pioneer Resources.The fracking company loses about 12.00 for each barrel of oil equivalent production,by Mr.Einhorn's reckoning,and its cash flow generation is falling,even as it spends too much on such amenities as cars and buildings.He conducted a discounted cash flow analysis that revealed a negative value.Among other problems,Pioneer has not adjusted its resource estimates to account for lower oil and gas prices.
Mr.Einhorn is consequently shorting several shale oil companies such as Pioneer and Whiting Petroleum.He thinks Pioneer's stock will drop precipitously.*
Such companies get better at drilling wells,counters Leo Mariani of RBC Capital Markets.Over time,we expect materially better returns.I certainly don't believe you're seeing losses of that magnitude;you're seeing operating and personnel costs drop.Certainly we've seen more than 16 billion of equity raised.Pioneer is selling some assets from the Eagle Ford,Texas shale holdings.There certainly is no issue with the balance sheet of Pioneer.It's one of the strongest companies in the sector.
All shale is not created equal.There are haves and have-nots.He makes some valid points,but there's no doubt that the strongest plays can make good returns in certain parts of the country.Even if the stock were to tank,I don't see the company selling itself.I guess it's possible,but I don't think it's a certainty Pioneer would sell itself,Mr.Mariani concluded.*
Pioneer Resources Inc (PXD)

Monday, May 4, 2015

Is Tesla Stock Ahead Of Itself ?

The problem with Tesla is,it is so far out in the future,said Erin Gibbs of S&P Capital IQ.The price target is 267.00.When you look at volatility,you're not getting paid for that upside.All of this hopeful,wishful thinking-we're thinking about 2016 and beyond.Yes,they have new models coming on,but it's far out in the future.*
Deutsche Bank,however,has a buy rating on the stock,with a 245.00 price target.Tesla's entry into home batteries is not being fully appreciated,according to DB.It's leasing option for the batteries means they will have perpetual customers and a revenue stream.With these stationary storage units,you can take power from the grid when it's cheapest,from 12 am to 4 am.*
Basically,Tesla is repackaging its electric car batteries as home and business energy storage systems.With its SolarCity sister company,which,along with SpaceX and Tesla,was also founded by South African-born Elon Musk,there is now an integrated system for both generating solar power and storing it onsite.It is an energy system that stabilises the power grid,protecting users from the swings in solar energy availability because of variable weather and electricity pricing.The system starts at 3500.00 for a residential battery pack.It does need installation and an invertor to convert the battery's direct current into the home's alternating current,which it is believed will almost double the setup cost.
Tesla has competitors in the energy storage business,such as Samsung SDI Co Ltd and Saft Groupe SA,as well ss Coda Energy.Yet demand for energy storage is predicted to experience strong growth in the years ahead as governments set higher targets for energy efficiency.That,plus Elon Musk's personal notoriety and Tesla's reputation for high quality and innovative products could help its stock price to continue to rise in the long term,despite its likely overvalued status at the moment.*
Tesla Motors (TSLA),SolarCity (SCTY)

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