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Author: Rob Varnon
Date: August 30, 2010
Publication: CTPost.com
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Fairfield-based Competitive Technologies Inc. complained Monday its shares were shorted and the price driven lower as executives were about to complete a deal to prevent the American Stock Exchange from delisting its stock.
Johnnie Johnson, a spokesman for the firm, said as many as 250,000 of the company's shares were shorted -- meaning investors had borrowed and sold shares, betting they would go down in price and could be bought back and returned to the owner cheaply, yielding a profit. It happened soon after Competitive Technologies had worked out a deal to sell 2 million shares to Crisnic Fund of Costa Rica. The share price plunged to less than the agreed-upon sales price, scotching the deal, which had the potential to raise more than $5 million, enough capital to keep Competitive Technologies on the stock exchange.
Officially, the New York Stock Exchange's AMEX board will suspend trading of Competitive Technologies' shares Friday because they did not meet the stockholders' equity threshold required by listed companies.
Johnson said Competitive Technologies, a microcap company with less than $75 million in market capitalization, could not sustain the short-selling of so many shares.
Moving forward, the company said it intends to list its shares over the counter, but has yet to determine what its ticker symbol will be.
An e-mail seeking comment to the Crisnic Fund was not immediately returned Monday.
Competitive Technologies is almost devoid of actual employees beyond executives and board members. Competitive Technologies reported it "employed the full-time equivalent of 9 people," as of Oct. 13.
The company buys and sells intellectual property and also leases it. It then either licenses the patents to manufacturers or hires job shops to produce the products.
Competitive Technologies did announce this year that it hired 35 independent sales representatives to sell its most high-profile product, the Calmare Pain Therapy device.
The company has been aggressive in its marketing of the device that quells pain with electricity and has reported several deals to sell it in the United States.
Paul Schatz, president and founder of the Woodbridge-based financial advisory Heritage Capital, said it might be considered an accomplishment to get and keep the company listed on an exchange as long as it was. Schatz said he doesn't believe that shorting was a problem for the company because delisting doesn't happen overnight.
"You could see this coming a mile away," Schatz said.
The company acknowledged this position in filings with the Securities and Exchange Commission, noting it has not had positive income in four years, although its sales, bolstered by its Calmare Pain Therapy device had been increasing revenues.
What's probably more important is whether the company comes back from this, Schatz said, and the odds don't favor it.
"The percentage of companies that come back from delisting is 1 percent," he said.
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Author: Angela Carter
Date: Aug 21, 2010
Publication: InvestmentNews
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NEW HAVEN — James Rawlings, president of the NAACP’s Greater New Haven branch, met Friday afternoon with the top executives of NewAlliance and First Niagara banks, to find out how the sale of NewAlliance to the larger Buffalo, N.Y.-based institution would affect jobs and future lending here.
“We have concerns about the local bank becoming a regional bank and how to continue our relationship we had with NewAlliance,” Rawlings said. “We don’t want to see the bank satisfy investors at the expense of our local community.
The companies have negotiated a deal that is scheduled to close in April 2011, pending regulatory approvals. The transaction was valued on a fixed exchange ratio of 1.10 shares of First Niagara stock for each NewAlliance share. Per market close Wednesday, this represents $14.09 per NewAlliance share, or approximately $1.5 billion.
NewAlliance stock closed Friday at $12.97 per share, up 19 cents on the New York Stock Exchange. First Niagara closed at $12.08 per share, up 13 cents on the Nasdaq.
Neither Peyton Patterson, chairwoman, president and chief executive officer of NewAlliance Bank, nor John Koelmel, president and CEO of First Niagara, could be reached for comment after the meeting.
When the former New Haven Savings Bank converted from a mutual savings bank to a publicly traded institution and merged with the Savings Bank of Manchester and Tolland Bank in 2004, depositors bought more than $1 billion worth of shares at $10 a share.
Rawlings said New Haven has been “devastated” by foreclosures and drops in property values, a crisis the organization does not want exacerbated by job losses and reduced access to capital.
Additional state and local NAACP leaders plan to meet with Patterson and Koelmel at a later date, he said.
Mayor John DeStefano Jr. said following the Thursday announcement of the acquisition that he suspected NewAlliance would be sold when it went public years ago and he believes First Niagara bank also will be bought.
Paul Schatz, a wealth manager and president of Heritage Capital LLC in Woodbridge, said NewAlliance stock was valued at $10 for the initial public offering, but opened at $16 per share, and long-term investors have lost money over time.
Patterson said during a conference call Thursday that the transaction was positive for shareholders because they would own 30 percent of the new company and the value of deal, based on Wednesday’s close, amounts to a 24 percent premium. First Niagara is an “exceptional partner” that will help accelerate growth, she said.
Schatz agreed with the mayor on the future of the bank. “The greater likelihood is that First Niagara gets acquired, rather than growing by acquisitions,” he said.
Call Angela Carter at 203-789-5752.
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Author: TRANG HO
Date: Aug 11, 2010
Publication: INVESTOR'S BUSINESS DAILY
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Treasury ETFs rallied Wednesday while stock markets around the world sold off and investors flocked to safe-haven bonds on fears of deflation.
The market turmoil followed the Federal Reserve's announcement Tuesday that it would buy more Treasuries to energize the economy and the government is selling $24 billion in 10-year notes as yields flirt with 16-month lows.
Pimco 25+ Year Zero Coupon U.S. Treasury Index (ZROZ) led its group, spiking 2.61% and keying off support at its 10-week moving average. It closed at 80.58.
IShares Barclays 20+ Year Treasury Bond (TLT) — the most popular long-term bond ETF — jumped 1.3% to 101.28 in above-average volume.
IShares iBoxx $ Invest Grade Corporate Bond (LQD) — the largest fixed-income ETF by assets — ticked up 0.23% intraday but closed down a penny at 110.60.
Mark Grimaldi, chief portfolio manager at Navigator Money Management, added to his stakes in LQD and TLT after the Fed said Tuesday it would buy Treasuries with maturities in the two- to 10-year range. The U.S. central bank said it plans to start buying Treasuries sometime next week with money from maturing mortgage assets.
"People are trying to get them before the Fed buys them," said Grimaldi, who manages his firm's Navigator Fund , which invests solely in ETFs. "So the increase in TLT and LQD is completely logical."
The Fed's move aims to keep mortgage rates and other long-term borrowing costs low in order to spur demand for loans and resuscitate a slowing economy.
Grimaldi plans to trim his position in LQD when it reaches his price target of $103-$104, up 3%-4% from Wednesday's close. His price target on TLT is $105, up 4% from Wednesday's close. He thinks the flight to safety in bonds will last at most three to four months.
"By then the election will happen and the market will calm down," Grimaldi said. "Eventually interest rates will start going up, so the LQD and TLT will not be the place to be."
Anti-Deflationary Plays
Thinly traded ZROZ has outpaced all fixed-income exchange traded products and the stock market this year. It's vaulted 14% year-to-date while the S&P 500 has slipped 2%.
Its IBD Relative Strength Rating of 67 is the second highest among its brethren, after WisdomTree Emerging Market High Yield's (DEM) RS of 70. ZROZ has a fair Accumulation/Distribution Rating of C.
Its chart has formed a series of higher highs and higher lows since it bottomed at 63 in April.
It tracks a batch of long-term zero-coupon bonds that trade at a discount to their outstanding face value. The zeros don't pay interest and offer return potential as their maturity nears in 25 years or more.
The ETF just started trading in November and charges investors 0.15% of assets a year to cover expenses.
TLT holds a basket of bonds that mature in 20 years. Its price has risen 11% this year, but it's down 3% in the past 12 months. As of Tuesday, TLT had a distribution yield of 3.87%. It carries a 0.15% expense ratio.
"As long as equities remain under pressure, as long as there's a risk of deflation and as long as the economic news remains less than sanguine, there will be buyers for TLT and ZROZ," said Paul Schatz, president of Heritage Capital.
"If we have real deflation, ZROZ and TLT will go vertical, like a tech stock did in 1999," added Schatz, who manages $104 million in individual and institutional assets.
That's because in a deflationary environment, dollars today are worth less than their future value. Bond prices could fall only if the Fed raises interest rates, which is unlikely in a weak, noninflationary economic climate. Bond yields and prices move in opposite directions.
Shares of LQD, which tracks corporate bonds, have gained 6% this year and 17% in the past 12 months. In June, the ETF broke out of a trading range between 103 and 107 that lasted six months.
It offers a 4.7% distribution yield and carries a 0.15% expense ratio.
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Author: Squawk on the Street
Date: August 03, 2010
Publication: CNBC.com
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U.S. stock index futures pointed to a lower open on Wall Street on Tuesday following the previous session's strong gains.
The dollar fell to a 3-month low against the euro on Tuesday, as the single currency gained support from solid euro zone data and corporate earnings, while the greenback fell on the perception that the U.S. growth outlook is deteriorating, forcing the Federal Reserve to keep interest rates low.
Here's what guests on today's Squawk on the Street are watching before the opening bell:
Since July 1 The Dow [.DJIA 10680.43 44.05 (+0.41%) ], Nasdaq [.NDQ Unavailable () ], S&P 500 [.SPX 1127.24 6.78 (+0.61%) ], Russell 3000 [RUA 664.27 4.63 (+0.7%) ], Wilshire [WFVK Unavailable () ] and oil are all up 9 percent but the transports are leading the way up 12 percent. Is this a sign that cash is back in the markets?
Paul Schatz, Heritage Capital, LLC President says that while it's an interesting statistic, it doesn't mean the cash that has been sitting on the sidelines for months is starting to chase returns.
"Just like when stocks collapsed in May and June, the whole world wasn’t panic selling," he says. "Volume has been anemic for some time and that’s one mediocre indicator to prove your point. Stocks can rise from a surge in buying interest or a lack of sellers or a combination."
Schatz says he thinks cash on the sidelines may be the single worst indicator in history.
"There is very little correlation to cash on the sidelines and investment returns," he explains. "The vast, vast majority of cash on the sidelines isn’t meant for equities no matter what. And there has been records cash levels for at least eight to 10 years."
As such, he's short-term bullish on the markets, preferring to “rent” rather than “own” positions. "The current rally should top out somewhere between the June and April high over the coming month (with a slight chance of a new 2010 high being the perfect selling opportunity) or so where I will become much more defensive. The end of the move could be explosive so just because I think the end is coming, doesn’t mean I wouldn’t enjoy the ride. It be may the last chance to make good money this year."
So where is he putting his money?
Heritage Capital's largest positions are in:
REITS [IYR 53.11 0.17 (+0.32%) ]
long-term treasuries [TLT 98.56 -0.76 (-0.77%) ]
high yield bonds [JNK 39.37 -0.09 (-0.23%) ]
and commodities [DBC 23.61 0.20 (+0.85%) ]
See more of what these and other analysts and money managers have to say, and get the latest financial news. Watch Squawk on the Street every weekday morning starting at 9 a.m. ET.
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