This Week's 5 Smartest Stock Moves

If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.

1. A form-fitting acquisition
Shares of Tempur-Pedic (NYSE: TPX  ) soared 15% yesterday after announcing the acquisition of mattress rival Sealy.

You don't often see buyers pop on buyouts, but there are two big reasons for Tempur-Pedic shareholders being rewarded this week.

  • The company behind the high-end foam mattresses is cashing out Sealy at just $2.20 a share, a 3% premium to where the stock closed the day before. It has already secured the consent of investors holding 51% of the shares, so it's pretty much a done deal at a sweet price.
  • Tempur-Pedic shares lost nearly half their value in a single day back in June when it warned that soft sales would result in a sharply lower profit than the market was expecting on a 3% to 5% decline in revenue. Buying a rival that is starting to branch out from its innerspring roots to offer higher quality foam bedding will help keep Tempur-Pedic in control.

2. Pumping up the ARPU
Average revenue per user -- or ARPU -- is a big metric for Sirius XM Radio (Nasdaq: SIRI  ) .

The satellite radio giant is trying to drum up ways to get its subscribers to pay more. It increased its monthly rate earlier this year, and now it's trying to encourage receiver-based subscribers to pay a few bucks more for streaming through new features including on-demand content.

Well, now Sirius XM is trying to raise the bar in a different direction. The satellite radio giant is teaming up with Nissan to offer a suite of premium telematics solutions. When the platform rolls out, buyers of new Nissan cars will be able to enjoy features including 24/7 emergency support for accidents, stolen vehicle tracking, and roadside assistance.

The telematics service won't be free, and that's where both Nissan and Sirius XM can be breaking into the ARPU dance.

3. Facebook bears gifts
Facebook (Nasdaq: FB  ) is making it easier to show your friends your appreciation beyond kind words and the click of a "Like" button.

The operator of the world's largest social networking website unveiled a gift-giving feature this week. Facebook's 955 million active users -- or at least its stateside members, for now -- will be able to purchase online gift cards from a growing list of retail partners.

The move can always backfire. Folks may stop wishing one another greetings if they see that others are doing so with gift attached. However, Facebook has so many advantages with the many friendship connections through the site. It's time for it to begin to take advantage of the e-commerce possibilities beyond its cut of the online games.

4. 56.2 million reasons to back Pandora
Pandora
(NYSE: P  ) is throwing its weight behind the Internet Radio Fairness Act, and it's easy to see why. The bill that was recently introduced in Congress will save Pandora and other music streaming websites a ton of money by lowering music royalties in line with what other broadcasting mediums are paying in relation to their revenue.

Pandora paid more than half of its revenue last year in performance royalties, and the act's successful passage would mean healthier margins for the fast-growing industry.

Pandora's turning to its user base, firing off a request to contact local congressional members to back the act. Will it be enough? Well, Pandora has 56.2 million active monthly users. Sure, most of them may be freeloaders, but that may also work in Pandora's favor. If the growing number of listeners putting up with ads to enjoy Pandora's streams for free want to keep it that way, getting this bill to the point where it becomes a law is crucial.

5. Netflix plays up small screens
DISH Network (Nasdaq: DISH  ) is introducing a nationwide broadband service.

A new satellite with 10 times the processing power is giving DISH the ability to roll out dishNET, providing 10 gigs of monthly data at a speed of 5 megabits a second for as little as $40.

Sure, the data cap is a bit low for a home broadband service. The speed is slower than more fiber-based cable and DSL offerings. However, DISH is hoping to market the service to rural customers. Since those customers don't have access to major cable and telecom services, it's a safe bet that DISH is probably already serving plenty of rural customers among its 14 million current subscribers.

Given the unwelcome trend of net defections at DISH, having even a limited broadband offering is a smart move in the name of retention.

Keep it coming
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The Motley Fool owns shares of Tempur-Pedic International and Facebook. Motley Fool newsletter services have recommended buying shares of Facebook. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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