We can't speak for the rest of the country, but global warming has really been working out for those of us on the East Coast. Here at Fool HQ in Alexandria, VA, just outside the nation's capital, we've seen our early December temperatures in the seventies. Pretty darn sweet. (Environmental disclaimer: We're kidding about global warming being a good thing, please hold the flames.)
Rising temperatures led to rising stock prices today as The Motley Fool 50 Index took back yesterday's losses and rose in the vicinity of 2%. The Nasdaq popped about 3%.
In Today's Motley Fool Take:
Avant! (Nasdaq: AVNT) is one of few companies on the stock market with an exclamation point in its name that still holds some cache. In fact, the company had enough cachet to be purchased today for the immodest sum of $769 million, or $20.55 per share, by suitor Synopsis (Nasdaq: SNPS).
The offer by Synopsis came in at 87% above yesterday's closing market price and sent Avant! shares sailing nearly 60%, granting the company's exclamation point added ha-rumph! Synopsis is a $3 billion creator of electronic design automation software for the integrated circuits (IC) industry. Avant!'s design, testing, and IC layout software complements and in some cases overlaps that offered by Synopsis, but together the companies will offer IC clients more complete services.
Integrated circuits are used in everything from personal computers to cell phones to handhelds and network routers. They're used in the new "Ginger" product, too.
With shares of technology-related companies beaten into the ground, the purchase of Avant at an 87% premium to market prices could be seen as a sign of encouragement that some tech companies' stocks are just too darn cheap. When knowledgeable industry leaders are buying second-tier companies at large premiums, its apparent that investors have over-sold at least some stocks. Avant!, though, unlike many beaten-down stocks, has been profitable.
You and Your Money
Americans are weird.
Okay, let's qualify that statement. Americans are kind of weird about money. For instance:
- 48% of us would dress more revealingly to double our salary.
- 22% of us would go up against a heavyweight boxer for $100,000. (Better make sure your plastic surgeon has a ringside seat.)
- We tip less at restaurants on rainy days, and more on sunny ones, when the bill comes on a tray, and when we're eating alone. And the tip improves when waitresses draw a smiley face on the bill. When waiters do it, we're less generous.
That's what average people like us (well, people who aren't quite as good looking as we are) do, according to author Bernice Kanner in her new book, Are You Normal About Money?
Through statistics and surveys, Kanner provides insights on how "normal people" physically handle money (72% of us store our bills in rigid order with smaller currency leading up to higher denominations) and emotionally react to financial matters (half of us lose sleep worrying about money).
How normal are you about money? Let's see...
Are you likelier to sell stocks that have gone up or down?
Three out of four people are likelier to cash in the winners.
How often do you check stock quotes?
41% do it once a day; 33% do it 3 or more times a day; 10% never check.
How often do you count the money in your wallet?
One in 10 of us never do, while 15% tally their loot at least once a day.
Do you cheat on your taxes?
Yeah, right. Only a third of people admit they occasionally exaggerate expenses or deductions and 21% to not reporting all income earned.
What's friendship worth to you?
25% of us would abandon all our friends for $10 million.
Are You Normal About Money? is a sequel to Kanner's 1995 book, Are You Normal? For now we'll spare you the details about our toenail grooming habits and whether or not most of us believe in ghosts.
Free Computer Memory
Computer users won't forget this year, with memory upgrades a steal. But where customers benefit from lower prices, the memory makers are getting killed. DRAM (dynamic random access) manufacturers -- the DRAMurai -- are giving blood involuntarily, selling DRAM in all its incarnations for below cost at up to 90% of former prices.
It's a classic tale of too much supply, declining demand. According to Gartner Dataquest, the DRAM market collapsed 67% from $31.8 billion in 2000 to an estimated $10.5 billion this year, and will drop another 19% drop in 2002 to $8.5 billion.
Eyes focus on the top four DRAM makers Samsung, Micron (NYSE: MU), Hynix (formerly Hyundai Electronic Industries), and Infineon (NYSE: IFX). South Korea's Hynix has balanced its $6.6 billion of debt on the edge of bankruptcy for months, and now Micron executives will travel to Japan to check out a possible acquisition, supply agreement, or asset purchase. Japan's Toshiba is also reportedly in talks with Infineon.
Micron, with $1.67 billion in cash and short-term investments as of August 30, and negative free cash flow for the last three quarters, can't have any interest in taking on a Sorak (Korean mountain range -- show off!) of Hynix debt, but it presumably wouldn't mind snapping up Hynix's Oregon facilities to hoard for a future market upturn. Micron shares closed yesterday at $28.56, within a 52-week range of $16.39 to $49.61.
Lovely, Luscious Lucent
Those scanning the business news wire today may have run across the following screaming headline:
LUCENT STARTED AT 'ATTRACTIVE' AT THOMAS WEISEL
Attractive? We can at least give Thomas Weisel credit for thinking outside the "Buy/Sell" box, and for inspiring the following gems from our Fool staff:
Avon = Beautiful
Waste Holdings = Smelly
Northwest Natural Gas= Passing
Nokia = Finnished
AT&T = Busy
Enron = Unbelievable
Gateway = Holey Cow
JDS Uniphase = Light
Anheuser-Busch = Tipsy
Playtex = Supportive
Martha Stewart = Fussy
Playboy = Lascivious
Johnson & Johnson= Repetitive
Philip Morris = Secondhand Sell
Pfizer = Outperformance Anxiety
Excite@Home = Limp
Got a better one? Feel free to post it to our Eyes on the Wise discussion board.
Shameless Plug Department: 18 Stocks Poised to Beat the Market
Looking for an emerging giant in the casual apparel business? How about a credit card company with a leg up on the competition? There are 16 more stock ideas where these come from. Check out this year's Industry Focus.
AT&T Corp (NYSE: T) backed out of an agreement to buy the assets of Excite@Home. The former broadband leader and number three portal, now three-penny stock -- just enough to buy an opera -- seemed to have little choice but to close its doors. AT&T was miffed that Excite@Home had cut off many of its customers last week, while creditors played hardball in negotiations with Ma Bell. Comcast (Nasdaq: CMCSK), Cox Communications (NYSE: COX), and others have negotiated separate deals to keep their customers' lines lit during the transition to the cable companies' services.
Sprint Fon Group (NYSE: FON), which consists of the telecom giant's wireline businesses, dropped abruptly after the company lowered earnings per share expectations for the fourth quarter from $0.37-$0.39 to $0.31-$0.33. Sprint said that fourth-quarter revenue should fall 5%-6% year-over-year to $4.1-$4.2 billion. The cause of the shortfall is slower-than-anticipated data traffic and continued weakness in telecom equipment. To make up for some of the loss, Sprint is scaling back capital expenditures in 2002 from an estimated $4 billion to $3.5 billion.
You think you've got problems? The U.S. Postal Service has problems. It lost $1.7 billion for the fiscal year, which ended September 30, making last year's $199 million shortfall look like a moderately bad day in Atlantic City. Mail volume fell in all categories except first class, which rose only a miniscule amount. Of course, not all of this happened after September 11, but the terrorist attacks made a bad situation much worse -- and that doesn't even count the anthrax scares of October, which will cost the USPS $3 billion to clean up and protect against. Look for a big jump -- maybe $0.03 -- in the regular stamp rate.
And Finally...
Today on Fool.com: Do you know what it means to "grok" your investments? Find out in the Rule Breaker Portfolio report. Whitney Tilson says that unfortunately Enron investors could have seen it coming in "Lessons From the Enron Debacle." And it's time for financial analysts to become accountable.
Contributors:
Zeke Ashton, Brian Bauer, Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, Brian Lund, Rex Moore, Bill Mann, Selena Maranjian, Dayana Yochim
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