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Netflix, Jos. A. Bank, and Men's Wearhouse Soar on Big Deal Action

By Jack Kramer and Nick Martell – Feb 25, 2014 at 6:00AM

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Good morning, good lookin'... The three things you need to know on February 25th are:

The S&P 500 reached a record high of 1,859 points midday? You should probably celebrate with one of those freaky waffle breakfast tacos from Taco Bell, which appropriately has around 1,859 calories. The Dow jumped a healthy 104 points, too, Monday to start the week right.

1. ebay pops after Icahn hate
Don't freakin' mess with Carl Icahn. The activist super investor has got gray hair, but boiling youthful blood when it comes to the management of his investments. On Monday, he lashed out hard at eBay(EBAY -0.42%), in which he owns nearly 1% of all outstanding shares, through a letter he posted online.

So what'd he say? First, he reamed two directors who he said are invested in and advising companies that directly compete with eBay. Then, he reiterated his desire for eBay to spinoff Paypal (which it owns) into its own company. And he didn't say "please," or ask nicely. He demands shareholder-friendly moves, and the Paypal spinoff (casting it off into its own separate company) would be one of 'em.

The takeaway is that this isn't activist Icahn's first use of aggressive "do-it-my-way" hate mail. He only recently stopped writing aggressively to Apple about what the company should be doing with all its cash. eBay countered Icahn hard, saying he was "cherry-picking old news clips;" but that probably won't put an end to Icahn's favorite hobby besides investing billions.

2. Netflix pops on Comcast deal 
Congratulations... you can now sit on your couch and not have TV-time interrupted. After a multi-year standoff with multiple Internet providers like Verizon, Netflix (NFLX -2.04%) will pay cable giant Comcast (CMCSA 0.34%) to use its broadband network, improving streaming to Comcast customers. Wall Street gave the deal two thumbs up, as NFLX rose 3.4% Monday.

A court ruling last month threatened to cause a season's worth of House of Cards viewing to take two weekend days instead of one. The federal court ruled that Internet companies can give preferential treatment to certain websites, putting at risk Netflix, whose users consume about a third of all U.S. broadband. This deal keeps Netflix viewers safely on the VIP list at the largest Internet club.

The takeaway is that this is big for both companies. Just last week, Comcast agreed to buy Time Warner Cable, making it the Godzilla of U.S. broadband providers. And for Netflix, users can now stream more quickly and smoothly like there's no tomorrow.

3. Men's Wearhouse increases bid to buy Jos. A. Bank
The battle for cheap suits continues as Men's Wearhouse (TLRD) raised its offer by 10% to acquire rival Jos. A. Bank (NASDAQ: JOSB). The back-and-fourth corporate slugfest goes on, as each company tries to devour the other, and the stock prices keep driving up.

How did this all begin? In October, Jos. A. Bank publicly offered to purchase all the shares of larger Men's Wearhouse, but the Board of MW was offended and insulted by the offer from the smaller company. MW counter-offered with a takeover bid of its own, and JOSB has been running like a scared dog ever since. It even announced it was buying teeny little Eddie Bauer, just so it could grow large enough to become too-big-to-be-acquired by Men's Wearhouse (and so it could wear plain looking outerwear while doing so).

Men's Wearhouse now offers $63.50 per share of JOSB stock -- and it will up the offer to $65 if they drop their silly Eddie Bauer acquisition gimmick. The combined company seems bound to benefit from domination in the cheap-suits market for men who begrudgingly need to put on loafers and a two piece in the morning. MW and JOSB are up 7.5% and 9%, respectively, Monday, while both are up more over 35% since the battle to eat the other began. 

Tuesday:

  • Consumer Confidence Survey
  • Fourth-Quarter Earnings Reports: DreamWorks, Macy's

MarketSnacks Fact of the Day: One bike is stolen for every 15 daily bike riders in San Fran -- but find my iPhone is reporting for duty to fight crime.

As originally published on MarketSnacks.com

Jack Kramer and Nick Martell have no position in any stocks mentioned.  The Motley Fool recommends eBay and Netflix. The Motley Fool owns shares of eBay and Netflix. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Netflix Stock Quote
Netflix
NFLX
$285.54 (-2.04%) $-5.96
Comcast Stock Quote
Comcast
CMCSA
$35.65 (0.34%) $0.12
eBay Stock Quote
eBay
EBAY
$45.04 (-0.42%) $0.19
Tailored Brands Inc Stock Quote
Tailored Brands Inc
TLRD

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