If you're the competitive type, it's going to be a good evening to sit in front of the TV. Red Sox vs. Angels at 4:00. Twins vs. Yankees at 8:00. And Edwards vs. Cheney at 9:00. Sit back, order a pizza, and let the fun begin.

In today's Motley Fool Take:

An Opportunity From Chiron's Misfortune?


Alyce Lomax (TMF Lomax)

Wow, it's hard to believe that we could have another flu season with a dose of vaccine-related drama. Last year, MedImmune's(Nasdaq: MEDI) no-stick FluMist vaccine flamed out despite the fanfare preceding its launch. Today, we learned that Chiron(Nasdaq: CHIR) is leaving us high and dry this year after a U.K. regulatory body suspended its manufacturing license because of contamination.

Chiron, which has supplied flu vaccine to the U.S. for two years, was supposed to have shipped about half our vaccine this year; the other major supplier is Aventis SA(NYSE: AVE). The whole thing started in August, when Chiron announced a related delay in vaccine delivery. Despite the company's vows that it would provide the vaccine, Chiron investors ended up getting burned today, with shares down as much as 21% at one point.

Some investors are likely now mulling over MedImmune's prospects, since one major player has been removed from the running this year. There's no problem with wondering whether one company's misfortune is another's windfall. However, in August, CBS MarketWatch reported that MedImmune did not intend to bolster production of FluMist based on Chiron's vaccine delay. Perhaps there is a little room for FluMist to pick up the slack now.

Furthermore, MedImmune still faces obstacles in widespread adoption of FluMist. Although the FluMist price tag of $23.50 announced in June is more palatable than last year's, whether customers accustomed to paying half that amount will balk remains to be seen. Storage remains an issue. Most important of all, perhaps, is that FluMist is still not FDA-approved for the people who need it most -- the elderly and small children.

According to the Centers for Disease Control, many, many people simply ignore public health officials' requests that we all get vaccinated against the flu, even though the "real deal" (as opposed to a garden-variety cold or such) is a truly dangerous disease. More disturbing is that only a small percentage of folks in the age-related danger zone bother getting vaccinated.

Granted, chances are much better that this year MedImmune won't have to give FluMist away, at any rate. However, investors ought to tread carefully here. Some analysts are predicting a severe lack of credibility for Chiron after this debacle (no argument there, considering the company's insistence that a safe vaccine supply would be forthcoming despite the delay), so investors ought to contemplate whether this is a short-term setback or a real problem -- when it comes to PR and good manufacturing practices.

And, as stated above, anyone eyeing MedImmune needs to be aware that despite any opportunity this provides, FluMist isn't yet completely ready for prime time.

In the meanwhile, maybe the rest of us had best stock up on our vitamin C.

Alyce Lomax does not own shares of any of the companies mentioned.

Discussion Board of the Day: TV Banter

Has TV political content interrupted your fall season viewing habits? What are you watching these days? All this and more in the TV Banter discussion board.

PeopleSoft's Courtroom Confession


Tim Beyers

You'd think that after the disaster Jean-Marie Messier created at Vivendi(NYSE: V) by overhyping the prospects of an aging French water utility, no executive would ever again resort to lying about his company's prospects.

Yeah, you'd think, but we don't live in fantasyland. So I guess you can color me unsurprised that the reason Craig Conway was fired as CEO of business software maker PeopleSoft(Nasdaq: PSFT) was because... wait for it... he was less than honest in describing PeopleSoft's sales prospects. Oops.

The dirty laundry was aired yesterday at the opening of the trial in Oracle's(Nasdaq: ORCL) suit to remove anti-takeover provisions that would allow it to move forward with a $7.7 billion hostile acquisition of PeopleSoft. Director Steven Goldby took the stand and described how Conway misled analysts in September 2003 when he said that Oracle's bid was having no impact on sales. Goldby also said that the board took action shortly afterward, amending his comments in a transcript filed with the Securities and Exchange Commission.

But Conway didn't get into hot water until recently, when in a deposition relating to the trial he gave his reasons for stretching the truth. A report at Forbes.com quotes Conway saying in the deposition that he was "promoting, promoting, promoting." And that he decided to brush off the impact Oracle's bid was having on sales because he was "hoping for a self-fulfilling prophecy."

Are you kidding me? News flash, folks: Denial isn't a strategy and is best reserved for the dark sitcoms making the rounds on HBO. It's as if Conway was planning a guest spot on Curb Your Enthusiasm rather than running a $2 billion a year software firm. No wonder the board fired him.

Of course, amid the comedy is an important lesson for investors: Run away from any firm that gets so caught up in promoting itself that it takes its eye off business fundamentals. That's probably what happened with PeopleSoft under Conway. New CEO Dave Duffield is unlikely to let that happen again, but it's probably too late for it to matter.

Indeed, in follow-up testimony this morning Goldby admitted that PeopleSoft's board would be willing to talk about a deal if the price were right and the acquisition could be closed quickly. Does anyone doubt the database king will agree to those terms? I don't.

It's time to get ready for OracleSoft.

Need to get current on the Oracle-PeopleSoft love-hate affair? Try these Foolish tidbits:

  • When Conway was sacked last week, I argued that OracleSoft was inevitable.

  • But a white knight like IBM(NYSE: IBM) could step in and rescue PeopleSoft. Microsoft(Nasdaq: MSFT), however, has already said it wants no part of a deal.

  • Oracle has been on the up, but its recent results make a PeopleSoft acquisition more inviting.

  • Fortunately, a federal judge decided that Oracle could go ahead with its bid.

Fool contributor Tim Beyers owns shares of Oracle. You can view his Fool profile here.

Quote of Note

"If man does find the solution for world peace, it will be the most revolutionary reversal of his record we have ever known." -- George C. Marshall, U.S. general

Wal-Mart Looks Overseas


Seth Jayson (TMF Bent)

If you can't get enough of the big gray boxes that line our nation's highways, then you should be happy with Wal-Mart's(NYSE: WMT) latest plans. Yesterday's release detailed management plans for expansion that, to judge by the headlines, will give us 8% more square footage to love and/or loathe, in the form of traditional stores, Supercenters, Sam's Clubs, Neighborhood Markets, and international branches.

It will certainly be enough to stay ahead of competitors in the space, such as Target(NYSE: TGT), Costco(Nasdaq: COST), Dollar General(NYSE: DG), Family Dollar(NYSE: FDO), and just about everybody else. But while it sounds like a lot, the circa-185 tally for new U.S. stores is actually smaller than what was planned in last year's nearly identical release. A more notable difference is that fiscal 2005 (this year) called for 100 new international locations, but the 2005 goal is 35% higher.

It's not hard to figure out why. Even without the $1.5 billion boost from foreign exchange gains, Wal-Mart's international revenue growth is outpacing domestic sales by a hefty margin. For the first half of this year, international revenues constituted more than 19% of Wal-Mart's total sales. That performance helped perk up margins earlier this year.

But a bigger foreign presence isn't necessarily the final antidote for sagging comps back at home. Operating margins were 5% overseas so far this year. Sure, that's a lot better than the 3.4% at Sam's Club, but it's not nearly as juicy as the 7.5% enjoyed by domestic Wal-Mart. Moreover, those pesky foreigners aren't always so excited to have America's gorilla retailer, or its local surrogate, roll over the indigenous merchants.

Time will tell whether this strategy pays off. Until then, investors need to keep an eye on the firm's same-store sales. If growth is coming mainly via expansion, the shares should be priced accordingly.

For related Foolishness:

Seth Jayson has no positions in any company mentioned. View his stock holdings and Fool profile here. Fool rules are here.

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For a list of all our stories from today, see our Today's Headlines page.