The DOW started the new trading week on a down note, trading lower for the fourth trading day in a row and settling in at below the 13,000 mark. News headlines have gone negative on the hopes of continued economic momentum, as predicted, with both sides of the political spectrum playing up the March jobs report to benefit their own respective interests.
This week we'll take a look at some falling stocks that may trade down with the market for the time being, but could quickly rebound when the downward momentum is finished thanks to expectations of solid news developments or pending catalysts that could help reverse the trend.
With the market dipping, there were also some solid new bytes hitting the wires. We'll also take a look at some companies that may be bucking the downward trend and moving higher based on key developments.
And the Mets at 4-0? I didn't have these guys winning four games until June.
Facebook (FB), Yahoo! (YHOO), Microsoft (MSFT) and AOL (AOL): All the big players in the Internet world are gearing up for the pending IPO of Facebook, which is slated to take place next month.
This IPO is being touted as the biggest since Google's (GOOG) a few years back and anticipation has been building as Facebook chose the Nasdaq over the NYSE last week as its trading board of choice. Not to let the growing momentum of anticipation slow down, Facebook opened up the new trading week by making a billion-dollar splash with the purchase of the photo-sharing company Instagram.
CEO Mark Zuckerberg noted that investors should not expect Facebook to spend its free cash in this manner too often, if at all again, but the company liked Instagram's infiltration into the mobile market. The purchase of Instagram has sparked some comments that another photo-sharing company, Shutterfly (SFLY) could become a buyout target of a Facebook competitor. Given SFLY's four percent Monday drop, however, investors may not be taking that notion too seriously.
In the meantime the patent wars are heating up for these Internet giants.
Facebook and Yahoo! (YHOO) are engaged in all-out war, with companies playing suit and counter-suit in the courtrooms. In what could be viewed as a preemptive strike, Microsoft (MSFT) paid a billion dollars of its own to purchase over 800 patents from AOL (AOL) last week. In addition, AOL grants Microsoft a license to also utilize the patents still retained by AOL after the deal is complete.
The growing amount of patent-based lawsuits in America shows us that market share is not the only indicator of a company's power potential, but patents are pretty valuable too - valuable enough that innovation could be stifled as legal disputes live on.
Watching these four giants in action is akin to watching The Rock and John Cena play out a year's worth of hype before settling the score in Wrestlemania.
Shares of AOL were flying on the news, while MSFT and YHOO went relatively unchanged.
Impant Sciences (IMSC): VFC's Stock House has been keeping a close eye on Implant Sciences over the past few weeks after an increase in volume looked to be positioning the stock for a major boost in price based on developments regarding potential new distribution for the company's explosive and narcotics detectors.
The "major boost" may have taken shape on Monday as volume of more than five times the daily norm led to a near-twenty percent boost in price on the day. Shares closed Monday at just a hair below the one dollar mark.
Recent comments from the company and speculation by investors have indicated that a deal with the United States Transportation Security Administration (TSA) is expected to be consummated in the coming months. Such an event would be a huge victory for the small company and would undoubtedly place this stock in prime time, given the increasing security needs at transportation hubs globally.
In this game nothing is a done deal until it's a done deal, but the recent boost in price is certainly encouraging that things are about to get exciting for investors of Implant.
Thus far, IMSC has bucked the market trend and should continue to do so if news patterns remain positive.
Cytosorbents Corporation (CTSO): In preparation for growing commercialization in Europe for CytoSorb, a blood purification treatment for severe sepsis and other indications where high cytokine counts are present, Cytosorbents Corp (CTSO) announced the establishment of a European subsidiary on Monday.
CytoSorbents Europe GmbH will have offices in Berlin, Germany and will "manage distribution, sales and marketing, and customer support throughout Germany and other European countries."
The company is also looking to license or sell its HemoDefend blood purification technology.
Share initially moved as high as five percent on the subsidiary news before pulling back at the end of the day to settle at price two percent higher than the previous close.
Capstone Turbine (CPST): Capstone Turbine's (CPST) low-emission microturbine units continue to gain significant traction in the North American shale gas market. The company announced on Monday that it has received two orders from the Eagle Ford shale gas play, one from a new customer and the other a re-order from a customer already sporting a fleet of Capstone's microturbines.
In total, the news orders will send 12 microturbines to the Eagle Ford fleet.
Capstone's share price has dipped below the dollar mark again with heavy short interest and a general market downswing weighing heavily on the stock, but history has shown us that CPST can rebound nicely from such lows.
CPST remains a solid green energy pick, in my opinion, as the company inches towards profitability.
Spectrum Pharmaceuticals (SPPI) showed last week that the company's business plan does not include sitting around idly by after experiencing developmental setbacks. The purchase of Allos Therapeutics (ALTH) helps to offset the Phase III trial failure of apaziquone but also demonstrates to investors that the company is gunning for prime time, setback or not. Investors may not be so convinced as shares fell significantly for a second straight day...Ampio Pharmaceuticals (AMPE) fell by over seven percent on Monday as the company announced that it will seek a pathway for approval for its premature ejaculation (PE) treatment, Zertane, in the United States. Currently the FDA does not see PE as a medical need...CellDex Therapeutics (CLDX) down ten percent on the heels of initiated analyst coverage of 'Buy'...Amarin Corporation (AMRN) back to below ten bucks as buyout rumors heat up again...Keryx Biopharmaceuticals (KERX) below $1.50 as investors shift rudders and focus on Zerenex...Happy Trading.
Disclosure: Long AMPE, CTSO, CPST.
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