Stocks in Motion: Chalone
Updated from 11:34 a.m. EDT
Shares of Ultimate Electronics (ULTE) were among the Nasdaq's losers Monday, falling 53.7% after the company warned that it is mulling a possible reorganization.
The retailer's lenders previously said they would need more reserves against various loans. And although the company's Thanksgiving weekend sales showed improvement, fourth-quarter sales have been "weak," Ultimate said. The company, as a result of that fourth-quarter weakness, anticipates that it will be in violation of one or more financial covenants under its credit facility. The company intends to ask for a waiver from its lenders, it said.
Ultimate said lower sales, the more stringent reserve requirements and potential loan covenant violation raise "substantial doubt about its ability to continue as a going concern." As a result, the company is exploring all of its strategic alternatives, including a possible reorganization of its business. Shares traded down $1.30 to $1.11.Chalone Wine Group (CHLN) rose 17.5% after the company said it received an acquisition proposal that is superior to the $11.75-a-share merger price offered by Domaines Barons de Rothschild. The winemaker said that Rothschild has until Dec. 17 to present a counter offer to the $13.75-a-share offer received by the undisclosed suitor. If Rothschild does not offer a better deal, Chalone said it would terminate its agreement with Rothschild and pay a breakup fee of $2.475 million, which would be paid by the new acquirer. Shares traded up $2.06 to $13.85. Shares of Tuesday Morning (TUES) fell 17.3% after the retailer warned that fourth-quarter earnings would fall below expectations. The company expects earnings of 83 cents a share. Analysts surveyed by Thomson First Call had been expecting earnings of $1.05 a share. For the full year, the company expects earnings of $1.44 a share on sales of $890 million. Analysts had been expecting earnings of $1.67 on sales of $936.1 million. The company said weakness in some of its key decorative home categories and in some of its seasonal merchandise led to the bleak outlook. Shares traded down $6.27 to $30.01.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV