5. Boeing's Bad Dream Just when Boeing's ( BA) brass finally thought they could sleep at night, the company's recurring Dreamliner nightmare once again turns the heavenly skies into their own version of Elm Street. Heck, even Freddy Krueger must be tired of Boeing's media bloodbath by now -- and he haunted kids' dreams in nine movies! Regulators around the globe grounded the Dreamliner for safety checks Wednesday after one of All Nippon Airways ( ALNPY) fleet was forced to make an emergency landing. This problem in this latest case was a cockpit message showing battery problems along with a burning smell that was detected in the cabin. Forget the unpleasant odor of airline food -- sniffing a burning battery 35,000 feet above Tokyo must really turn your stomach. The grounding comes only two days after Japan's transport ministry announced its plan to investigate two fuel leaks that popped up on a Dreamliner in Boston owned by Japan Airlines. For the record, the Dreamliner is not just big in Japan, but huge, with Japanese airlines accounting for nearly half of the 50 planes currently in service. Prior to this latest move, Japanese regulators, along with their counterparts at the U.S. Federal Aviation Administration, seemed dead-set on keeping the $207 million plane in the air as they studied its nagging problems. For example, Transportation Secretary Ray LaHood sounded more like a cheerleader than a regulator last Friday when he told reporters he had "absolutely no reservations about boarding one of these planes and taking a flight." Sorry, Ray, but that type of tough talk is not going to fly anymore. With safety concerns being splattered all over the headlines, old Freddy himself would lose sleep before boarding a Dreamliner at this point. The steadfast reassurance by government officials like LaHood also kept Boeing's shares flat in the past few weeks, when by all rights they should have been nose-diving on the steady stream of bad news. That's changed as well. Goldman Sachs acknowledged the crisis of confidence Wednesday by yanking Boeing from its conviction-buy list and cutting its price target on the company to $90 from $98 a share. Boeing stock fell almost 4% on the day. Responding to the FAA decision, Boeing CEO Jim McNerney said in a statement: "The company is working around the clock with its customers and the various regulatory and investigative authorities. ... We are confident the 787 is safe and we stand behind its overall integrity." Thanks, Jim, but standing behind it is not the problem. Flying inside it is. Meanwhile, even as Boeing is suffering a death by a thousand tiny cuts from its Dreamliner woes, the company will soon be featured in another slasher movie. Almost 40% of Boeing's sales come from its defense business, which could be hard hit if the upcoming debt-ceiling battle turns bloody. If that's the case, then this latest Dreamliner horror show may turn out to be merely a sideshow.
4. Given's Gut Check One would have thought Given Imaging ( GIVN) would have looked deeply inward before lifting and then dashing investor hopes about a sale. Seriously, it's an endoscopy-technology provider! If they don't do it, who will? The Israel-based camera-in-a-pill maker announced Tuesday it will not merge or sell itself and will focus on its existing operating plan. Given Imaging added that Discount Investment Corp., which owns 45.5% of the company, planned to unload of its controlling stake in Given in one big, fat block. "After a thorough exploration, the executive committee of the board of directors ... concluded that the continued execution of the company's operating plan, supplemented by additional acquisitions and alliances, provides the best opportunity at this time to enhance value for all of the company's shareholders," the firm said in a statement. Shares of Given gave back over 11% on the news, or roughly the entire amount of its run-up following its mid-October announcement that it was exploring a sale "in order to maximize growth and enhance shareholder value." Let's get this straight: The company whets shareholders' appetites with mouth-watering talk about a juicy deal, invites everybody to the party and then turns around barely three months later and says it's serving up the same old stuff. Forget about an endoscopy. Sounds more like Given gave its shareholders a colonoscopy instead.
3. Zuck's Cry for Yelp Aw shucks, Zuck! Did you really need a huge press event to step all over itty bitty Yelp ( YELP)? Next time, pick on somebody your own size! Facebook ( FB), which sports a $65 billion market cap, mind you, used Tuesday's mystery event at its Menlo Park headquarters to unveil "Graph Search," a new way to search the billion people and more than 240 billion photos on Facebook. The frenzied days leading up to the much-hyped press conference had Facebook fans speculating about everything from a video-streaming deal with Netflix to a Facebook phone. In the end, however, all they really got was a bigger search bar at the top of each page. And, to be precise, they are not even getting even that much. Right now the beta-search technology is available only to a small number of people who use Facebook in the U.S. and are willing to sign up and wait for it. But Facebook's users were not the only ones CEO Mark Zuckerberg left wanting. Wall Street's analyst community didn't get any specifics on how they plan to monetize this new function. All Zuck had to offer them was a vague promise that "this could be a business over time." Facebook's investors were left similarly unfulfilled. Shares of the company, which had gained momentum in recent weeks following its post-IPO funk, fell almost 3% after the announcement. Facebook's competitors also left Zuck's party empty-handed in a sense. Google ( GOOG), which sports a $238 billion market cap, exited with the knowledge that it did not have a real serious search competitor, despite Facebook's hefty valuation. As for Apple ( AAPL), well, it departed with the knowledge that Zuck is not the hoodied second coming of Steve Jobs. Then again, Apple has its own problems right now and neither Steve Jobs nor Larry Bird is walking through that door to help it. Which brings us to Yelp. Yelp, which weighs in at relatively puny $1.3 billion in value, saw its shares tumble 6% on worries that Facebook's new offering would cut into its recommendations business. Specifically, Yelp investors fretted that Facebook users would eschew its services in order to query Facebook for things like "delis that don't make my friends sick" or "steakhouses that serve salmon that my annoying friends will like." Yep, what started out as an opportunity for Zuck to prove his company deserves to be in the same fighting class as heavyweights Google and Apple turned into a whimpering cry for Yelp. And nothing more.
2. HerbalifeMania Sorry, folks, but this hedge fund fight over Herbalife ( HLF) is just too big for the close confines of Wall Street. Even with all the extra security the NYSE has added over the years, we simply don't think it can handle hostile combatants armed with this much firepower. There is only one man who can host a battle royal this big, in our opinion. And now that his wife is done spending his millions in futile bids to become a low-paid public servant, he can finally get back to business. Yeah, you know who we're talking about. We can see it on the marquee at Madison Square Garden now: WWE's Vince McMahon presents HerbalifeMania. Damn straight. Forget talking heads blabbering on CNBC or speeches at the next Ira Sohn Conference. Only Vince can pull off a production befitting this heavyweight matchup. In one corner, Bill "The Animal" Ackman (no relation to George "The Animal" Steele as far as we know). Ackman, who runs the $11 billion Pershing Square hedge fund, is betting $1 billion that Herbalife stock will fall to zero. He laid his case right on the mat in a 300-plus slide presentation -- the dreaded PowerPoint being Ackman's fiercest move -- in which he called the weight-loss supplement maker a "pyramid scheme." Tending Bill's corner as his manager will be David "The Unicorn" Einhorn. He leveled Lehman Brothers, strafed St. Joe and hammered Herbalife shares by 30% last spring with a single question. But this time around he's guarding his buddy's back because Bill's got a massive target on it -- and the last thing Bill needs is another Target. And in the other corner, Dan "The Resume Reader" Loeb (after his vicious takedown of former Yahoo CEO Scott Thompson). Loeb runs the $10 billion Third Point fund, and he reportedly has been itching to take a swing at Ackman ever since they failed miserably in their attempt to tag-team Target. Loeb slammed Ackman's Herbalife fraud accusations and said he amassed an 8% stake in the company "during the panicked selling that followed the short seller's dramatic claims." Shares of the company sank almost 40% to $24 on Ackman's attack, but have returned to pre-Ackman levels since Loeb threw his hat in the ring. In Loeb's corner is Herbalife CEO Michael Johnson. Frankly speaking, Johnson should remain as quiet as Mr. Fuji because he never really helps his company's case when he pops up on CNBC. (Not that Loeb needs any help in a brawl, anyway, as the newly unemployed investment bankers at Morgan Stanley are now learning.) Finally, the referee will be Herb "No Relation" Greenberg. The CNBC commentator wants to be in that ring. Scratch that. Herb needs to be in that ring and we want him there, too, especially if he's hyped up on Green Mountain Coffee. It will be Herb's job to maintain a fair fight and keep billionaire investor Carl Icahn out of the squared circle. Or let him in. Heck, the more, the merrier. All that leaves is the rules for Vince's hedge fund free-for-all. Should it be a Lumberjack match? Ironman match? Steel cage, perhaps? No way. It's gotta be bigger than that. We're talking "Loser Leaves Greenwich." And it's on, baby!
1. HP's Sunny Day The sun don't shine on the same dog's ass every day, but it's been a long time since HP ( HPQ) has seen the ray of light it's getting now -- even if it is being reflected off Michael Dell's money clip. HP shares climbed over 4% Wednesday following a news report that unnamed purchasers -- stirred perhaps by Dell's ( DELL) buyout discussions -- are considering buying some of its units. The WSJ reported this week that the humbled tech giant has received "expressions of interest from potential suitors" for its EDS and Autonomy divisions, but CEO Meg Whitman was uninterested in selling at this point. For those who may not remember, HP acquired EDS for $13.9 billion in 2008. In August 2012, HP took a charge of $10.8 billion, mostly related to the writedown of the computer-services company. Oh, man, HP's prankster friends on Wall Street really gave them some great valuation advice on that one. Talk about earning your advisory fee. As for Autonomy, well, it's hard to forget what happened there, even though Whitman wishes she could. HP's then-CEO, Leo Apotheker, snapped up the U.K. software maker in August 2011 for $11.1 billion, shelling out a 58% premium to the British company's shares at the time. Last autumn, however, the purchase was thrust into the spotlight when HP recorded a massive writedown of $8.8 billion relating to accounting improprieties at Autonomy prior to the acquisition. Obviously, whichever banker did the due diligence on that schnauzer of a deal clearly wasn't being very diligent. The two sides are currently in litigation, making it even more curious as to why a buyer would want to step into that morass. That said, Silicon Valley CEOs have a habit of doing whatever Wall Street salesmen whisper in their ears. And on that note, we can't wait to see what happens with Dell. Private equity groups are arranging billions in financing as we speak for a buyout of the once-proud PC maker that could top $24 billion. Yee haw! We haven't seen a deal in the Lone Star state this big since the TXU LBO. And we all remember what a Texas-sized turd that turned out to be. Look: Wall Street pocketed massive fees to build up HP and now they want even more to break it up. As a result of all the attention, HP shareholders are finally getting their day. Good for them. As we all know, every dog deserves at least one.