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Microsoft, Dell slip; Yelp, Netflix jump

By Rex Crum, MarketWatch

SAN FRANCISCO (MarketWatch) — Tech stocks put in a broad slate of gains Friday, even with several bellwethers closing in the red, on a day that was dominated by mixed Wall Street reactions to Microsoft Corp.’s reorganization plan and Dell Inc.’s slip following the latest proposal from billionaire activist Carl Icahn.


Microsoft CEO Steve Ballmer at the company’s Build conference last month.

Offsetting those losses were Netflix Inc. and Yelp Inc. — the latter of which set a new all-time high on a positive analyst note.

Icahn, who along with Southeastern Asset Management is opposing an effort led by Dell

/quotes/zigman/27952/quotes/nls/dell DELL

 Chief Executive Michael Dell to take the PC company private, on Friday proposed an offer that would value Dell shares at $14 each, along with a warrant for every four shares tendered. Michael Dell’s current offer, in league with the equity firm Silver Lake, to take Dell private values the company at $13.65 a share.

Investors didn’t immediately rally behind Icahn’s offer, as Dell’s shares slipped 3 cents to close at $13.32. The meeting for shareholders to approve or reject Michael Dell’s privatization bid takes place next Thursday.

Microsoft Corp. shares

/quotes/zigman/20493/quotes/nls/msft MSFT

 pared back by 2 cents to close at $35.67 a day after Chief Executive Steve Ballmer unveiled a major realignment of the software giant’s business operations.

“While we understand that the company’s changes have the potential to improve efficiencies, we believe Microsoft is in need of innovation, not a more streamlined operating structure,” wrote David Hilal of FBR Capital, who maintained a market perform rating on the stock. “Furthermore, we believe a company of Microsoft’s size, as well as where it sits in the sluggish PC environment, faces considerable execution risk and a significant lag time before any material impact.”

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The Nasdaq Composite Index

/quotes/zigman/12633936 COMP

, however, rose almost 22 points, to close at 3,600, while the Philadelphia Semiconductor Index

/quotes/zigman/1468249 SOX

rose 0.6%.

Advancers included Inc.

/quotes/zigman/63011/quotes/nls/amzn AMZN

, which reached another high of $307.55 a share after climbing above $300 for the first time Thursday.

Yelp Inc. shares

/quotes/zigman/9021597/quotes/nls/yelp YELP

 hit an all-time high during the session before closing with a gain of more than 5% at $39.40. Before the market opened, Needham Co. analyst Kerry Rice initiated coverage of the online review and recommendation company with a buy rating and $45-a-share price target.

In a research note, Rice said he took his position on Yelp because the company “has successfully established itself as a key online marketing and lead generation platform for small and medium-sized businesses in North America and is taking strides in becoming a necessary advertising medium for local businesses worldwide.”

Online medical-information company WebMD Health Corp.

/quotes/zigman/98206/quotes/nls/wbmd WBMD

 saw its shares surge more than 25%, to close at $33.82, after it raised its full-year forecast following better-than-expected second-quarter results.

Netflix Inc. shares

/quotes/zigman/87598/quotes/nls/nflx NFLX

 rose more than 5% to $257.26 following reports that the company was in talks about producing another season of the series “Arrested Development.”

Additionally, Netflix was seen as benefiting from the announcement that the studios that own rival Hulu have decided not to sell the online video-streaming service but to maintain joint ownership and recapitalize it.


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Mystic Maggie

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