The Yen Falls in Spectacular Fashion, Stoking a Rally in Stocks

All of the dreams and fantasies of the Bank of Japan Governor, Haruhiko Kuroda, are coming true–at least for today. The yen is falling in spectacular fashion, much to the delight of yen carry trade gamblers, positioned long equities. With the yen dropping by 1.4%, trades have become indelibly profitable from recent levels and it might be time to up the leverage, ahead of the BREXIT results.

It’s worth noting, however, gains in Europe are fading, as traders tuck tail and run ahead of the BREXIT results. Who can blame them, really? The DAX was up more than 2%, now higher by 1.1%. The Italians and their MIB don’t give a shit, still up, whilst drinking wine, by 2.5%

U.S. markets just opened, higher by 155.

Happy BREXIT day.

Adam Jonas is one of the most bullish Wall Street analysts covering TSLA, localed from the venerable investment bank and chief underwriter for TSLA, Morgan Stanley.

Jonas thinks the SCTY deal is horseshit of the very first magnitude and has subsequently slashed his price target for the shares.

Jonas, whose firm has underwritten securities offerings for Tesla, lowered his recommendation on the stock Thursday to equal-weight from overweight and reduced his 12-month target for the stock price to $245 from $333.

“While there may be any number of lucid arguments supporting the strategic rationale of a combination, we believe many of the benefits could have been achieved through arm’s length/strategic partnership and without the risks inherent in exposing Tesla shareholders to the financial and capital markets risks faced by SCTY,” Jonas wrote in a report to clients.

Rumor has it, Jonas has been throwing vases against the walls at Morgan all morning long after publishing this note.

His love affair with Musk is, essentially, over (no homo).

Investment banks have been optimistic about YELP’s prospects as of late. This morning, Needham is out with some bull porn for all of you YELP lovers out there.

Price target has been lifted to $34; hitherto, it was only $28.

Needham raises their YELP tgt to $34 from $28. Firm notes while growing its sales headcount remains a top priority, they are encouraged by mgmt’s increased attention to account mgmt and focus on national advertisers. They believe the positive impact of these initiatives is not reflected in models. However, they believe product innovation is even more important as high-demand products such as Request a Quote or Eat24 should not only enhance sales productivity but also improve retention. These products and the shift to CPC pricing transitions Yelp toward performance marketing and a more transactional business, which should enhance its value over time as it more clearly demonstrates its ability to add value to consumers and businesses. Thus, they recommend shares to investors.

The stock is only up 1.1% in the pre market.

I have no idea who this Ocean Imagination is. Many news sites are wrongly calling them Ocean Management ltd, a defunct British investment firm, which would make sense, being that the Chinese like to produce counterfeits. Maybe this Ocean Imaginaion firm is one giant fiction, an imaginary firm making imaginary bids? What? It’s possible.

Anyway, they made a bid to buy QUNR. Shares are sharply higher in the pre-market.

According to the proposal letter, the Buyer is an entity related to Ocean Imagination L.P., a private equity fund dedicated to investing in travel-related industries in China. The Buyer intends to seek the support of the Company’s shareholders accounting for a majority in voting power of the Company for this proposal. The Buyer also intends to fund the consideration payable in the Transaction with a combination of debt and equity capital, with the equity financing to be provided from the Buyer in the form of cash and any rollover equity capital in the Company from the Significant Shareholders.

The Board has formed a special committee comprised of three independent, disinterested directors, Mr. Jimmy Lai, Mr. Jianmin Zhu and Ms. Ying Shi, to consider the Buyer’s proposal and the transaction contemplated therein. The special committee expects to retain independent advisors, including independent financial and legal advisors, to assist it in this process.
The Board cautions the Company’s shareholders and others considering trading the Company’s securities that the Board has just received the proposal letter and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to the Company’s response to the proposal. There can be no assurance that any definitive offer will be made, that any definitive agreement will be executed relating to the proposed transaction or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

Can one of you Canadians out there tell me who is buying Blackberry devices? How on earth are they going to post positive free cash flow for 2016, as promised?

Back on earth, revenues fell 39% year over year for the Canadian telephone makers. However, they exceeded estimates, guided higher, and have $2.5 bill in cash.

This company is very stubborn and just won’t go away. They sort of remind me of MySpace.

Reports Q1 (May) net of breakeven, $0.08 better than the Capital IQ Consensus of ($0.08); revenues fell 39.2% year/year to $400 mln ($424 mln Non-GAAP) vs the $470.82 mln Capital IQ Consensus.

Co issues upside guidance for FY17, sees EPS of ($0.15) vs. ($0.34) Capital IQ Consensus Estimate.

BlackBerry had approximately 3,300 enterprise customer wins in the quarter. Approximately 74% of the first quarter software revenue was recurring.

Total cash, cash equivalents, short-term and long-term investments was $2.5 billion as of May 31, 2016. This reflects a use of free cash of $65 million, which includes negative $61 million of cash flow from operations.

Outlook: The Company anticipates maintaining a strong cash position and further reallocating additional resources to go-to-market and product development areas as it continues to execute on its strategy of positive adjusted EBITDA for the full 2017 fiscal year. “Our current plan calls for continued investments to expand our addressable markets and drive sustainable profitability and revenue growth. For the full fiscal year, we are on track to deliver 30 percent revenue growth in software and services. Based on a more efficient operating model, we expect a non-GAAP EPS loss of around 15 cents, compared to the current consensus of a 33 cent loss. We also expect to generate positive free cash flow for the full year.”

European markets are really picking up some steam, as the BREXIT vote gets underway in Britain. The voting just started a few hours ago, so the rally must be predicated around some polling data of people sleeping and/or how many of them walk outside with a cup of coffee in their hands vs tea. Rumor has it, it’s the tea drinkers, those devilish bastards, who want BREXIT.

SPY futures soar.

Germany rejoices.

The yen is plunging vs the dollar. This is porn for Kuroda.

Imagine if the UK voted to leave? Thank heavens the tea drinkers slept in.

Nigel Farage has been at the vanguard of trying to dislodge the people of Britain from the effeminate men in Brussels. If he wins this referendum, it would mean a tremendous political win for Farage and UKIP. If he loses, without question, he might never get a chance to become Prime Minister, which is, unquestionably, his end game motive.

Jim Cramer rants and raves about government interference in oligarch designs for world dominance and monopoly. Aside from that, he then proposes the solution to all of our problems would be to merge all companies, left and right, stupid. He posits that share buybacks aren’t enough and that share supply needs to be removed from this fucking market, permanently, via the execution of mergers and acquisitions on an industrial scale.

Sadly, this doesn’t seem to be happening, as CIO’s horde cash like morons, investing in the ark and things of that nature.

Wishcasting at its best.

A. Left is short both SCTY and TSLA and fucking hates both companies with every fiber of his existence. Like Chanos, Mr. Left believes SCTY is a giant fucking donut, masquerading as a $21 security. He rifles through a litany of reasons to be short the stock, stemming from the possibility that the deal might fall through.

Worst case scenario, SCTY shorts transfer over to become TSLA shorts upon consummation of the deal. Best case scenario, Elon Musk is sent packing on one of his Space X rockets to live out his days on Uranus, as SCTY barrels, headlong, towards $00.00.

Good stuff.

Long term critic and short seller of both TSLA and SCTY, Jim Chanos, called the TSLA-SCTY a ‘brazen bailout’, citing the 20% yielding SCTY bonds as evidence that the company was barreling towards financial distress.

Moreover, he said the price action in both SCTY and TSLA’s shares today indicated that TSLA shareholders believe the par value for SCTY was, essentially and inexorably, zero.

Shortseller Jim Chanos of Kynikos Associates blasted Tesla Motors Inc’s proposed acquisition of SolarCity Corp, describing it as a “brazen” bailout and “shameful example of corporate governance at its worst.”

“SolarCity, whose bonds were yielding 20 percent yesterday, is a company headed toward financial distress,” Chanos said in an emailed statement on Wednesday. “It is burning hundreds of millions in cash every quarter, a burden that now Tesla shareholders will have to bear, at a total cost of over $8 billion.”

Chanos, whose firm has been betting against Tesla and SolarCity shares, said the combined drop in the market value of the two companies was more than the equity value of the deal itself, “which means that Tesla shareholders think SolarCity shares are essentially worthless.

“Finally,” he added, “it is hard for me to believe that this deal was not being contemplated when Tesla, and Mr. Musk himself, sold shares just a few weeks ago.”