Call options of Marvell Technology have been trading at four times their usual volume today. Apple’s iPhone is widely rumored to use a wi-fi processor manufactured by a company Marvell bought last year. Shares of Marvell traded up 5.81% for the day, with nearly twice the average number of shares changing hands.
One analyst we spoke to said he did not believe that the surge trading volume in the options and shares indicated anything suspicious.
“Some people are definitely trading on hopes that the stock will get a bump once the teardown analysts release their reports on the iPhone,” the trader told us. (He asked to remain anonymous because he wasn’t authorized by his employer to speak on the iPhone.) “But I don’t think this pick-up is due to someone having inside information about what’s insider the iPhone.”
Marvell is still priced well-below the highs it hit in early 2006. Since then the company has faced an stock options scandal that lead to the resignation of its chief financial officer. Its most recent quarterly results came in below estimates.
But it hasn’t all been bad news for Marvell. Nasdaq announced this week that it was holding off suspending trading in Marvell’s while Nasdaq’s board reviewed allegations against the company. Marvell was recently added to the Russell 2000 index.
“There’s other news on this company besides the iPhone,” the trader told us. “But today’s interest is definitely trying to get in pre-teardown.”
Of course, it’s not just speculating traders who are excited about the iPhone. Nerds are excited too! Our reporter on the scene, Scott Bressler, says that there are approximately 362 people on line at the Apple store in Soho. At noon there were about 280, up from 68 at midnight.
(Photo: Waiting for tonight’s iPhone launch outside the Apple store by Scott Bressler).
Archive for June 2007
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Posted in:
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Options Traders: Betting They’ll Find Marvell In The iPhone Tear Down?
By John Carney
Our more fashionable little sister site, Fashionista.com, noticed today that Esprit is on the hunt for a small, high-end brand to buy. Despite its powerful earnings and impressive performance of its stock—Bloomberg notes that it is the best performing stock on the Hang Seng index in ten-years—the company’s executives feel the brand lacks a little luxury appeal.
“Even though they sell loads of sportswear to Germany and the rest of Europe, they know they’ve got nothing on TopShop, H&M, or even The Gap in terms of style cred,” Fashionista writes. “Their hope is to find a company that makes Esprit look better to designers and fashion folk who might, eventually, pair with the line.”
The Fashionista readers have been chiming in with the names of potential targets. Luella and Diane von Furstenberg both seem to be favorites.
What Should Esprit Buy? [Fashionista]
Apple will release the iPhone tonight, but consumers and the media are unanimously apathetic. We just googled “iphone” and received five results, four of which referred to the International Paper Historians eg. “IPH, one group of paper historians…”
What little buzz there is for the phone seems confined to NYC, maybe just downtown. This picture of the Apple Store in Soho was taken by Scott Bressler.
CNBC reports that the SEC has asked Bear Stearns to turn over its documents about the investments made by its two hedge funds that nearly collapsed. Bear representatives, Masters o’ PR, have pointed out that inquiry is “informal” rather than full-fledged. But the only reason the investigation is being called “informal” is because Bear Stearns is cooperating, says the SEC. If they were to put up a fight regarding turning over the documents, a subpoena would be requested and the investigation would become “formal.”
Related: Jeff Lane, the guy Bear recruited from Lehman Brothers to replace Richard Marin as asset management chief, is “not known as a fixer of failed things.”
SEC Heightens Scrutiny Of Bear Stearns’ Hedge Funds [CNBC]
Last night we sent DealBreaker intern Scott Bressler to scout the scene at the Apple stores in NYC. In Soho he met the folks at the front of the line, who are broadcasting their standstill adventure at iPhone Launch TV. They plan to be the first to buy the iPhone, which they will auction on eBay for charity. (Scott made an appearance on their webcast last night, and we’ll be posting his pictures later today.)
So the bleeding hearts are selling the iPhone for charity. We’re sure that’s sweet of them. But what we want to do is get our hands on one of these babies and smash it.
That’s the only way we’re going to get real answers to the question that has Wall Street traders speculating, whispering and rumor-mongering today: Who makes the components of the iPhone? Some rumored parts makers are Marvell Technology, Broadcom, Samsung, Infineon Technologies, FoxConn Technology and Cambridge Silicon Radio. Apple won’t say who is manufacturing the guts of the new phone, and none of various players are commenting to the press.
But that hasn’t kept the stocks from moving. Marvell technology seems to be a favorite. The stock is up nearly 3.5% today, and just halfway through its trading day it has almost reached the three-month average for trading volume. Broadcom is down a bit, after rising earlier in the week. Infineon has been up and down all week, and is currently trading about where it started on Monday.
Clearly we need to learn who makes what inside the iPhone as soon as possible. And the only way to do it is to break the phone open.
The market expects Apple to sell as many as 1 to 2 million iPhones today.
Update: It looks like we’re not the only ones who want to break the iPhone.
Barbarians at the Gate was a great read but who’s up for a new book by the voice of our generation? By a day trader so great he turned $12,415 in Bar Mitzvah money into a fully audited pre-tax sum of $1.65 million, a writer so wonderful he just might trump Mergers and Acquisitions in book sales? Anyone not vigorously shaking his/her yes is a liar and a fool. Yes, friends, hedge fund guru Tim Sykes has a book. Unfortunately, he doesn’t have a publisher other than himself. And master of his own publicity as he is, he needs a little help. So we’ll be excerpting his memoir, “An American Hedge Fund: How I Made $2 Million As A Stock Operator & Created A Hedge Fund” whenever the mood strikes us, and if you like it, you can buy it (in October), and if you don’t (and/or have some edits), you can email Tim at Tim at timothysykes dot com.
“My high school teammates loved my wins but were put off by my intensity. As a result I didn’t get captain; probably because they knew I’d work them as hard as I worked myself.”
“I hated Tufts University from the start. The weather seemed colder than Connecticut. The girls were overwhelmingly unattractive.”
“I was used to having my own space. Lots of it. I’d drawn a forced triple, which meant that I shared a room with two roommates instead of just one. The room was barely meant for two people, let alone three, so it was extremely tight and crowded. Early on, I banded together with one of my roommates whom I liked and we planned to irritate the third roommate into leaving. We toyed with him on a daily basis using such petty tricks as subscribing his email address to pornographic websites and spraying his sheets and pillows with Windex. After a few weeks, our operation succeeded and he moved out. My roommate and I celebrated our newfound space by throwing a party for the dorm.”
Movie critic and head of the Bear Stearns the asset-management division that ran the two nearly-collapsed hedge funds, Richard Marin, has been replaced by Jeffrey Lane of Lehman Brothers Holdings. Though Marin will remain an “adviser” to Bear Stearns, he will now have considerably more time to blog.
Rich, Rich, Rich. What can we say? We warned you about comparing yourself to the Spartans. Sounds like you basically just met the Wall Street equivalent of the fate of King Leonidas.
Lane To Head Bear Stearns Asset Management [CNBC]
Bear Stearns Hires Lehman’s Lane as Head of Fund Unit [Bloomberg]
One of the great secrets of our success here at DealBreaker is our readership. We have the brightest, wittiest and best informed commenters on the web who help keep our recent comments page always fresh. And our tipsters—often people we have never met who reach out to us through email and phone calls—have helped us break stories and get the insider angle on stories where everyone else is simply re-writing the press release.
So this morning we’re happy to bring you new ways to send us tips. Starting today, you can now contact via instant messaging. Our AIM screenname is TheDealBreakers. But sometimes you need that extra-measure of security—or rather, to avoid those extra measures of security from the folks who might be monitoring your computer usage. So we also have a DealBreaker tips text message account. Send your text tips to 973-495-0177.
Of course you hope you will still email us at tips@dealbreaker.com or calls us at 212-334-1871 with your office gossip, bonus rumors, misbehaving banker snap shots, true-life stories of work gone bad, deal news, trading desk follies, market movements, promotions and firings, and whatever else happens to be on your mind. As always, you can rest assured that we will keep your identity confidential.
Carl Icahn and Hank Greenberg don’t play golf. And they don’t like executives who do. On Wednesday we went to the Wall Street Journal’s Deals and Dealmakers conference, and while everyone else was frantically scribbling down what Treasury Secretary Hank Paulson said about globalization—hint: he’s for it—we found ourselves more interested in the slightly less, well, earth moving details.
Golf—arguably the most popular pastime in America—didn’t score well with two headliners.
“I hate golf,” former AIG chairman Greenberg told the assembled crowd of investment bankers. “I play tennis. It doesn’t take long. Then I get back to work.”
After his talk we asked Greenberg about the popularity of golf among corporate executive.
“A lot of people like to get away from their work,” he said. “You have to wonder about whether they like what they’re doing.”
Icahn, the legendary corporate raider turned shareholder activist, was even more dismissive of golf. For him golf players symbolized the kind of clubby, chummy corporate executive he thinks is dragging down American business.
“These guys would rather play golf, slap each other on the back,” he said. “I want a guy running a company who sits in his tub at night thinking about the challenges he faces. The guy who can’t let it go. The focused guy.”
Yesterday we noted that Carl Icahn is not just short golf. He also tried to short Blackstone just after it’s IPO.
Here’s the latest BonusBumper chart. Thanks UBS, for driving down the median. Bonus numbers are starting to roll in, and while there isn’t any speculation on whether bonuses are higher than the amounts listed, there is speculation that they may be a tad lower. It’s also possible that the majority of bonuses have diverged so far from the top that no one knows what the real top is anymore. It doesn’t help that that top analyst is usually a complete pain in the arse and the one person in your group who’s mum about the extent of that obscene lump sum.
Comment or send any bonus info to: tips at dealbreaker dot com
What do you do when you’re trying to take the heat off your firm for the near-collapse of two hedge funds, and your last attempt to do so, leaking the fact that the guy in charge of the unit that ran the funds has a blog (hey, look, a blog!) backfired after a few people wondered aloud, “Why is this guy writing movie reviews?”? Let’s see, how about we get a guy to produce some pictures of John Mack dressed in drag? No? Okay, say someone could arrange for a hedge fund to lose $6 billion in two weeks? Is that something anybody would be interested in? No…okay…what about a profile of James Cayne that has all of the clichés about James Cayne that every article ever written about him includes, plus some new stuff about how he’s cutting back on red meat? Yes, this is the way to go.
Make sure the lede has the word ‘bellyache’ in it. Q. Who wants to read the article in the Journal that actually names the funds when we’ve got an exposé on Jimmy Cayne’s gastrointestinal problems? A. NO ONE. It is of the utmost importance that you mention JC’s affinity for cigars. Write something like “[Yadda, yadda, yadda], he said as he took a deep puff on a freshly lit Montecristo cigar.” This serves two purposes—it a) reinforces something everyone already knows about Cayne and b) is a nod to Charlie Gasparino’s assertion that “James Cayne has smoked more cigars than any CEO on Wall Street.”
Next up is cards. Forget about the Bear Stearns High Grade Structured Credit Strategies Enhanced Leveraged Fund, forget about the SEC, forget about Bear Stearns being a sty. James Cayne is a “world class bridge player who did not finish college.” Losses? What losses? James Cayne’s ascent “has been a result of a card player’s guile.” What is this subprime mess you speak of? James Cayne “didn’t go to Harvard Business School—he was a bridge bum.”
Now talk about Cayne cutting out “red wine, bacon and salmon for breakfast.” His “tan” thanks to weekends down the Shore. His “youthful demeanor.” The fact that he likes the musical stylings of a Norwegian pop star named Sissel and “any movie that stars Halle Berry.” Basically, anything you can get off his MySpace page is fair game.
Finally, ctrl-V “bridge-cigar” several times. How many is something of a personal choice but thirty is too few, sixty is probably too many. But no fewer than thirty, because Richard Marin felt the need to tell us not to see “Evan Almighty.”
Salvaging a Prudent Name [New York Times]
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