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Opening Bell: 1.26.07

Microsoft Shares Rise After Profit Beats Estimates (Bloomberg)
So we've been saying all weak that this quarter's tech earning season is taking place in some sort of parallel universe where the cool kids get dumped on, while the nerds win homecoming crowns. Microsoft kept things going with a surprise performance, announcing yesterday evening that sales had exceeded expectations, all the while raising their forecast for the coming year on anticipation of good sales from Windows and Office. Analysts were certainly expecting some weakness in this last quarter, if only due to a pre-Vista lull in business. It wasn't so, and in other areas, such as the XBOX and its server business, sales easily exceeded expectations.
GM to delay earnings, restate past results (CNNMoney)
After Ford dropped its $13 billion bomb on the market, GM had to follow that up with some bad news of its own. The company insists that it will show a profit for its last quarter (more on that in a sec), but before it can tell us what that profit is, it has a bunch of accounting issues it needs to work out in the meantime, and that will prompt a delay in the earnings release. Ok, as for the GM profit, does anyone believe it? There's a big difference between "showing a profit" and "profiting", the latter being much more difficult -- difficult to the point where we're not sure that GM is capable of it, particularly since there doesn't appear to be much change at the company. The only change, it seems, is that its rival Ford has found itself in a much worse position, which only makes GM look good by comparison.
How Borrowed Shares Swing Company Votes (WSJ)
The Journal tips us off today on what's sure to be one of the next big scandals "empty voting", the practice of borrowing shares in a company just for the purpose of swinging the vote on issues that shareholders can vote in. The claim is that hedge funds are doing this, often, for the purpose hurting the company's stock price, so, voting opposite to the real interests of shareholders. The article cites on instance of a fund that blocked a merger that had been thought to be a done deal, because apparently the fund had an interest in pushing the company's stock price down. We could debate this for a long time, but suffice to say it's just the kind of issue that's bound to get regulators really foaming at the mouth, since it sounds like "buying" democracy, or something like that.
Lay and Others Dropped from Enron Suit (Dealbook)
Good news for Ken Lay, assuming he's still alive. His name is been dropped from a class action lawsuit brought by former Enron investors. Yes, there's still a lawsuit going forward. We're going to be hearing about this issue until 2020, at least. As for Lay, maybe this means it's safe to come out of hiding now.

SEC Begins Formal Probe Of KB Home Stock Options (WSJ)
It had already been alleged, but now it's official. The SEC is going after stock options practices at KB Homes. Four grants in particular to recently resigned CEO Bruce Karatz, dated between 1998-2001, appear fishy, since they were all dated at either annual or quarterly lows. Karatz resigned this past November, but probably not soon enough.
SaskPool sweetens hostile bid for Agricore United (Globe and Mail)
It looks like the Canadian grain sector is bound to repeat the drama of the metals business that happened last summer. We already mentioned that wheat producer Saskatchewan Wheat Pool Inc has a standing offer for rival Agricore -- that came out a few months ago. So far, the deal hasn't materialized, so SaskPool is going back to the bank and upping its offer for Agricore. With Agricore reluctant to do a deal, but faced with an increasingly tempted offer, it's easy to see if seeking a white knight of sorts (maybe a South American company?) to intervene. If it happens, you read it here first.
Scientist Develops Caffeinated Doughnuts (AP)
Now this is disruptive technology. Now there's no need to pick up coffee and donuts in the morning, just pick up the donuts and get your buzz as you chew through the cakey dough -- they're already caffeinated! Brilliant, really, just brilliant.
Hog Farmers Brace for High Feed Costs (AP)
Here's an idea for a recurring series of anyone wants to take it: Ethanol: The High Price Of Energy Independence. It's becoming clear that ethanol subisides, now John McCain's favorite pet issue is going to do some serious economic damage around the horn, as the price of corn starts to soar. Already, pic producers are freaking out, worried about the cost of feed, which means that it might not be so cheap for you to just add the two strips of bacon to your cheeseburger for lunch. And we've also seen the reports about soaring tortilla costs in Mexico, which won't help the case for smooth trade. So buckle up, this is the future.