This Week's 5 Smartest Stock Moves
Jan 4th 2013 9:47AM
Updated Jan 4th 2013 9:52AM
If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. Intel thinks inside the TV box
Intel is looking to shake up the pay TV industry.
A source in the video distribution industry began by telling tech blog TechCrunch over the weekend that the chip giant is gearing up to offer a virtual cable service that streams content from major networks as well as live sports. There will naturally also be an Intel-backed set-top box to set the endeavor in action.
The Wall Street Journal indicated on Tuesday that Intel was facing delays in getting cable channels on board, but two sources still predict that the service will launch later this year.
Will there be resistance in the pivotal content-licensing agreements? Absolutely. These companies make a lot of money through lucrative satellite and cable deals. However, consumers are tiring of paying for a ton of channels that they don't care to watch. The cord-cutting revolution is real, and the six largest cable and satellite TV providers combined to lose a net 292,000 subscribers during last year's third quarter.
Intel is going to face stiff challenges, but if it can beat other aspiring game changers in this space to put out the virtual cable service that consumers truly want, it will be huge for the unlikely tech darling.
2. Facebook gets an unlikely new friend request
Analysts keep warming up to Facebook , but now the social networking website operator has won over its biggest skeptic.
BMO Capital Markets -- the last major analyst firm to have a sell rating on Facebook -- changed its tune on Monday.
BMO analyst Daniel Salmon is upgrading his rating from underperform to outperform. His new price target is $32. BMO famously slashed its price target on Facebook this summer -- from $25 to $15 -- so the dramatic turnaround in recent weeks is refreshing.
No one is doubting Facebook these days. Sure, it's still trading well below May's $38 IPO price, but there are no longer doubts about its ability to monetize mobile or build on its stickiness.
3. Zipcar yields at the merge sign
Car-sharing leader Zipcar is driving into the arms of a new owner.
Avis Budget is buying Zipcar in a $491 million deal, a nearly 50% premium to where Zipcar closed the previous trading day.
This is a win-win deal. Avis lacked a significant presence in the fast-growing auto-sharing market. The car rental giant goes from laggard to leader in one move.
The move also works for Zipcar. Yes, it's growing, but the industry is evolving quickly. Rivals are breaking into price wars. The peer-to-peer sharing niche is picking up steam. Zipcar can now take advantage of Avis' massive fleet and financial muscle to truly become a global juggernaut.
4. I'll tumbler for ya
Winning props from eco-friendly java sippers, Starbucks introduced a reusable tumbler this week.
It's easy to be skeptical about the plastic cup bearing the Starbucks logo that the coffee giant will sell for $1. Who wants to lug a tumbler around? If they have to rinse out the cups after every use, won't this take away from the convenience that may be the reason why they're paying a premium at the local Starbucks in the first place?
However, Starbucks is making the eco-friendly move pay off by giving buyers a $0.10 discount on future orders. The tumbler pays for itself in 10 visits, and the token discount may encourage more frequent visits.
5. Sirius situation
Shares of Sirius XM Radio blasted to their highest level in nearly five years this week.
The FCC approved the transfer of control of the satellite radio provider's licenses to Liberty Media . It's a big regulatory nod of approval, freeing Liberty Media to grow its effective 49.8% stake to gain majority control and probably spin it off to shareholders.
Some investors may be concerned about the likely glut of shares on the open market, but Sirius XM armed itself for this inevitable event by authorizing a $2 billion share buyback that will probably kick in if Liberty Media does go through with spinning off the only game in town when it comes to satellite radio.
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The article This Week's 5 Smartest Stock Moves originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz owns shares of Zipcar and Liberty Media. The Motley Fool owns shares of Facebook, Intel, Starbucks, and Zipcar and has the following options: long JAN 2014 $20.00 calls on Facebook and short JAN 2013 $47.00 puts on Starbucks. Motley Fool newsletter services recommend Facebook, Intel, Starbucks, and Zipcar. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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