Friday, April 25, 2008

Spike in Food Prices Taking a Toll on Restaurant Industry

The cost of eggs, cheese, wheat, and (most recently in the news) rice is going up and up. The effect is taking a toll on the restaurant industry, where profits are being squeezed at a time when middle-class America is cutting back on dining out. The fast food eateries are holding up better, since many people who had been frequenting mid-priced chains are now going to fast food. But for mid and high price restaurants, the hurt is on.

Looking in iMiners press release database we can see the recent news being put out by companies in the Retail-Eating Places industry. Companies like Yum Brands and CEC Entertainment (Chuck E. Cheese) are holding up well. Mid-priced eateries like Ruby Tuesday are not (see stock chart for CEC: vs. stock chart for Ruth's Chris:
Even Starbucks is getting hammered as more people make their coffee at home rather than paying $3.50 for a latte. See Starbucks 90 day chart:

Where will it take us? Follow the news and find out...

Wednesday, April 23, 2008

Airline Industry Continues to Get Pummeled

This is not shaping up to be a good year to fly OR to own airline stocks. Recent articles in the WSJ are forecasting this summer's travel season to be worse than ever in terms of crowded planes and cancelled flights. As for owning shares of an airline? The cost of jet fuel is making it harder and harder for airlines to turn a profit. All one needs to look at is the recent bankruptcy announcements by ATA, Aloha, Frontier and Skybus. iMiners' press release database allows any user to search press releases by date range and industry (and other criteria as well), so I just did a query for the airline industry to review recent releases. We have a useful application which shows the percentage change of a company's share price on the day of a release (or the next day if the release was issued after the market closed). As I scroll through releases from recent days it does not look pretty. United shares were down 36% yesterday, and AirTran shares were down 21%. JetBlue was down 6% and Alaska Air down 7%. American Airlines was down 14%. Not a good earnings season thus far.

The only interesting press release that looks like had a positive impact on an airline's stock was Frontier's announcement on April 17 "Two Industry Veterans Join Frontier Management Team". The company's stock price went up nearly 19%. Other than that the database is just showing lots of red.

Friday, April 18, 2008

Thomson Reuters Deal Complete

It took nearly a year, but yesterday marked the closing of the merger of Thomson and Reuters, forming a new entity called Thomson Reuters. See the press release here:

It should be interesting to see in coming months how the new company merges their operations, products and sales teams. I know lots of people at both organizations and everyone is anxiously waiting to see how it plays out, and how it affects their jobs.

As for how this affects iMiners, there has never been a better time for innovative new players to enter the market. Thomson Reuters, Nasdaq OMX, and other large service providers have enormous resources and reach, but companies like iMiners can utilize its smaller size to quickly bring innovative products to the market. In my experience, lots of IROs and PROs don't like consolidation of vendors because it leads to monopoly status and eventually, higher prices. iMiners intends to focus on bringing innovative products to market that leverage our unique database of nearly half-a-million categorized press releases from over 6,500 companies. Next up? PR Cycle, which we are about to launch as a beta product. Stay tuned.....

Wednesday, April 9, 2008

Volatile Markets!

I went to a National Investor Relations Institute (SF) luncheon yesterday, where the speaker was the head of investment banking for Pacific Growth Equities. He shared a statistic on how volatile the markets are in 2008 that boggled my mind: the market went either up or down by at least 2% in 58% of the trading days so far in 2008 (or maybe it was in Q1). That compares to something like 17% for all trading days in 2007, 6% in 2006, and 4% in 2005. I am recalling this off the top of my head as I didn't have a pen and paper to write it down. But if these aren't the exact numbers he quoted they are pretty close. The point being that we are in incredibly volatile times.

Monday, April 7, 2008

Electronic Shareholder Forums: Web 2.0 Technology Is Encouraged by the SEC

In this world of blogging, My Space, Facebook, LinkedIn, etc. it seems Web 2.0 technology is creeping into all facets of our lives. But in the Investor Relations world companies are communicating to constituents "same as it ever was". Dell's IR team has implemented the only noteable IR blog, but it has little participation ( so far from shareholders. Other companies have been slow to embrace new technologies to communicate with shareholders. That may be about to change.

In November the SEC voted to adopt amendments to the federal proxy rules to facilitate the use of electronic shareholder forums: And in January they released the 35 page final rule release for shareholder forums. Noteable in the final ruling is that 1) Amended Rule 14a-2 provides that participation in an electronic forum will not constitute a "solicitation subject to the proxy rules" and 2) Amended Rule 14a-17 provides that a shareholder or company (including 3rd party provider) that operates an electronic forum "will not be liable under the federal securities laws for any statement or information provided by another person participating in the forum". The effective date was February 25, 2008.

What does this all mean? It means that the Securities and Exchange Commission is encouraging (but not mandating) companies to embrace Web 2.0 technology (specifically Electronic Shareholder Forums) as a means of better communicating with shareholders, analysts, and other constituents.

What is an Electronic Shareholder Forum? First, it is NOT a message board or chat room. An effective Electronic Shareholder Forum should be a site where investors can come to interact with other shareholders, company management, and directors to ask questions and engage in dialogue. Company management can get a pulse on what investors are thinking, and by doing it in a company sponsored forum it will have much more credibility than any chat room or message board (especially if the Electronic Shareholder Forum is the only place where management and directors respond to shareholder inquiries). But much like a conference call, not everyone can necessarily ask questions, and not every question/comment will get addressed. This is necessary to ensure the forum does not deteriorate into a message board where anything goes.

"Today's action is intended to tap the potential of technology to help shareholders communicate with one another and express their concerns to companies in ways that could be more effective and less expensive," said SEC Chairman Christopher Cox. "The rule amendments are intended to remove legal concerns, such as the risk that discussion in an online forum might be viewed as a proxy solicitation, that might deter shareholders and companies from using this new technology."

At this point in time the SEC has not mandated how these forums should be used, so as to encourage experimentation by issuers and vendors. It'll be interesting to see who the early adopters are, and how quickly other companies jump on the Electronic Shareholder Forum bandwagon.

Thursday, April 3, 2008

WSJ subscription: This Makes No Sense?

My annual subscription to the WSJ print edition just expired at the end of March. When I went online last month to renew my subscription I noticed it was being offered for current subscribers at a price of $161.29 for 12 months of print only, or $333.41 for print and online. However, once my subscription expired I could start a new subscription (instead of renewing my old one) at an introductory price of $79.00 for 12 months (print only) or $99 for print and online.

Does this make any sense?