EZ Wealth and Money

By Tiernan Ray

Here are some things going on this morning in your world of tech:

Shares of Facebook (FB) have turned positive despite adverse headlines. The stock opened at $31.37, up about 1% from yesterday’s close, after rising in pre-market trading, and is now up $1.21, or 4%, at $32.20, reversing yesterday’s 9% drop.

That, despite the fact that a report by StreetInsider this morning says that Facebook shares are now “freely available” to be sold short.

Weighing on the shares this morning is a whole raft of negative press. Reuters’s Olivia Oran and Nadia Damouni follow up on their colleagues’ work yesterday describing how Facebook was telling analysts at its underwriters to cut estimates because of investor concern about mobile advertising. As Oran and Damouni write, “Facebook backed off and said, ‘Hey get your models down‘” to analysts, citing an unnamed source.

An article in The Wall Street Journal last night by Shayndi Raice, Anupreeta Das, and Gina Chon describes how Facebook CFO David Ebersman worked closely with Morgan Stanley to boost the number of shares of the stock offered by 25% just three days before the offering. Another piece, by Jenny Strasburg and Jacob Bunge, relates how Nasdaq’s head of transaction services, Eric Noll, would have canceled last Friday’s start of trading in Facebook if he had anticipated how bad the technical glitches would be.

But there was one bright spot: Needham Co.’s Laura Martin this morning started coverage of Facebook with a Buy rating and a $40 price target.

And how’s this for an investment thesis: “With over 900mm monthly unique users, we believe FB is an option on the World,” writes Martin. Like, perhaps, the option they’ll spend all of their time on Facebook, I guess. “We believe that FB should have higher revenue than Google (GOOG) over time because the number of users are about the same but the average time spent on the Facebook site is 14 mins per day.”

Shares of Dell (DELL) are off $1.97, or 13%, at $13.11 in early trading, steepening their decline following yesterday’s lower-than-expected Q1 report and Q2 outlook. The stock got one downgrade, that I can see, from Mizuho Securities’s Abhey Lamba, who cut his rating to Neutral from Buy, and cut his price target to $15 from $20, writing that Dell is now a “show-me story.” Price targets and estimates are going down elsewhere.

Shares of Alcatel-Lucent (ALU) are up 7 cents, or 4.7%, at $1.55 this morning after the company said yesterday it will enter the “core routing” market, as expected, a move that creates greater competition for Cisco Systems (CSCO) and Juniper Networks (JNPR), the numbers one and two in that market. A couple of reports this morning say Alcatel can make headway against the two, including a note from Mark Sue of RBC, who writes Alcatel’s margins could improve from around 30% as it wins routing deals. Goldman Sachs warned Juniper could be in for trouble.

Solar energy technology provider Trina Solar (TSL) this morning reported lower than expected Q1 revenue, and a deeper net loss than anticipated, as solar module sales fell 11% from the prior quarter, and prices dropped even further in the market. Citigroup’s Tim Arcuri this morning nevertheless reiterates a Buy rating on the stock, writing that this may have been the bottom for the company’s gross margins. Trina shares are down 38 cents, or 7%, at $4.95.

Talk Biz Talk

Article source: http://blogs.barrons.com/techtraderdaily/2012/05/23/this-morning-facebook-rebounds-despite-headlines-alcatel-vies-with-jnpr-csco/