Stock News 12-30-09

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(Tickers: Nasdaq: CGEN, NYSE: MGM, NYSE: DAL, NYSE: AET, NYSE: CBY, NYSE: KFT, NYSE: HSY, NYSE: GJM, OTC: JALSY.PK)

Today's market-moving stock news includes reports on Compugen, Aetna, GMAC, MGM Mirage, Japan Airlines, Kraft Foods and Cadbury. These "stock news" briefs will be a new regular column for Wall Street Greek. Besides providing the stock news, we hope our expert stock analysis from a seasoned Wall Street analyst will prove helpful in your daily understanding.

Stock News

Compugen

Compugen (Nasdaq: CGEN) raised $19 million in a sale of 4.1 million shares at an average price of $4.91. The offering extended from November 13 through this past Tuesday. Fund are geared toward "general corporate purposes," which is legalese that allows the company to use the funds in any manner and limits lawsuit concerns. We wonder though if "general corporate purposes" means paying bonuses and failing shareholders these days? The company hopes to develop more collaborative agreements in order to reach cash-flow break-even by 2011. CGEN shares were up 7.6% at hour of publishing, and that likely also has something to do with the buzz the company created on Monday when it declared it had discovered a drug target for multiple epithelial tumors, also known as carcinomas. The stock jumped 26% on that day alone.

MGM Mirage

An analyst at Oppenheimer, David Katz, raised his earnings and price target estimates for MGM Mirage (NYSE: MGM) today. The company provided data for its newest projects in Las Vegas and Macau, which included better margins than Katz anticipated. His price target was boosted to $9 from $8, but MGM already trades at about nine bucks and change. So, this is not a screaming "buy" based on this news, and the stock is down modestly on the day. The analyst rates the stock "Perform," and reportedly sees this news already priced in the shares.

Aetna

Aetna (NYSE: AET) said it expects to post a charge of up to $65 million in Q4, as it accounts for layoffs and other consolidation. In November, the company said it would cut 2% of its staff, roughly 625 jobs, with a similar number of cuts coming in 2010. Aetna shares were off about 2.4% at hour of publishing.

Japan Airlines (Delta, American)

Japan Airlines (OTC: JALSY.PK) shares are diving today, down 20% on intensifying fears the struggling airline is nearing bankruptcy. JAL is Japan's largest airline, and was recently being looked at by Delta (NYSE: DAL) and American Airlines, as the two American carriers consider Asian expansion.

Kraft Foods & Cadbury Plc

Kraft Foods (NYSE: KFT) is seeking a hostile takeover of British candy and chocolate maker Cadbury Plc (NYSE: CBY). On Wednesday, the UK Takeover Panel extended a deadline by which Cadbury was to disclose any new information about the bid. Cadbury now has until January 15 to do so, versus the previous January 12 cutoff. This will allow Cadbury to publish its "trading results" (we assume this translates to "earnings" in American English). Kraft still has until February 2 to get the approval of a majority of Cadbury shareholders, and until January 19 to revise its offer. Two other firms have reportedly made informal inquiries, including The Hershey Co. (NYSE: HSY) and Italy's Ferrero International SA.

GMAC

GMAC (NYSE: GJM) is likely to get another government handout to help it absorb mortgage loses, according to Reuters. The sum of $3.5 billion was reported by the news agency, and that would build upon the $12.5 billion GMAC has already taken. The rumor factored in lowering the cost of GMAC's debt default risk, and has the shares up 1.0% today. GMAC has had trouble raising capital on the private market, and the government's stress test indicated it would need about $11.5 billion. Still, the security's current price does not scream trouble, so the market seems near certain the government has GMAC's back.


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