Five Things to Watch: IPO Bonanza and More
Warren Buffett auditions for Michael Scott's old job on The Office, but plenty to chew on during the day Thursday. Two big-time public offerings in the news, while two overdue retailers report quarterly earnings. Here's what we're watching…
The Commodity King: Glencore may not trade in the US, but it is an astounding company in every way. In short, it's the world's largest commodity trader. Its daily oil sales volumes represent approximately 3 percent of the world's daily consumption. They also control 7 percent of the world's copper volumes, 13 percent of the world's zinc volumes, 9 percent of aluminum. Their top executives, post-IPO, are now some of the richest men in the world. Oh, and up until 1994, the firm was called Marc Rich & Co., after its famously pardoned founder was forced to sell amidst his tax woes. It's a long list. But, what does it mean when the big boys are selling? Another sign the commodity complex has cracked?
LinkedIn's Public Profile: On the domestic front, a smaller but majorly noteworthy listing… as LinkedIn (LNKD) priced its offering at the top of its $43-45 range, valuing the company at a whopping $4.25 billion. Really? The social network's flotation marks the first major "tech" IPO in a while and the first of the private social media big wigs. Are companies like LinkedIn the wave of the future or the new bubble waiting to burst? While it may serve as a proxy, LinkedIn and Facebook surely aren't the same animal.
Out-of-style Retail: In Thursday's earnings lineup, we get two names that have seen better days. Earlier this month, Gap warned that it wouldn't meet Wall Street estimates for the quarter. We've been hearing endlessly about the supposed turnaround. Will it ever come? The latest consensus calls for earnings per share of 39 cents a share. At least that would be a profit! As far as perennially troubled Sears is concerned, a $1.12 per share loss is in the cards. Eddie Lampert's aggressive cost-cutting over the years seems to have yielded little more than declining sales.
Forecasting Travel: AAA is set to announce its annual Memorial Day weekend travel forecast during a 10:30am ET news conference, squarely addressing the questions of summer. While the American consumer has certainly continued to rebound, the impact of $4 gas is paramount. What does it mean for whether and how people will travel? For one, hedge fund heavyweight David Tepper made a bet on a related sector, as he disclosed fresh stakes in United Continental, Delta Air Lines , US Airways and American this week.
Meet John Lipsky: At 11:45am ET, the Acting Director of the IMF John Lipsky will deliver a speech entitled "Summoning the Will to Act" at the Bretton Woods Annual Meeting. In just about any scenario, that wouldn't warrant too much attention. But, most scenarios a week ago didn't involve criminal charges against the now imprisoned Domique Strauss-Kahn. While markets collected balance after an initial bobble on the news, there are still major questions about the immediate future of an organization deeply involved in the European debt crises. Any day now, we could get the IMF's report on the Greek economy and how it has delivered on the terms of its initial bailout.