Alcoa kicks off earnings Monday. It always pleases me that AA starts earnings season, because it is a pretty simple story: they are very tethered to the price of aluminum. (See: 'Fast Money' traders' take on Alcoa.)
Aluminum prices came down notably as we closed out the quarter, from a high of $1.13 a pound on April 16 to a low of $0.84 a pound on June 7, according to Desjardins.
So AA was a victim of the drop in aluminum prices as well as the drop in the overall markets: its stock went from about $15 to close the quarter at about $10.
The good news is that inventories appear to have stabilized.
Alcoa's big customers are in the automotive, beverage cans and aerospace business.
Big Week for IPOs:
The $1.9 billion KKR deal is not technically an IPO, since it is a relisting of an existing company. However, there are several interesting companies looking to go public next week:
1) RealD (RLD) is the company behind 3-D images for motion pictures. They are seeking to sell 10.75 million shares in a range of $13-$15, pricing Thursday for Friday.
2) Qlik Technologies (QLIK), which provides business intelligence software, is looking to float 11.2 milion shares at $8.50-$9.50, pricing Thursday for Friday.
2) Smart Technologies (SMT), a Canadian company, is set to price 35.3 million shares at $16-$18 on the NASDAQ on Thursday; at the midpoint that would bring in about $600 million, making it the biggest IPO in the U.S. this year, pricing Wednesday for Thursday.
SMT makes "interactive technology products" including interactive whiteboards, which allows the placement of shared files on a "whiteboard" that lets users mark up the board.
Intel owns roughly 26 percent of the outstanding stock; Apax Partners owns 51.4 percent, so there is a heavy private equity component. 75 percent of what is being sold is coming from shareholders (the insider cost is $2.70!).
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