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Knobias ClipReportAftermarket News Has 3 Names on the MoveWednesday’s session saw the indices rally on the back of jobs data which was reported higher than analyst estimates. The job growth displayed numbers which were in stark contrast of any expectation of recession. Even so, fear and anxiety remained with continued subprime talk on the horizon. Headlines were reporting that the Bush administration was proposing a 5 year interest rate freeze on owner occupied subprime mortgages. Large investment firms were also reporting the receipt of subpoenas to testify before congress on the selling of these risky debt securities. The fear and anxiety were still expected to be enough to tip the scales in favor of a cut in the interest rates by the Fed next week.
But the real news came post-market on Bidz.com Inc. (BIDZ), Hoku Scientific (HOKU) and Novastar Financial (NFI).
BIDZ has been battling a negative mention by Citron Research which was published last week. The Company refuted the allegations made by Citron in a conference call that did more harm than good to the share price. Following the report and call, shares were effectively been cut in half.
But it still didn’t dissuade analysts from coming to its defense. Roth, Think Equity, and Craig-Hallum all maintained a Buy rating in their reports and noted the weakness as entry opportunities. Roth even commended the Company in its attempt to address the negative report after shares dropped some $2.50 during the call.
Prior to the Citron report, BIDZ had issued guidance on November 27th of $180 million to $182 million in revenue for the 2007 fiscal year. Fourth quarter revenue was expected at $56 million to $58 million. The reason for the raised guidance was noted as the record Thanksgiving holiday weekend which saw a substantial jump. 2008 revenue guidance was also released which noted expectations for $225 million to $230 million in revenue and 47c to 51c in earnings per share.
In aftermarket action on Wednesday, the Company updated their guidance. In a little more than a week, the Company noted that it now expected revenue for the year to be at the higher end of their $180 million to $182 million view. Pretax income for the year was guided for $18 million to $18.5 million. Pretax income for the fourth quarter was expected to be $5.6 million to $6 million on $56 million to $58 million.
Not much changed except the Company’s expectation of 2007 revenue coming in at the higher end of their range. That and the fact that televisions (one of the questions brought up in the conference call regarding shill bidding) are no longer available on the site. Aftermarket trading saw shares hit highs in the $13.00 range before falling back down to closing levels.
Hoku Scientific, a clean energy technology company, which has been gathering extravagant amounts of prepayment contracts for polysilicon in hopes of gathering enough to construct a plant in Idaho, announced that the Company had signed a non binding term sheet with Merrill Lynch for $185 million in financing to facilitate the cost of construction. Following the announcement, shares jumped to the $10.40 range after closing at $9.80.
Novastar Financial Inc. (NFI) shares, which had been on many trader’s screens following their recent activity, saw another boost following the subprime mortgage lender’s waiver acceptance by Wachovia. At issue was the Company’s adjusted tangible net worth which had fallen below the convent levels. The Company originally broke the covenant on September 30th, but received a waiver until November 30th. The Company now announced that Wachovia has until Dec. 7th, this Friday. The first waiver was for 2 months. The second is now only 7 days which could signify Wachovia is running short on patience. Even so, shares were up some 30% in after market trade.
Wednesday’s aftermarket session saw a plethora of exciting, market affecting news cause some large swings in after hour trading. If the action continues to Thursday’s session, investors would certainly be wise to watch.
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Labels: BIDZ, HOKU, Knobias, NFI, small cap stocks
