Schaeffer's Trading Floor Blog

The 'Dislike' Button: Don't Go There, Facebook Inc (FB)

If Mark Zuckerberg wants to add buttons to Facebook Inc, he should look beyond 'dislike'

by 12/17/2014 1:30 PM
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When I first heard that Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg was considering a "dislike" button, my first thought was: "Oh no." As if the social media site hasn't sufficiently degenerated into one giant shouting match, this new feature could be the equivalent of pouring fuel onto the proverbial fire.

Now, Zuckerberg clarified that the "dislike" button's purpose wasn't to make put-downs easier. "A lot of times people share things on Facebook that are sad moments in their lives. Often people tell us that they don't feel comfortable pressing 'like' because 'like' isn't the appropriate sentiment," the 30-year-old billionaire explained. "Some people have asked for a dislike button because they want to say, 'That thing isn't good.' That's not something that we think is good for the world."

But you know what they say: The road to hell is paved with good intentions. So, no, I don't see this decision -- if it's made -- ending well. Too many people (read: trolls) would abuse the "dislike" button, and too many people couldn't handle the blowback for their unpopular views.

That said, I've taken it upon myself to provide a list of potential non-ego-bruising alternatives (you're welcome, Mark). So, here goes:

  • "Respectfully disagree": Basically, "you're wrong … but please don't hate me."

  • "Concerned": This speaks to Zuckerberg's scenario above. Yes, it's weird to click "like" when someone's mother is in the hospital, but it's also weird to click "dislike." Actually, it's weird that our way of showing empathy these days is through pressing a button. Pick up the phone or send a card, people.

  • "Your opinion is valuable": Because everyone's opinion is valuable, right? This button essentially says nothing, but could provide a self-esteem boost.

  • "I don't know": For those times when you disagree, but don't have the gumption to say so.
  • "Please clarify": When someone's post or response to a post is utterly unintelligible or passive-aggressive, but you fear coming across as mean-spirited by appealing to rules of grammar and/or brute facts.

The list could go on, but you get my point. All sorts of buttons could be implemented to help FB users succinctly express their full range of emotions.

But, frankly, none of the above really does the trick for me. So I've come up with yet another list to reflect my own typical reactions to FB posts.

  • "Stop complimenting yourself": For those "friends" who specialize in shameless self-promotion.

  • "Stating the obvious": No description necessary.

  • "Mob mentality": Just because 100 people have said something doesn't mean you need to say it. Actually, please don't.

  • "Your life is better than mine": To help that extremely successful friend know how happy you are for his/her fortunes, popularity, good looks, and non-stop travels.

In conclusion, I think Zuckerberg's really onto something. Additional buttons could be a good thing -- a way to accurately and succinctly convey our sentiments, without wading into the sometimes dangerous and often inane world of the "comments" section.

But my reaction to the "dislike" button remains the same. I dislike it.

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Analyst Update: Cliffs Natural Resources Inc, BlackBerry Ltd, and Hewlett-Packard Company

Analysts offered their two cents on CLF, BBRY, and HPQ

by 12/17/2014 11:36 AM
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U.S. stocks are higher in early trading, as crude oil extends its rebound and speculators await an announcement on diplomatic relations with Cuba and this afternoon's Federal Open Market Committee (FOMC) policy statement. Among equities attracting the attention of analysts are commodities concern Cliffs Natural Resources Inc (NYSE:CLF), mobile phone maker BlackBerry Ltd (NASDAQ:BBRY), and tech titan Hewlett-Packard Company (NYSE:HPQ).

  • CLF has plummeted 10.4% to $6.09, and earlier touched a 10-year low of $5.63, yet Credit Suisse expects the stock to steepen its slide by quite a bit. The brokerage firm today slashed its price target on Cliffs Natural Resources Inc to $1 from $10, and reiterated an "underperform" opinion, saying the company's "balance sheet handicap is simply too great." In 2014, CLF has now surrendered more than three-quarters of its value, so it's no surprise to find most analysts already in the bears' corner. Just one offers up a "strong buy" opinion, compared to seven "holds" and four "sell" or worse ratings. There could be more price-target cuts on the way, though, as the average 12-month price target of $8.18 represents a premium of 34.3% to CLF's current perch. Elsewhere, short sellers are likely cheering the equity's retreat, as more than half of the stock's float is dedicated to short interest.

  • BBRY is flirting with a 1.9% gain at $9.69, as traders applaud the company's highly anticipated Classic device launch and an upbeat analyst note. Specifically, BGC Financial upgraded BlackBerry Ltd to "buy" from "hold," and lifted its price target to $12.50 from $11. The shares have muscled 30.4% higher year-to-date, yet analysts remain unconvinced. Just one out of 19 brokerage firms deems BBRY worthy of a "buy" or better rating, meaning more upgrades could be coming down the pike. Furthermore, short interest makes up 23.2% of BBRY's total available float, representing more than nine sessions' worth of pent-up buying demand, at the stock's average pace of trading. As the shares extend their upward momentum, a short-squeeze situation could add fuel to the fire.

  • Finally, HPQ has added 2.6% to trade at $38.29, after Morgan Stanley upped its view of the IT hardware industry to "in line" from "cautious." The brokerage firm also hiked its price target on HPQ by $4 to $44 -- representing a new three-year high -- and underscored an "overweight" assessment. Hewlett-Packard Company has soared roughly 37% in 2014, led higher atop its 10-week and 40-week moving averages. Nevertheless, option traders have purchased HPQ puts over calls at a near-annual-high clip during the past two weeks on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), as the stock's 10-day put/call volume ratio of 1.16 stands higher than 97% of all other readings from the past year. Considering HPQ's long-term ascent, though, some of those puts may have been purchased by shareholders looking to lock in profits.

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Herzfeld Caribbean Basin Fund, Inc (CUBA) Surges On Obama's Bold Move

Herzfeld Caribbean Basin Fund, Inc tagged a fresh seven-year high earlier

by 12/17/2014 11:33 AM
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Herzfeld Caribbean Basin Fund, Inc (NASDAQ:CUBA) -- which is tied to equities principally traded in the Caribbean Basin country -- has rallied nearly 43% today to linger near $9.71, and earlier hit a fresh seven-year peak of $9.87. Stoking the bullish flames are reports that the U.S. and Cuba will begin diplomatic discussions.

More details should emerge when President Barack Obama and Cuban President Raul Castro -- who spoke by phone earlier today -- take the podiums in their respective countries at 12 p.m. ET to formally announce a prisoner swap. Additionally, Obama is expected to unveil a number of changes to current travel and economic restrictions.

Should the strides taken between the two nations continue to benefit Herzfeld Caribbean Basin Fund, Inc (NASDAQ:CUBA) -- which is now in the black on a year-to-date basis -- a short-covering rally could ensue. Short interest surged 49.4% over the past two reporting periods, and at the fund's average daily pace of trading, it would take more than six sessions to cover all of these bearish bets.

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Analyst Upgrades: CVS Health Corp, Salix Pharmaceuticals, Ltd., and VeriFone Systems Inc

Analysts upwardly revised their ratings on CVS, PAY, and SLXP

by 12/17/2014 9:27 AM
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Analysts are weighing in today on pharmacy chain CVS Health Corp (NYSE:CVS), drug developer Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP), and electronic payments facilitator VeriFone Systems Inc (NYSE:PAY). Here's a quick roundup of today's bullish brokerage notes on CVS, SLXP, and PAY.

  • Following yesterday's announcement of a new share buyback program, CVS has been on the receiving end of price-target hikes from no fewer than seven analysts. The most ambitious among them is Guggenheim, which is targeting a move up to $110 -- a record high -- and calling the stock a "buy." Taking a step back, CVS Health Corp has run 29% higher this year to settle at $92.31 yesterday, so it shouldn't come as any surprise that Wall Street is behind the stock. Sixteen out of 19 covering analysts rate the shares a "buy" or better -- compared to three "holds" and not a single "sell" -- while less than 1% of CVS' float is sold short.

  • SLXP said yesterday it will clear excess inventory by the end of 2015 (subscription required) -- a year earlier than expected -- prompting a round of bullish brokerage attention overnight. In fact, no fewer than five analysts upped their price targets, including a $30 boost to $147 at Canaccord Genuity, which also reaffirmed its "buy" assessment on the equity. Meanwhile, Salix Pharmaceuticals, Ltd. has tacked on roughly 30% year-over-year to trade at $110.11, but has failed to win over options traders. Speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open close to four puts for every call during the last two weeks, yielding a 10-day put/call volume ratio of 3.96 -- in the 98th annual percentile. Given SLXP's technical tenacity, a portion of these put purchases may have been at the hands of shareholders hedging against a pullback.

  • Finally, a post-earnings rush of bullish brokerage attention on PAY is continuing this morning, with the shares scoring an upgrade to "overweight" from "equal weight" at Barclays, as well as an $11 price-target boost to $47. On the charts, the stock has provided plenty of reasons for such optimism, advancing 28% year-to-date to perch at $34.34, assisted by support from its 50-week moving average. In recent weeks, however, short sellers have increasingly set their sights on VeriFone Systems Inc. Specifically, short interest rose 43.5% during the latest reporting period to more than 4 million shares -- though this represents less than 4% of PAY's total float.

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Analysts are weighing in today on electric automaker Tesla Motors Inc (NASDAQ:TSLA), commodity concern United States Steel Corporation (NYSE:X), and telecommunications giant Verizon Communications Inc. (NYSE:VZ). Here's a quick roundup of today's bearish brokerage notes on TSLA, X, and VZ.

  • Morgan Stanley cut its price target on TSLA to $290 from $320 -- but maintained its "overweight" rating -- although this still represents expected upside of nearly 47% to last night's close at $197.81, TSLA's first finish south of $200 since May. In fact, the stock hasn't traded north of $290 on an intraday basis since Sept. 4, when it hit a record peak of $291.42, and has shed 32% during this time frame. Plus, the security notched a second consecutive close south of its 320-day moving average on Tuesday, something that hasn't happened since early November 2012. Against this backdrop, option traders have been growing increasingly pessimistic, as evidenced by Tesla Motors Inc's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.19, which ranks at an annual bearish peak.

  • X was slapped with a price-target reduction to $31 at Jefferies, which also underscored its lukewarm "hold" recommendation. This bearish brokerage note isn't too surprising, considering X has surrendered 40% since hitting a three-year high of $46.55 in mid-September. Should United States Steel Corporation continue to struggle, another round of downwardly revised analyst ratings could be on the horizon. There are currently six "strong buy" ratings levied toward the stock, versus four "holds" and three "sell" or worse suggestions. Additionally, the average 12-month price target of $43.31 stands at a 55.2% premium to Tuesday's settlement at $27.90 -- and in territory not charted since late September.

  • Bernstein weighed in on VZ this morning, lowering its price target on the shares by $3 to $54. The brokerage firm did reiterate its "outperform" rating, however, echoing the general consensus on the Street. Meanwhile, Goldman Sachs downgraded VZ to "neutral" and slashed its price target by $7 to $48. Eighteen out of 24 analysts covering the equity maintain a "buy" or better recommendation, with not a single "sell" to be found. Elsewhere, the consensus 12-month price target of $52.98 stands 16.4% higher than last night's close at $45.53, and within striking distance of the shares' July 29 annual high of $53.66. On the charts, Verizon Communications Inc. has put in an uninspiring performance in 2014, and is down 7.3%. More recently, the stock has struggled along with its sector peers, and is 10% lower on a month-to-date basis.

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