Thursday, July 29, 2010

10X Volume Alert in Crown Media (CRWN)

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Crown Media Holdings, Inc (NASDAQ: CRWN) is listed under ticker “CRWNE” under some quote systems because of the recapitalization that was completed at the end of June.  The stock happens to be the largest percentage gainer today with a 51.7% price gain at a price of $2.70.  The price hit a high earlier today of $2.93 and the new adjusted 52-week range is $1.19 to $2.93.  At 1:10 PM EST there have been some 350,000 shares traded versus an average daily volume of only about 35,000 shares.

A 52-week high on a 10X volume alert is hard to ignore even for a $2 or $3 stock… This is the owner of cable TV stations and currently owns and operates The Hallmark Channel and Hallmark Movie Channel in the U.S. to 86 million subscribers.  The distribution is via a network of over 5,300 cable systems, communities, and satellite services.

When the company announced on June 29 its recapitalization completion, it noted the following data:
“The Recapitalization transactions include, among other things, approximately $1.162 billion of amounts due to Hallmark Cards and its affiliates being restructured into $315.0 million principal amount of new debt instruments with maturities of December 31, 2013, $185.0 million liquidation preference of convertible preferred stock of the Company, Class B Common Stock being converted into Class A Common Stock with Class A Common Stock becoming the only authorized and outstanding common stock of the Company, and 254,887,860 shares of Class A Common Stock of the Company.”

It further noted:
“Other aspects of the Recapitalization include a Credit Agreement for the new debt, an amendment to the Tax Sharing Agreement with Hallmark Cards, a registration rights agreement, an increase in the authorized Class A Common Stock to 500,000,000 shares and a decrease in the authorized preferred stock to 1,000,000 shares, mergers of two intermediate holding companies with and into the Company and a stockholders’ agreement pursuant to which certain Hallmark entities agree not to acquire, through December 31, 2013, additional shares of Class A Common Stock of the Company, subject to certain exceptions, and agree to certain restrictions on their ability to sell or transfer shares of Class A Common Stock of the Company until December 31, 2013 and, subject to lesser restrictions, until December 31, 2020. Concurrent with the closing of the Recapitalization transaction, the Company has also amended its credit facility with JP Morgan Chase Bank to continue a $30 million revolving credit facility through June 30, 2011, which will provide additional short-term liquidity to the Company.”

The company has also recently noted that the CFO, Brian Stewart, has resigned with an effective date of August 20, 2010.  That is after the scheduled August 12 earnings report date.

The last time this one traded this many shares was on June 25, back when the stock traded 451,600 shares, with a $1.71 close.  The last time this was above $2.00 was in April and March 2010 when the highs were $2.01 and $2.06 respectively.  This one was above $3.00 back in May 2009 and above $5.00 in October 2008.


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Turn For Symantec In Pre-Market Trading Following Q1 Performance

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Symantec Corporation (NASDAQ: SYMC) has fallen behind earnings after announcing Q1 profits of $0.20 per share compared to a market expectation of $0.35 per share.  At 8:35 AM EST Symantec was down 9.75% from $14.67 to $13.24 and has traded 241,310 shares, compared with the daily average of 15,290,500, making it one of the greatest losers with regards to both volume and percentage in today’s pre-market trading.  This comes during a 52-week range of $13.58 â€" $19.16.  Shares are currently trading below both the 50-day and 200-day price averages.

This downturn comes amidst rising concern over competitive threats to Symantec’s primary business, which is software security.

-Michael B. Sauter

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