Diamonds and Dogs

1/3/19

The New Year starts with a biotech merger. Celgene (CELG) is up 24% after agreeing to be bought out by Bristol Myers for $74 billion. The deal initially priced Celgene stock at $102 a share, but the stock is only ain the low $80 range due to Bristol's stock selling off 13% and investor confidence the deal won't go through. Longer term the deal is expected to achieve $2.5 billion in cost savings by 2022 and add more than 40 percent to its earnings in the first year after the deal closes. The deal is expected to create the top oncology franchise and a top-five immunology franchise with strength in both solid tumors and blood cancers. The combined companies will launch six products over the next 12 to 24 months for treatments in late-stage clinical development - five coming from Celgene's pipeline.

Darkest day for Apple's iPhone era. Apple is trading down 8% to new lows after lowering sales guidance for the first quarter. The new forecast will mean Apple is reporting a holiday quarter slowdown for the first time since Cook became CEO in 2011. The stock is now down 38% from the October highs with the market cap down over 40%. With over a $100 billion in cash and generating an extra $60 billion a year, the cash will account for over 20% of their market cap. Not bad.