Corp. (Nasdaq: ADAT), a provider of web-based software applications and
telehealth products and services for healthcare organizations, announced today
that the Department of Veterans Affairs (VA) has informed the company that it
does not intend to exercise the fourth and final option year under its Care
Coordination Home Telehealth Program contract for devices and services. The
company's agreement with the VA, which was originally awarded in April 2011,
consisted of a base year and four one-year option years that were exercisable
at the VA's sole discretion. The current option year under the contract
expires on May 15, 2015 and the company anticipates that it will complete its
transition process with the VA by that date.
Ian C. Bonnet, Authentidate's recently appointed Chief Executive Officer
stated, "The VA contract contained no minimum purchase requirements and the
company was never able to realize the level of growth and profitability
anticipated from the VA relationship, despite its best efforts and the
commitment of substantial resources. Although we are obviously disappointed
with the VA's decision, the expiration of this contract will allow us to
reduce our operating costs in excess of the average monthly recurring revenue
and equipment margins previously generated from the VA project. This will
allow us to repurpose our investments to focus on offering a broader array of
solutions to the healthcare market than we already have available and to
increase our sales efforts on the commercial market opportunities for our
products and services, which we believe have greater potential."
In response, the company will immediately implement plans to reduce its
operating costs to better align its resources with its anticipated revenue
over the next several quarters and the growth opportunities that it intends to
pursue. These changes include a reduction in staff and the use of external
resources and other costs. The company also expects to report significantly
reduced revenues over the next several quarters due to the non-renewal of the
Mr. Bonnet concluded, "Authentidate has invested considerable time and
significant resources developing state-of-the-art products and services, and
we believe our proprietary software offers unique advantages to a healthcare
industry that relies increasingly on technology to reduce costs, improve
efficiencies and enhance patient outcomes. The VA has extensive requirements
not necessary in commercial sectors. While some of those requirements have
innovated our offerings, others are simply not value add to commercial
customers. By no longer building legacy products to those specifications, we
will be able to dedicate more resources to more meaningful efforts for our
customers and shareholders, exploit the key advantages of our products and
services and focus our product development and sales efforts on healthcare
organizations with the greatest demand for telehealth and Inscrybe solutions.
As part of this strategy we intend to pursue strategic relationships with
industry partners to supplement our marketing efforts."
Google Inc (NASDAQ: GOOGL)(NASDAQ: GOOG) generates most of its revenues through advertising and search advertising. For a company that is so dependent on advertising, every inch of the screen counts, and as consumers progress from larger to smaller screen devices, the advertising real estate for companies like Google will continue to shrink.
Heather Bellini, partner and managing director at Goldman Sachs, was on Bloomberg Friday to discuss how the consumer's shift to mobile is impacting Google.
“Mobile search is a big shift,” Bellini said. “They were dominant and grew up in the desktop age; and in the age of mobile, search economics are a little bit different. So, it does create a challenge.”
She continued, “The revenue per search that Google generates on mobile search, because the real estate on your screen is much smaller than on the desktop, is less; and so the price that advertisers are willing to pay for ads at least at this point in time is just significantly lower. We estimate about half.”
Bellini was asked how mobile can cause a dent in Google's revenues when it has significantly increased the number of searches over the years. She replied, “You probably have apps on your phone, and instead of searching a restaurant on Google, like you might have in the past, maybe you go to OpenTable or you go to Yelp.
“And so those types of things mean that Google isn't necessarily getting the revenue that it was before. So, yes, there are a lot more searches, but you just have to think about where they are going.”
Friday’s jobs report indicated a better-than-expected gain of 295,000 payrolls, which originated despite the shortened month of February and inclement weather conditions across much of the country. This data sent both stocks and bonds lower, as investors started to anticipate the U.S. economic growth engine may force the Federal Reserve’s hand in raising benchmark interest rates this year.
One of the strongest areas of the market on Friday was the PowerShares DB US Dollar Index Bullish (NYSE: UUP), which gained over 1 percent and continues its near vertical ascent to new 52-week highs. This move in currencies weighed heavily on international investments and gold-backed funds such as the SPDR Gold Trust (ETF) (NYSE: GLD) as well.
The following ETFs represent a sample of the best- and worst-performing funds over the last five trading sessions.
Solar stocks have been on a tremendous push this year and the Guggenheim Solar ETF (NYSE: TAN) is one of the beneficiaries of this strength. TAN gained 11 percent this week and is now more than 28 percent higher since the start of 2015.
This ETF is the largest index dedicated to 29 stocks in the solar industry with over $400 million in total assets. TAN is a truly global fund, with 47 percent of the portfolio allocated to the United States and the remainder spread among China, Hong Kong and other developed nations.
The relative strength of TAN versus the broader market should make this ETF one to watch over the course of 2015.
Gold mining stocks truly felt the effects of falling bullion prices and equity volatility this week. The Market Vectors Gold Miners ETF (NYSE: GDX) dropped more than 12 percent over the last five trading sessions and has nearly erased all of its gains for the year.
GDX tracks a portfolio of 38 small-, mid- and large-cap global mining companies. This ETF has more than $7 billion in total assets and has been in a slow decline since peaking in January.
Gold mining stocks typically exhibit higher volatility than traditional gold-bullion prices, and Friday’s weakness may bring out more sellers anticipating further downside.
Stephen Weiss is a buyer of iPath S&P 500 VIX Short Term Futures TM ETN (NYSE: VXX).
Pete Najarian thinks that Facebook Inc (NASDAQ: FB) is going to test its highs. He owns call options in the name, but he sees this trading idea as a short-term trade.
Giving a respite to Wall Street, all 31 banks subjected to Federal Reserve's stress test have cleared the first round. Mike Mayo, CLSA bank analyst, was on CNBC Friday to weigh in on this and to discuss why the second round of the stress test is so crucial for Citigroup Inc (NYSE: C) CEO Michael Corbat.
“Well, I'll say the stress test is good news-bad news,” Mayo said. “The good news is the industry is resilient. Based on some numbers from the Fed, the industry can survive not only one financial crisis, but two financial crisis.
“The bad news is that this can be a false positive and a false negative for individual banks.”
He explained further, “The big news comes out five days from now. The last two years, one out of every eight banks failed on qualitative factors, and those are issues that we won't know until five days from now.”
Mayo was asked why he thinks that Citigroup's CEO could lose his job if the company fails the second test. He replied, “We will know five days from now whether or not the CEO of Citigroup, Mike Corbat, still has a job.”
He elaborated, “Last year [...] when Citi failed the stress test the second time in three years, we said, ‘Somebody at Citigroup should be held accountable.'
What happened was the CEO of Citigroup came out and said, ‘Hold me accountable.' Well, guess what? It's a year later and the CEO of Citigroup needs to be held accountable.
“If Citigroup fails the stress test, he – and I would imagine – some other people at Citigroup will be gone. If they pass the Fed's stress test, then this could be a multi-year inflection point,” Mayo concluded.
The U.S. Dollar Index is trading at multi-year highs on Friday after U.S. government data showed a better than expected U.S. unemployment rate of 5.5 percent. The March U.S. Dollar Index was trading at 97.60, up 1.21. The data also showed 295,000 jobs were added during February. Once the data was released, forex traders aggressively bought U.S. dollars in anticipation of a hike in Interest rates by the Federal Reserve.
TD Ameritrade Chief Strategist JJ Kinahan discussed Friday's payroll data and the state of the economy.
Construction, healthcare, education and a positive bounce in manufacturing were seen in the jobs report, Kinahan observed. "We've created jobs in every single sector but mining," and he pointed out that the mining sector included energy related jobs which were cut due to low oil prices.
U.S. stocks fell following the news and Kinahan told Benzinga that "there is more pressure on the Fed to raise rates."
"While it was a good report which should make the market, theoretically, go up, if the Fed raises rates, that's a negative for the market," which may have also prompted the selloff in gold, according to Kinahan.
"Don't forget that the dollar hit 11 1/2-year highs [Thursday] night versus the euro," which Kinahan indicated could also impact gold.
Related Link: What This Market Expert Thinks Of Greece And The ECB
Speaking further about currencies, Kinahan observed that due to the strength of the U.S. dollar, "we may see a rotation out of companies that are more dependent on foreign sales." However, Apple Inc. (NASDAQ: AAPL) as an example, "does a lot of foreign sales, which had a blow-out quarter and hasn't really talked about their expectations for their earnings coming down [due to FX]." Kinahan suggested the issue would need to be watched on a company-by-company basis.
Discussing the topic of interest rates, Kinahan felt that with pressure to raise U.S. rates and lower rates abroad, the U.S. dollar and euro may move towards parity.
The last time the dollar and euro were at parity, "the U.S. economy was doing very well, so now the U.S. economy is going along but its not exactly shooting forward." Further complicating the picture was the decision to begin Quantitative Easing in Europe and now the Eurozone "is running out of options" for helping its economy, according to Kinahan.
Friday's USDA hog slaughter was 410,000 head versus a year ago at 414,000 head. Lean Hog Futures traded lower during a choppy trading session. April Hogs settled at 66.12, down 0.70. June Hogs settled at 80.05, down 0.35. July Hogs closed the day at 80.52, down 0.30.
Orexigen Therapeutics, Inc. (NASDAQ: OREX) sole product, the anti-obesity drug Contrave, almost certainly won't get pulled from the market, an analyst said Friday
Orexigen shares fell 12 percent Friday after a regulatory official threatened sanctions on the company for prematurely disclosing data from a drug trial. The official also called the data unreliable.
RBC's Simos Simeonidis, who maintained an Outperform rating on Orexigen, said it's "highly unlikely" that sanctions would include withdrawal of marketing approval for Contrave.
The official, John Jenkins of the Food and Drug Administration, also said the prematurely disclosed data suggesting that Contrave afforded benefits to cardiovascular patients represent "a highly unlikely, random-chance finding."
The disclosure of the supposed heart benefit Tuesday sent Orexigen shares up 50 percent.
Simeonidis said it's probable that cardiovascular benefits seen in the interim data will diminish as the study progresses.
But such an outcome "would not put the drug's regulatory status in any jeopardy," according to Simeonidis.
Contrave, developed in partnership with Takeda Pharmaceutical Co Ltd. (OTC: TKPYY), got approved last year as a weight-loss treatment.
"The most likely scenario is that nothing really material comes of this, other than short-term volatility," Simeonidis said.
Potential sanctions on Orexigen, according to Jenkins, who heads the FDA's Office of New Drugs, range from imposing financial penalties to withdrawing Contrave from the market.
Data disclosed Tuesday, in an Orexigen filing concerning a patent application, concerned a long-term study aimed at determining whether use of Contrave posed cardiovascular risks.
Friday's USDA cattle slaughter was 102,000 head versus a year ago at 102,000 head. Live Cattle Futures traded higher. April settled at 154.65, up 1.37 during a firm trading session. June Live cattle traded choppy and settled at 147.10, up 1.07.