Thursday, January 01, 2009

A Look Into the Micro Crystal Ball

Published in

By Eric Jackson

12/31/2008 12:00 PM EST

In these final days of 2008, we turn our eyes to next year and how the stock market will fare. Rather than adding to the chorus of predictions about the price of oil, gold and the dollar -- as well as the S&P 500 in general -- I wanted to offer some predictions that are micro in nature.

1. New York Times (NYT - commentary - Cramer's Take) will be sold to avoid shutting down. The sales of its Boston properties, cutting of its dividend and mortgaging of its headquarters will not be enough to refinance its debt in 2009. The Times will be forced to seek out a friendly purchaser, more likely to be Mort Zuckerman, Eli Broad, Terry Semel or Ron Burkle than Rupert Murdoch because of News Corp's (NWS - commentary - Cramer's Take) own financial challenges.

2. Yahoo! (YHOO - commentary - Cramer's Take) will appoint an inside board member as CEO by the end of February (either Gary Chapple, Maggie Wilderotter or V.J. Joshi), which will be panned by the business media and employees as uninspiring. Current President Sue Decker will immediately leave the company and take a job later in the year working for Warren Buffett at Berkshire Hathaway (BRK.A - commentary - Cramer's Take). Microsoft (MSFT - commentary - Cramer's Take) and Yahoo! will announce a friendly "merger" by the end of the summer.

3. Terry Semel will buy a media property through his investment firm and effectively run it (a la Sam Zell). After all the bad press from his days at Yahoo!, Semel won't be content to stay on the sidelines.

4. CBS (CBS - commentary - Cramer's Take) will be spun off from Sumner Redstone's control and Les Moonves will be removed as CEO. Redstone's debt restructuring talks with the banks will force him to jettison his stake in CBS and hang on instead to Viacom (VIA.B - commentary - Cramer's Take). The network will be sold to another media company and Les Moonves will immediately move on. Home Depot (HD - commentary - Cramer's Take) cofounder Ken Langone will be among the new owners of the company.

5. Howard Stern will announce he's not re-signing with Sirius (SIRI - commentary - Cramer's Take) and instead retire; Sirius will restructure through Chapter 11 with Mel Karmazin staying on. Disappointed in his lack of influence as part of Sirius, Stern will throw in the towel and announce he's retiring after his five-year contract ends in 2010. He will stay retired for nine months before announcing he's returning to terrestrial radio.

6. Google (GOOG - commentary - Cramer's Take) will buy geospatial satellite operator GeoEye (GEOY - commentary - Cramer's Take). Google will see providing the map images (and searching any location on Earth) that appear on Google Maps, Google Earth and its G1 mobile phone as strategic, as well as in line with its interest in space in general. Google's stock will end 2009 at $350.

7. Women's retailers will face bankruptcy. Ann Taylor (ANN - commentary - Cramer's Take), Talbots (TLB - commentary - Cramer's Take) and Charming Shoppes (CHRS - commentary - Cramer's Take) will all announce bankruptcy before the summer, as cautious women shoppers stay away from these retailers and tighten their purse strings. Chico's (CHS - commentary - Cramer's Take) will teeter on the edge of bankruptcy but survive the year.

8. Bill Gates' investment firm will orchestrate a takeover of Crocs (CROX - commentary - Cramer's Take) in his first active investment. Faith in the Crocs products, which are used by the Bill & Melinda Gates Foundation with children in Africa, as well as frustration with the current management, will spur Gates into taking over the footwear company.

9. Hugh Hefner will make a lowball offer to take Playboy (PLA - commentary - Cramer's Take) private with several other friendly individual investors after disillusionment in the low stock price. This action will spur interest from a larger foreign investor to buy the company with the promise of letting Hefner continue to run it independently.

10. Dry bulk shippers like DryShips (DRYS - commentary - Cramer's Take) and TBS International (TBSI - commentary - Cramer's Take) will triple in value before June 1 as the general market rallies, before declining 50% in the second half of the year.

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