Video: Warm Up to Coal: China Watch

NEW YORK (TheStreet) -- In the face of interest rate hikes, contributor Eric Jackson details how strong Chinese coal demand is likely to remain and what the best China coal plays are.

Mon 03/14/11 10:08 AM EST -- Brittany Umar & Eric Jackson

Stocks in this video: YZC | NUE | BHP | KOL | X | MT | PKX

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Undershooting the New iPad

By Eric Jackson
RealMoney Contributor
3/15/2011 10:00 AM EDT
Click here for more stories by Eric Jackson

Most analysts expect that sales of Apple's(AAPL - commentary - Trade Now) iPad 2 over the weekend have exceeded those of a year ago, when the first version of the product was released. Chances are, though, that these estimates are way below the actual numbers Apple will soon report.

Last year, there certainly were people lined up to buy the iPad, and Apple sold 300,000 in the first 24 hours. It was one of the most successful new product launches ever. Ever since iPad 2 debuted 10 days ago -- a presentation for which Steve Jobs made an unexpected appearance -- there has been excitement that this version might even do better than the original.

Piper Jaffray's Gene Munster said Friday that, based on the lines we saw that day, he was upping his estimate of weekend iPad 2 sales to 500,000 units. A year ago, the Apple analyst was actually one those who were more bullish about the first iPad. While some initially said that Apple would sell only 1 million units for 2010, Munster came out in March with a massive estimate of 5.6 million units for the year.

Yet, less than a month later, Munster backtracked. The initial launch of iPad 1 seemed below Munster's estimates, so he cut his full-year forecast to 4.3 million iPads.

Well, last week, Apple announced that they sold 15 million iPads in 2010.

It's déjà vu all over again. The Wall Street analysts have it all wrong. iPad 2 is likely to sell far more units over this first weekend, and for all of 2011, than what anyone expects. Bloomberg reported last week that the analysts' consensus was for Apple to sell 600,000 iPad 2s this weekend, and 35 million in all of 2011.

I believe Apple will soon say they achieved sales of 2 million units in the first 24 hours. What's more, I believe they will do 100 million iPad 2s for the full year.

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Earthquake Won't Shake Tech Stocks

By Eric Jackson
RealMoney Contributor
3/14/2011 8:00 AM EDT
Click here for more stories by Eric Jackson

With the frantic headlines and devastating imagery over the weekend of the Japanese earthquake and tsunami, what are the implications to your portfolio of tech stocks and Chinese stocks?

I believe we are nearing the end of the uncertainty weighing on the markets over the current nuclear concerns. If we were focused on rebuilding, the markets would be having an easier time moving forward. As it is, we are still not sure of the situation with the nuclear reactors. Every time the word "nuclear meltdown" is used in describing the event unfolding, the market jitters.

But this is not the '80s in Chernobyl. This is modern-day Japan. The fears are outpacing the reality of the situation. By the end of the week, I suspect our fears will have subsided and our full attention will be focused on the improving American economy, not Japan.

I listened in on a conference call of BAML Capital Partners' top Japan and Asian analysts last night. One of their key messages was that the Japan crisis would have little if any impact on the rest of Asia. Yes, China exports a lot to Japan, and the Japanese consumer is going to be in hunker-down mode for a while. Yet this headwind will likely be more than offset by Japan's need for stuff in order to rebuild.

Electronics, basic materials, food, energy. Japan needs them. China will sell them a lot.

It's been interesting to watch over the past week (especially Friday) how a number of Chinese tech names have been performing well. On Friday, there were big gains in Baidu (BIDU - commentary - Trade Now),Sohu (SOHU - commentary - Trade Now), Sina (SINA - commentary - Trade Now), Shanda Interactive(SNDA - commentary - Trade Now), Perfect World (PWRD - commentary - Trade Now), Changyou.com(CYOU - commentary - Trade Now), SouFun (SFUN - commentary - Trade Now), and Shanda Games(GAME - commentary - Trade Now).

NetEase.com (NTES - commentary - Trade Now) was down on Friday but has had a strong couple of weeks since its earnings came out.

Why have these Chinese Web and gaming companies been doing so well, even after the massive earthquake hit at midnight last Thursday night? Despite the jitters about energy in North Africa in the last month, most investors are seeing the strength in all these names with rising advertising revenues and increased game usage from a confident Chinese consumer. Those local factors will trump tragic events next door in Japan.

These companies will continue to see their stock prices rise and fall solely on their own performance and the continued strength of the Chinese economy.

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Golden Plays: China Watch

NEW YORK (TheStreet) -- Contributor Eric Jackson explains what's behind China's appetite for gold and what the best China gold plays are.

Fri 03/11/11 06:00 AM EST -- Brittany Umar & Eric Jackson

Stocks in this video: NG | ABX | GLD | FCX | NEM | MT | PKX

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Dangdang Must Step Up

By Eric Jackson
RealMoney Contributor
3/10/2011 1:45 PM EST
Click here for more stories by Eric Jackson

What happened to E-Commerce China Dangdang (DANG - commentary - Trade Now)?

It debuted with great fanfare in an initial public offering last December. The stock priced at $16 a share, which was considered high, opened at $24 and quickly went to the $30 range, closing at a high above $34 in mid-January. Since then, the stock has steadily been returning to its initial trading levels.

Yesterday, it released its first earnings report since going public. As usual with these Chinese stocks, it takes time for the market to digest the news contained in the results. The initial reaction was positive. The stock traded up in the premarket to almost $27 after closing the prior day under $26. But it immediately started selling off yesterday and hasn't stopped yet. Today, the stock is currently trading under $23, down nearly 7%. So what happened in the earnings report?

The e-commerce site, which still makes the majority of its money selling books, revealed that its net revenue for the fourth quarter was up 58% year-over-year to $108 million and its full-year revenue also grew 57% to $346 million.

They also boasted in their earnings call that non-book revenue grew 150%. They aim to reposition themselves -- much like Amazon (AMZN - commentary - Trade Now) did 10 years ago -- by selling a variety of goods via e-commerce rather than just books, which tend to be lower-margin sales. General merchandise revenues in 2010 were up 156% to $59.4 million from the previous year.

Yet, the scale of those general merchandise sales -- only 17% of overall sales -- shows that Dangdang still has a way to go to credibly saying it's no longer just a bookseller.

Its first-quarter guidance indicated that net revenue would be between $102.4 million and $103.6 million, representing a 50% increase year over year. That was in line with estimates.

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[*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]

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Video: Jackson Interview on Apple's Jobs

March 10 (Bloomberg) -- Eric Jackson, founder and managing member of Ironfire Capital LLC, talks about the outlook for Apple Inc. and its Chief Executive Officer Steve Jobs. He speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

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Steve Jobs's Best App Might Be Succession Plan: Eric Jackson

By Eric Jackson - Mar 9, 2011 7:00 PM ET

Bloomberg Opinion

Apple Inc. (AAPL) suffers from a Steve Jobs discount, and it’s not fair.

Ever since Jobs, the chief executive officer, disclosed that he had a rare form of pancreatic cancer in August 2004, Apple’s stock has been underpriced. That assertion may seem absurd, given that the shares have risen more than 2,000 percent since then and the company’s market value of $325 billion is second only to that of Exxon Mobil Corp. Apple’s share price is now hovering at about $355.

It should be much higher. Since 2004, Apple earnings have gained 134 percent a year on average. In 2009, net income rose 35 percent, during the biggest economic collapse since the Great Depression. And they increased 70 percent last year. Yet Apple’s price-earnings ratio based on expected earnings in fiscal 2012 is only 11, compared with the Standard & Poor’s 500 Index’s average of 15. Trading at the S&P 500 multiple, Apple’s stock should be more like $480.

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[** This post is an excerpt of the full article, available on Bloomberg.com by clicking here. **]

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Video: SINA is an Attractive Buyout Candidate

Contributor Eric Jackson says Sina's Weibo growth hasn't yet fully been reflected in its stock price given its potential. Tencent or Baidu (BIDU) would be interested buyers. And there's not a founder CEO to block a deal. Eric owns SINA and YHOO.

Wed 03/09/11 12:11 PM EST -- Eric Jackson

Stocks in this video: YHOO | SINA | AMZN | NTES | BIDU | EBAY |TCEHY | SOHU | GOOG

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Why Sina Might Be Bought Out

By Eric Jackson, Senior Contributor03/09/11 - 08:30 AM EST

Stock quotes in this article:SINA, AAPL, SOHU, NTES, BIDU, YHOO, GOOG

NEW YORK (TheStreet) - Sina(SINA_) would be an attractive buy-out candidate.

In 18 months, it has created from scratch a Twitter-like service called Sina Weibo that -- as of last month -- surpassed 100 million users. That's something that took Twitter twice the amount of time.

To call Weibo a Twitter clone does it a disservice. It's actually much more functional than Twitter with a superior Apple(AAPL_) iPhone application, commenting and forwarding system, along with instant messaging and location-based services. It is more of a combination of Twitter and Facebook that a pure copycat of Twitter.

Since the start of last July, Sina's stock is up 146%, and its market capitalization stands at more than $5 billion. Remember that it was worth $2 billion when it was just known for its traditional advertising-supported portal business (which has also been on fire since last summer - just ask its competitors Sohu(SOHU_) andNetEase.com(NTES_). Sina also has almost $1 billion in cash.

Keep in mind that, since July 1, Sohu's stock has increased almost 100% on its own -- just on its ad-supported business. Although it has a Twitter-like microblogging service, it is far less popular than Sina's.

Therefore, even though Sina has seen its stock price soar since July, it is reasonable to argue that the "extra" value created in market capitalization for Sina relative to Sohu directly attributable to Weibo is only an extra $1.1 billion.

Yet, Weibo is a powerful platform to drive future growth for the company. We all understand this intuitively when we think about Facebook and Twitter. Twitter was recently valued in asecondary market stock sale (which has surprisingly turned out to be very accurate indicators of actual values later award by private sophisticated investors) at $7.7 billion. Yet, Twitter's revenues were reportedly only $45 million last year . Twitter is supposed to have 160 million users at the moment. Sina Weibo might surpass them in users by September.

Facebook was recently valued by General Atlantic Partners at $65 billion. Its revenues were$1.2 billion to $2 billion in 2010 . Facebook now has 500 million users worldwide.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]

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Stop Excoriating Apple

By Eric Jackson
RealMoney Contributor
3/7/2011 1:45 PM EST
Click here for more stories by Eric Jackson

There is a wide perception that Apple (AAPL -commentary - Trade Now) is universally beloved by investors and customers alike, but there's actually quite a bit of criticism of the company to be found. Here are the top complaints that I've heard and why I believe they're off the mark.

"Everyone likes Apple. It's a one-sidedtrade."

There are 63 analysts at last count covering Apple. Of those, three have a Hold on the stock and only one has a Sell. Critics howl that this is a sure sign of the world seeing Apple through rose-colored glasses. They point to the dot-com bubble and say that Apple's story will also end in tears.

Time for a reality check. Yes, Apple is liked and admired by investors almost to the point of being a cult, but there is good reason for this. Anyone who goes into an Apple store and compares the experience to any other retailer knows that there is a much deeper and obvious connection between Apple users and their products.

Although Apple is recommended by most analysts, they are still way too conservative in their estimates for future earnings, which I'll address in more detail later. That conservatism is, in fact, an opportunity, compared with a stock where five out of 10 analysts rate it a Buy and the rest rate it a Sell.

"It's too expensive."

We see $360 and we know that Apple is one of the most expensive stocks on the Street for a single share. Additionally, we know that Apple currently has the second-highest market capitalization in the world at $327 billion, behind Exxon Mobil's (XOM - commentary - Trade Now) $424 billion. There's an urge to think that if something is among the most expensive, it has nowhere to go but down, hence all the hand-wringing. I even read one complaint that although Apple is second in market capitalization, it's not even in the top 20 for total revenues.

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[*** This post is an excerpt of the full article, available by clicking here to go to RealMoney.com. Note: subscription required. ***]

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Apple's Display of Strength

By Eric Jackson
RealMoney Contributor
3/3/2011 12:15 PM EST
Click here for more stories by Eric Jackson

Yesterday's iPad 2 announcement from Apple (AAPL - commentary - Trade Now) was remarkable for several reasons.

The biggest surprise was Steve Jobs' appearance as the master of ceremonies. Kara Swisher, tech columnist at The Wall Street Journal reported that he might make an appearance, but it certainly was not expected. The audience roared at his arrival, and he gave a vintage "Jobs" performance (albeit a little weaker than normal).

Jobs' appearance was a relief to investors. Since his Martin Luther King Day announcement that he would take an indefinite medical leave from the company, concern has spread among investors that he might not return. Trashy magazines and websites had circulated unflattering photos of Jobs, which only added to investor anxiety. While most people trust and take comfort in the fact that Tim Cook is ready, willing and able to step into Jobs' day-to-day role, the concern of the last month has weighed on the stock.

The Jobs we saw yesterday was much stronger that most of us had been led to believe by the National Enquirer. We all know that the Apple product plan is likely set for the next four to 10 years and that the company has capable management depth. However, Jobs' performance yesterday was encouraging to long investors in the stock.

Apple's Senior Vice President of Industrial Design, Jony Ivy, was also at yesterday's event. There have been rumors over the past week or so that Ivy and Apple's board have been at odds over Ivy's desire to relocate back to England. Ivy is the wunderkind behind the design of Apple's products. Who knows if these rumors have any merit? It's hard to imagine that Ivy would want to leave the company over the issue of where spends his time. In any case, he was there yesterday in the front row, and he had a speaking role in one of the videos.

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Video: Unloved China Gem: Shanda Interactive

Contributor Eric Jackson says Shanda Interactive (SNDA) is basically trading for its cash. Yet it has a number of initiatives in games, literature, and payments that could pay off big this year. It reports earnings on Wednesday. Eric owns YHOO.

Wed 03/02/11 13:52 PM EST -- Eric Jackson

Stocks in this video: YHOO | AMZN | BIDU | SNDA | GAME

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Gupta's Charges Latest Sign that Goldman's Board Too Cozy

By Eric Jackson03/01/11 - 04:35 PM EST

NEW YORK (TheStreet) -- The news that the Securities and Exchange Commission was charging the former head of McKinsey & Co., Rajat Gupta, with insider trading for tipping off hedge fund manager Raj Rajaratnam were shocking.

Gupta was a blue-chip business executive. McKinsey's corporate reputation as an adviser has been beyond reproach prior to this (although another lower-level McKinsey consultant was swept up in this sameGalleon probe earlier). He moved in rarefied corporate circles since leaving the top job at McKinsey.

Gupta had served as a corporate director forGoldman Sachs (GS_) and Procter & Gamble(PG_) and is also a board member of AMR(AMR_). He'd advised the World Economic Forum and the United Nations' Secretary General.

If Rajat Gupta is tipping off hedge fund buddies, an observer must ask: How pervasive is this kind of insider trading among other corporate executives and directors?

We will likely never know the full answer to that question, but I had previously criticized Goldman Sachs for allowing Gupta to serve on its board more than 18 months ago. I said the board was too cozy with old friends of Goldman and people who were ill-equipped to strongly question the strategy of the firm presented by CEO Lloyd Blankfein and COO Gary Cohn.

I said that Gupta was likely someone who had personally consulted for Goldman for years (for compensation, of course). Even though I thought that Gupta would try to fulfill his job as a director in a professional manner, any human would feel beholden to a former client (Blankfein and Cohn), especially in a role (as director) that brings good compensation and unspokenopportunities to invest in different opportunities that Goldman uniquely has access to (like the recent private investment in Facebook for example) and general prestige that would be associated with the job.

I also disliked that Goldman's board had five former or current CEOs who were also presumably former Goldman clients, including current ArcelorMittal (MT_) CEO Lakshmi Mittal, Colgate-Palmolive's(CL_) former COO, Lois Juliber, former chairman and CEO ofFannie Mae (FNM_) James Johnson, former CEO of Medtronic(MDT_) William George, and former Chairman and CEO of Sara Lee (SLE_) John Bryan.

They could also have a hard time saying "no" to Blankfein and Cohn, for the same reasons Gupta would.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]

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America: Wake up! How are we going to compete with China?

By Eric Jackson, Senior Contributor03/02/11 - 06:00 AM EST

Former GE(GE_) CEO, Jack Welch, was on CNBC Tuesday, saying, "This is still the best country in the world."

Those words make us all feel warm and fuzzy. We're the best. We have been and we always be. Politicians like to invoke these same feelings in their speeches.

But the words are hollow. We're not the best anymore. Our time at the top is coming to a close, unless we take drastic actions which we seem unwilling to consider. China is about to pass us. The Chinese work harder, for less money and benefits.

We need a wake-up call.

I had a long car ride last weekend and was listening toSirius(SIRI_) satellite radio with an endless loop onCNN and Fox News Channel. If you only got your news from these two channels and the politicians and pundits speaking on them, you would assume our leadership atop the global is unassailable.

The biggest question facing our country, according to the talking heads, is whether we should have more or less government and more or less taxes.

These debates miss the big picture: China is eating our lunch economically. Are we, as Americans, going to come together as a cohesive team and think about how we can better compete with the Chinese or are we going to keep fighting ourselves?

Americans have had it good for a long time. Our standard of living is the best in the world. We borrowed money over the last 20 years because our expectations of continued prosperity were assured. But the party is over. We've collectively maxed out our credit cards. It's time for us to look at ourselves critically in the mirror.

We don't need politicians who act like polite Saks(SKS_) sales clerks telling us that our butt doesn't look fat in a new pair of jeans we're trying on when it does. We need politicians who talk to us like a personal trainer at the gym: We're fat and out of shape --- and we need to get on a program.

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[** This post is an excerpt of the full article, which is available on TheStreet.com by clicking here. Free Site.**]

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