MORNING COFFEE

Smart Money Selling Facebook Shares.  With all the hype surrounding the highly anticipated Facebook (FB) IPO scheduled for Friday, the average person thinking about purchasing shares may not be aware of what the smart money plans on doing with their shares.  Just a week ago Facebook was looking at a valuation of $77-$96 billion and early investors where looking to book their profits by selling their shares to the public.  Additionally, Warren Buffett said on CNBC that he would not be purchasing any shares.

Fast forward one week, GM (GM) announced that they would no longer be advertising on Facebook due to poor results and news that Facebook is having difficulties monetizing their mobile platform. Despite the news, the hype continues allowing Facebook to increase the offering size and raise their IPO target price range to meet demand. 

Now estimate valuations of the company are $104 billion and Wall Street’s smartest are selling even more shares.  The following is a partial list of early investors looking to dump shares.

Goldman Sachs (GS) plans to sell up to 50% of its shares, up from 23%.

Peter Thiel plans to sell as much as 50% of his stake, up from 22%.

Tiger Global plans to sell up to 50% of its shares. They had previously planned to sell only 7%.

DST Global and Mail.ru plans to sell up to 40% of its shares, up from 23%.

Accel Partners plans to sell up to 28% of its shares, up from 20%.

CEO Mark Zuckerberg is still planning to sell 6% of his shares.

These early investors into Facebook know the company better than any individual investor and they have decided to book profits.  This could be a warning to the average investor who plans on purchasing shares in the open market when the company begins trading.  Remember what Warren Buffett has said about investing “Be fearful when others are greedy and greedy when others are fearful.”

Upgrades

Duke Energy (DUK): Macquarie raised their rating from Neutral to Outperform and placed a target price of $23.50 on the company. After Hours: 21.38 -0.01 (-0.05%)

Downgrades

AFLAC (AFL): RBC Capital lowered their rating from Outperform to Sector Perform and placed a target of $59.00 on the company. After Hours: 41.50 -0.11 (-0.26%)

Visa (V): Goldman Sachs lowered their rating from Conviction Buy to Buy and lowered their target price from $142.00 to $135.00. Pre-market: 117.39 -0.14 (-0.12%)

Abercrombie & Fitch (ANF): Wells Fargo lowered their rating from Outperform to Market Perform and lowered their target range from $52.00-$57.00 to $40.00-$42.00. After Hours: 39.35 -0.15 (-0.38%)

Coverage Initiated

Kirby Corp. (KEX): Wunderlich initiated coverage with a Buy rating and target price of $77.00.

Thermo Fisher (TMO): Wells Fargo initiated coverage with a Market Perform Rating and target range of $55.00-$60.00.

Agilent Tech (A): Wells Fargo initiated coverage with an Outperform Rating and target range of $50.00-$55.00.

Waters Corp. (WAT): Wells Fargo initiated coverage with an Outperform Rating and target range of $98.00-$103.00.

SanDisk Corp. (SNDK): Susquehanna initiated coverage with a Positive rating and target price of $47.00. Pre-market: 33.06 -0.40 (-1.20%)

Micron Tech. (MU): Susquehanna initiated coverage with a Neutral rating and target price of $7.00.

Earning Reports

Hot Topic (HOTT): Reported EPS of $0.09 beating estimates by +$0.02.

Jack In The Box (JACK): Reported EPS of $0.27 beating estimates by +$0.04.

Limited (LTD): Reported EPS of $0.41 in-line with estimates. Pre-market: 46.23 -1.73 (-3.61%)

Advance Auto (AAP): Reported EPS of $1.79 missing estimates by -$0.03. After Hours: 82.26 +0.16 (0.20%)

Children’s Place (PLCE): Reported EPS Of $1.10 beating estimates by +$0.04.

Dollar Tree (DLTR): Reported EPS of $1.00 beating estimates by +$0.03.

Sears Holdings (SHLD): Reported EPS of -$0.31 beating estimates by +$0.34. Pre-market: 50.90 +0.03 (0.06%)

Wal-Mart (WMT): Reported EPS of $1.09 beating estimates by +$0.05. After Hours: 59.25 +0.06 (0.10%)

Markets: 
Futures at 6:38: Dow +0.01%. S&P +0.03%. Nasdaq -0.14%. Crude -0.05% to $92.78. Gold +0.62% to $1545.80. 

Europe: London -1.09%. Paris -0.82%. Frankfurt -0.66%. 

Asia: Japan +0.86%. Hong Kong -0.31%. China +1.39%. India +0.25%.