Tony the Tiger sparks Sallie Mae rise; E*Trade down on earnings fears; EMC, Suntech Power slammed

By Evan Weinberger

New York, Jan. 7 - A shakeup at the top of SLM Corp., the student lender better known as Sallie Mae, sent its stock and convertibles soaring.

An analyst's warning smashed E*Trade Financial Corp.

EMC Corp. convertibles were hammered.

Suntech Power Holdings Co. Ltd. had a rainy day.

Trading activity continued to be light Monday. A trader said that he had been showing "a slew" of markets to clients for days, but no one was biting. "I am deadly quiet," he said.

"It just doesn't feel that busy," an analyst said. "I think people are just kind of waiting around until 2009."

He said that every bit of good news that comes out - like the increased hopes of a Federal Reserve rate cut at the end of the month - seems to be followed by a bit of bad news - a naval skirmish between Iranian and U.S. forces in the Strait of Hormuz.

No new issues were announced as of this writing, although market watchers expect more to hit the market in the coming days.

Equity markets were wishy-washy Monday. There was a lot of up and down movement between fairly narrow ranges on all three.

The Dow Jones Industrial Average inched up 27.31 points, or 0.21%, to close at 12,827.49.

The Nasdaq slipped 5.19 points, or 0.21%, for a 2,499.46 close.

The Standard & Poor's 500 picked up 4.55 points, or 0.32%, to close at 1,416.18.

Salle Mae gets tiger in its boardroom

Reston, Va.-based Sallie Mae restructured at the top Monday. The company named Anthony P. Terracciano its new chairman. Albert L. Lord, Sallie Mae's pugnacious former chairman and CEO, as vice chairman while he retained his position as CEO.

Terracciano is often called "Tony the Tiger." His last position was president of First Union Corp., which is now Wachovia. His specialty is banking sector turnarounds, including preparing some for takeovers.

Sallie Mae stock has been battered since the failure of its takeover by a consortium led by private equity shop J.C. Flowers & Co.

Sallie Mae also named John F. Remondi, who until recently was a portfolio manager at Par Capital Management and helped Sallie Mae wean itself from direct government support in a previous stint that began in 1999, was named vice chairman and chief financial officer.

When asked whether there was a good reaction from investors, one analyst said simply, "There was."

That is evidenced by the performance of Sallie Mae's 7.25% series C mandatory convertible preferred stock due Dec. 15, 2010. The preferreds closed Monday at 989.50 versus a closing stock price of $17.83. They closed Friday at 918.2 versus a stock price of $16.67.

Sallie Mae stock (NYSE: SLM) jumped $1.16, or 6.96%, on the day.

E*Trade down on earnings worries

A Citigroup analyst said New York-based online brokerage house E*Trade is facing three years of losses Monday.

The analyst, Prashant Bhatia, said in a note to investors that E*Trade had lost about $30 billion in client assets over the last two months. That represents about 15% of the brokerage's total managed assets.

Bhatia added that E*Trade's bailout strategy of marketing for high yielding deposits is "uneconomical and unsustainable."

Investors fled E*Trade Monday.

The company's 6.125% common equity units due Nov. 18 (Nasdaq: ETFCP) closed Monday at $4.75 versus a closing stock price of $2.83. They closed Friday at $5.22 versus a stock price of $3.23.

E*Trade stock (Nasdaq: ETFC) tumbled 40 cents, or 12.38%, on Monday.

EMC down

Hopkinton, Mass.-based data storage maker EMC was blitzed Monday.

The company's 1.75% convertible senior notes due Dec. 1, 2011 closed Monday at 124.32 versus a closing stock price of $16.04. They closed Friday at 128.54 versus a stock price of $16.99.

EMC's 1.75% convertible senior notes due Dec. 1, 2013 closed Monday at 125.509 versus a stock price of $16.04 after closing Friday at 130.118 versus a stock price of $16.99.

EMC stock (NYSE: EMC) was down 95 cents, or 5.59%, on the day.

Suntech Power sees clouds

Wuxi, China-based solar panel components maker Suntech Power had a dark day Monday.

The company's 0.25% convertible senior notes due Feb. 15, 2012 closed Monday at 167.49 versus a stock price of $74.96. They closed Friday at 179.108 versus a stock price of $81.84.

Stock in Suntech (NYSE: STP) fell $6.88, or 8.41%, on the day.

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