With little macro data out today, the big news in the market is that HP CEO Mark Hurd resigned due to a sexual harrassment discrimination suit that seemed to involve less sex than Bill Clinton’s bedroom (that is when Hillary is sleeping there).  Apparently Hurd hid business expenses when taking out a MILF/GMILF named Jodie Fisher who has starred in such films as “Intimate Obsession,” “Body of Influence 2” and “Steamy Cleveland Nights” (and only one of those three is made up).  Basically, Hurd hired Fisher to run some BS PR events and then took her to dinner afterwards because apparently he is either a big fan of the skinema and wanted to talk to her about her acting influences, or he is a lonely married guy who just happens not to know how to spend the $33MM he made last year (hint Mr. Hurd, if you’re going to wine and dine a lady, how about finding someone younger than 50 who is not going to sue you for inappropriate touching?).

Anyway, Fisher claims that at no point did Hurd try to put his ink cartridge in her printer (though her statement came after she reached a monetary settlement with him, so buyer beware) and HP found he did not break any of the company’s sexual harassment rules, but he did violate their ethics standard by paying Ms. Fisher $20k for no “legitimate reason” (unless wanting to get some stank on your hanglow is a legitimate reason) and then lying about it on his expense report.

This of course raises the question, if he didn’t break HP’s sexual harassment rules, why the fuck would he have to pay Ms. Fisher any type of settlement?  Either HP’s sexual harassment rules are laxer than Heidi Fleiss’, or we are getting only the half of the story about which no one cares.  Honestly, the story seems fishier than Portia Di Rossi‘s breath in the morning but whatever happened, it’s likely more of a blow for HP than it was for Mark Hurd (rim shot please).  Hurd will get a ~$35MM exit package which is the biggest package since Whitezilla hit the scene and now HP will have to find a way to replace the guy who turned them around from a crappy company that sold shitty printers and computers to a good company that sold more shitty printers and computers.   Without his leadership, it is unclear if HP can keep their strategy afloat and the company sold off 10% on Friday after the news.

That said, there is a dearth of macro news today as the market awaits the Fed’s statement tomorrow where investors will hang on every word by Ben Bernanke as if he were Amber Lancaster and the word was “enter.”  The consensus is that the Fed will change very little in their approach to the economy although a growing segment thinks the Fed may undertake more quantitative easing to help spur the economy from it’s current malaise (or whatever is slightly worse than malaise, like death or Kathy Griffin‘s face).  The “hot idea” is that the Fed may buy more mortgage backed securities or Treasuries in order to get more liquidity in to the markets while the “hotter idea” is a Maria Bartiromo-Amanda Drury threesome.  Money McBags would not be shocked by the Fed doing something to try to stimulate the markets (whether it’s growing their balance sheet or showing the market Heather Vandeven films, he’s not sure) as we are at another inflection point where macro data is lagging the market’s run and eventually the decoupling will re-couple so unless the macro data can be turned around, the market will likely come back.

In other market news, HP wasn’t the only one to announce executive changes as the CEO of Sara Lee is stepping down after suffering a stroke which the company vociferously denies had anything to do with her eating too many Jimmy Dean sausages or Sara Lee Brownie Bites, and AAPL has axed the guy responsible for fucking up the antenna on the iPhone4 (“ax” of course from the vernacular meaning to cut or chop as opposed to the slang, meaning to ask in an illiterate way).

As for stocks, RIMM did a job on the market today as Saudi Arabia announced they may have a way to send blackberry messages through their servers before the messages go to Canada which would relieve some of the country’s security concerns (though not harboring terrorists would probably relieve those concerns a bit more).  MCD fattened investors wallets today as they announced their same store sales for the month were up 7% and up 5.7% in the US thanks to people not being able to afford good food.  It was their biggest month in over a year driven by frappes and smoothies during the hot July summer as well as “coronary artery giveaway” week.  Money McBags remains a fan of MCD, even if he won’t eat their food, because companies with solid global brand equity that sell cheap aspirational products are only going to keep growing.

In earnings news, Chrysler drove to a loss of $172MM which was slightly better than the loss in Q1 and slightly worse than being a respectable company with products people want to buy.  That said, revenue was up 8% sequentially and the company earned an operating profit but many of those sales were driven by fleet sales where they sell their crappy cars to rental agencies for cheap prices in order to make up for their 15% slump in sales to the retail market.  Also in earnings news TSN had a good Q led by higher pork prices (which should also augur well for revenue at the Mustang Ranch).  Increased prices of beef and pork allowed the company better margins and they nearly doubled their profits from a year ago yet Goldman initiated the company with a conviction sell rating today citing an oversupply of chicken leading to decreasing prices and the fact that GS needs to have at least one company on their conviction sell list to even moderately be perceived as not just pumping up stocks.

In small cap news, EBIX put up another huge quarter growing profits 51% on 44% revenue growth and some great sleight of hand.  Money McBags has written about this company many times and it remains an enigma wrapped in a riddle and covered with feces because it is either one of the most undervalued stocks in the market or a complete fraud.  It’s harder to explain the company’s business model than it is to explain boolean algebra to Mickey Rourke (and not any Mickey Rourke, but a lobotomized Mickey Rourke) and they have a history of changing auditors while acquiring businesses globally that makes their tax rate more in flux and harder to believe than Mischa Barton‘s acting career.  The fact is, Money McBags simply has no ability to forecast this company and no way to feel confident in their numbers but he did find it interesting that in their earnings release CEO Robin “Making it” Raina said they have no interest in starting a dividend.  This is interesting to Money McBags because the company has ~$28MM in cash and ~$16MM in FCF last Q, so by not wanting to dividend cash back, the company is sort of verifying Money McBags’ thesis that in order to keep growing, they are going to need to remain aggressive with acquisitions (or that the company is a total fraud and doesn’t actually have the cash to pay a dividend).  Either way, Money McBags isn’t going anywhere near this company as it is either a 2 to 3 bagger or a negative 1 bagger from here, but if you want to make money, a long options straddle position in this stock isn’t a bad idea (though nowhere near as good as a long straddle position in Sofia Vergara‘s stock).

In other small cap earnings news, CRTX was up big after their quarter and last week Money McBags mentioned their bizarre deal to license one of their drugs which is the opposite of their business strategy, but whatever.  The company had $28.5MM in revenue which was up 14% from last year but margins were down from ~88% to ~71% as a result of shifting to more sales of lower margin products like Curosurf.  They also announced they are going to be discontinuing their non-strategic products at the end of 2010 which accounted for ~$10MM in revenue this Q which means strategic product sales grew only ~4% sequentially, so hopefully their strategy involves handing out free pictures of Shanna Marie Mclaughlin with Factive/Curosurf/Zyflo to get the topline moving.

The company also announced that they are going to be developing a generic for Tussionex to further penetrate the cough cold space (though the best way to penetrate the cough cold space would probably be to take it out for a nice dinner and tell it you want to put it in movies).  Anyway, they earned ~$.10 per share non-GAAP have $46MM in cash and a $173MM market cap with their “strategic” portfolio at ~$18MM per Q run rate which means they are trading at ~2.5x sales which is well below competitors at closer to 4x.  That said, the company has little operating history and is basically buying their way in to the respiratory space while discontinuing all of their previous and now non-strategic drugs so there is a reason they trade below compeitiors.  They did just build out a hospital sales force which is encouraging but the top line results for that sales force are not in yet and their earnings releases certainly don’t make following this company easier for investors.

If Money McBags were running CRTX, the first thing he would do is see if they had any free samples, the second thing he would do is hire Jodie Fisher to set up some personal PR events, and the third thing he would do is put a fucking table in the earnings release showing how each drug performed.  For fucksake, will you tickle my balls a little bit here, even if its just for a nanosecond.  Perhaps they broke the individual sales out on the conference call (Money McBags has yet to be able to listen to it) but he would love to see a clear concise table of their sales by drug so he could better understand the drivers of the $18MM in strategic revenue as well as the growth rates around that portfolio to understand if there is actual growth here or if it is all acquisitions.  Either way, this is a name that could have nice appreciation from here if you can get comfortable with their portfolio and management (and their management’s decision to sell controlling interest of the company to Italian company Chiesi about a year ago in order to acquire Curosurf).  It’s a name more speculative than two week old chinese food or whatever is in Jamie Lee Curtis’ pants, but some good research here (and Money McBags has given you a head start) could yield nice returns.

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