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Leigh Baldwin & Co.

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Diamonds and Dogs

6/6/12

Tempur Pedic International Inc. (TPX)

Tempur Pedic shares fell out of bed today, down 48.73% at $22.39. Tempur Pedic threw the market a curve this morning, cutting its second-quarter and 2012 outlook and citing intense competition. The company predicted its earnings will be cut in half this quarter and warned that the rest of the year looks murky. Tempur-Pedic now expects full-year EPS of $2.70 on revenue of $1.43 billion, well below Wall Street's view of $3.93 and $1.64 billion. CEO Mark Sarvary said, "We are projecting lower sales than previously anticipated for the rest of the year and are taking actions to realign our expense structure appropriately." Furthermore, Sarvary stated, "However, we remain very confident in our Company's growth potential and our strong brand, and as a result remain committed to our long-term strategic plan." Temper Pedic has crashed 75% from its April highs. A May cover story in Barron's, which focused on the fact that a lot of memory-foam users have found that the mattresses make sex more difficult, didn't help either.

Ancestry.com Inc. (ACOM)

Ancestry.com climbed up the family tree today, up 10.74% at $25.06. The Utah-based company has been facing slowing subscriber growth, and also lost a major promotional vehicle when NBC last month canceled the celebrity family history series "Who Do You Think You Are?" Ancestry.com was a key sponsor of the show and provided research services to producers. Facing these issues has left Ancestry puzzled on what to do with the company. Bloomberg reported that Ancestry is working with Qatalyst Partners to find potential buyers, mostly among private equity firms. The company was speculating that a possible buyer might be Facebook or Google. The news sparked investor interest in the company, as a possible buyout could reap rewards. Ancestry has 1.87 million paying subscribers to its family tree service, with a market capitalization of $1.06 billion.
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