Archive for June 3rd, 2008
Posted by: in Latest News
Filed under: Deals, Law, Microsoft (MSFT), Yahoo! (YHOO)
.jpg) When Yahoo (NASDAQ: YHOO) spurned Microsoft (NASDAQ: MSFT)’s offer to acquire the company last month, many shareholders were outraged. Carl Icahn has acquired a stake in the company and he’s rattling the proxy fight saber. Meanwhile, Yahoo has been sued by a group of shareholders alleging that the company and its officers and directors breached their fiduciary duty in failing to negotiate in good faith with Microsoft.
Court documents unsealed in Delaware Chancery Court appear to be quite damaging to Yahoo’s management. The papers show that Yahoo rebuffed a bid of $40 per share from Microsoft in January of 2007. Bloomberg quotes one of the company’s more quotable shareholders, T. Boone Pickens: “Whoever’s suing the Yahoo management and board of directors, if they had a $40 offer and didn’t take it, they’re going to want to cut their throats for being that stupid. Anybody who sued them has got a good lawsuit, I’d state. I’d hate to be on that board of directors right now.”
The shareholder lawsuit alleges that the company’s CEO, Jerry Yang used his power “to delay, to refuse to negotiate in good faith and to erect roadblocks.”
The complaint alleges that Yang ignored the counsel of compensation consultants in structuring change of control terms for employees, in a deliberate effort to make an acquisition difficult.
If all of this is true, Yang has got to go as Yahoo CEO. Even if it isn’t true, the company’s performance in recent years is pretty compelling evidence that change is needed. He is probably the number one CEO on the hot seat right now
Read | Permalink | Email this | Linking Blogs | Comments
Share This
Share This
 No Comments »
Posted by: in Latest News
Filed under: Analyst reports, Forecasts, Deals, XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI)
The satellite radio business could be in such sad shape that a merger between Sirius (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) may not do either much good. Neither has ever made a net profit. Their subscription growth rates are slowing. And, each has well over $1 billion in long-term debt.
Goldman Sachs recently said the combined company might need to raise $500 million to $1 billion to fund operations.
The editors at The Wall Street Journal figured this all out, perhaps a bit later than most. According to the paper, “The nation’s only two satellite services are growing slower than previously while the broader economy is in a slowdown. Fewer people have been buying new cars, which is where the companies derive the bulk of new subscribers.”
While the data might be obvious, the conclusions might not be. Companies with over $1 billion in debt and huge operating losses often do not make it, at least not in their current form. If the FCC does not approve the deal or puts a number of restrictions on it, one or both of the companies may have to seek the protection of Chapter 11. Large debt service against no profits can do that.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
Read | Permalink | Email this | Linking Blogs | Comments
Share This
Share This
No Comments »
Posted by: in Latest News
Filed under: Deals, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
It is always simple to stand alone, until someone else wants to take your freedom. According to Reuters, “Yahoo Inc (NASDAQ: YHOO) executives dismissed a search-advertising deal with Google (NASDAQ: GOOG) due to antitrust concerns, one day before Microsoft Corp (NASDAQ: MSFT) made its takeover offer earlier this year.”
Odd. Yahoo! turned to Google nearly immediately after the takeover offer from Redmond. What a rapid change of heart. It is yet another piece of evidence that Yahoo! management is fickle and has been willing to do whatever it would take to stay independent.
The news raises two issues. The first is that many reports state Google has cooled to the idea of providing search services to Yahoo. Perhaps the largest search company sees now that it was only being used as leverage against Microsoft. It also indicates that Google may simply let a Yahoo! deal die.
The news also supports the Microsoft opinion that a tie-up between the No.1 and No.2 search engine companies might be viewed by the U.S. government as anti-competitive. Google and Yahoo! together could lock up the market.
For Yahoo!, it is yet another in a series of moves that makes its management and board look like buffoons.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
Read | Permalink | Email this | Linking Blogs | Comments
Share This
Share This
No Comments »
Posted by: in Latest News
Filed under: Before the bell, Deals, Law, Apple Inc (AAPL), Dell (DELL), General Motors (GM), FedEx Corp (FDX)
 Before the bell: Futures mixed ahead of Bernanke (LEH, SPLS, TOL)
With the Apple (NASDAQ: AAPL) conference just around the corner, analysts anticipate several features from the new iPhone that’ll likely be announced during the conference. The first is of course the 3G ability, which would boost iPhone sales in Europe and quell complaints about the speed of download through the AT&T (NYSE: T) network. The second is the corporate email capability. A third feature will likely be iTunes downloads through cellular networks and the applications store. Also, some anticipate Apple to try a different business model including subsidies and multiple carriers.
FedEx Corp. (NYSE: FDX) stated it plans to change the FedEx Kinko’s name to FedEx Office and take a related charge of nearly $900 million. The company said the name change will better reflect the services that it provides at its retail centers. Perhaps FedEx is right, but Kinko’s is a well established brand and I find it hard to believe someone doesn’t know what Kinko’s is all about. FedEx also said it would raise its quarterly cash dividend by one penny, to 11 cents a share payable July 1 to shareholders of record as of June 13.
General Motors Corp. (NYSE: GM) is expected to announce plant closures in North America on Tuesday morning, according to The Wall Street Journal. The closures might include a truck plant in Oshawa, Ont., Canada. The Canadian Auto Workers will hold a press conference later this morning. Brocade Communications Systems Inc. (NASDAQ: BRCD) stated it has reached an agreement to settle a securities lawsuit related to a stock-options backdating scandal for $160 million. The settlement still must be approved by the court. Continental Airlines (NYSE: CAL) reported May traffic rose 1.8% to 8.28 billion revenue passenger miles from 8.14 billion a year earlier. A revenue passenger mile is one paying passenger flown one mile. The airline said capacity increased 2.2% to 10.2 billion available seat miles last month from 9.98 billion in May 2007. Its load factor, measuring occupancy, fell marginally to 81.2% from 81.5%.
It’s interesting that while Michael Dell, the CEO of Dell (NASDAQ: DELL), received compensation about $2 million last year, Ronald Garriques, leader of Dell’s consumer business took home more than $33 million according to an Associated Press analysis of a regulatory filing Monday. Most of the compensation came in the form of stock allows and options that the company valued at $25.3 million on the date they were issued in February 2007.
Permalink | Email this | Linking Blogs | Comments
Share This
Share This
No Comments »
Posted by: in Latest News
Filed under: Before the bell, Earnings reports, Deals, Ford Motor (F), General Motors (GM), Toyota Motor Corp. (TM), Market matters, Staples Inc (SPLS), Toll Brothers (TOL), Economic data, Oil, Lehman Br Holdings (LEH), Housing, Federal Reserve
U.S. stock futures were mixed early Tuesday morning, trading in a narrow range as investors awaited Fed Chairman Bernenake’s speech, analyzed oil prices and reacted to news Lehman Brothers might $4 billion in capital.
After a four-day winning streak, U.S. stocks declined on Monday following renewed concerns about the financial markets following management changes at Wachovia and Washington Mutual, downgrades of several financials and Britain’s Bradford & Bingley warning about profits. The Dow industrials dropped 134 points, or 1.06%, the Nasdaq Composite lost 31 points, or 1.23%, and the S&P 500 dropped 14 points, or 1.05%.
While not much is on the economic docket for this day other than April factory orders due at 10:00 a.m. EDT, investor will likely be interested in the International Monetary Conference in Barcelona where Federal Reserve Chairman Ben Bernanke as well as European Central Bank President Jean-Claude Trichet and Bank of Japan Governor Masaaki Shirakawa are going to talk starting 9:00 a.m. EDT. Meanwhile, crude oil futures remained above $127 a barrel Tuesday with some investors thinking oil prices might have peaked, despite others being concerned yet about supply meeting growing global demand.
The biggest corporate story this morning no doubt come from Lehman Brothers (NYSE: LEH) as The Wall Street Journal reported Tuesday the investment bank is considering whether to raise up to $4 billion in fresh capital, suggesting it may report its first-ever quarterly loss as a public company. LEH shares are trading down 2.9% in early premarket action.
In deal news, Staples Inc. (NASDAQ: SPLS) can’t take no for an answer as it said on Tuesday it raised to $2.6 billion its hostile bid for Dutch office supplies distributor Corporate Express NV (NYSE: CXP). If Corporate Express can’t come up with another clever way to get out of this one, perhaps third time’s a charm? Corporate Express shares are now worth more than twice what they were when rumors of a Staples bid began circulating in February.
And in earnings news, Toll Brothers (NYSE: TOL) swung to a hefty loss in the second quarter due to huge write-downs on the value of land joint ventures, but results topped Wall Street expectations.
Also this day, automakers will be reporting May auto sales figures. Overall weakness is expected, as even Toyota (NYSE: TM) might not be immune to the downturn.
Permalink | Email this | Linking Blogs | Comments
Share This
Share This
No Comments »
Posted by: in Latest News
Filed under: Analyst reports, Forecasts, Deals, Bad news, Wachovia Corp (WB), Lehman Br Holdings (LEH)
After a month or so when the market thought that financial stocks might recover, the firing of the head of Wachovia (NYSE:WB) is being followed by news that Lehman (NYSE: LEH) might have to raise $3.4 billion. If so, the company’s losses are expected to be much more massive than most analysts forecast.
The potential need for more cash raises several questions, one of which is whether CEO Richard Fuld will keep his job. According to The Wall Street Journal, “Lehman Brothers Holdings Inc., set to report its first quarterly loss since going public, is considering raising billions of dollars in fresh capital to help shore up its balance sheet.”
Experts believe that Lehman has more exposure to the mortgage market.
The news reinforces the idea that both banks and brokerages could post losses through 2008 and into 2009, which would push many of their shares under the 52-week lows most hit in March. That would mean a 10% to 20% correction for some. Any move to raise more capital would drive dilution, which would also pressure share prices.
While Wall Street may have hoped the problems at financial institutions were getting better, it turned out to be a mirage.
Douglas A. McIntyre is an editor at 247wallst.com and the author of the Ten Stocks Under $10 letter.
Share This
Share This
No Comments »
|
Entries (RSS)