Whoever takes over for Steve Ballmer may be smart. He made have the requisite business experience. He may know how to give a speech that rallies the troops and he may even be a media darling. But if this person doesn’t have the ability to spontaneously go completely, combustible apeshit insane on stage at a company event? To soak his entire shirt with sweat, nay, with passion? Well, then he’s just always going to be known as the guy who followed Steve. Read more »
Sell-Side Analyst Who Passed Inside Information To SAC Employee, Who In Turn Traded On It On The Firm’s Behalf (Without Steve Cohen’s Knowledge Or Approbation*) Is ArrestedBy Bess Levin
Richard Lee, of the SAC Capital Lees, had a “senior internet research analyst” friend named Sandeep Aggarwal (illustrated at left), who had an unnamed friend working at Microsoft, who had material non-public information re: “a Microsoft-Yahoo partnership agreement…likely to be announced in the next two weeks.” See if you can guess what happened next. Read more »
If you were Microsoft and the sponsors of an LBO came to you and said, “we have about $17bn in debt to place, do you want $2bn of it,” would you say yes? Let’s say you’d say yes: would you demand a higher or lower interest rate for it than everyone else?
The Dell deal is pretty new and soon we’ll have a Background of the Merger to chew over – and, y’know, actual deal docs – but for now the most informative reporting seems to be this Journal story and it’s … sort of odd. Here is Microsoft’s involvement:
Between Silver Lake and Mr. Dell, the buyout group felt it could arrange for cash and loans on its own. The choice was between taking on $2 billion more in high-yield debt or bringing in Microsoft as a “passive debt investor” who would get no board seats or governance rights, but would be “emotionally and financially committed” to Dell’s future, a person said. Microsoft and Dell already are partners, but the $2 billion debt was aimed at creating a closer partnership between the two within an existing commercial agreement, the person and others said. Microsoft’s $2 billion note is a multi-year instrument with an attractive interest rate, one of the people said.
I don’t know what any of those words mean! The concept of Microsoft being “emotionally committed” to anything particularly boggles me. (It may have something to do with supporting “the long term success of the entire PC ecosystem” without ticking off other manufacturers by taking an equity stake in Dell.)
Also, I don’t know what “attractive interest rate” means. Read more »
According to several sources close to the case, the SEC is in final negotiations to settle insider trading charges against Pequot Capital Management, over a year after it issued the firm and its founder, Arthur Samberg a so-called Wells notice, indicating the agency was going to formally charge the firm.
It’s unclear what the final settlement will be, but sources said the two sides have recently discussed an agreement that includes a total of about $25 million in fines with Pequot neither admitting nor denying wrongdoing.
It looks like the fantasy that tech was going to pull everything out (did anyone really believe this) has been torpedoed twice, is dead in the water and is listing 12 degrees to port.
Microsoft Corp. will cut 5,000 jobs, or about 5 percent of its workforce, as the global recession eats into demand for software.
The reductions, Microsoft’s first companywide firings, will take place in nearly all areas, including research, sales and marketing, the company said today in a statement. The measure, announced with the company’s second-quarter earnings, will save $1.5 billion, Microsoft said.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company’s Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
Doing the monkey-boy dance isn’t likely to save things for Microsoft, which, like it or not, faces increasing irrelevancy and timing of a product cycle that isn’t doing it any favors. Vista is a disappointment and Windows 7 isn’t likely to help much. There are just so many new tricks you can squeeze into an operating system and until Windows cooks perfect toast in the morning, we’ve hit the point of diminishing marginal returns. This, combined with the Microsoft-Intel chain gang effect puts old Steve in the spotlight while chained by the ankle to Woody Allen. There are fates worse than death, but not many.
Microsoft Cuts 5,000 Jobs as Recession Curbs Growth [Bloomberg]
Yes, we were quite shocked too, to find that Portfolio (yes, that Portfolio) seems to have an occasional penchant for investigative journalism. Or perhaps they are just more tolerant of reading SEC filings and the like than we have been of late. But who can resist a juicy tale of unexplained millions in payments to former Microsoft employees, divorce filings, insider trading, politically motivated SEC coverups and, best of all perhaps, John Mack?
A separate facet of the S.E.C. investigation looked into whether Morgan Stanley C.E.O. John Mack had fed inside information to Samberg about a planned General Electric acquisition of Heller Financial, a lender to businesses. Samberg’s hedge fund had bought Heller shares and shorted G.E. stock in advance of the announcement, and made $18 million on the trading, the S.E.C. said.
The Mack aspect of the case hit the headlines because the S.E.C. fired the government lawyer investigating the allegations, Gary Aguirre. Aguirre claimed he was fired for insisting on subpoenaing Mack, a move which he said higher-ups at the S.E.C. overruled because of Mack’s connections and political clout.
The S.E.C. denied that, but a joint investigation by the Senate judiciary and finance committees in August 2007 sided with Aguirre and sharply faulted the S.E.C. for failing to pursue the case, including the evidence concerning Zilkha and Samberg’s Microsoft trading.
Pequot’s Puzzling Payments [Portfolio]
It used to be that the Microsoft-Yahoo clash seemed, at its root, a “personality conflict.” Yang and Ballmer’s war of words was, at one point, so pointed that Ballmer was said unable to consider an acquisition of any kind while Yang was still leading the firm. Or, that was the press version, anyhow. Around this time Microsoft spent a period in that Texas Hold’em sort of intentions limbo. When strong, attempt to appear weak, when weak, attempt to appear strong. Ballmer didn’t want to advertise the degree to which he lusted after Yahoo. Nor did anyone at Microsoft want to admit that the firm was (is) dangerously close to obsolescence and irrelevance in the face of Googlesque economies (though various classes of writers literally fell over each other to point this out). So, what exactly are we to make of this:
Microsoft Corp. is no longer interested in buying all of Yahoo Inc., CEO Steve Ballmer said Wednesday, though he told shareholders that the company would still be “very open” to a collaboration on Internet search. His comments sent Yahoo shares diving by 12 percent.
“Let me be clear,” Ballmer said at Microsoft’s annual shareholder meeting. “We are done with all acquisition discussions with Yahoo.”
Yahoo spurned a $47.5 billion takeover offer from Microsoft in May, and later rejected Microsoft’s bid to buy only its search engine. Ballmer has said repeatedly of late that the buyout remains off the table, though a search-related deal is possible.
Ballmer dismisses Yahoo buyout but open on search [Yahoo Finance (Ha! Ha!)]