In December, Clearwire’s majority owner, Sprint, offered to buy the rest of Clearwire that it doesn’t own for $2.2 billion, or $2.97 a share. The next month, satellite TV company Dish Network Corp. bid $3.30 a share, and Clearwire shares have traded well above the Sprint offer since. Dish since has bid for the entirety of Sprint, putting its Clearwire bid in question.

Read the rest of this post on the original site

The board’s independent committee revealed that it reviewed several alternatives including breaking up the company, a leveraged recapitalization, a change to the dividend or continuing on the current course. Ultimately, the board decided to go forward with the buyout, which it said was done in a unanimous vote.

Read the rest of this post on the original site »

Like me, David Einhorn — the brainy hedge fund star who is currently engaged in a proxy battle with Apple over a corporate governance procedure, related in this case to how to deal with its $137.1 billion cash hoard — is a bit of a night owl (or, in his case, an early riser).

So, when I pinged him around midnight PT about the conference call his Greenlight Capital is having with investors later today to better explain his effort to thwart an Apple effort to make it harder to issue preferred shares that pay a dividend, he offered to chat right then about what he was up to.

Einhorn has been fighting with Apple over its plan to let shareholders vote on the issuance of preferred stock, after the longtime Apple bull got no satisfaction from lobbying its board to issue preferred shares.

He then sued the company seeking an injunction to stop or invalidate next week’s vote on the company proxy proposal related to “blank check” preferred stock.

As The Wall Street Journal noted:

Mr. Einhorn’s lawsuit, filed in the federal court in Manhattan, argues that the very formulation of Apple’s proxy statement violates Securities and Exchange Commission rules that allow shareholders to vote on “each matter” in the proposals. The suit seeks a court injunction against Apple’s proxy vote, and says he asked twice this week for the company to stop the vote or to “unbundle” the proposal at issue, but was rejected by the company.

Although the Silicon Valley tech giant said it was talking to Einhorn, Apple CEO Tim Cook also hit back at an investment conference recently, saying that Greenlight’s legal moves were a “silly sideshow” and a distraction.

That said, a judge in the case later contended that there was a “likelihood of success” in Greenlight’s case.

Thus, in a time-honored blabby hedge-fund-dude manner, Einhorn decided to make his case even more noisily about the proxy proposal, which is up for a vote at Apple’s Feb. 27 annual meeting.

“We’re going to explain ourselves better, because I think that there has been reaction where people are asking, ‘Why don’t they just raise their dividend or do a buyback?’” said Einhorn in an interview. “We think the preferred stock idea is a lot better, and once people understand it, we want people to convert from worrying that it is complicated to wondering ‘Since it makes so much sense, why doesn’t Apple do that?’”

It sounds so easy, but it has not been, with a heated debate occurring since Greenlight went after Apple, and some dubious of Einhorn. This has clearly caused a lot of confusion that he said he hopes to clear up.

For example: “I think it is peculiar that people are focused on the blank-check preferred and taking away a takeover defense, since no one is going to be taking over Apple.”

Einhorn said he bears no ill will toward Apple over the capital allocation issue, which he said was typical across the tech scene.

“Apple has collected this cash hoard due to cultural issues within the industry and also within the company, some of which are partly understandable. Tech companies have learned over time they need to have cash in case of trouble, and there is also an element of comparing balance sheets. There is always a rationalization to justify any situation,” Einhorn said. “But we do not want to convince them to undo their cultural view. We want them to unlock value for shareholders. In this case, the cash is a product of Apple’s success, but it developed from being like several others to an extraordinary level because of Apple’s extraordinary success.”

While some have painted him as an Apple attacker, Einhorn begs to differ.

“I like that what we are offering is a win-win for everyone. There has been a lot of conflict around why Apple is holding so much cash for a long, long time,” he said. “We have a solution that allows shareholders to see that value and Apple to keep that cash.”

We’ll see, when Greenlight presents its case later today, doubtless with all kinds of fancy charts and graphs and numbers that will flummox my tiny brain. Until then, here’s its official press release on the call:

GREENLIGHT CAPITAL ANNOUNCES FEBRUARY 21 CONFERENCE CALL AND WEBCAST TO DISCUSS APPLE’S CAPITAL ALLOCATION STRATEGY AND ALTERNATIVES

Urges Shareholders Vote AGAINST Apple’s Attempt To Amend Charter and Eliminate Ability To Issue Preferred Stock In Proposal 2; Apple Must Explore All Value Creation Options

NEW YORK — February 20, 2013 — Greenlight Capital, Inc. (“Greenlight”), a value oriented, research-driven investment management firm, today announced that it will host a public conference call and webcast to discuss Apple Inc.’s (NasdaqGS: AAPL) capital allocation strategy and Greenlight’s proposal to unlock significant value for all shareholders. Greenlight continues to ask shareholders to vote AGAINST Proposal 2 in Apple’s proxy, which would eliminate preferred stock from Apple’s charter and restrict the Board’s flexibility on capital allocation decisions. On the call, Greenlight will provide additional details regarding the options available to Apple, including the merits of Greenlight’s suggestion of distributing perpetual preferred stock to Apple shareholders for free.

The conference call and webcast will take place on February 21, 2013 at 2:00 p.m. Eastern. The conference call may be accessed by dialing 1-800-901-5241 (U.S. callers) or 1-617-786-2963 (International callers) and entering the passcode 62063868#. Those who intend to participate in the call should dial in at least 20 minutes in advance. A replay of the call will be available through March 6, 2013 by dialing 1-888-286-8010 (U.S. callers) or 1-617-801-6888 (International callers) and entering the passcode 45128663#. The webcast can be accessed by visiting www.media-server.com/m/p/aj2p6kq7.

A lawyer for Greenlight said the proposal improperly “bundles” three measures in violation of securities rules and said shareholders like the hedge-fund firm should be allowed to vote on the measures separately.

Read the rest of this post on the original site »

“We believe the proposed buyout does not reflect the value of Dell and we do not intend to support the offer as put forward,” said Brian Rogers, Price’s chairman and chief investment officer, in a statement.

Read the rest of this post on the original site »

Now, the clock is ticking down and Apple is keen to keep things moving.

Read the rest of this post on the original site »

“ISS policy supports the elimination of ‘blank check’ preferred shares, because of their potential to be misused in a takeover defense,” the firm said in a note published on Friday. Also, the firm said, if Apple eventually decided it wanted to issue such shares, obtaining shareholder support wasn’t likely to be “an insurmountable obstacle.”

Read the rest of this post on the original site »

In a statement issued a few minutes ago, Apple said it is in “active discussions about returning additional cash to shareholders,” and said it would “thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock.”

The talks come as Greenlight Capital has sued Apple over a plan its CEO David Einhorn says could generate as much as $32 a share through the issuance of preferred stock.

Einhorn launched a public campaign today alongside the lawsuit, urging Apple shareholders to vote against a proposal in Apple’s proxy that he argued would eliminate preferred stock from the corporate charter.

In its statement, Apple disputes Einhorn’s view of the proposal, the second going before shareholders on its latest proxy statement: “As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.”

Apple’s hoard of cash — it counts both cash and short- and long-term investments in its cash position — has grown substantially in recent years to north of $137 billion as of its most recent quarter ended in December. The cash, easily the largest among tech companies, and among the highest cash positions of all corporations in the world, comes from Apple’s considerable generation of free cash flow: $23 billion went straight into its coffers last quarter alone, and it hasn’t had debt for years.

Last year, Apple initiated a quarterly dividend payment to shareholders of $2.65 a share in partial reaction to shareholder outcry.

Here’s the full statement from Apple:

Statement by Apple
By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.

We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.

Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.

As a part of our efforts to further enhance corporate governance and serve our shareholders’ best interests, Proposal #2 in our proxy includes some recommended changes to our articles of incorporation. These changes were recommended independently of Greenlight’s proposal and would not preclude Apple from adopting their concept. Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock.

Currently, Apple’s articles of incorporation provide for the issuance of “blank check” preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock. As such, Proposal #2 has the support of many of our shareholders.

We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.

Chief Executive and Chairman Rupert Murdoch told shareholders at News Corp.’s annual meeting that all of the nominated board members had been approved, based on a preliminary count of shareholder votes. A final count will be reported in a coming regulatory filing, News Corp. said.

Read the rest of this post on the original site »

The software giant boosted its quarterly payout by 15 percent as it looks to find ways to boost shareholder returns. The increase means Microsoft will now pay 23 cents a share, up from 20 cents. The raised payout will cost the company an additional $1 billion a year.

Read the rest of this post on the original site »

That changed a little bit last year when he disclosed in a television interview and in SEC filings that he had taken stakes in two technology bellwethers: IBM and Intel. Today, SEC filings show that he’s increased his already sizable stake in IBM but has sold off his Intel shares.

Explaining that Big Blue “treats its stock with reverence,” Buffett last November spent $10.7 billion to buy 64 million IBM shares — amounting to about 5.5 percent of the shares outstanding — making him the company’s biggest shareholder, slightly ahead of State Street Investments. His holdings are now north of 66.6 million shares and worth more than $13 billion.

His holdings in Intel were much more modest: The same day he announced the IBM investment, Buffett disclosed a stake in Intel amounting to 9.3 million shares, which at the time was worth about $200 million. By the end of March, that investment had declined to about 7.8 million shares. Now the latest SEC filings show Berkshire Hathaway liquidated its Intel shares as of the end of June.

In an internal email to staff, first reported by The Wall Street Journal, Google CEO Larry Page wrote that “there is nothing seriously wrong with me,” noting he would be in charge as usual.

Page missed a shareholders meeting last week and with the search giant saying he would not speak its upcoming Google I/O developers event this week or its next quarterly call in July, due to an unspecified issue with his voice.

Google has declined to give more information about the illness, despite what is likely to be increasing investor concern. But right now, Google shares have remained steady, even gaining slightly on Friday.

In three years, Groupon has grown to 11,000 employees in 48 countries, and in the past year alone has acquired 11 companies and launched 11 new products.

“Although there are risks in moving too fast, companies often don’t survive long enough to apologize for moving too slow,” Mason writes. “Perhaps more importantly, by moving quickly, we reached a scale that has helped us solidify our market leadership, and accumulated data that is enabling our future and helping us continuously improve the experience of our customers.”

Mason writes that now it has that scale, the company’s mission is “to become the operating system for local commerce.” He promises to share new products soon.

The letter follows a particularly tough week, where the daily deal company’s shares slid 3.3 percent, or 34 cents, to settle at $9.97 a share, marking the first time its stock closed in single digits. Today, the stock is trading up 5.5 percent, or 55 cents, to $10.52 a share.

At that price, Groupon’s value still hovers around $6.8 billion, which is uncomfortably close to Google’s $6 billion buyout offer, which the Chicago company turned down in late 2010.

Groupon has been unable to regain investor confidence since revising its fourth-quarter results at the end of March, despite putting out a string of press releases. Over the past couple of weeks, it has hired a new SVP, Kal Raman, and appointed two new directors with accounting expertise.

In the letter, Mason attempts to outline what the company has done to date, and where he believes it is heading. Mason writes: “Groupon’s chief accomplishment to date has been discovering a business model that brings the power of the Internet to local commerce.”

Going forward, the company is building a suite of tools and services that it believes will profoundly change the way everyone shops. Today, it might be a glorified mailing list or daily deals company that is easy to replicate. “Tomorrow, we aim to move upstream and serve as the entry point for local transactions,” Mason explains.

A couple of metrics Mason provides detailing its successes:

• Groupon says emails sent to people using its targeting algorithm have a 50 percent higher purchase rate.
• 30 percent of its North American transactions were completed on mobile devices in April, compared to 25 percent just four months ago.
• According to a research report commissioned by Groupon, its U.S. consumer satisfaction score is 83, placing Groupon 11 points higher than the e-commerce benchmark. Merchants give Groupon a satisfaction score of 79.

Dear Stockholders,

2011 was an exceptional year for Groupon. I will start by listing a few of our achievements:

• By year-end, we sold more than 170 million Groupons to more than 33 million active customers on behalf of more than 250,000 merchants in 48 countries around the world.
• We drove well over $2 billion to the small businesses of Main Street, helping them to overcome challenging global economic conditions.
• We launched 11 new products and services, including Groupon Goods, Getaways, Rewards, Now!, and Scheduler.
• We completed 11 acquisitions, which both expanded our geographic footprint and accelerated our product roadmap. Additionally, these acquisitions brought dozens of talented entrepreneurs to our team.

Along the way, we delivered strong growth and improved our operating leverage. Revenues grew 415% year-over-year to $1.6 billion, and we improved our operating margin from negative 134% to negative 14% for the full year. We improved our GAAP EPS during the year from a loss of $0.48 per share in the first quarter of 2011 to a loss of $0.12 per share in the fourth quarter of 2011. And so, though the six months since our IPO have been rocky to say the least, the fundamentals of our business have continued to improve.

As much as this letter is intended to catalog our achievements in 2011, I would also like to use it as an opportunity to share our vision for Groupon and the tangible progress we are making. We are more excited than ever for our future.

Our Mission: To Become the Operating System for Local Commerce

Entertainment, media, politics, and the way we buy products, connect with each other, and consume information—nearly every aspect of life has been fundamentally changed by the Internet. But there’s a huge exception—the way we shop locally.

Groupon’s chief accomplishment to date has been discovering a business model that brings the power of the Internet to local commerce. During the past three-and-a-half years, that business model has allowed us to connect with millions of consumers and hundreds of thousands of merchants and build a brand that they deeply trust.

Upon the shoulders of this business model, Groupon is setting out to reinvent the multi-trillion-dollar local commerce ecosystem. We are building an integrated suite of tools and services that we believe will profoundly change the way we shop locally. Today, Groupon is a marketing tool that connects consumers and merchants. Tomorrow, we aim to move upstream and serve as the entry point for local transactions.

Why Groupon? Aren’t we a daily deals company? A glorified mailing list? What our competitors have learned is that success in local commerce requires an unusual combination of skills—a proficiency in both technology and people-driven operations. With a world-class engineering team—built quietly over the last several years in Chicago, Silicon Valley, and Berlin—and with thousands of salespeople who have cultivated relationships with hundreds of thousands of small-business owners, we believe that we are uniquely in possession of both sides of the equation. That makeup is why we remain the clear leader in local commerce, despite the efforts of hundreds of competitors—from start-ups to the world’s largest technology companies—who have validated the consumer and merchant value created by our business model through their attempts to replicate it.

Many of the seeds we’ve planted in pursuit of our mission are beginning to bear fruit:

• Site and Email Personalization In the past year, we doubled the efficacy of SmartDeals, our deal personalization algorithm. For example, in markets with high deal density such as Chicago, emails sent using SmartDeals have a 50% higher purchase rate. It has taken time to get deal relevance right, but progress has begun to accelerate, and we believe that we’re still in the early stages. We’re excited to finally have begun rolling out SmartDeals outside of the U.S., and we are targeting a broad international rollout by the end of 2012.
• Mobile Adoption The rapid adoption of Groupon on mobile devices demonstrates the importance of smart phones to local e-commerce. Our average North American mobile customer, for example, spends well over 50% more than customers who have never purchased on a mobile device. In April 2012, nearly 30% of our North American transactions were completed on mobile devices, compared to 25% just four months ago. This growth has created momentum for Groupon Now!, our real-time deals service offering deals for whenever you’re hungry or bored, which recently surpassed 1.5 million purchases. Our Now! customers buy approximately twice as many Groupons as customers who only buy daily deals.
• Groupon Rewards: Making Groupon Customers a Merchant’s Best Customers Groupon Rewards allows customers to effortlessly earn rewards at their favorite merchants, simply by paying with a normal credit card. Thousands of merchants are already participating in our pilot cities, and we expect many more to join. During the past two months, about 30% of eligible daily deal merchants in those cities have signed up for the program. As part of Rewards, we are also providing merchants with deep payment analytics to assess the profitability of their Groupon campaigns. Though the preliminary dataset is small, pilot results show that Groupon Rewards customers are more loyal than other customers.
• Groupon Scheduler: The Foundation for Automated Yield Management Groupon Scheduler is a bookings management system that addresses a fundamental need of many of our merchant partners—but that’s only half the story. As we begin to feed merchant inventory to our demand-generation services such as Groupon Now!, we plan to offer a fully automated yield management system for every local business. Scheduler embodies our intent to provide every mom and pop store with powerful technology solutions that were once reserved for sophisticated corporations with multimillion-dollar budgets.

Though our transformation from daily deal provider to local commerce platform will not happen overnight, in the coming quarters, we will release the products that we believe complete the foundation for our ecosystem. We look forward to sharing them soon.

—

In my letter to potential stockholders that accompanied Groupon’s S-1, I warned investors of a bumpy road—an unfortunate side effect of our unprecedented growth. Groupon has scaled to more than 11,000 employees and 48 countries in only three-and-a-half years. Why move so fast? We believe that Groupon is standing before an enormous opportunity, one that hundreds of competitors large and small have seen. Although there are risks in moving too fast, companies often don’t survive long enough to apologize for moving too slow. Perhaps more importantly, by moving quickly, we reached a scale that has helped us solidify our market leadership, and accumulated data that is enabling our future and helping us continuously improve the experience of our customers.

Bumpiness aside, there are three things I come back to again and again that give me confidence in our ability to execute against our mission:

1. Consumers and merchants love Groupon.
Making merchants and consumers happy is core to the Groupon culture and at the center of everything we do. It’s not surprising, then, that we like to talk about how much consumers and merchants love Groupon, and why we go to great lengths to measure their satisfaction. You don’t have to take our word for it—we commissioned ForeSee, a leading third-party research firm and a standard in e-commerce for measuring customer satisfaction, to use their internal methodology to evaluate our relative positioning versus other top Internet retailers, and their results validate our internal research.

Looking at previous ForeSee online retail satisfaction reports, our U.S. consumer satisfaction score of 83 places Groupon among the highest—11 points higher than the e-commerce benchmark, 6 points above the ForeSee Internet Retailer 100 benchmark, and within approximately 2 points of the average #1 satisfaction score for online retailers during the past five years. We believe the #1 spot is within our reach.

What about merchants? The B2B satisfaction benchmark in the United States is a score of 64, and our merchant satisfaction score is a very strong 79. This is a significant number: not only is it 15 points higher than the B2B benchmark, it is a full 10 points higher than the Fortune 500 benchmark.

2. We have an enormous, untapped opportunity in our core business.
Through smarter deal targeting, there is significant growth waiting to be unlocked in our core daily deal business. In the United States alone, we have more than 10 million geo-located subscribers engaging with Groupon every month who have yet to make a purchase. We are kicking off a campaign to activate these customers, primarily by featuring deals that are closer to them; as you might imagine, deal proximity is a major driver of purchase behavior.

3. We are most excited about our long-term potential.
We are focused on what is arguably the last great white space in the consumer landscape that has yet to be disrupted by the Internet. We are deploying significant capital and talent toward the opportunity to bridge the large but fragmented local commerce ecosystem. The opportunity before us is substantial: merchants need customers, and customers crave simple tools to discover and buy locally at a great price, tools we believe we are best positioned to provide.

Armed with our mission, strong execution, and courage, Groupon has the opportunity to become one of the world’s great companies. We believe it is our duty to you, our stockholders, to pursue our mission with unyielding perseverance. Thank you for joining us as we continue on this journey.

Sincerely,

Andrew D. Mason

Chief Executive Officer

Groupon, Inc.

A letter sent to shareholders today by founder and CEO Jeff Bezos, titled “The Power of Invention,” tackles the publishing industry head-on by explaining how both authors and customers are benefiting from its Kindle publishing business.

While Bezos fails to address the DOJ lawsuit, which accused Apple and five major book publishers of conspiring to raise e-book prices, he provides a glimpse at how he’s changing the economics of the business on a small scale.

Bezos says Amazon’s Kindle Direct Publishing division has already produced more than a thousand authors who are selling more than a thousand copies a month. Some have reached hundreds of thousands of sales, and two have joined the Kindle Million Club.

Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43.”

If you can’t take Bezos at his own word, the letter includes eight quotes from customers and authors who have benefited from Amazon’s services, including its publishing, fulfillment and Web services.

“These innovative, large-scale platforms are not zero-sum — they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers,” he wrote.

The company’s stock was trading down 1.81 percent, or $3.46 a share today, to $187.23. In recent months, the stock has slipped from its 52-week high of $246.71 a share.

Less than five months after going public, Groupon’s stock is trading at more than half-off.

Today, the daily deals company’s shares slid another 3.2 percent, or 48 cents, to close at $14.54 a share. That’s less than half the $31.14 that some investors paid at the stock’s high point, just after it went public in early November.

At today’s close, the company’s stock hits a new low, though it slumped to similar levels at the end of November.

The stock has not recovered since last Friday, when Groupon revised its results for the fourth quarter due to higher-than-expected return rates during the holiday period.

Today, lawyers announced that multiple class actions have been filed against the Chicago company. The law firms, however, don’t have a lead plaintiff, and are looking for someone who participated in the company’s IPO and suffered financial losses. The complaint charges that certain officers issued materially false and misleading statements regarding financial results.

As part of the announcement on Friday, Groupon reaffirmed its guidance for the first quarter, and is still expecting revenue of up to $550 million, and net income from operations of up to $35 million. The company will release its first-quarter results on May 14.

Details from the press release:

“Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.

Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.”

The money will come from Apple’s domestic cash pile, which allows the company to avoid the heavy tax hit it would face if it “repatriated” its overseas holdings.

My hunch is that CEO Tim Cook and CFO Peter Oppenheimer won’t have a whole lot more to say during their call, but we’ll check in, anyway. You never know! You can listen for yourself at this link, or follow along here for live coverage:

9:07 am: After some technical difficulties, we’re joining the call in progress. CFO Peter Oppenheimer is speaking.

Apple wants to, among other things, attract new investors. The dividend, as already disclosed, will be $2.65. The main intent is to offset the dilution expected from employee RSU.

We will expect first year’s dividend payments to be $10 billion, Oppenheimer says.

Commencing in fiscal year 2013, Apple will begin repurchasing shares, primarily from employee stock grant. Cash use to consume $4 billion in the first fiscal year.

That will eat up $45 billion in domestic cash over three years.

Now open for Q&A:

Barclays asks about the philosophy on dividend growth. He’s wondering if the $2.65 will get higher.

Oppenheimer: We’ll review the payments periodically with the board. Payments will be more than $2 billion a quarter, making it one of the highest dividend payers in the U.S. Still avoiding the tax hit from repatriating cash held outside the U.S. Sensitive issue there.

Barclays analyst is asking a follow-up. Can you reiterate confidence in future product pipeline?

Tim Cook is speaking. We had an incredible growth last quarter of 73 percent, despite the base on the growth being large. The pipeline is full of stuff. Our customers will be incredibly pleased with what they see.

Morgan Stanley question. She’s asking about international cash, almost $100 billion overseas. How does the board think about putting that to us?

Oppenheimer: Today, we’ve got plenty of U.S. cash to invest, pay dividends and buy back shares. Repatriating cash would incur significant taxes. We have expressed our views to Congress and the White House. We think there’s a significant disincentive. He didn’t answer the question, really.

Gene Munster of Piper asks about potential for stock splits.

Cook: We have looked at it. The current information we have would suggest there’s little support that it helps the stock. We are in a unique position, so this is something we continue to look at, and if we thought it were in the best interest of shareholders, we would do it.

Munster: Any color on iPad?

Cook: Record weekend, and we’re thrilled with it.

Goldman Sachs: How do you think about growth in repurchases versus growth in dividends? Which is more important?

Oppenheimer. We remain very confident in what we’re doing. We are squarely focused on achieving our potential in the business. We will continue to assess our plans periodically. Nothing further to say today.

Cross Research: How did you arrive at the numbers you announced today?

Oppenheimer: We opted to go with a hybrid approach after doing a lot of analysis and listening to input we were getting from the shareholders. Emphasis behind the dividend. Most cash is going there. $10 billion in first year is going out in dividends. He keeps repeating the “neutralize dilution from employee RSU.” We also want to maintain sufficient U.S. cash to take advantage of strategic opportunities from time to time.

I totally missed Shannon Cross’s second question.

Cook is speaking about using domestic cash versus overseas cash. Our emphasis will always be on creating innovative products. He says even with all this cash going out the door, the domestic war chest will be big enough to do whatever they need to do. Plus, they see it as good for shareholders.

Oppenheimer says there are 17.7 million RSU (restricted stock units) outstanding.

That’s it! We’re done.

A person familiar with the matter had said that Zynga investors planned to sell stock in the near future, just three months after the company’s December initial public offering, breaking a 165-day lockup early in an attempt to reduce future volatility of the stock price.

Read the rest of this post on the original site »

Let’s put this in the simplest terms: Yahoo cannot spend the next half year in any kind of testy proxy battle with activist shareholder Daniel Loeb.

Not shouldn’t. Can’t.

Having closely covered the last goat rodeo in 2008 with corporate troublemaker Carl Icahn — which ended in big shareholders dinging the board badly and the controversial activist joining it — I can say definitively that the experience damaged the Silicon Valley Internet company in ways that are still resonating.

Angry shareholders (whose anti-Yahoo votes were initially miscounted in a stunning bumble), distracted management, media story after story about the fight, it eventually led to the departure of then CEO Jerry Yang by the holidays of that year, a rejiggered board and a new CEO, Carol Bartz, and fervent promises of change and turnaround.

Fast forward to today: Bartz was ousted in the fall of last year, a newish board is coming in, there’s another new CEO and, of course, more fervent promises of change and turnaround.

This is like the movie “Groundhog Day,” except not nearly as funny.

Speaking of funny, a Heard on the Street in The Wall Street Journal yesterday actually went fabulously snarktastic with its headline on Yahoo’s current tussle with Loeb of Third Point: “Is Yahoo Ready for a Loebotomy?”

Heh.

Opening with the line, “How many activists does it take to screw in Yahoo’s light bulb?,” the piece went on to ponder back and forth the impact of Loeb on the already dicey situation at Yahoo.

It concluded: “Yahoo investors shouldn’t expect a quick fix whoever the directors are. But, given how long Yahoo has been struggling to gain traction on its own, having a champion of shareholder value on the board can’t hurt.”

Nope, it can’t, as long as said investor wants to help find the successful fix previous Yahoo leaders have been heretofore unable to.

Another commentary in the Journal, “Dealpolitik: The Yahoo Paradox” took an opposite tack.

“Even giving Mr. Loeb a single seat could further weaken Yahoo. As a gadfly Mr. Loeb could challenge each board decision,” it read.

Actually, given this board changes direction more often than Republican presidential candidate Mitt Romney — witness the now non-talks with its Asian partners this past week and, before that, with private equity investors — I am not sure Loeb would change the status quo all that much if he threw one tantrum per meeting.

So, which is it? Will a settlement with Loeb lead to more trouble or will it create the kind of change that Yahoo has long needed and never gotten?

At this point, I have no idea — but I do know that a fight between Loeb and Yahoo is good for no one, except lawyers and perhaps page views on this site and others.

And, frankly, I don’t want them.

That’s because — even as the rest of Silicon Valley reinvents and innovates more aggressively than ever these days — Yahoo and its still deeply committed employees will be caught up in more fraught financial mishegas and machinations and will be unable to do anything to attract new talent and begin to truly fix itself and its products in the profound ways it needs to.

And new CEO Scott Thompson — who seems intent on setting a new course for Yahoo in a non-advertising arena — will be inevitably distracted, no matter the also inevitable protestations that he will not be.

And, it won’t just be Loeb who is hovering — there is no doubt a panoply of other interested outside investors still waiting in the wings to see what tasty bits of Yahoo might come available if the crisis deepens.

It’s certainly not come to roadkill yet by any measure. But it’s not a recipe for hitting the ground running, either.

Here is a video of me talking about the problematic situation on WSJ.com’s “Digits” online show:

In a written statement Wednesday, the company said its board and management team “remain firmly committed” to creating value for its shareholders. “We will continue to aggressively execute on our strategy in 2012 as we continue the turnaround of AOL,” the company said. AOL added that it had cut costs, sold noncore assets and made “significant investments for our future” during the past two years.

Read the rest of this post on the original site »

The sharks are coming from all directions. The majority shareholders of Yahoo’s operations in China and Japan want to buy out Yahoo. So much so that there are reports that they may try to bid for the whole company. Others may be putting together bids as well. And this time no one is talking anything like the premiums that Microsoft offered back in 2008. Why would they when Yahoo has been so weakened?

Read the rest of this post on the original site »

Even after Groupon issues 30 million shares in its initial public offering, its three founders will continue to control more than half of the company’s shares.

According to documents filed with the Securities & Exchange Commission today, Groupon has conducted a two-for-one stock split. In addition, it recapitalized all of its outstanding shares into newly issued shares of Class A and B stock.

This plan was disclosed late last month, but became official as of yesterday.

CEO Andrew Mason, Executive Chairman Eric Lefkofsky and Director Bradley Keywell will now control 58.1 percent of the voting shares through ownership of Class A stock and 100 percent of the Class B shares.

The Class B shares will have 150 votes per share, while the Class A stock will have one vote per share. There are 600.4 million shares of Class A; 2.4 million shares of Class B.

Due to the high concentration of shares owned by the founders, the filing warns that the three will be able to dictate the company’s future when it comes to directors on its board, as well as other transactions, such as a merger or other sale of the company or its assets.

Addressing shareholders, the filing continues: “This concentrated control will limit your ability to influence corporate matters and, as a result, we may take actions that our stockholders do not view as beneficial. As a result, the market price of our Class A common stock could be adversely affected.”

In particular, Mason will control 19.8 percent of the vote, Lefkofsky will control 28.1 percent and Keywell will control 10.2 percent.

Such a move is not unprecedented. Many Web companies, including Zynga and Facebook, are largely controlled by their founders.