Post Tagged with: "mergers"

Privacy and the ubiquity of embedded technology

Privacy and the ubiquity of embedded technology

Yesterday, Google announced that it would buy privately-held Nest Labs for $3.2 billion. This was Google’s second largest acquisition ever. Nest is a smart thermostat and smoke alarm-maker which promises to give Google a leg up in the fast expanding home automation market. But the acquisition also highlights the degree to which communications technology is now embedded in ordinary devices. The benefit is convenience. The risk is privacy.

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Mobile is driving merger mania and consolidation in the TMT space

Mobile is driving merger mania and consolidation in the TMT space

Let’s get back to technology for a day here. I have a slew of links in the TMT space and the overriding them is consolidation. Mobile is now king. And what technology, media and telecom companies are finding is that the mobile world often demands a wider product portfolio and great companies find themselves in search of ways to fill in the gaps.

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Excess cash on the balance sheet is wealth destruction

Excess cash on the balance sheet is wealth destruction

Many of the largest technology companies are making so much money that they are rapidly accumulating cash on their balance sheets. While on could argue that this cash should be stripped off the balance sheet for valuation purposes, I would argue that the cash is worth less than face value because having excess cash on the balance sheet is an invitation to wealth-destroying acquisitions. The excess cash should be returned to shareholders as quickly as possible in the form of dividends or share buybacks to prevent such an outcome.

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Daily: A brief post about mergers, accounting and shareholder value using Hewlett Packard

Daily: A brief post about mergers, accounting and shareholder value using Hewlett Packard

Below are a number of articles I feel are worth reading on the Hewlett Packard acquisition of Autonomy and the accounting scandal associated with writedowns from that acquisition. I want to briefly analyse the fallout from this episode from a number of different levels from the economy-wide macro to the company specific and investing. First, looking at the autonomy acquisition […]

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The Race for Energy Resources

The Race for Energy Resources

Scarcity is a powerful force and it leaves those in control of limited resources wielding great power. We think a scarcity of uranium will increase Russia’s power; control over some of the last big, easy oil deposits has earned Saudi Arabia great global influence. Petronas’ deal with Progress is a sign that shale gas could generate similar prowess for North America, and is a strong reminder that the global race for resources will provide some with money and power while leaving others in the dust.

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European banks pull out of Latin America, currency plummets in Argentina and Brazil

European banks pull out of Latin America, currency plummets in Argentina and Brazil

This is a quick note here on Latin American economies where currency issues are the main story. Argentina has been most often in the news, but the slowdown in Brazil should be top on the radar. I also note that some European banks are pulling the plug on their Latin American investments, ostensibly to raise capital. But this could be in reaction to recent nationalisations in Bolivia and Argentina and the threat that more could be coming.

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Facebook Snaps a $1-Billion Photo

Facebook Snaps a $1-Billion Photo

“What made Instagram worth $1 billion to Facebook?”

When asked this question recently, I responded with an immediate, “Nothing.”

I’m not usually so terse or emphatic with my answers, as any longtime reader knows. But in this case, there really was nothing inherently valuable inside Instagram that made them worth the unbelievable sum Facebook agreed to pay. Yet they did it anyway. Clearly, there’s something missing from a traditional valuation analysis here.

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AT&T raising charges by 33%

AT&T raising charges by 33%

This is not an opinion on AT&T stock since AT&T benefits from a monopoly status in fixed line and oligopoly status in mobile telecom. But I did want to briefly flag something regarding the telecom industry and M&A.

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News Links: The ECB’s back-door bail-out for Italy, Spain, Belgium, and… France?

News Links: The ECB’s back-door bail-out for Italy, Spain, Belgium, and… France?

News links for 22 December 2011 including stories on the tech world, Europe, and the ECB

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News Links: Corzine Rebuffed Internal Warnings on Risks at MF Global

News Links: Corzine Rebuffed Internal Warnings on Risks at MF Global

Financial news links for 6 December 2011 featuring stories on MF Global, Facebook, class divides and retail sales.

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A Battle for Oil Production Is Brewing

A Battle for Oil Production Is Brewing

With big oil’s bank accounts full to the brim with cash, the stage is set for some significant acquisition activity… or, to put it another way, for a battle to buy producing assets. There are quite a number of contestants in the battle – big oil companies are not only competing against each other to sweep up good assets but also against the national oil companies of developing, energy-hungry nations like China, South Korea, and India. Oil demands are rising in these nations so quickly that just to cover expected annual demand increases those three countries would have to jointly spend $30 billion on acquisitions each year.

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The Creeping Eurozone Credit Crunch

The Creeping Eurozone Credit Crunch

Here’s a very informative chart via Morgan Stanley showing the deterioration in the Eurozone’s key credit indicators. Banks will no doubt sell assets, at least in part, as a way to meet their required capital targets.

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