Just last week, Sybase (SY) seemed to be digging in for a long fight with dissident shareholder Sandell Asset Management. Sybase called Sandell’s demand that it either buy back more stock or spin off some assets: “short-sighted, inadvisable and ill-timed.”
So guess that they are doing now? If you said, “Buying back more stock,” then you win the prize!
Phoenix Technologies chief executive Woodson “Woody” Hobbs may have gotten a bit more bullish on his company’s prospects than the company felt comfortable with, according to an article by Bloomberg News that Phoenix chose to “publish” in a filing with the SEC Friday.
Brocade Communication’s chief executive, Michael Klayko, got a 25 percent raise in his salary for fiscal 2008, which rose from $580,000 to $725,000, according to the company’s proxy filed Monday with the SEC.
Klayko, who has been with Brocade since January 2003 and served as chief executive since January 2005 when he replaced Greg Reyes, got a $1.3 million bonus for fiscal 2007 along with a $1 million restricted stock grant and an option award valued at $1.1 million. He also made $4.1 million last year exercising 1.2 million shares of Brocade last year.
We’d like to hear from the Brocade rank-and-file about the size of their salary bumps last year. Let us know whether they were more like Klayko’s, or closer to the zero percent raises that two of its named executives — VP for product development, Don Jaworski, and sales VP Ian Whiting — got. They will have to make do with $375,000 again this year.
Symantec let it be known via an SEC filing that group presidents Thomas Kendra and Greg Butterfiled are “no longer serving in such capacity with Symantec effective as of February 20, 2008.” The moves are a result of the fact that Symantec “has realigned its enterprise product groups to improve collaboration across the organization.”
The remaining “line leaders” will report directly to Enrique Salem, who became Symantec’s chief operating officer last month.
MIPS Technologies filed an amendment Friday to its credit agreement set up last August that provided for $35 million of revolving credit that would mature after a year. The week before MIPS “acknowledged that we were in default of the leverage ratio covenant as of December 31, 2007.” The amendment increased interest rates on the loans, reduced the amount that could be borrowed to $20 million (with additional $1 million reductions to occur each month beginning on March 31), and imposed certain limitations on how the borrowed money could be used.
MIPS also had to pay a $200,000 “amendment fee”. The company could have been forced under the default terms to have paid even higher interest that would have been applied retroactively to the loan from its inception.
Kevin Johnson, president of Microsoft’s Platform & Services Division sent his employees an update on the company’s “Yahoo! Proposal,” referred to by most everyone else as its hostile bid to acquire the owner of the world’s most visited Web site.
He wanted to answer “a few common questions” that have been asked regarding the deal. First of all, “What are the benefits of a Microsoft-Yahoo!”?
“I have personally met with top executives of the major media companies,” wrote Johnson, “and I know there is a desire for more competition in search and online advertising.”
We’re guessing Johnson didn’t ask what those executives thought about more competition in the area of personal computer operating systems. Oh wait. MEDIA companies? They’re all on Macs anyway. Never mind.
The number two question (which we’re thinking was really number one among his people): “Would there be any staff reductions?”
“People are the single most important asset in this combination.”
However Johnson never said “no” to this one. In fact, he pointed out that Microsoft is a “growth” company with other departments that might be hiring.
Another question on the minds of Johnson’s workers: How should we interact with Yahoo! employees?
“It’s important that Microsoft employees not speculate with Yahoo! employees about the proposal or about what a deal would mean for the combined company.” In fact, “no Microsoft employee should reach out to Yahoo! employees for the purpose of integration planning unless specifically instructed to do so”.
And as to whether Microsoft would maintain locations in both Silicon Valley and Redmond:
“Absolutely.”
Read between the lines of Johnson’s letter for yourself, and tell us what you find.
Venture capitalists invested a record $928 million in Indian startups in 2007, according to a report released by Dow Jones Thursday. That was 166 percent more than the $349 million invested in 36 deals the year before.
Indian companies developing information technology attracted 38 rounds of funding totaling $384 million of the total invested last year, or 48 percent. The most popular part area of the IT sector were companies in the Web-oriented ‘information services’ sector, which accounted for 22 deals and nearly $141 million in investment. It included the the $10 million second-round funding in Bangalore-based Four Interactive, an online provider of local information on food, events, lifestyle, shopping and more.
”It takes relatively little money and little time for these kinds of companies to begin generating revenues and, because of this, Web-related and consumer and business services companies accounted for more than half of all the venture capital deals done in India in 2007,” said Jessica Canning, Director of Global Research for Dow Jones VentureSource, in a statement in the press release announcing the results.
What’s wrong with this picture? Nothing that a big fat impairment charge can’t account for.
Credence Systems, the Milpitas maker of equipment used by chip makers, said in an SEC filing Thursday that it sold the assets of its “diagnositics and characterization” business to DCG Systems. In return, Credence “”may” receive up to $10 million, depending the business hitting certain targets over the next three years.
However, the book value of the assets involved, including component inventory, fixed assets, and intangibles that Credence will transfer to the new owner adds up to $22 million. Credence will also fund “”the fulfillment of approximately $4 million of existing warranty and service contract obligations” related to the business.
Credence will take a big charge in its recently concluded fiscal 2008 first quarter to account for the lost value which will likely end its two-quarter profitability streak. Credence shares have had double-digit percentage losses in its stock price over the last four years, and is headed for a fifth based on the additional 42 percent the shares have lost so far in 2008.
There’s no time for modesty when one of your major shareholders is giving you grief about your business. Those big meanies at Sandell Asset Management threatened to launch a proxy battle last December after acquiring 5.4 percent of Sybase’s stock. They want the usual: more stock buybacks and a spin-off of some assets.
In an 8-K filed on Thursday, Sybase decided it was time to toot its own horn:
“Following Sybase, Inc.’s fourth quarter and fiscal year 2007 — which were the best in its 23-year history and included historical highs in total revenue, operating margin, operating income, net income, earnings per share, and cash flow from operations — the Company reaffirmed its commitment to its goals of creating sustainable value for all of its shareholders and commented on its repurchase strategy.”
In your face, Sandell! (CEO Thomas Sandell)
Lest Sandell managers miss this point, Sybase executives picked up the phones to gloat about discuss this stellar performance with Sandell:
“On February 15th and February 20th, 2008, representatives of the Company participated in calls with representatives of Sandell Asset Management Corp. (“Sandell”), a 6% stockholder of the Company, to discuss Sandell’s previously stated concerns with the Company’s strategic direction and, in particular, Sybase’s balance sheet and cash position. In these calls, as in prior calls with Sandell, the Company explained to Sandell that the Company’s Board continually evaluates the Company’s financial position to optimize its capitalization, including maintaining a well-balanced approach to leverage and return of capital.”
And for the record, what does Sybase think of Sandell’s proposed strategies: “short-sighted, inadvisable and ill-timed.”
What say you, Sandell?
NeoMagic, the Santa Clara supplier of chips and software tools to develop multimedia
applications for handheld devices, recently sold eighteen of its U.S. patents and one patent application related to embedded memory products to Faust Communications Holdings for $12.5 million. After paying “agency commissions” on the deal the company got $9.5 million. That works out to a hefty 24 percent in “agency commissions.”
But that was down from the 30.7 percent in expenses the company paid the last time it unloaded its intellectual property, when it sold four patents during its fiscal 2007 second quarter to Samsung Electronics for $1.4 million, of which NeoMagic got $1 million.
NeoMagic’s shares, which fell 47 percent last year, are down another 56.6 percent so far in
2008.
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