Boots Del Biaggio’s BFF Doug Bergeron of Verifone: A Match Made In …?
My column in the Mercury News today takes a swipe at Boots Del Biaggio. But near the bottom, I also turn an eye toward Biaggio’s one-time friend Doug Bergeron, the chief executive officer of VeriFone:
“By the way, Bergeron - who sold $134 million worth of VeriFone stock from September 2005 to November 2007 - ran into his own problems in December when it was disclosed that his company had overstated its pretax profits by 80 percent. Oops.”
But apparently I was a bit behind the curve on that. In April, my colleague Steve Johnson posted a story about VeriFone’s disclosure that its misstatement was larger than originally thought, and that its CFO was stepping down. Johnson wrote:
“The maker of store checkout-counter devices that process credit card transactions announced Dec. 3 that it had found accounting errors that would require it to cut its previously stated operating profit for the nine months that ended July 31, 2007, by $29.7 million. But after a further investigation by its audit committee, which reviewed more than 5 million documents, the company said Wednesday its operating profit will have to be scaled back by $36.9 million.”
Yikes. Bergeron also said he was giving up the chairman’s role, but would stay on as CEO. But there was no word on whether he planned to give back any of the money he made from selling stock during the period when the company was overstating its profits (and enjoying a nice run up in the stock price).
The involvement of Bergeron with Del Biaggio is much bigger news in his native land of Canada. On Monday, the Toronto Globe and Mail ran a story recalling that Bergeron was supposed to be part of Boots’ group buying a stake in the NHL’s Nashville Predators. Last Fall, Boots told a Globe and Mail reporter:
“I don’t mind telling The Globe and Mail I’m very excited to have a Canadian billionaire as part of my group.”
The paper said it never confirmed that Bergeron was a billionaire. But it remains unclear why Bergeron dropped out of the group. And whatever the reasons, his finance firm DGB is now suing Boots for obtaining fraudulent loans.
I’m guessing the friendship is long since over. But I’m still left wondering what happened last fall. And how these two characters hooked up in the first place.
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Chris,
you hit the nail on the head with this Bergeron character. You should go back and check the PAY Yahoo message boards.
Verifone (PAY): There is never just one cockroach
Pete, January 9, 2008 @ 3:48PM ET | Link | RSS | Read via Email | Start a Discussion
Investors often focus on and obsess about the greatness of a company and its management. Once they fall in love with the stock, it is easy to forget one of the most important rules of investing: diversify.
This past month, investors in VeriFone Holdings, Inc. (NYSE:PAY) got a wake up call by a surprising announcement:
VeriFone to Restate Past Results (WSJ.com)
VeriFone Holdings Inc. said it will restate results for its fiscal first, second and third quarters, due to errors in accounting related to in-transit inventory. Shares plunged 46%. The San Jose, Calif., maker of credit card readers and point-of-sale systems used by retailers said previously reported results for those periods can’t be relied upon. Shares of VeriFone fell $22 to close at $26.03 on the Nasdaq Stock Market.
This is a daily chart of VeriFone Holdings (NYSE:PAY).The price bars are colored according to the status of our relative momentum indicator. Red = underperform. Yellow = neutral. Green = outperform. The red and green dots are the InVivo.Stops.
PAY was outperforming the markets until the company dropped the bombshell. The stock was crushed, and investors are taking the brunt of this downside move. There has been some interesting news buzz regarding the company. Let’s take a closer look.
First, a search for insider transactions finds that VeriFone CEO Douglas Bergeron sold $72,075,350 worth of shares and bought none in the past year. Graphic below is from SECForm4.com.
Let’s take a look at a weekly chart since its IPO from May 2005
Here are some 2007 news headlines:
During 2007 VeriFone Holdings was a presenter at a number of conferences: 1. the Wachovia Securities Services Conference, 2. SunTrust Robinson Humphrey Annual Institutional Investors Conference, 3. Raymond James Institutional Investors Conference and 4. NYSE Group and Prudential Equity Group Growth Conference
VeriFone CEO Douglas Bergeron Wins Ernst & Young 2007 Entrepreneur of the Year Award
VeriFone Reports First Quarter Fiscal 2007 Results
James Cramer Interviews VeriFone CEO Douglas Bergeron
Douglas Bergeron is the chairman and CEO of VeriFone. He says the company hit records on every line item in the financial statements last quarter. 61% growth. Sixty percent of revenue came from overseas. Gross margins and operating margins hit all-time highs.
VeriFone Reports Second Quarter Fiscal 2007 Results
VeriFone Reports Third Quarter Fiscal 2007 Results
Verifone earnings [Video]
Discussing the electronics payments specialist’s earnings, with Douglas Bergeron, VeriFone chairman/CEO and CNBC’s Becky Quick
Billionaire can’t resist sports fan’s ultimate fantasy
His logic for becoming the first person from this area to become an NHL owner sounded flawless, but the 47-year-old San Francisco-based business whiz tossed aside the cold arithmetic because he couldn’t keep the excitement inside any longer. “You know, after we’re done this interview, I’m going down to Los Angeles to have dinner with (fellow Predators co-owner) Boots Del Biaggio and Luc Robitaille and then watch the team play the Kings ,” said Bergeron, who is the CEO and single largest stock holder in the U.S’s leading electronic payment company VeriFone. “That’s what’s going to be fun about owning part of a NHL team. “I’m not denying I’m going to enjoy the prospect of ownership more than my other investments that simply send me a dividend cheque every month.”
The questions investors must be asking are:
Why do Wall Street firms still maintain 2.5 rating on the stock, telling investors to ‘Hold’?
Did any of the big financial institutions catch wind of this potential earnings mishap during their investor conferences as the CEO sold large positions of his holdings throughout the year?
Large Mutual funds hold big positions in VeriFone (NYSE:PAY): Fidelity Contrafund 5,309,398 shares, Calamos Growth Fund 2,300,000 shares, AIM Constellation Fund 2,070,214 shares and Vanguard Explorer Fund 1,466,725 shares etc.. Will this affect their performance?
Lately every news item related to VeriFone (NYSE:PAY) is about a Class Action Lawsuit against them. Will all these cases be litigated and at what cost?
Investors cannot afford to be complacent when its stock price takes a dive. There is never just one cockroach. A balanced trading plan must be in place to manage risk and exposure. Never average down.
Food for thought: Bulls and bears are fighting it out on the message boards regarding VeriFone’s future, and something caught our attention. If we take a look at CEO Douglas G. Bergeron resume on VeriFone.com versus the resume posted on Forbes there is a bit of discrepancy. Forbes shows that Bergeron was from April 1999 to October 2000 President and Chief Executive Officer of Geac Computer Corporation.
Bergeron quit as CEO of Geac Computer Corporation on October 2000 and if you do a thorough news search how Geac Computer did during his tenure you will find the following article interesting:
Geac says profits will eventually return Friday, December 8, 2000
Geac Computer Corp, Canada’s largest software company, posted dismal results late Thursday evening that didn’t even come close to matching analysts’ expectations. The share price sagged on Friday on that news.
The company reported a loss of $56.5 million (91 cents a share) in its second quarter compared to a profit of $19.7 million (32 cents a share) a year ago.
It’s the latest in a string of bad news announcements since September from Canada’s largest software company. The company has cut 500 jobs or 12 per cent of its workforce, it has replaced its chief executive twice, demand for its enterprise resource planning software has slid and its stock price has dropped sharply.
Geac shares plunged another 40 cents to $2.90 Friday, a new 52-week low. The shares have traded as high as $31.40.
Perhaps it was a and oversight that his 19 month tenure as CEO of Geac Computer Corp position is omitted in his resume; thankfully the internet gives everyone an opportunity to do our own due diligence. Will history repeat? We shall see, but one lesson is clear: the CEO learned to cash out.
Interesting?
The guy says he’s a billionaire.
http://www.canada.com/windsorstar/news/story.html?id=b2d79fb6-1d25-4995-98c8-984cd42ef1ff&k=47333
Billionaire can’t resist sports fan’s ultimate fantasy
Assumption high school grad, business man part owner of NHL team
Dave Waddell, The Windsor Star
Published: Wednesday, January 09, 2008
Windsor-born billionaire Doug Bergeron was explaining the business case for becoming a part-owner of the NHL’s Nashville Predators when he stopped himself.
His logic for becoming the first person from this area to become an NHL owner sounded flawless, but the 47-year-old San Francisco-based business whiz tossed aside the cold arithmetic because he couldn’t keep the excitement inside any longer.
“You know, after we’re done this interview, I’m going down to Los Angeles to have dinner with (fellow Predators co-owner) Boots Del Biaggio and Luc Robitaille and then watch the team play the Kings ,” said Bergeron, who is the CEO and single largest stock holder in the U.S’s leading electronic payment company VeriFone.
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Windsor-born billionaire Doug Bergeron is part-owner of the NHL’s Nashville Predators.
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Font:****”That’s what’s going to be fun about owning part of a NHL team.
“I’m not denying I’m going to enjoy the prospect of ownership more than my other investments that simply send me a dividend cheque every month.”
Having joined the nine-man group that bought the Predators just before the deal closed last fall, Bergeron doesn’t expect to get his ownership application rubber stamped by the NHL for another couple of months.
The other eight owners, with Del Biaggio and David Freeman being the primary investors, were approved by the league in November.
Bergeron calls himself a second-tier owner of the Predators, who sold for $193-million US.
“I never grew up dreaming of owning a NHL team, but knowing there’s the possibility my name could one day be on the Stanley Cup is pretty exciting,” Bergeron said. “It’s a pretty exclusive club. Teams don’t become available very often. It’s an honor to be part of that group.”
Growing up in South Windsor and playing the game like most Canadian boys, Bergeron said he quickly grasped he was more a ’science and math’ guy than an NHL prospect.
The closest he thought he was going to get to the NHL was delivering the sports section of the Windsor Star as a paper boy.
“I wasn’t an off-the-rails hockey fan like some guys I know,” said Bergeron, who graduated from Assumption Secondary School in 1978. “I was a Wings fan, definitely not a Leafs fan.
“I remember seeing Gordie Howe and Frank Mahovolich play (at the Olympia) before the Wings got bad in the 70s.”
Bergeron and his brother had a childhood that was a mix of sports, music lessons and big family gatherings.
“Some of my fondest memories from back home are going out to LaSalle to visit my dad’s family between Christmas and New Year’s and us all skating and playing hockey on River Canard,” Bergeron said.
“Back then, before global warming spoiled things, everybody had backyard rinks and we’d play all the time.”
Bergeron, who has three younger children with his wife Sandra and two teenagers from his first marriage, brings his family back home usually twice a year to visit his mother Eleanor in the house he grew up in on Lonsborough.
His father George, who was diagnosed with multiple sclerosis when he was 34, died in 1999, but he retains strong local ties through his extended families on both sides.
“My mother was a district sales manager for Avon for about 25 years,” said Bergeron, who donated $1-million to the Multiple Sclerosis Society of Canada in 2000 in his father’s memory and is director of the MS Society of San Francisco and Bay area. “Anyone who sold Avon in Windsor from the 70s through the 90s worked for her.
“My brother is a high school music teacher in Windsor at Holy Names.
“Even though my dad couldn’t work after he got MS, we didn’t want for anything. We were a typical middle-class family complete with music lessons.”
The love of music runs in the family and Bergeron chuckles at remembering how excited he was about earning a little pocket money with a band he formed with his pals in Grade 12.
“We played a lot in the Knights of Columbus and at weddings when we were in high school and university,” Bergeron recalled. “We’d play every Friday and Saturday night and get $200 to split amongst the four of us.”
Now, $200 is just walking around money for a man who spearheaded the purchase of VeriFone from Hewlett Packard for $50-million US in 2001 and then helped turn it into a multi-billion dollar operation.
Bergeron, who is also a member of the Listed Company Advisory Committee of the New York Stock Exchange, said owning a piece of a hockey team was hardly on his mind until recently.
He has followed the game closely for the last 30 years, especially from a business perspective but, when Del Biaggio and some other business friends asked him to join in the Predators purchase, his curiosity proved addictive.
After analyzing the potential of the deal, Bergeron broached the topic with his wife Sandra, herself an accomplished business leader as chair of the board of the computer security company TraceSecurity Inc.
“It’s not an overly significant part of our net worth,” said Bergeron of his sales pitch.
“Her only comment was, ‘You’re not going to be flying around with the team. You’re going to be staying home and helping with the kids.’
“I go to west coast games only.”
Bergeron, who plans to take a hands-off role with the team except on major budget decisions, admits the hockey fan in him is making it hard to resist living a sports’ fan’s fantasy.
“The team was in L.A. the other week and I was invited to come to Montreal for their game Saturday,” Bergeron said.
“They got in Friday night and had part of free day Saturday and I was thinking, if I was 28 and single, that would’ve been definition of going to heaven. But I’ve got kids and work during the week, so I had to pass.
“It’s pretty exciting to be involved with the other owners and just the comraderie of the team.
“I’m just tipping my toe in the water here. Maybe someday, when the kids are older, I could take a more active role with the team.”
dwaddell@thestar.canwest.com or 519-255-5777, ext. 412
© The Windsor Star 2008
COMMENTS ON THIS STORYAdd Your CommentGood luck Mr BergeronThu, Jan 10, 08 at 07:57 AM
It Just goes to show the people of Windsor. Education is the answer. Educate yourself and then move on, I love your story and I wish you all the Luck in the world. Your hard work made you what you are. Only in a America can you fine your dreams and success . It it so sad to see how the people of Windsor hate the USA. I am a “Wing” fan, but I will root for “Nashville” as long as they are not playing the “RED WINGS” I am so happy for you and your family.
JackThu, Jan 10, 08 at 09:40 AM
Great to hear a story about a local boy, made good. Now if the fathers of our beloved city can have some of the chutzpah this guy has
Greg VerbeemThu, Jan 10, 08 at 12:20 PM
This is good for the Predators and good for the NHL. Doug Bergeron is a tirelessly hard working and brilliant individual, with a midas touch in the world of business and technology. Even though his intial involvement with the team will be limited to a fairly hands off role - I cant help but believe that eventually his remarkable business acumen will be lent to the organization with great success sure to follow. The NHL can only get better with people of this calibre involved directly in the game, in any capacity. Heaven help the rest of the NHL if Doug develops a Billy Beane-esque metrics analysis of player ability/talent. This story is yet another testament to George and Eleanor’s incredible parenting job. The Bergerons, to a person, are a very special family. Good luck Doug !
Roman MannMon, Jan 21, 08 at 12:07 PM
Doug…………I couldnt believe my eyes when I read this. I tip my hat to you and raise a glass to the boys who grew up in South Windsor. Congratulations
chinaskiThu, Jun 12, 08 at 02:35 PM
Doug, you are the man! Good luck to you and Boots on being billionaires and NHL owners! WOW!
Calling the kettle black???
INVESTOR ALERT: WestEnd Capital Management, LLC Announces It Has Retained KGS to Prosecute Securities Fraud Class Action Lawsuit Against VeriFone Holdings, Inc.
Marketwire
Posted: 2007-12-11 11:29:20
NEW ORLEANS, LA, Dec. 11, 2007 (Marketwire delivered by Newstex) –
http://at.marketwire.com/accesstracking/AccessTrackingLogServlet?PrId=338555&ProfileId=051205&sourceType=1
San Francisco-based investment advisor WestEnd Capital Management, LLC announces that it has retained prominent New Orleans-based class action securities law firm Kahn Gauthier Swick, LLC (”KGS”) to recover losses related to its investment in VeriFone Holdings, Inc. (”VeriFone” or the “Company”) (NYSE: PAY).
The case against VeriFone is pending in the United States District Court for the Northern District of California, on behalf of shareholders who purchased the common stock of VeriFone between August 31, 2006 and December 3, 2007. VeriFone and certain of its officers and directors are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934 (the “Exchange Act”).
Institutional investors and money managers who purchased shares of VeriFone between August 31, 2006 and December 3, 2007 are urged to join WestEnd and to contact Lewis Kahn, Managing Partner, KGS, toll free 1-866-467-1400, ext. 100, via cell phone at 504-301-7900, or by email at
lewis.kahn@kgscounsel.com
to learn about your legal rights and how this action may benefit you. For further information on KGS, please visit
http://www.kgscounsel.com
.
Sean Cooper, Chief Operating Officer, Sr. Portfolio Manager of WestEnd, stated, “We have retained KGS because, as investment advisors, we are not a commission-based brokerage house and, therefore, the success of our firm depends upon the performance of our portfolios. Accordingly, WestEnd is extremely proactive in recovering assets when impacted by the negative effects of market fraud or manipulation. This is an outrageous situation, which never should have been allowed to occur. We were fortunate that WestEnd is doing so well, that the loss only moderately impacted our diversified portfolios.”
Lewis Kahn, Managing Partner at KGS, also stated, “We applaud the participation of leading investors such as Mr. Cooper and WestEnd for taking a role in protecting the rights of investors. We agree that the VeriFone case is an egregious example of lax accounting and wholly deficient internal controls and procedures.”
On December 3, 2007, Defendants shocked and alarmed investors after they published a release that revealed, for the first time, that the Company’s previously reported financial statements and reports could no longer be relied upon and that these results for at least the previous three quarters would require to be restated. Particularly, the Complaint alleges that VeriFone failed to disclose improper valuation of products in its inventory, which would result in close to a $30 million reduction in pretax income for the first nine months of the fiscal year.
The revelations that Defendants had materially misrepresented the Company’s financial and operational condition, its controls and procedures and its results of operations, belatedly revealed on December 3, 2007, decimated shares of VeriFone. As evidence of this, that day, shares of the Company collapsed over 45.8% in the single trading day — falling over $22.00 per share to close at $26.03 on very high trading volume of over 49.228 million shares traded.
Del Biaggio may have skirted full NHL review
Investor says he was told league let co-buyer slide
By BRAD SCHRADE • Staff Writer • July 17, 2008
A potential investor in the Nashville Predators says troubled financier William J. “Boots” Del Biaggio III told him the NHL allowed Del Biaggio to bypass some of the league’s strict financial background checks for prospective owners.
Doug Bergeron, a California-based Canadian investor and entrepreneur and president of DGB Investments, was among those to whom Del Biaggio tried to market a share of the Predators.
Bergeron said Del Biaggio told him in December that National Hockey League Commissioner Gary Bettman’s office had given special permission for Del Biaggio to buy a share of the team without being subjected to all the scrutiny the league usually gives to prospective owners. Del Biaggio told him the commissioner’s office did not require him to show audited financial statements before it approved him.
“Boots bragged to me that he was able to convince Bettman’s office to overlook the need for his audited financial statements because it was too much work,” Bergeron said.
Bettman himself told Bergeron that he helped arrange the agreement that Del Biaggio had with the Predators’ local owners, Bergeron said.
That agreement gave Del Biaggio and his partners, among other things, contractual rights to possibly take over the team and move it.
Del Biaggio, a venture capitalist based in San Jose, Calif., has filed for bankruptcy and has been accused in several lawsuits of defrauding millions of dollars in loans from various lenders.
The FBI has subpoenaed records from the Metro government about its dealings with Del Biaggio.
The audited financial statements are part of the exhaustive disclosure process within the NHL’s standard vetting of prospective owners.
The disclosure of financial records, plus tax returns, business arrangements and other personal and legal documents is intended to ensure the league’s owners are financially stable.
Metro had protections
Metro had such confidence in the thoroughness of the NHL’s vetting process that it relied heavily on the league and the chief lender, CIT Group, to do the financial vetting of the prospective Predators owners.
Mayor Karl Dean on Wednesday said he didn’t know the specifics of Del Biaggio’s dealings with the NHL. Dean said the city negotiated protections in its lease agreement with the new Predators ownership group that will ensure the team remains here for five years.
“As far as I can see, he was telling lies to people in California,” Dean said. “Because the deal is structured in such a way that they can’t move the team for five years without penalties and paybacks to us and everything else.
“It’s not a good thing for him to have done that, but again, I think the city was protected by the agreements, and I’m assuming the local owners felt they were protected by their agreements.”
Bettman, through his spokesman, declined an interview request made Wednesday morning. NHL Deputy Commissioner Bill Daly responded by e-mail, saying that the NHL’s background process on Del Biaggio was the same as that performed on other owner candidates.
“With respect to Mr. Del Biaggio’s apparent claim that the League waived certain of our standard financial background checks, we do not believe that to be the case,” Daly’s e-mail said. “Due diligence on Mr. Del Biaggio’s ownership application was treated in a consistent manner as with the applications of other prospective owners.”
The Tennessean e-mailed Daly again later Wednesday afternoon, asking whether the league specifically asked for and reviewed audited financial statements for Del Biaggio or any of his business entities. The newspaper did not get a response before deadline.
Predators managing partner David Freeman said Wednesday he did not know of the dealings between Del Biaggio and the NHL.
A Nashville-based venture capitalist, Freeman underwent the background check himself. He said he didn’t exactly recall the documents he provided to the NHL but said the level of detail the league seeks is extensive, and there was often follow-up from the league about various assets.
“I certainly felt like it was a more exhaustive examination than I had ever been through in purchasing anything else,” Freeman said.
Freeman said the agreement his group had with Del Biaggio’s hockey firm, Forecheck, was negotiated between himself and the Forecheck partners, Del Biaggio and Warren Woo, a California investment banker, with former Predators owner Craig Leipold involved on the periphery.
“I can say they (the league office) were not involved in structuring it or developing it,” Freeman said.
“They certainly reviewed it when we submitted the operating agreement to the league for approval. They certainly reviewed it and were probably intimately aware of all the details, which goes to the thoroughness of their review process.”
Situation was avoidable
Some of the fraud allegations described in the lawsuits against Del Biaggio are apparently related to loans he took out in the hockey deal. His financial collapse came some six months after his California-based group and a majority group of Nashville executives purchased the team from Leipold.
A call placed to Del Biaggio’s cell phone number on Wednesday yielded an out-of-service message. His attorney in the bankruptcy proceedings, Michael St. James, said his client declined to be interviewed.
Bergeron said he was reluctant to speak, but said he was doing so because he felt as a hockey fan and a potential investor in the league that it had failed in doing its due diligence in the Del Biaggio matter.
“This whole drama was eminently avoidable,” Bergeron said.
Bergeron eventually decided not to invest in the Predators. He is, however, a creditor in the Del Biaggio bankruptcy and is a plaintiff in one of the lawsuits filed over the past two months in Northern California claiming Del Biaggio defrauded lenders. Del Biaggio owes Bergeron’s investment firm $3 million from a secured loan made last year that was unconnected to the Predators deal.
Bergeron said Del Biaggio first approached him around last September about investing in Forecheck and the Predators. He said Del Biaggio and his partner in Forecheck, investment banker Warren Woo, presented him with a marketing slideshow that outlined their investment thesis.
It was almost identical to the presentation The Tennessean obtained, dated January 2008, and reported on in Sunday’s newspaper, he said.
Bergeron met with Bettman in New York, where the NHL is headquartered, in late October as part of his own process of assessing whether he wanted to invest in the team. He described it as a good meeting.
He said Bettman’s comments about Del Biaggio were generous, and that he was aware Del Biaggio was seeking additional investors. Bergeron said Bettman told him he helped structure the agreement, including the preferred rights, that Boots and Forecheck’s investors would have in the deal.
Bergeron said Bettman spoke as though he was familiar with Forecheck’s arrangement, although he never specifically mentioned the slideshow or the portability of the team.
“We didn’t talk about mobility, per se, but we talked about the unique structure of the Forecheck agreement with the other owners,” Bergeron said. “Gary said, ‘It’s a great structure that we put together, and Boots should be happy, because it was my idea.’ ”
Daly said in his e-mail statement that the league was aware of the preferred rights of Forecheck but were completely unaware of the Forecheck slideshow.
“As part of its approval process, the League reviewed and was aware of the structure of the Nashville ownership transaction, and the structure of the transaction was disclosed to and considered by the Board of Governors in its ultimate approval of the transaction,” Daly said.
“The League had no knowledge of either the existence or content of Mr. Del Biaggio’s presentation to potential investors.”