A group of key shareholders stand a fighting chance of derailing Michael Dell’s ambitions to take the company he founded private.
The possibility of a privately held Dell has sparked our imagination, and also left us scratching our heads. As one of the leading PC OEM’s of our generation Dell has had a profound impact on personal computing, however, they also have a long history of failure that shouldn’t be forgotten. The big question facing Dell shareholders today is what the company’s long term prospects are, and if a $24.4 billion buyout offer by Michael Dell and his consortium is in their best interest.
Steve Ballmer might look like Joe Everyman on the outside, but under that sweat stained exterior is a billionaire in disguise, and according to Reuters he’s cashing out. The CEO has apparently confirmed reports that he has sold 49.3 million shares of Microsoft stock worth an estimated $1.3 billion, a move that some feel might be motivated by the end of Bush-era tax cuts on capital gains.
According to Ballmer investors shouldn’t read too heavily into the decision to sell off shares, and it was done purely for personal financial reasons. At current prices Ballmer is sitting on about $10 billion in company stock, so despite the poor optics of a CEO selling off a large pool of shares, we suspect the temptation of all that non-liquid cash simply became too much. When you consider that his 2009 bonus was a mere $670,000 as a result of poor performance in the mobile and tablet market, it would make sense that he would want to supplement his income somehow.
Despite the sale Ballmer will remain one of the top shareholders in the company with a 4 percent stake, second only to Bill Gates who holds 7 percent. I guess with Windows Phone 7 and Kinect now on the market Ballmer just needed a bit of extra pocket change before he heads over to his local Best Buy.
It looks as though 8M-series notebook owners aren't the only ones feeling slighted by Nvidia, who in the past several month has taken a PR hit due to an "abnormal failure rate" in what the company still claims is a limited batch of notebook GPUs. Media reports have questioned exactly how limited the problem remains, and there's even speculation that the faulty parts may apply to both the newer 9M-series of GPUs and desktop parts as well.
Now Nvidia must fight a new battle, this one in court. The graphics company has been hit with a securities fraud class action lawsuit, which covers all investors who purchased or otherwise acquired common stock of Nvidia between November 8, 2007, and July 2, 2008.
The complaint alleges Nvidia violated the Securities Exchange Act of 1934, accusing the company of making a series of misrepresentations and omissions that actively concealed and failed to disclose the unusually high failure rates of its mobile GPUs, along with the impact the supposed defects would have on Nvidia's financial condition. Nvidia in July announced it would take a one-time hit of $150 to $200 million to cover warranty and repair costs associated with the failures, and the company's stock tumbled downwards in after-hours trading following the announcement.
The ghosts from Apple’s past have returned to haunt the company. A couple of years ago, an internal inquest was launched into the alleged backdating of stock options grants at Apple made between 1997 and 2001. The investigation uncovered several irregularities - and forgeries - that eventually prompted the Securities and Exchange Commission to step in.
Although SEC filed charges against then Apple CFO Fred D. Anderson and general counsel Nancy R. Heinen, the company’s top brass including Steve Jobs were given the clean chit and lauded for their cooperation in the investigation.
However, disgruntled Apple stockholders Martin Vogel and Kenneth Mahoney believe there is more to the stock-option-backdating story than what met SEC’ keen eye. They have initiated a class-action suit against Apple CEO Steve Jobs, already beleaguered Anderson and Heinen, and four others from the Board of Directors.
The plaintiffs alleged that Apple’s blue-eyed boy Steve Jobs was the beneficiary of one such backdated stock option and profited to the tune of $20 million, and that Apple’s account department didn’t deem it necessary to record this spending in their books.
Also up for legal debate will be the catastrophic decline in Apple stocks – that wiped $7 billion in share value within two weeks – after Apple’s announcement of the internal investigation and whether shareholders deserve to be redressed for it.