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Posted
Apr 14 2008, 06:07 AM
by
Douglas McIntyre
Filed under: Microsoft, Cisco, Yahoo, E*Trade, Intel, Sirius, XM Satellite Radio, JetBlue, Dell, Take Two Interactive, Electronic Arts, Level 3
Rating:
Most companies on Nasdaq did fairly well with the shorts in the two-week period which ended on March 31. The two tremendous exceptions were Level 3, where short interest moved up 20.3 million shares to 243.9 million, and Sirius, where shares sold short jumped 40.4 million to 137.8 million.
In a tough stock market and credit environment, it is not hard to see why investors would place bets against both companies. Each stock trades near its 52-week low. Level 3 recently pushed out its president. Although it is in an attractive business, bandwidth infrastructure, it is a patch-work of M&A work with a large amount of debt and almost no cash-flow. In other words, a liquidation candidate in a deep recession.
Sirius is also hurt by a high debt-load -- over $1.2 billion -- and negative operating income. If the company's merger with XM Satellite does not go through, it may not be able to survive as a standalone company either.
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Posted
Apr 03 2008, 01:18 PM
by
Kim Peterson
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Customization is a big business these days. Starbucks says it can customize 87,000 drink combinations for its patrons. Whether it be clothes, cars or gadgets, allowing customers to order a unique version is becoming a successful business model. Not so for Dell, a company who made a name for itself on its build-your-own-PC policy. This week, the company said it will focus less on the build-to-order model and more on selling pre-built versions. The switch is part of the company's mission to bring down costs. When it comes to computers, people don't need an extreme level of customization anymore, executives told analysts this week. Customers are giving up the luxury of picking their own computer features and opting for cheaper, pre-made PCs from other companies. Dell's
share of the worldwide PC market has slipped to under 13% from 19% in 2006, and it has lost the title of top computer maker to Hewlett-Packard. Its growth has slowed to a trickle, while HP's 2007 growth could hit 30%.
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Posted
Feb 28 2008, 04:09 AM
by
Robert Walberg
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Like the former high-school baseball star in the Springsteen song, Michael Dell knows how glory days can pass you by in the wink of a young girl's eye. His company, Dell, delivered yet another earnings disappointment last night. The former king of the PC industry cited higher-than-expected costs for the earnings shortfall. The excuse may be new but falling short of estimates has become old hat to Dell.
Not that long ago, Dell rode its cheap cost structure, build-to-order model and aggressive market campaign to the top of theh PC world. But after years of management missteps, the company finds itself looking up at Hewlett-Packard much the way General Motors finds itself trailing Toyota. About the only category in which Dell surpasses HP these days is in restructuring announcements. According to Mr. Dell, the current plan, which calls for more staff reductions and improved operating efficiencies, is apt to adversely impact near-term earnings growth. No kidding.
But I'll tell you what the restructuring plan isn't going to do -- it's not going to resolve the company's long-term problem any more than the dozen or so turnaround efforts have resurrected GM. And the reasons are much the same -- both management teams are too focused on the bottom-line and not focused enough on the big picture. Dell's problem isn't that the call center in Canada is overstaffed, it's that the company no longer possesses a significant cost advantage over the competition. Dell was never a very innovative company -- its strength was in the cost savings produced by the model. That cost benefit doesn't exist any more and simply adding new channels to sell product that's priced about the same as Toshiba, Acer and HP just isn't going to get it done.
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Posted
Feb 20 2008, 08:48 AM
by
Douglas McIntyre
Rating:
Hewlett-Packard turned in one of the best performances of the earnings season. Net income rose 38%. Revenue rose 13% to $28.5 billion. The computer company raised guidance and its shares moved up 5%.
HP is probably the best tech bellwether in the U.S. It not only sells PCs and printers, it has a large software and server operation. It has tremendous businesses outside the U.S., especially in Asia.
Shipments from the company's PC operations were up 27% in the quarter. That has to be good news for chip companies AMD and Intel. Because HP is No.1 in global PC market share, it is also likely a boost for sales of Microsoft's Vista.
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Posted
Jan 30 2008, 12:32 PM
by
Kim Peterson
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The shopping mall is no place for electronics sales, it seems. Unless you're Apple. First Palm shuts down its retail locations. Now Dell decides the mall is no place to be either. The computer maker is closing all 140 of its kiosks. Too bad for the Dell kiosk employees. The guys at the mall near me usually seemed bored, but at least they didn't harass me like the cell phone hawkers. Did anyone buy a Dell computer as a result of those kiosks? I'm wondering if they truly were worthless, as CrunchGear states, or if they served some tenuous sales purpose.
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Posted
Dec 27 2007, 02:37 PM
by
Matt Koppenheffer
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Was bringing Dell back to Dell the right answer after all?
It's been a rough few years for Dell, as competitors like HP and Apple have been chomping away at its market position and its stock is 40% off the highs it hit back late 2004. It got bad enough that early this year Michael Dell stepped back in as CEO after stepping down in 2004.
Based on the stock price at least, it'd be hard to call 2007 an extraordinary success as the stock is roughly flat for the year. Dell (Michael that is) has been active, though, and is bringing some interesting changes to the company. In the Spring the company announced that it would start selling computers at Wal-Mart, and since then it has announced that it will be entering other retailers, including Best Buy
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Posted
Dec 18 2007, 08:52 AM
by
Robert Walberg
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Remember when it was cool to own/buy a Dell computer? Not that long ago it was Dell, not Apple, that had the laid back young kid starring in commercials that resonated with consumers. "Dude, it's a Dell," was the stuff of genius. Dell's were cool, they were cheap and they were everywhere.
Yet in little less than five years Dell has gone from cool to ice cold. Its share of the PC market has eroded due to misguided retail practices, poor customer service and outdated design. The company has also lost its price advantage. Despite the cheap prices you see on the company's web site, or in the flyers that arrive in the mail, once you configure the computer to match even the most basic of needs, the price ends up being as high or higher as PCs from Toshiba, Hewlett Packard and Acer.
Quite simply there's nothing that sets the company apart anymore -- at least nothing positive. Its abysmal technical service group certainly set it apart, as waiting on the Dell help desk was an exercise bordering on cruelty. To its credit, Dell's management team has begun to address this issue by adding staff, but once you get a bad reputation it can be very hard to change consumer perceptions. Dell has a lot of making up to do and some blunt talk from its back-in-the-saddle CEO, Michael Dell, just might help remake its image. Let's face it, Apple was left for dead a few years back and look at what the return of Steve Jobs did for that company.
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