Will win the EMC prize?

EMC Stock Soars After Investors Learn About Mega-Merger Talks With HP, Others

Excerpt:

For nearly a year, EMC and HP have been kicking the tires on a merger that would have created one the biggest enterprise tech companies on the planet — with over $130 billion in annual sales, according to the Wall Street Journal. For comparison, IBM is expected to do $98 billion in annual sales this year. Apparently, the talks have stalled because they couldn't agree to terms. Both companies were concerned they couldn't sell the deal as it was to shareholders, reports the WSJ. ... The WSJ said EMC was talking to Dell about a merger, which may have involved just selling parts of itself off. Dell is working hard to get a piece of EMC's enterprise storage business. This means that EMC is open to talks with others, too, with names like Oracle and Cisco being dropped to the WSJ and Barron's. Cisco would be interesting match with EMC. The two companies are close partners, but in recent years, EMC subsidiary VMware has been threatening Cisco with a new technology called "software-defined networking." SDN threatens Cisco's Cisco's $21 billion router/switch business with a new software-centric way to build networks. Everyone from Goldman Sachs to Facebook has jumped aboard the SDN bandwagon. Then again, HP, Cisco's main rival in the network industry, has been all-in on SDN. Owning EMC/VMware would be sweet for HP on that count. All this merger talk might amount to nothing, but EMC is at a crossroads. EMC's bread-and-butter technology, enterprise computer storage, is under attack from a whole slew of young new technologies that offer bigger, faster, and cheaper storage options — and from cloud computing.

Comment: HP has a disastrous record with acquisitions (detailed in the article). But this would be a merger - a stock swap. I think Oracle is a better match as Oracle has been somewhat moribund of late. So it could be good for Oracle. A dark horse is Seagate but Seagate's market capitalization is a fraction of EMC's. But it seems to me there is a natural synergy there.

Mike Quinn's Hobby

Cisco VP to memo leaker: Finding you is now 'my hobby'

 Excerpt:

This is an open response to the person(s) that sent our internal confidential memo regarding the RFP response noted in the Subject line.

I want to advise you that no matter the color of your badge (blue or red), the years of service and or your CPC rating you have decided to violate the Code of Business Conduct. The company in response to a number of requests to share internally what our RFP contained once again is insulted by the lack of respect for the business and "family" internal to Cisco. The person or persons whom felt it was cool or correct to share this internal memo should now have the intestinal fortitude to stand up and admit that they did this, then resign.

I want you to remember that Cisco puts the groceries on your table every two weeks, not Brad Reese or other Slander Sheet Journalists. That you disrespected everyone else at Cisco. Now I know you do not have it in you to stand up and admit what you did, so I will now make you my "hobby." Ask around you will find out that I like to work on my hobbies.

Comment: Additional info from the Brad Reese blog: here and here. Never a good idea to leak company information, but I would hope that Quinn would find a more productive hobby!

Show Investors the Money

Nader Kindles Fires of Revolt

Excerpt:

Mr. Nader isn't calling for a router recall or claiming the company's networks are unsafe at any speed. Instead, he wants the tech company to pay a bigger dividend to boost its shares.

The consumer advocate's motives are far from altruistic. He is a longtime disgruntled Cisco investor who called the company's share performance "appalling." In a private letter to Cisco Chief Executive John Chambers sent June 13, Mr. Nader blasted the CEO for not doing enough to lift shares of the technology company and said "it is time for a long overdue Cisco shareholder revolt against a management that is oblivious to building or even maintaining shareholder value," according to the letter.

In 4 p.m. Nasdaq Stock Market composite trading Thursday, Cisco's shares rose 11 cents, or 0.7%, to $15.47. They are down nearly a third in the past year and are off 75% from their all-time, tech-bubble high. In comparison, the Nasdaq Composite index is down about 48% from its all-time high in March 2000.

Among the specific actions Mr. Nader suggested in the letter are the distribution of a one-time dividend of $1 a share and an increase in Cisco's annual dividend to 50 cents from 24 cents.

"If they can't give shareholders value, then they have to give cash," Mr. Nader said in an interview this week, adding that the company's stock has plummeted even though its profits generally were on the rise until recently.

Cisco, like many big tech companies, has been accumulating cash despite its weak growth. It holds $43 billion in cash, nearly half of its market value.

Comment: Nader has a good point. Give a better dividend

Nothing says love like a ..... router!

Cisco Pitches $250,000 Router as Valentine’s Gift

Excerpt:

The networking company has put up a comic Internet ad, championing the ASR 9000 router that it started selling last November. This is some serious metal with an average price around $250,000 and meant for large service providers sending out vast streams of data.

Comment: Yeah that's the ticket!