Carl Icahn Prints His Own Money, Today with Apple

[Daniel Payne]

In the EDA world we were shocked when Carl Icahn made a hostile bid for Mentor Graphics in 2010, gained three seats on the board, then lost interest in taking over the company, all while making millions in the rise of MENT shares.

Deja vu with Icahn and Dell over the past several months.

Today, the same song repeated as Icahn buys shares in Apple, announces to the world that AAPL shares are undervalued, the stock blips upwards, and Icahn pockets millions in paper profits.

I hope that within my lifetime I can witness the financial downfall of Mr. Icahn because no person should be allowed to print their own money by manipulating stock prices.

 

[glforte]

Another good reason to lobby your congresspersons to enact meaningful financial reforms.

 

[Daniel Payne]

Gene,

Good point, although how could we have financial reform and yet still allow the free market to operate? It's a dilemma for my thinking.

 

[Michael Clayton]

Restoring US Manufacturing Supply Chain | Apekshit Mulay

The article show how the idea of "Free Trade" is a double-edged sword, and how we got into this pickle.
Financial reform musts be married to Congressional Fiscal Reform and a return to old-time conservatism, without the extremism of libertarianism, dominionism, and Taliban-like ideologies. Sorry, but I am "mad as hell, and I won't take it any more" as the movies once said. Seems anger and blame-games have replaced basic fiscal governance.

 

[Michael Clayton]

Re: Icahn and his million dollar tweet. CNBC was shocked, but managed to finally bring on guest who said is was all very legal, not really market manipulation.
We will see...but you might sent a not to CNBC staff about the earlier Mentor games by Mr. Icahn...just for fun.

 

[Daniel Payne]

Michael,

Thanks for the link to the economic article, I'll have to ruminate on it a bit.

Even in EDA the majority of new jobs are not in the USA, rather they are outside our borders.

 

[Paul McLellan]

And Steve Ballmer found a nice way to print his own money. Announce his retirement. His net worth was over $1B higher after the announcement than before!

 

[Daniel Payne]

Yes, the irony of Ballmer retiring and getting an even larger golden parachute. At least Ballmer has to wait for his successor in the next year, lots of drama watching who Microsoft will name in his place.

The best hardware company that I ever worked at was Intel and they have a corporate value, "Promote from within".

So many companies today ignore that corporate value and instead Promote From Outside which then demoralizes all of the other executives from within the company that have seniority, history and perspective.

Think of Apple hiring John Sculley, or HP hiring Loe Apotheker. Now those two didn't last very long.

 

[Michael Clayton]

Ballmer did a great job riding Gates model of software pricing and change control for enterprises, but both of them underestimated the impact of consumer market as hardware costs dropped, and free software got better and better. Finally, Google dropped the hammer (Android for Mobile, and Chrome for PC, and next will be ChromeOS for everything perhaps. ) But Google tends to confuse some consumers with rate of change.
But so did Microsoft with Windows changes, just less often.

Note: Google backend servers were down for 2 minutes last week roughly, and the total internet traffic dropped 40% we have heard during that 2 minutes. Amazon back end was down 20 minutes with minor impact. Nasdaq was down for many hours with no impact on consumers....only on day traders.

Motorola, like Microsoft, had an "industrial" business model that worked great, until they tried to get into consumer marketplace with cell phones (black only for too long). But their cellular infrastructure business did much better.
Consumer is fickle, and consumers do not buy multi-year service agreements like enterprise IT people. They can move from Blackberry to Apple to Android as often as they want, and are more interested in movies and communications than PowerPoint. The world wide web (not the internet) was what changed the world, and agile IT and product design rule now in consumer market. Adjust quickly or get out of the way.

But Microsoft has tons of cash, just like Apple, but MS rules the old lazy IT departments just as IBM did for years, and then DEC and then MS. Hardware is a very tough business in consumer market. 10x pricing reduction with 1000x+ capability improvement in PC's in past 10 years. Batch electronics (IC's) made that possible, and batch display making at Samsung has driven display cost down but not as fast.

Industrial, Military and Medical Device markets can take advantage of hardware cost reductions from consumer market adventures like flat screens, touch screens, and better processors and memory devices. And given slower growth there, they can avoid huge marketing costs, and just build long-lived businesses where customers change infrequently in their needs. Just stay out of the tempting consumer market, or do it as separate corporation.

 

[Daniel Payne]

Michael,

I agree with you assessment of Microsoft.

What interests me is how Google partners with more established brands like Asus to bring their 7" tablet to market, instead of trying to create their own hardware.

Companies like IBM championed the mainframe market, but were unprepared when the likes of DEC created the mini-computer market. Ironically, IBM then jumped into the PC market a bit late in 1981 and established itself quickly. Intel and Microsoft have done well with the Desktop and even Laptop markets, however were unprepared for the Tablet and Smart Phone markets.

I recall in the 1970's when Intel tried to enter the consumer business with watches by purchasing a company called Microma, which failed. Of the Semi companies probably TI had figured out the consumer market with their PC and Speak'n spell products back in the day.

Even Sony for awhile dominated consumer electronics with their WalkMan, stereos and TV sets. Along comes Apple with their iPod and quickly surpasses the WalkMan.

The Microsoft model of upgrading their OS and Suite of Software every few years has met with slowed consumer demand, because my new data is not on my device, rather it's in the cloud.

There's never a dull moment in the consumer or Semi industries.