Tag Archives: shareholder

May 05

Nokia's New Boss Defends Turnaround Strategy

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Sales of Nokia’s new Lumia smartphone range have disappointed

4:02pm UK, Thursday May 03, 2012

Sales of its Lumia smartphone range have disappointed, leaving the company trailing behind market leaders Apple and Google.

But its chairman-designate, entrepreneur Risto Siilasmaa, defended the company’s attempts to catch up.

“I am confident that Nokia has the right team, right strategy and now increasingly also the right products on the market to get us through this transition period,” he said.

The competitors were faster, and bringing their solutions to the marketplace faster

Nokia’s outgoing chairman Jorma Ollila

April was a tough month for the company – it reported a larger-than-expected loss of 929m euros (£760m)for the first three months of the year and was overtaken as the world’s largest maker of mobile phones by Samsung.

Executives got a grilling on these issues at the meeting by frustrated investors who have seen the value of their Nokia holding fall 90% in less than five years.

“The situation of Nokia and Nokia Siemens Networks is close to catastrophic,” shareholder Pekka Jaakkola said.

“Nokia is fighting against time.”

The company’s outgoing chairman, Jorma Ollila, promised it would launch a range of tablets and “hybrid” smart mobile devices that would “make a difference”.

He admitted Nokia was too slow at the start of the smartphone revolution – an area he has been criticised for neglecting while at the helm.

“Tablets are an important one, so that is being looked into, and there will be different hybrids, different form factors (handset designs) in the future,” he said in an interview with the Financial Times.

Nokia’s outgoing chairman Jorma Ollila has been with the company for 27 years

The company is expected to reveal its first tablet computer when Microsoft’s Windows 8 launches later this year.

Mr Ollila, who is stepping down after 27 years with the company, admitted Nokia’s “returns have not been where they should have been.”

“The company saw it and it was broadly accepted but the software capability and particularly the platform software knowhow was not there,” he said.

“The competitors were faster, and (were) bringing their solutions to the marketplace faster.”

His comments come as Nokia filed lawsuits against mobile phone and electronics groups HTC, RIM and ViewSonic in the US and Germany for infringing patents.

Nokia said it had filed the litigation “to end the unauthorised use of our proprietary innovations and technologies”.

Nokia's New Boss Defends Turnaround Strategy

Feb 18

Einhorn gives the green light on tech

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By Evan Niu

As a hedge-fund superstar, Greenlight Capital’s David Einhorn makes moves that are worth watching. It’s about that time of year when quarterly 13-F SEC filings, which disclose the positions the fund is holding, are starting to roll in. Let’s take a look at some of the notable changes in Greenlight’s portfolio over the past few months to get an insight into what this value investor has his eyes on.

Increased position: Apple During the fourth quarter, Greenlight increased its position in Apple (AAPL) from about 1.31 million shares to over 1.46 million shares, a roughly 11% increase in position size. This was also the quarter where Apple lost Steve Jobs, launched the iPhone 4S, and put up a surprise earnings miss relative to Wall Street expectations.

With Apple’s most recent quarter obliterating everyone’s expectations and the subsequent rally to new heights — shares recently topping $500 for the first time ever — you can bet Einhorn is pretty pleased with this move.

New position: OmniVision As a shareholder, I’ve always had mixed feelings about image-sensor specialist OmniVision Technologies (OTVI), but even in my darkest bouts of backside-illuminated​ depression, one fact has remained inescapable: OmniVision is ridiculously cheap. As of its most recent quarter, the company was sitting on $7.79 per share in cash and short-term investments alone.

That rock-bottom valuation has evidently attracted Einhorn’s attention with a new, small position of nearly 197,000 shares. While my personal position currently sits next to a lot of red ink, it does give me a little more confidence to know that Einhorn is on my side.

New position: Research In Motion This one was a downright shocker to me, but evidently Einhorn is bottom-fishing by picking up a new position in Research In Motion (RIMM). RIM had an awful year by just about any measure you can think of, the most glaring of which was its share price shedding over three-quarters of its value.

Greenlight’s 2.9 million RIM shares were added in the fourth quarter, so the loss on the position presumably shouldn’t be too large. the position is surely sitting at a loss right now since shares are currently below $15, lower than any time in 2011. Since the turn of the year, RIM has had a bit of a shakeup, naming a new CEO and chairwoman with high hopes of a turnaround.

RIM sports a P/E under 4, which is bound to attract the value gurus, but I’m going to have to officially disagree on this one. Research In Motion isn’t a value buy — it’s a value trap.

New position: Yahoo! Speaking of upper-level shakeups, that brings us to Yahoo! (YHOO). During the tail end of last year, the purple portal gave its foul-mouthed CEO Carol Bartz the boot — over the phone, no less. the company remained without a permanent head throughout the rest of the year, with CFO Tim Morse acting as interim CEO.

It was against this backdrop that Greenlight picked up just over 3 million shares of Yahoo!. just after the turn of the year, Yahoo! named a new CEO, Scott Thompson, who had previously led eBay‘s PayPal. Shortly after, co-founder and ex-CEO Jerry Yang called it quits. Rumors resurfaced late last year that Microsoft was interested in Yahoo! again, four years after Yang spurned Mr. Softy’s previous advances – and whose $33 per-share offer looks dreamy compared to today’s $15 price. (Microsoft owns and publishes top Stocks, an MSN Money site.)

With Yang out of the way, who knows? maybe Microsoft will come back to the bidding table, which would certainly delight Einhorn, since Greenlight’s unchanged Microsoft position continues to irk him to no end.

New position: Dell Also on the new tech position list is No. 2 domestic PC maker Dell (DELL). Greenlight opened a 14.1 million share position on the computer vendor at a time when Dell was trying to capitalize on domestic PC top dog Hewlett-Packard‘s identity crisis.

Meanwhile, Dell has yet to formulate a meaningful game plan with the biggest revolution in computing in generations, the mobile revolution. Dell’s attempts at smartphones and tablets have been met with commercial failure, most recently with both the Streak 5 and Streak 7 devices.

That being said, this trade is working out for Einhorn with Dell enjoying gains around 23% year-to-date and prices higher than any seen in the fourth quarter.

Tech time? Einhorn’s tech moves look awfully prescient, considering that the Nasdaq Composite is up roughly 12% so far this year, outperforming the Dow Jones Industrial Average and S&P 500, whose 5% and 7% respective gains pale in comparison. but then again, as a relatively tech-centric investor myself, I can’t say I’m complaining.

Fool contributor Evan Niuowns shares of Apple and OmniVision Technologies, but he holds no other position in any company mentioned. The Motley Fool owns shares of Microsoft, Yahoo, and Apple. Motley Fool newsletter services have recommended buying shares of eBay, Yahoo, Microsoft, and Apple; creating a bull call spread position in Microsoft; writing covered calls in Dell; creating a bull call spread position in Apple; and writing puts in eBay. Try any of our Foolish newsletter services free for 30 days. the Motley Fool has a disclosure policy.

Einhorn gives the green light on tech

Dec 20

An Open Letter To Jim And Mike Of Research In ...

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Dear Jim and Mike,

Thank you for being the "forefathers" of the smartphone market; Research In Motion (RIMM) truly revolutionized the way we communicated by adding messaging/email to the boring cellphone!

As a long-time shareholder who held steadfastly true even during the NTP saga that threatened RIMM’s ongoing viability, it was easier to hold on then given that RIMM was the only dominant player in its space and that lawsuit was always about money. however, this time, the threat is different.

I can certainly understand why most shareholders are angry and may want both of you removed given that:

  • RIMM’s stock has cratered by over 70% year to date and is flirting toward levels not seen since 2004.
  • RIMM’s market capitalization has gone thru an epic slide from over $30B to less than $8B; stock closed at $13.44 EOD.
  • RIMM’s US smartphone share continues to slide. Quarter to Quarter sequential decline remains unabated.
  • PlayBook (the product and the launch) was an absolute disaster.
  • BB10 (dare I say BBX?) has been delayed again.
  • Cash was used to repurchase shares earlier this year at higher prices; was that just a smokescreen?

Is hindsight really 20/20 or can you see the writing on the wall?

  • Your response to the iPhone; and your response to Neff made me wonder what you had for breakfast…

…iPhone is launching, to the best of my knowledge in one carrier and one country and we’re in about a 100 countries and 300 carriers…

  • Mike on the iPhone…

"Talk — all I’m [hearing] is talk about it," he said, dismissing the iPhone’s chances in the enterprise. "I think it’s important that we put this thing in perspective."

He said iPhone penetration remains low, with Nokia’s N95 more than doubling iPhone European sales, although the N95 costs twice as much.

Walt: “Something has happened” over the years to “your iconic leadership.”

Kara: “not in Sumatra,” but here, in the United States.

Mike: We’re running a business. We invented the smartphone. We decided to go global.

Visually…(click chart to expand)

When RIMM touted BBX and PlayBook as the "next big thing"? I wrote about it here and here. While RIMM fans may perceive this as being "nit picking," I wanted to share with them (and you) why it pays to listen (or watch) and understand what is presented in the CCs or interviews and how executives handle themselves provides hints of what is going on with the company that numbers sometimes cannot tell.

Allow me to use some examples from your recent conference call transcript and compare that to the suggestions I wrote about in my recent article titled "What would Apple do if it ran RIMM?"

Suggestion #1 – Accept that your past accomplishments does not guarantee RIMM’s future success. Quit the hyperbole’s and stop "spinning" your press releases!

…and while we have remained solidly profitable and delivered significant unit volume during this transition, we recognize that our shareholders MAY feel we have fallen short in terms of product execution, market share and financial performance.

  • Duh…seriously? using the word "may" in that very sentence tells me that you guys just don’t get it. "Significant" relative to what?
  • There is no doubt RIMM is profitable now; but "solidly"? You’ve missed your own "missed" estimates and have sequentially declined over the past 3 quarters. How "solid" is that?

…regarding our commitment to completing this challenging transition and commitment to leaving no stone unturned when it comes to evaluating the business and determining the best ways to improve our performance going forward.

  • Where was this perspective when the iPhone and the droids first came to the market? If you couldn’t see it then, how will you see it now?

…it is important for you to know that Mike and I, as 2 of RIM’s largest shareholders, understand investor sentiment and we are more committed than ever to addressing the issues at hand.

  • Both of you have made your money; you’ve sold shares along the way. Even if your holdings become worthless, both of you are set for life. Can you say the same to the shrinking portfolios and those who got recently laid off?

…while the proposed transformation may take some time, we believe that the steps we are taking will improve our performance and better enable us to deliver on what we expect of ourselves.

  • History has shown that both of you have been incapable of seeing the strategic shift in your business; how would your approach be any different today?
  • What is the timeline? By the time BB10 ships; AAPL and the droids will have a full year ahead of them in sales and to prep up their next gen phones.

…we understand that our marketing efforts over the past year have not achieved the desired results, impacting the company’s performance…

  • I understand you are spending $100M in marketing; I have a better idea for you – pay me $10M and I’ll fix this ship in less than a year! I mean, how do you "package" your grandma’s rotary phone and convince consumers that it is the next big thing? Guys, the Ad agencies (are they related to you?) will love you both! great use of your shareholders’ money!
  • Make great products with the end user in mind and you won’t have to spend this amount of money in marketing!

…this chipset will not be available until mid-2012, and as a result of this and certain other factors, we now expect our first BlackBerry 10 smartphones to reach market in the latter part of calendar 2012…

  • Now, compare this to what you said during your Q2 2011 CC…

…development efforts on the first QNX-based smartphone products are going extremely well, and we plan to ensure that when we launch, the product will have the features, industrial design and content and app ecosystem it needs to deliver a dynamic and industry-leading customer experience. The development platform for QNX phones will be presented in more detail at DevCon in October…

  • Are you saying that you didn’t know that the chipset wasn’t available? given how RIMM flubbed the trademark to BBX, I guess that scenario is possible. to hear you dance around the subject was as painful as listening to your epic interview meltdown…
  • Leading edge? What happened to PlayBook?
  • Is the delay a software issue because QNX isn’t porting very well to your BB platform?

…we don’t break out geographic subs. I mean, we did give you a little bit of color on the call there…

  • There is a big difference between "not being able" to break it down (due to MIS limitations) and "will not provide" that to you (which I fully understand). Which is which? IF it is the former, then it gives us a glimpse on why management consistently stumbles in delivering the goods.

Suggestion #2 – Ditch the PlayBook (for now). as expected…

…I firmly believe that the BlackBerry PlayBook tablet remains the most secure and most advanced tablet platform on the market today. With true real-time multitasking, Flash-enabled browsing, uncompromised video streaming for both HTML5 and Flash video, which constitutes the majority of premium video content on the Internet today…

  • Have you asked yourselves why PlayBook didn’t sell well and why you had to discount to move it?
  • Can you make money at $199? Remember your quote below from Q4 2011?

…and the PlayBook, you’ve seen the interest is fantastic, and it’s really a no-compromise environment. you get the performance and you get the tonnage of apps and you get the uncompromised web and you get — CIOs are pleased by its enterprise greatness. it is a hot, hot capability…

  • The ugly Truth? Heavily discounted and had to be written down…but yet the "spin" continues as you can read from the quote below…

…we’ve seen a significant increase in sell-throughs since the launch of these programs ($199), and we expect this trend to continue with the launch of PlayBook 2.0 software in February…

Suggestion #3 – keep it simple. here is an easy excercise: write down ALL the BB models that you are still currently supporting; how many do you get? May I humbly suggest ONLY making 2 models – one with Qwerty keyboard and one that is pure touch. as the next gen model comes in; the old one gets discounted. not a rocket science.

…are evaluating a number of areas, including product management and the number of SKUs offered, supply chain and building material cost efficiency…

  • Bluntly, there is NO time. RIMM hasn’t succeeded given its plethora of BB models; what isn’t clear about that?" it is evident that your board either is gutless or clueless; there is no excuse for them not to see this coming.

…that is being led by a cross-functional executive team that will identify opportunities to drive efficiency in the organization. this program includes evaluating our current and future product portfolio to determine the appropriate number of SKUs and segments to address, as well as focusing on cost and supply chain efficiency…

  • Why must we make things complicated? Let me guess…we should run a monte carlo simulation on what the optimal number of SKUs based on another monte carlo simulation on various carrier specs!
  • This suggests that no one wants to be accountable for any difficult decisions that need to be made. Leadership starts with the top; if the "top" is indecisive and is not accountable…there will be no progress.
  • I can bet that this "cross functional" effort means more "process" and more useless "reports"!

Respectfully, you are running out of time to make RIMM great again. The game has changed and you are about 4 years behind! hence, it is even more imperative that you devote all your resources into making BB10 the best it can ever be. Otherwise, amateur hour will truly be over.

Unless there is a meaningful catalyst (buyout, ouster, etc…), RIMM continues to be dead money till BB10 wows the market. Compelling fundamental valuation alone will not save it from drifting lower.

Let me use a hockey analogy to close this missive.

Imagine you are a gifted player that has lit up all the scoring stats at the major junior level and have played in championship teams. Now, you are playing in the NHL. does your past performance guarantee that you will have the same success at the pro level? why is that?

RIMM was great; for RIMM to be great again…it needs to disrupt itself. it starts with both of you.

Disclosure: I am long AAPL. I may short or go long RIMM for a scalp.

An Open Letter To Jim And Mike Of Research In Motion – Seeking Alpha