Xbox exec takes on finance for the poor
Posted by Kristi Heim at 4:30 PM
A former Microsoft executive who led the launch of Xbox and the co-founders of both Classmates.com and Jobster.com have all joined a local non-profit dedicated to helping poor people gain access to credit.
They're part of a wave of experienced technology people leaving the business world to apply their skills to problems of inequality.
Maybe they were listening to Bill Gates' Harvard commencement speech...
Their business experience is valued at Redmond-based Unitus, which looks at microfinance, or providing tiny loans and other services to working poor, as "an up-and-coming business sector, not a charity," in the words of its spokesman. Unitus also operates a separate, for-profit investment fund.
That for-profit approach is somewhat controversial and has its share of critics. But in microfinance the line between doing good and making money is blurring.
Unitus reaches more than 2 million people now with loans, insurance and other services that would not be available to them through traditional banks. Like an aggressive tech startup, it plans to expand to a million more by the end of the year.
Xbox veteran Ed Bland, who was a general manager in Microsoft's Entertainment and Devices Division, left to join Unitus as chief operating officer.
Ed Bland's job is anything but.
Other techies that have recently joined Unitus are Derek Streat, co-founder of Classmates.com and now Unitus VP of microfinance solutions; Jobster.com co-founder Jonathan Weinstein, now Unitus director of product development; former Microsoft and BEA employee Diana Reid, now Unitus VP of donor and investor relations; and RealNetworks and Microsoft veteran Sandra Winters, who is Unitus director of strategic alliances.
The money is real, but the debate is virtual
Posted by Kristi Heim at 5:40 PM
Note: Please keep the comments polite and refrain from any personal attacks.
Following on my post last week about hybrid Web sites that combine social networking and financial services, a lively debate arose about rating financial advisers online. It seems timely to raise these issues, considering the turmoil in markets recently and the subprime lending debacle. Investors can certainly benefit from better information, and the web makes sharing it much easier.
One concerned reader made these criticisms about the site and about financial advisors in general:
"Clients of 'financial advisors' that are usually brokers/salesmen simply do not have the knowledge to rate those brokers. I have helped many advised clients and NONE of them understood the fees they were paying, or how their returns compared to the indexes. They had no idea that their broker participated in revenue sharing, or that they were being charged 12b-1 fees. Some thought they paid no fees at all! None knew what their bill for financial costs came to, or the effect of those costs over time. They had all been manipulated into trusting their 'advisor'... blindly.
"The questions asked on financialjoe are very superficial and will NOT give a true rating for advisors. Not even close.
"Uneducated people answering superficial questions and giving unreliable ratings isn't what investors need.
"What needs to happen is that investors need to be educated on what their financial advisor will never tell them. For example:
" 'the BCT study found that the raw returns of equally weighted mutual funds (net of all expenses) for 1996 to 2002 were 6.626% for the investors working on their own and were 2.924% for funds provided by advisors.
" 'In other words, the public working on its own did more than 100% better than financial advisors when it came to selecting equity mutual funds. After factoring in inflation and taxes, clients of financial advisors lost money and lost purchasing power.'
"If someone is calling themself a 'financial advisor', they should advise, not sell. It's almost impossible to do both honestly I have learned.
And financialjoe.com's Shawn Tierney responds:
"To categorize clients who use a financial advisor, essentially saying that they're all too ignorant to rate their brokers, is a gross misstatement! There are millions of doctors, attorneys, business owners, and other professionals that use financial advisors; are they ignorant? There are also tens of thousands of financial advisors who work for all the major wire-houses, banks, and other firms that hold CFP's, CFA's, and Masters of Economics degrees; are they not qualified to advise?
"The majority of investors cannot even explain the functionality of a mutual fund, let alone the fee structure, and most don't want to learn because of the complexity involved. Study after study has shown that investors fail to become educated due to the complexity of the investments, and the level of vocabulary Wall Street injects.
"During our focus testing, financialjoe.com used various levels of vocabulary in the questions. We found the more in-depth the question, the less participation, and completion of the questionnaire.
f"inancialjoe.com's focus is participation. Through participation will come knowledge by way of experienced wisdom.
"Through financialjoe.com investors rate their advisors. As each rates their advisor they become tagged to that advisor, and are exposed to that advisor group discussion. It takes one of the users to bring up the discussion of 12b-1 fees, or anything else they have learned through experienced wisdom. Through these discussions they can together determine if the advisor disclosed the entire fee, or just portions of the entire fee.
"Did the advisor disclose the entire fee for a wrap account (total fund expenses plus wrap fee) or did he essentially lie and just disclose the wrap fee leaving out the total fund expense because he wanted to capture the business.
"The result? Mission accomplished! The advisor has now been exposed to every client that he services who participates as a user of financialjoe.com, as well as every potential client who was thinking about hiring him. This is a permanent record that cannot be expunged by the NASD or any other regulatory who settles financially without admitting guilt.
"The final result is permanently weeding out these types of 'advisors' who conduct unethical behavior. But, this cannot be accomplished without participation! So, in knowing this, why would we structure questions that we know will alienate the average investor?
"The comment also states, 'None knew what their bill for financial costs came to, or the effect of those costs over time. They had all been manipulated into trusting their 'advisor"...blindly.'
"I can assure you through personal experience in explaining fees to clients that there are those clients who, after breaking down the fees to them, say, "I really don't care about the different types of fees, just tell me the total fund expense". I also know of RIA's (Registered Investment Advisors) who tell their clients that their management fee is 1%, but fail to disclose to their client the additional mutual fund expenses held in a separate account.
"As for the questions being 'superficial' that is simply incorrect and needs no further explanation other than the aforementioned.
"The financial industry encompasses more investment vehicles than just mutual funds. The commenter, 'Caution!!', submits the BCT study, but fails to attach the entire package. Yes, the BTC study that Morningstar.com published has a lot of great info, but as Morningstar.com says themselves:
"I can't think of the findings for any study that apply to every single financial advisor in America.
"The study is not perfect. It is unfortunate that the authors use the word 'broker' in their landmark study to apply to almost all financial advisors. Their use of the word 'broker' does not just encompass Series 7 licensed reps who are paid commissions and loads. It truly applies to almost all financial advisors who sell mutual funds.
If you hold a Series 7 or Series 65 license, if you are a registered rep, RIA or IAR, if you work for a broker-dealer, major brokerage firm, wire house, or if you are an insurance agent with a Series 7 or Series 65 license, the BCT study may very well have analyzed your transactions (both buy and sell transactions) during the years of the study. Unless you work for a fund supermarket on a salary, your transactions were probably analyzed in the BCT study.
"In the study, virtually everyone selling mutual funds (even RIAs and IARs) are referred to as "brokers"-even if you don't have a Series 7 license.
"Why are these findings so scary? The BCT study implies that about 50% of all FAs produced returns of less than 2.924% per year.
When you factor in taxes and inflation, the clients of all of these "advisors" lost spending power and thus literally became poorer each year. This gives even more credence to the Wall Street Journal's Jonathan Clements' warning of many years that people would be better off if they avoided financial advisors.
I disagree-if only for the reason that skilled financial advisors provide many valuable services besides investment management-but that is the topic for another article.
"The findings of the BCT study seem to apply most directly to advisors who have been selling mutual funds with a 5.75% load, a 3% or some other relatively high load or a front-end, back-end or level load. Even if the fund is a so-called "high-performance fund," with all these fees on top of the human tendency to buy high and sell low, advisors' returns may be much lower than most FAs ever suspected".
"The BCT study found that it is the combination of high-cost mutual funds and advisor behavior that lead to such poor returns. Thus, it is conceivable that even if an advisor uses super-low cost index funds, he or she could significantly under-perform the indexes simply due to buying when prices are high (and everyone is exuberant about the market) and selling when prices are low (and many people are scared).
"Conversely, it is possible that some advisors using high-cost funds could deliver outstanding performance by buying these funds when the prices are low (and when such funds are unpopular) and then selling them when prices are high (and everyone else wants to buy them). This is not what the BCT study found-but it is possible that a few advisors in America could be delivering such performance.
The above advisors might somehow be able to overcome the performance hindering effects of high-cost funds through their mastery of behavioral finance".
For the ENTIRE article the following link will take you there.
"I will finalize my response with this. No system is perfect, but financialjoe.com will improve as technology advances, and as we find new ways to enhance the services we provide.
"I can assure you one thing will be accomplished. Investors will become wiser, poor advisors will be weeded out, and nothing will have a greater impact on Wall Street than the community of investors who came at them through financialjoe.com!"
New site lets people rate financial advisors
Posted by Kristi Heim at 10:39 AM
New ventures that combine social networking and personal finance are starting to to take off, and the latest local example is financialjoe.com.
After spending 10 years in the financial industry, Shawn Tierney was unsatisfied with the quality of information people have about their investment advisors. As a former insider, he should know. Tierney worked as a financial planner for Morgan Stanley and Bank of America.
"An advisor can get away with not servicing his clients, making poor recommendations, or never calling the client again once he makes the commission," Tierney said. "This is because no one else will ever know."
Tierney, along with his brother James Tierney and former Microsoft employees Richard Gerschwiler and John Pezzanite, started financialjoe.com as a place for people to rate their advisors, find people with the same advisor and share information about financial issues. The site launched just two weeks ago.
Users can identify themselves with tags to their advisor, joining online public forums with that advisor and other clients. Clients' names and emails are kept confidential.
Today, the forums had information about regulatory actions against Ameriprise, student loan woes and a conversation about mutual funds. Users get an email message every time a new rating is posted on their advisor.
The site can help investment firms, too, Tierney says, by providing feedback on their advisors, helping them improve customer satisfaction and avoid losing clients.
Avvo offers a similar service but for rating attorneys. "Avvo's great," said Tierney, but people are going to need financial advice much more often than they'll need a good lawyer.
A few other social networking / finance hybrids to check out are wesabe.com, Geezeo.com, and covestor.com.
Bucking the trend
Posted by Kristi Heim at 12:26 PM
What do Chinese stocks and Apple have in common? They're part of a parallel universe. While Wall Street suffered one of the biggest plunges of the year today, the Shanghai Composite Index hit an all-time record high. The market's rebound has driven the Industrial and Commercial Bank of China past Citigroup and into the top spot as the world's largest bank by market capitalization.
Meanwhile, Apple's shares jumped 7 percent today after Wednesday's earnings report showed a 74 percent rise in profit.
I'd grab my iPhone and move to Shanghai, but apparently I can already get one there for $150.
New equity funds target profit and social good
Posted by Kristi Heim at 5:20 PM
Two Seattle area organizations announced funds today aimed at expanding the reach of financial services for the poor, while providing attractive returns for wealthy investors.
The Unitus Equity Fund closed today with $23.4 million in capital, making it the largest global equity fund in the microfinance industry fully funded with private capital. The investors are Omidyar Network, Abacus Wealth Partners and Kensington Investments.
Unitus has a unique structure in that it operates both a for-profit equity fund a non-profit grant-making arm.
Ten percent of the fund's profit will go into the non-profit arm of Unitus for grant making. Unitus provides grants to microfinance institutions that offer small loans to the working poor in Asia and Latin America.
The concept of microcredit was pioneered by Nobel Prize winning economist Muhammad Yunus. But organizations like Unitus and Omidyar Network take the concept much further by bringing in commercial capital and large investors to greatly increase the amount of money available for lending.
Seattle-based Global Partnerships today launched an $8.5 million investment fund that combines donations with private capital. Individuals donated $255,000, while a group of socially motivated investors contributed $8.2 million. The fund will be used to expand Global Partnerships' funding to 20 microfinance institutions in six countries throughout Latin America.
Briefs: iConclude, HTC and Microsoft
Posted by Tricia Duryee at 10:17 AM
Sometimes things get a little hectic around here, and things that would normally be stories, end up being briefs. Tuesday -- for today's newspaper -- was one of those days. So, I'd like to point three things in today's paper. They can all be found here (If you were to look for it yourself, it's a link that's nearly halfway down the business section page, indicated by the tag "Business Digest."
1. Brier Dudley and I blogged about this yesterday, but Opsware, a company co-founded by a founder of Netscape, purchased iConclude for about $60 million in cash and stock.
2. Microsoft's Jeff Raikes is set to announce today that the company is releasing a new version of its Office Communications Server at VoiceCon Spring 2007.
The new version of is pretty interesting, and expands the 2005 release significantly. I talked with Eric Swift, Microsoft's senior director of product management in the Unified Communications Group, about it Tuesday, and he said the big feature will enable users to be able to click to call, instant message or start a Web conference from within Microsoft Office documents or Outlook.
Because of these enhanced abilities, Microsoft forecasts that within three years, the cost of rolling out VoIP will be cut in half because of software implementations. And, by then, it expects 100 million people, or twice the number of current business VoIP users, to initiate calls from Microsoft applications.
The public beta of Office Communications Server 2007 will start at the end of March, and general availability is expected by this summer.
3. Yahoo! announced today that its mobile application called Yahoo! Go for Mobile 2.0 will now be available on Windows Mobile devices.
Yahoo! Go for Mobile includes oneSearch, which allows users to surf the Internet and also access maps, news, photo sharing and Yahoo! e-mail.
In addition, Yahoo! said it has formed a strategic partnership to pre-load and distribute Yahoo! mobile applications on millions of HTC devices. HTC, a Taiwan company with U.S. headquarters in Bellevue, is one of the largest distributors of Windows Mobile devices.
I think this is yet more evidence of how Microsoft is willing to work with other companies on its mobile initiatives. Steve Ballmer even said so at 3GSM two years ago; Microsoft is in mobile to partner, not dominate, he said. He doesn't want anyone -- a carirer or handset manufacturer -- to feel that they have to buy Microsoft's entire package.
If HTC, which is super reliant upon Microsoft, feels this way, it has to be true.
The other recent example was when Palm launched the new 750w. Instead of integrating MSN as the main search engine, it chose to go with Google, a decision that was fully supported by Microsoft, Palm said.
Are Americans becoming more charitable?
Posted by Kristi Heim at 11:56 AM
Well, some are. But the list of the top 15 donors of 2006 includes only one person from the world of technology -- and an unlikely one -- Oracle CEO Larry Ellison.
Warren Buffett's record $31 billion donation to the Bill & Melinda Gates Foundation enormously expanded the pool of charitable giving in the U.S. last year. The top 15 charitable gifts totaled $35 billion in 2006, this story points out. Last year that figure was only $2 billion.
Besides Buffett, more people donated amounts exceeding $100 million than ever before. The top donors made their fortunes in real estate and financial services.
As for Ellison, who has a reputation for stinginess despite his $16 billion estimated net worth, the donation went to his Ellison Medical Foundation, not to, ah, Harvard.
Ellison pledged to donate to charity to settle a lawsuit against him.
But hey it's not the amount of money that should be measured, Ellison says, it's the results. Maybe his medical foundation will find a cure for dementia before he changes his mind again.
Google shares hit $500 for the first time
Posted by Kim Peterson at 10:29 AM
Google shares are on a tear today, topping $500 for the first time. You can check the current share price here.
According to this AP story, investors appear to be thinking that Google will quickly announce ways to get more online advertising sales from its $1.65 billion acquisition of YouTube.
Microvision offers stock sale to public
Posted by Kristi Heim at 2:21 PM
Microvision said today it's going forward with a public offering of 3,317,567 shares of its common stock at $2.39 per share. The company is expecting to raise $7.9 million.
It's a make-or-break time for the Redmond company, which creates imaging and display technology. It's losing about $7 million a quarter and had just $14.6 million left at the end of September.
Microvision signed a deal with an Asian manufacturer to produce a new miniature laser projector called PicoP, which it plans to demonstrate at the Consumer Electronics Show in January. Embedded inside a mobile device, the PicoP is designed to enlarge images from the device and project them onto another surface a few feet away.
Cray files to sell $80 million in stock
Posted by Benjamin J. Romano at 12:35 PM
Supercomputer maker Cray is planning to sell up to $80 million in stock, plus up to $12 million for its underwriters. In a regulatory filing Friday, the Seattle company said it will use the funds raised from the offering for general corporate purposes, product development and capital expenditures.
At the stock's current price, $10.83, the company would have to sell about 7.4 million shares to raise $80 million, plus 1.1 million to cover over-allotments for underwriters, including Thomas Weisel Partners and Needham & Company.
Cray's shares were trading down.
Posted by Kristi Heim at 10:51 AM
Harvey Baraban views the ups and downs of the stock market with the cool detachment of someone who has been a broker for more than 30 years. Yet ask him what he thinks about the U.S. economy and he replies, "I'm scared."
For one thing, the economy has never before been so heavily influenced by events in other parts of the world, such as the military coup in Thailand that roiled global markets. Technology allows stock prices to change in an instant.
But that's not what really worries Baraban, now a California-based educator who is speaking at 7 tonight before the Puget Sound chapter of the American Association of Individual Investors in Mercer Island.
It is the steady erosion of wealth in the middle class that is dampening the American dream, he said. Coming from a die-hard capitalist, what he said is sobering:
"We're in that process now in America where greed is more and more important. We see the total value of the upper class is huge compared to the upper class 10 years ago. Take the top 5 percent of all Americans in terms of net worth compared with the same percent 10 years ago. Nothing has grown as dramatically as the net worth of that 5 percent. The other classes have shown very little growth. A society can't exist forever with that happening. I'm a big capitalist, but I'm nervous because it's out of control."
So what's his solution for the other 95 percent? Learn as much as you can about smart investing, he said.
The era of mutual funds is over, and ETFs or exchange traded funds have become dominant, he said. ETFs are index funds that represent an entire industry. There are about 250 ETFs on the market now, so investors should get to know how they work, he said.
He also predicts that interest rates will remain flat, and the time to invest in money market accounts is over. Instead, he recommends treasury notes bought on auction.
Even with recent softening in the housing market, Baraban concludes, "real estate is your best investment going forward."
Google gets charitable
Posted by Kristi Heim at 2:01 PM
Google seems to be taking its philanthropic efforts in an interesting direction. This story today reveals that Google.org will be a for-profit venture, and one of its first projects will fund work on a fuel-efficient car engine.
At first glance, the effort seems a bit haphazard, and certainly not very Warren Buffett-like. Besides developing the plug-in hybrid car engine, Google wants to fund its own work on water in Africa, have its own microfinance charity, do its own education project.
Google.org's Executive Director Larry Brilliant, both a physician and a former CEO, works with company co-founders Larry Page and Sergey Brin to "define the mission and strategic goals of Google's philanthropy."
The for-profit status requires Google.org to pay taxes but also gives it more flexibility to fund start-up companies and other projects as an investor, Brilliant said.
The trend is for philanthropic organizations to act much more like a business, being more entrepreneurial, setting goals and measuring results. Google.org takes that notion to a new level.
Earn money reviewing stock options
Posted by Kristi Heim at 5:32 PM
We already know F5 Networks executives have been well compensated by stock options. Turns out the special committee formed to investigate its questionable stock option practices will be compensated well, too.
Each member will be paid $750 for each meeting attended in person or by phone, according to a recent F5 filing with the Securities and Exchange Commission. That's in addition to fees paid to the directors for sitting on the board and for attending board meetings or meetings of board committees.
Last month F5 received a warning of potential delisting from Nasdaq because the company failed to file its third quarter earnings report on time. In July F5 said it would restate earnings for the past five years as a result of issues with past stock option grants. It identified at least one instance of improperly timed options.
Three shareholder lawsuits are pending.
Microfinance gets another boost
Posted by Kristi Heim at 2:17 PM
Stepping up its efforts in the area of microfinance, or financial services for the poor, the Gates Foundation today said it has awarded a three-year grant to the Grameen Foundation. The $1.5 million grant is the third largest the Grameen Foundation has received toward its goal of reaching 5 million new families and making sure at least half of them can rise above poverty permanently within five years.
The Grameen Foundation grew out of the Grameen Bank of Bangladesh, started by economics professor Muhammad Yunus to offer tiny loans to poor women to expand their businesses. It operates in 22 countries and has a technology center in Seattle.
Buffett's money starts to flow
Posted by Kristi Heim at 2:49 PM
The first payment of Warren Buffett's estimated $31 billion gift to the Bill & Melinda Gates Foundation went to the foundation today in the form of 500,000 Class B shares of Buffett's company, Berkshire Hathaway.
Buffett pledged to give 5 percent of the total gift each year. That's 500,000 shares down and 9,500,000 more to go. The shares are worth $3,208 each at today's closing price, for a total of $1.6 billion. Buffett requires the full value of his gift to be spent the year after it's received, starting in 2009.
Until then the money is managed through Cascade Investments, the private Kirkland firm that handles the Gateses' investments. Lest some readers get the impression that the Gates Foundation is suddenly funding media companies in its mission to save the world, Cascade's investments run the gamut from oil, silver, solid waste and ethanol to the Canadian National Railway.
Microsoft a private equity target? ... nah
Posted by Benjamin J. Romano at 10:27 AM
After the record-setting $33 billion acquisition of hospital-operator HCA earlier this summer, the Financial Times suggested private equity firms raise their sights higher:
Why have they failed to tilt at the scores of companies much larger than HCA or NTL [a European cable group that could be on the block for $20 billion] that have far less efficient balance sheets, bigger cash flows and a crying need for focus? Consider Microsoft, which has a balance sheet so inefficient that it would make a private equity investor weep. There was not an iota of debt in the thing at the last year-end. Worse, this mature software giant was sitting on cash and investments of $34.1bn -- more than the value of the total HCA deal.
Daniel Primack, the respected private equity analyst and editor of PE Week Wire (which alerted us to the FT story), wrote today that a leveraged buyout of Microsoft is an "inane suggestion."
Primack, who gave his thoughts this morning on CNBC, broke it down like this: Leveraged buyout firms don't have enough money. Bankers won't back the deal. It would hurt fundraising for the firms.
The last point is particularly interesting here. Primack and the FT noted that institutional investors are pushing more money into private equity funds. The state of Washington, for example, has $1.5 billion in the most-recent Kohlberg Kravis Roberts fund, which was one of the buyers of HCA.
So imagine if KKR suddenly helped buy Microsoft and -- as the FT suggests -- lays off lots of workers, sells off/shuts down a few divisions and ignores the rest because it's already gotten paid via dividend recaps? No elected official in Washington would ever again be able to justify an investment in KKR, nor any other firm that helped strip jobs from one of the state's largest private employers.
"A lot of insanity" as buyouts reach new heights
Posted by Al Scott at 12:47 PM
Deputy Business Editor Rami Grunbaum filed this report from a session of today's Northwest Growth Financing Conference:
Buyouts by private equity funds are proliferating with huge deals such as the $23 billion sale of hospital operator HCA. But at a Seattle corporate-finance conference Thursday morning there was a distinct nervousness about the sector's "irrational exuberance."
"There's a lot of deal flow, but there's a lot of insanity," said John Beauclair of L.A.-based buyout fund Sun Capital Partners. "I feel like a lot of people are putting band-aids on bullet wounds."
Massive inflows of capital, increased levels of debt financing, and a slowdown in corporate earnings could combine to burst the buyout world's bubble, according to Beauclair and other representatives of small and midsize private-equity funds at the Northwest Growth Financing Conference.
Michael Nibarger, of Seattle-based Evergreen Pacific Partners, said competition among cash-flush buyout funds is driving up the price-to-earnings multiples at which private companies are being sold, while corporate earnings themselves are also high.
"You take a high number and multiply it by another high number, and you get a really high number. And that's troubling," he said. "I think there's a strong case that the multiples we're seeing now are not sustainable."
That makes it a good time to be selling a company, but a difficult time to be buying, Nibarger added. (His fund recently acquired Gene Juarez Salons & Spas).
The reason there's been such a rush of investment capital into buyout funds, said Mark Morris of Blue Point Capital Partners, is that potential 20 to 30 percent returns look appealing when the stock market is yielding 5 percent.
But all the inflow is causing a "capital overhang" as funds look to deploy their money on schedule, said Scott Svenson of The Sienna Group in Seattle. The "irrational exuberance" has big funds looking even at the smaller companies he deals with, he said, because "there is a lot of capital, and there is a clock ticking."
Needless to say, panelists were more upbeat about their own firms' prospects. For one thing, they are flying much closer to the ground than the stratospheric deals that are making the headlines.
Suitor loses interest
Posted by Kristi Heim at 10:37 AM
So CDC Corp's hot pursuit of Onyx is officially over. The Hong Kong-based company said this morning that it has withdrawn its offer to buy the Bellevue CRM software vendor for $5 a share. Onyx said it will go through with its deal to be acquired by M2M Holdings of Indiana for $4.80 a share, or about $92 million, pending approval by shareholders.
CDC and Onyx never really hit it off, feuding since their first contact, or you might say lack of contact, last year.
F5 Networks to restate five years of results
Posted by Kristi Heim at 2:21 PM
F5 Networks will restate its financial results from 2001 through the first two quarters of 2006 in light of an investigation into its stock options compensation practices, the company disclosed this afternoon.
F5 said financial statements for periods starting Oct. 1, 2000, "should no longer be relied upon." F5, one of the companies named in a federal investigation into the timing of stock-option grants, has received inquiries from the U.S. attorney in New York and the Securities and Exchange Commission (SEC) seeking details on how they grant stock options to executives. F5 is also facing three shareholder lawsuits alleging its top executives and directors defrauded the company and its shareholders by receiving millions of improperly backdated stock options.
The company also said a special committee of F5 board members would not complete its review in time to publish financial statements for the third quarter, ended June 30, by the SEC deadline of Aug. 14.
Apple's quarterly performance - the breakdown
Posted by Kim Peterson at 11:28 AM
In advance of Microsoft's fiscal year 2006 earnings announcement today, here are a few tidbits from Apple Computer's earnings call yesterday:
1. Mac computer sales represented 55 percent of total sales of $4.37 billion. That revenue fell short of expectations. Analysts surveyed by Thomson First Call had been expecting $4.4 billion.
2. Profit beat expectations at $472 million, or 54 cents per share. Analysts had forecast 44 cents a share.
3. The iPod accounts for more than 75 percent of the U.S. market for digital music players. The iTunes Music Store held an 85 percent share of the market for legally purchased and downloaded music in the U.S.
4. Apple retail stores saw 29 percent year-over-year revenue growth. Internal store surveys show that nearly half of customers buying Macs there are new to the Mac.
5. Apple would not give a firm answer as to whether Boot Camp was actually getting people to switch over from Windows. The programs allows Windows and Windows-based programs to be run on a Mac. Said Chief Operating Officer Timothy Cook:
The number of downloads that we have had are significant, and the customer feedback that we've had on Boot Camp is very, very good. It's clear that for a Windows user that considers switching to a Mac that it makes it even more appealing to them to switch.