Updated:
Now +110% after hoursFriday, July 12, 5:07 PM AT&T (T) is buying Leap Wireless (LEAP) for $15/share in cash. LEAP
+88% AH to $15. Sprint (S) +1.7%. T-Mobile USA (TMUS) +0.4%. 1 Comment [Tech, On the Move, M&A, Breaking News, Top Stories]
That is a
HUGE premium over the close.
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Consolidation in telecommunications as the big companies start buying up the little co's. You're also seeing consolidation in cable companies with discussions around Liberty Media and Time Warner Cable/Charter Communications. I just continue to think that the mobile theme continues to be a long-term story - the service companies, the infrastructure companies and even something like Visa as mobile payments will continue to gain over time.
It also goes back to Steven Spielberg and George Lucas discussing the "implosion" of the film industry (
http://www.theverge.com/2013/6/13/4425486/steven-spielberg-george-lucas-usc-film-industry-massive-implosion) and how entertainment will be increasingly delivered to the home (on a Cisco box over Comcast service) or via mobile (someone watching a Comcast on demand app on their mobile phone with Verizon service).
People have to do what's right for them, but I just continue to think personally that there is long-term appeal in a Verizon or T or Comcast or any other number of names that have the pipes/spectrum to deliver an increasing amount of data in the years to come. I think you have to own tech, but I think some of the telecom and more established tech names at least offer a nice dividend while you wait.
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Leap Largest Holders:
Growth Fund Of America Inc 3,900,000 4.93 23,010,000 Mar 31, 2013
Smallcap World Fund 2,955,100 3.74 17,435,090 Mar 31, 2013
iShares Dow Jones U.S. Telecommunications Sector Index Fund 1,707,124 2.16 9,628,179 May 31, 2013
BlackRock Global Allocation Fund 1,201,898 1.52 6,874,856 Apr 30, 2013
DFA U.S. Small Cap Value Series 978,534 1.24 5,655,926 Jan 31, 2013
New Economy Fund (The) 982,252 1.24 5,795,286 Mar 31, 2013
Vanguard Small-Cap Index Fund 821,138 1.04 4,844,714 Mar 31, 2013
iShares Russell 2000 Index Fund 814,007 1.03 4,590,999 May 31, 2013
Vanguard Total Stock Market Index Fund 767,242 0.97 4,526,727 Mar 31, 2013
Vanguard Telecommunication Services Index Fund 749,110 0.95 4,007,738 Feb 28, 2013
Comments
Regards,
Ted
Do you have an opinion on Microsoft's Xbox? Is it positioned to become the home entertainment center of future...all in one cable, video, computer, radio, game center?
I think the XBOX 360 has made tremendous strides in terms of being a complete home media center, offering XBOX Live (and really, when I was kid, I couldn't imagine anything like XBOX Live - I think it's probably the best thing that's ever happened to video gaming in many ways), video and more. Many have been upset by the upcoming XBOX's requirement to be always connected online, but it would appear they've cancelled that after all the upset. "When the new console is released this November, there will be no need to authenticate the system online every 24 hours – a requirement thought to have been introduced as a digital rights management measure. According to the statement, "After a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again." (http://www.guardian.co.uk/technology/2013/jun/19/xbox-one-drm-second-hand-restrictions-abandoned)
"The announcement follows a huge backlash against Microsoft which began when the company first revealed the Xbox One console at a press conference in May. Company representatives explained to journalists that all Xbox One games would need to be fully installed onto systems before play and that each copy would then be watermarked to its owner. Attempts to then sell on or give away the boxed copy of the game would be controlled by Microsoft; although the details have always been ambiguous, it appeared that the company would work with selected retail partners for the sale of pre-owned titles, and that publishers may have had the opportunity to charge purchasers of second-hand discs for the right to play." (http://www.guardian.co.uk/technology/2013/jun/19/xbox-one-drm-second-hand-restrictions-abandoned)
In terms of this generation of consoles, Microsoft has really taken the lead with the XBOX 360. If anything, I think the XBOX 360 is one of Microsoft's most successful product offerings. The higher price point of the next XBOX and some of the anger over things like the online requirement and feature changes (http://kotaku.com/xbox-one-drm-reversal-cuts-features-requires-one-time-514419715) does mean that Sony may make some strides in the next generation.
I do think micro purchases (in terms of mobile, you get the game for free, but real money will get you more items/further in the game/more maps for "Angry Birds", etc.) will likely be a bigger aspect of gaming both in terms of mobile and console gaming. It has certainly been a huge aspect of mobile gaming.
You will also see console games that bring in aspects of mobile. There are games already that are mixing mobile and console, including upcoming games where players on consoles can interact with players on tablets and mobile phones in impressive fashion. I think online gameplay, which Microsoft has done so well with XBOX Live, will continue to be a key as well.
I don't particularly like Microsoft from an investment standpoint or overall (I don't like Ballmer and I think - aside from gaming - Microsoft seems happy to not innovate and follow long after trends have started - as Steve Jobs once said, "The only problem with Microsoft is they just have no taste. They have absolutely no taste. And I don't mean that in a small way, I mean that in a big way, in the sense that they don't think of original ideas, and they don't bring much culture into their products."), but I do think they have been the front runner in the gaming industry with the XBOX. Hopefully for them they'll smooth out the issues with the new console.
Still, I'll honestly probably get the next XBOX because of "Halo 5" and the upcoming "Destiny" from the producers of the original "Halo". Spielberg is producing a live-action "Halo" series for next year, as well.
http://www.forbes.com/sites/erikkain/2013/05/27/steven-spielbergs-halo-tv-series-began-life-as-a-feature-film/
http://www.technologyreview.com/featuredstory/511076/steve-ballmer-on-the-strategy-behind-his-strangest-product/
One of the most fascinating things that didn't work out is a company that provided in-game advertising for people who were hooked up to XBOX Live. You're playing a basketball game and the advertising on the sidelines is actually something real (Coke, whatever) and changes over time. That's not really useful to me personally as a player, but if it's done right and done in a subtle fashion (and the instances I saw of it I thought were), I think it could have worked rather beautifully as a new advertising space.
It all really comes down to an upset with Ballmer (there are so many Youtube videos of Ballmer either laughing about a product that then took off or viral videos of remixed versions of Ballmer's infamous yelling/dances) and the idea that Microsoft continues to "follow along" in so many aspects rather than really delight and surprise with innovative offerings. Windows 8 is okay, but it's - and maybe this is just me - an instance of design over usefulness. Or taking what feels like a phone operating system and tweaking it for PC users.
I can imagine the live tiles design works great on a phone, but on a PC, after a week or two I just went back to the old desktop version, which Windows 8 thankfully offers with a click. Then when I need to shut down, I drag the arrow up to a corner just right so that a menu comes up, then I click "settings", then I click "power", then I click "shut down" and then I click "Yes, I really want to shut down" after I've inevitably left something running while attempting to shut down.
What's frustrating is that Microsoft has the money and the capability to really succeed in their desire to move further into hardware and consumer products. The 360 is a product that they got really right.
Microsoft may do well (and the stock has lately, I guess on the hopes for a new console and MSFT's latest "reorganization" plan, not to mention an activist investor or two - didn't Einhorn try that a couple of years ago and want Ballmer to leave? - http://dealbook.nytimes.com/2011/05/25/ballmer-must-go-einhorn-says/) but I just won't invest in it until Ballmer leaves.
Listen to Eric Schmidt or any number of tech CEOs who can offer thoughtful discussion on the future of technology and how it will change our daily lives going forward (as well as how their products demonstrate an understanding of how those changes may fit in/assist with/etc our daily lives.) Google Glass may have any number of issues and concerns, but you have a company that is continuing to try to be a pioneer and move technology forward.
Ballmer once said in an interview, "You don't need to be a computer scientist to use a Windows Phone, but I think you do need to be one to use an Android phone!" So, he's proud of a phone that's simpler and possibly less dense/feature rich (because if it's simpler than the Android phones, which are apparently so complex that you need a computer science degree to operate it, I'd guess from that statement it is less feature rich.) I own a Samsung Galaxy S2, which is a wonderful device and, despite not having a computer science degree, is both feature-dense and easy to use. The philosophy that "our products are simpler and won't challenge you" is not something that appeals to me, and apparently, given Android's market share, apparently there are other people without a computer science degree who are able to handle an Android phone.
Obviously Ballmer was trying to push against the competition, but terrible way to do so. From being late to mobile to making fun of successful competitors, Ballmer continues to seem out of touch. MSFT's Surface tablets sounded promising, but arrived to negative reviews (and various problems) and sales that aren't exactly what the company probably hoped for.
That's not to say that there aren't incredibly brilliant people at Microsoft - there are- but you have a face of the company that doesn't seem to be about being bold (unless you consider being loud bold.)
Lastly, here's what I want and it would require a company to be bold. Stop caring about how many apps your app store has in an attempt to show that your app store has statistically more than your competitors and focus on quality. It's great that anyone can make an app, but that also creates a problem in an attempt to sift through thousands of apps for something of interest:
The rise of the "Zombie App":
"Apple calls it the "world's largest app marketplace" offering over 900,000 apps for iPad, iPod and iPhone including games, tools and social media platforms. But new research by Adeven shows that 579,001 apps in a watched database of 888,856 are "zombies".
"What makes it a zombie is that it's not found on the top lists that Apple publishes every day," Adeven said in a press release. Forty thousand lists are published by the tech firm across the globe in which the firm promotes up to 300 apps on each list. Adeven collates the data from these lists.
(Read More: Vintage Apple Computer Sells for $387,750)
The 579,001 apps not listed are therefore "invisible", according to Paul Muller, Adeven's chief technical officer who told CNBC that these applications are "lingering around the shallows" of the App Store receiving between 1 and 100 downloads a day."
http://www.cnbc.com/id/100875687
It's sort of like Nokia offering a phone with a 41Megapixel camera. I don't need 14 megapixels, much less 41.
http://www.usatoday.com/story/tech/columnist/baig/2013/07/11/nokia-lumia-1020-windows-phone/2508711/
Is $900M huge for MSFT? No. But it represents MSFT failing again - trying to get in a trend after it's taken off. Ballmer is talking about this and that in regards to consumer hardware, but it's clear that it's not succeeding at tablets now either. It's not making major strides into phones, either, and the only reason it has the share it has is seemingly because Blackberry (or RIMM, or whatever one wants to call it at this point) has been an even bigger debacle. XBOX has been a bright spot on the consumer side, but what has happened so far with the upcoming XBOX console is not exactly promising.
This just was posted, as well: http://www.seattlepi.com/technology/businessinsider/article/People-Are-Totally-Bashing-The-Newest-Windows-8-4673037.php
and: http://news.cnet.com/8301-10805_3-57594435-75/microsofts-fourth-quarter-unravels-surface-rt-bet-a-flop/
and: ‘Sloppiest Qtr in Memory,’ says Citi http://blogs.barrons.com/techtraderdaily/2013/07/18/msft-conf-call-weak-pcs-will-again-weigh-on-this-quarter/?mod=BOLBlog
MSFT (and RIMM, for that matter) is just continually disappointing, because there's a lot of potential wasted because of terrible CEOs. RIMM has a great investor who worked his way into the board, but it's becoming questionable whether he can do anything. As for Ballmer, he shows no signs of wanting to leave, despite all hopes to the contrary.
Additionally, MSFT now down nearly 6.5% AH.
Cramer comparing MSFT's results with the new tablets to Zune.
I actually think the weakness is tech because of MSFT and GOOG is an opportunity to add to tech - Cisco, Qualcomm, Google and a number of other names still - I think - represent good long-term stories.
Crude passing $109. I continue to like COP, RDS, CVX and a number of other oil plays.
Interesting look at the effects of more US oil production on other countries:
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/the-repercussions-of-a-shale-revolution-on-oil-exporting-nations/article12579566/
"What is good for the United States and Europe – less imported oil and gas and lower prices for both – is bad news for some of the one-product wonders in Africa, the Middle East and Latin America. The power-and-income shift away from the traditional energy exporters to gluttonous energy consumers could trigger potentially dire economic and social consequences in the exporting countries, especially the ones with undiversified economies. The world saw what plummeting personal incomes and national wealth did to Greece. The same, or worse, could occur in the developing world’s oil-pumping economies."