Salesforce Swallows Heroku

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Salesforce.com (CRM) acquired Heroku for some $212 million net of cash acquired. Heroku is the leading Ruby application platform-as-a-service, powering more than 105,000 next-generation social and mobile cloud applications. I know this because that is what Salesforce said in their press release. Salesforce.com and its chairman and CEO Marc Benioff like never exaggerate anything.

Heroku was founded in 2007 by Orion Henry, James Lindenbaum and Adam Wiggins. Heroku’s investors include Baseline Ventures, Harrison Metal Capital, Ignition Partners, Redpoint Ventures and Y Combinator. Based in San Francisco, Heroku has about 30 employees. Should be a nice pay-day all around.

The question always becomes who got the better end of the deal. Sure it sounds like a good strategic fit.But with any growth opportunity additional capital will soon be required in great quantities. Were the investors ready to continue backing it and looking at potential dilution? Has salesforce.com taken on a hidden capex liability? No comment about what the future holds other than it will be a wildly successful transaction if you listen to Marc Benioff.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Talbots Fumbles

Talbots (TLB) announced Q3 results. Margins improved that’s good. Sales are down that’s bad. The big guy  Trudy F. Sullivan, Talbots President and Chief Executive Officer, said, “…. Importantly, during the quarter, we launched our segmentation strategy and store re-image program in addition to our enhanced marketing campaign. All of these key initiatives are designed to generate sales growth and productivity gains over time.”

No real comment about merchandising issues. Sales dropped and that’s it for discussion and analysis. What lines are selling? What regions are doing well? Same store sales? It’s very hard to get your arms around this story. Productivity gains over time are not concrete.

Kellogg Pantomime

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Kellogg Company (K) announced a new boss. David Mackay advised the board that he plans to retire in what; just a few short weeks. My God that is very short notice. But wait they have a succession plan. John A Bryant who is the current COO and remarkably has sat on the board since July 2011 will be the new boss.

Listen up sports fans the fix was in a long time ago. But were the investors in on the deal and knew what the succession plan was. I suppose when John Bryant was elected to the board that was the “poker tell” and everyone was supposed to guess.  There is a three-month transition where the old guy will help the new guy. Sounds good.

No word on if David Mackay will stay on the board or if he will really be spending time with his family. At the same time Kellogg reaffirmed its guidance. The guidance does not encourage investors, so the pantomime continues.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

SEC Christmas

FBI

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Just thinking out loud here. But if the FBI made arrests just before Thanksgiving day, what will they do just before Christmas? The SEC wants to send signals to the stock market. Police raids are now media events. Financial news will be very slow right around Christmas.

If you are a hedge fund manager who has done particularly well can you spot the surveillance? Who is sitting in that  car parked down the street from your fancy home?

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Phillips-Van Heusen Puffs CEO

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Phillips-Van Heusen (PVH) announced Q3 results making much about exceeding guidance and consensus. OK boys so you blew out the quarter. No commentary about what really went really well and why you beat your own guidance. The game PVH is trying to position is that we guide low and then substantially exceed.

Just read the CEO comments from the press release. Personal public relations for the boss.

  Emanuel Chirico, Chairman and Chief Executive Officer, noted, “We are extremely pleased with our strong performance in the third quarter, which enabled us to again exceed our guidance.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post.

Movado Strange Case of Double Negative

Movado Luno

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Movado (MOV) released Q3 numbers along with the usual executive nattering about how well they are doing.

Efraim Grinberg, Chairman and Chief Executive Officer, stated, “We have begun executing our multi-year strategic plan and gained traction in our initiatives during the third quarter.”  

Rick Cote, President and Chief Operating Officer, stated, “We are pleased with our results in the third quarter and year-to-date periods.”

But they also report  “On a GAAP basis, income from continuing operations in the third quarter of fiscal 2011 was $16.9 million, or $0.68 per diluted share, which included a liability reversal of $4.3 million, or $0.17 per diluted share, related to a previously recorded liability for a retirement agreement with the Company’s former Chairman. ” 

Liability reversal? They did not allude to any previously reported news. They just threw in the little tidbit and expect investors to suck it up and carry on. At $0.17 per diluted share management could have explained a little bit more. Avoiding the discussion just makes investors suspicious. Transparency is not well served.

Disclosure: George Gutowski writes from a caveat emptor perspective. I hold no positions in stocks mentioned in this post. 

Google Blunders on Groupon

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Google (GOOG) just offered a ridiculous amount of money for Groupon. Google which pioneered targeted search driven advertising had originally promised advertisers that they can find the interested consumer who will buy. Groupon is locally based but still old school mass marketing. For a while I subscribed to Groupon in my own major metropolitan area. I despaired when I received several ads for spa treatments and acrylic nails. I don’t care what the discount was. I am not in that market.

Google just spent billions of dollars to annoy me and other potential consumers with desperate ads for products that are not on my radar.

Disclosure: George Gutowski writes from a caveat emptor perspective. I do not hold positions in stocks mentioned in this post.