Microsoft’s Next CEO will be a Lawyer. Here’s how they F it up. $MSFT $GOOG $AAPL $YHOO $FB

Microsoft (Nasdaq:MSFT) is looking for a new CEO. What do they need? A lawyer of course and here’s why. Big Tech is subject to much legal and regulatory scrutiny if not outright interference. Antitrust actions are constant. Law suits against competitors are daily events. If you develop something or buy it the competition immediately attacks it because they were working on something just like it. If  they don’t attack it you will attack them.

This has nothing to do with engineering. There are thousands of engineers. some of them are even good.

What you need is a good war-time consigliere.

Yahoo (Nasdaq: YHOO) stole an attractive engineer from Yahoo who is playing the engineering and development card. Marissa Meyer if you must ask.

Apple (Nasdaq: AAPL) is post Steve Jobs but still very much in the developer super product mode.

Google (Nasdaq: GOOG) is still in the grips of its two founders Larry Page and Sergey Brin. Uber developers in their own right and employers of tens of thousands of brilliant and near brilliant engineers. They came the closest to breaking out of the mould and hiring a grey hair to help lead but they yanked the chain back recently.

Facebook (Nasdaq: FB) is still in the validation stage. Mark Zuckerberg must prove himself and validate his social media concept. But as any casual observer will notice they are spending more time on legal and regulatory issues; like it or not.

So the narrative at Microsoft is we need the next big general to lead us into battle. You can almost see the biblical imagery of an angel wielding a big ass sword slaying dragons and beasts.

The most effective leader for Microsoft would be a lawyer with good infighting instincts. The engineers you can hire and fire.

The market would be very confused because tech expects and evangelical type of CEO. A Steve Jobs who walks onto a stage holding something and fervently saying this is it and you need it now. The next day the law suits start-up.

If Microsoft hires a lawyer as CEO the competition would be very confused. If you hire an engineer you parse his résumé and you can guess what direction he will take. A lawyer well you just don’t know. And a lawyer is just what you need.

This radical idea would confuse investors in the interim but work big time in the long run.

But like the story title says. They will F it up for sure.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Microsoft Candy is Dandy but Sex Wouldn’t Rot You Teeth $MSFT $GOOG $AAPL $YHOO

Microsoft (Nasdaq: MSFT) announces dividend increases and share buy backs. As previously predicted the Financial Skeptic called for dividend increases and share buy backs just to keep investor enthusiasm err engagement err addiction up there.

The move is essentially a “Candy is Dandy but Sex Wouldn’t Rot your Teeth” gambit. By increasing the dividend you more deeply engage income investors and protect the floor. By purchasing shares you enhance the financial engineering. but this is all Dandy Candy.

The real sex will come when the new sovereign is found and proclaimed. There will be a magnificent royal procession allowing the subjects to see the new king and proclaim allegiance. Hopefully the sex will not rot our teeth.

It’s all about Steve Ballmer’s replacement. Until we know and have confidence there is a Black Swan Co-relation which causes the market to shiver unexpectedly.

George Gutowski writes from a caveat emptor perspective. He does not like shivering unexpectedly. Follow him on Twitter @financialskepti

Googles Californication Episode plays into a Chinese Gambit. Read How $GOOG $YHOO $MSFT $AAPL #Xiamoi

Google (Nasdaq:GOOG) has a high level love triangle which shows how Sergey Brin is losing focus. Sergey having a bad case of seven-year itch has become bored with Anne Wojcicki and has separated. He keeps most of the money due to clever pre-nup.

Sergey is now romantically involved with a women who was previously involved with Hugo Barra a key Android executive. Hugo is leaving for a fast expanding Chinese telephone company called “Xiamoi” which competes with Motorola in the Android space.

Sergey and Google if you recall have had their problems in the Chinese market incurring the wrath of Beijing and being marginalized. Knowing how the Chinese operate someone in Beijing signed off on Hugo Barra; most likely knowing they are taking a key Google brain and turning another gun against Google.

Will this be the demise of Google? Unlikely the game is too big. What is does say about Sergey Brin is most important. Sergey has two children after a six-year marriage. He exercises the droit de seigneur and becomes involved in an affair with a women who was involved with one of his key executives.

Come on buddy. What were you thinking at all those executive presentations. Complicating the issue is Anne Wojcicki’s sister is a Google vice president for advertising. The sister originally rented her garage to the Google founders in the very early days. But surely to God those debts must have been paid in full by now. Is there some sentimental issue involved.

If it wasn’t for the fact Sergey Brin is a founder and major shareholder this would not be important. In other companies executives would have been asked to leave or be re-assigned.

At Google they are still fumbling with China and playing a Californication dating game. the executive suite is beginning to look like a corrupt European court. Oh well let them eat cake.

Xiamoi means little rice in mandarin. Three years old and privately owned Xiamoi may be the next big contender. So who-ever the ex-girlfriend is she doesn’t get market potential concepts.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Microsoft Investors will be bribed, pampered, coddled and other neat stuff. Read how! $MSFT $GOOG $AAPL $YHOO

Steve Ballmer (Nasdaq:MSFT) is leaving in the next twelve months. Here are a few things Microsoft will do to keep investors loyal, happy warm and fuzzy.

 

  1. Serious dividend increases. Money talks and Microsoft has some. Lots actually. To keep investors focused the board will increase the payouts. A strong dividend will keep a floor under the stock price. Many of Microsoft’s businesses are steady predictable earners.
  2. To unlock value some businesses may be spun out and or sold off. Anyone new to Microsoft will want to write on a clean slate so let’s get going with the divestitures.
  3. No new major products and/or  initiatives will be undertaken before the new boy wonder arrives and starts putting his fingerprints on projects and idea’s. So in the meantime capex will shrink and cash flow will grow. Not a good thing but a real thing.

 

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti

Five Reasons to Hate Apple $AAPL #iPhone #iPad $GOOG

Apple (Nasdaq:AAPL) continues to generate controversy with declining margins and lower than expected unit sales of iPads. So here are a few reasons to really hate the stock.

  1. Despite competitions best efforts no one has delivered a knock out punch.
  2. $18.8 Billion returned to shareholders through dividends and stock repurchases.
  3. Enormous cash positions
  4. Enormous cash flow
  5. History of innovative product offerings

I’ll stop it after five points. There are no examples of investments who can make these claims and be considered losers.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti. Follow his evil twin who writes Wall Street Murder Thrillers on twitter @georgegutowski

The correct way to analyze Yahoo $YHOO

Yahoo (Nasdaq:YHOO) shares have done well for the past year mainly because of faith in the new CEO Marissa Mayer. But revenues have fallen and some investors are worrying. Tech stocks are not used to rebuilds and restructure and perhaps this is a good time to think about a process old line industrial stocks have followed for years.

Firstly restructures do not happen over night. It takes a long time to hire the correct staff get them focused and start producing commercial results.

Secondly a lot of existing revenue sources are declining and are or will be abandoned shortly. Temporarily this will cause short-term dips.

Thirdly the real catalysts for driving shareholder wealth will come from my products and new applications. Watch this space like a hawk. This is what will determine Yahoo’s success. Getting into a fist fight with Google or Facebook only results in a war of attrition with declining profit margins. Much like reading a history of World War One. Much bloodshed little progress. World War Two you had tanks, aircraft and new thinking on both sides.

Lastly watch the acquisitions space. Yahoo knows they have to buy and buy quickly.

So a classic financial analysis of quarterly earnings will profit little. So for those of you who like to analyze the crap out of everything don’t bother. The winning cards have not yet been dealt.

George Gutowski writes from a caveat emptor perspective.

Jim Rogers did what with smallcap Fab Universal. Watch Black Swan. $FU $GOOG $YHOO $FB $AMZN $NFLX

Fab Universal (NYSE:FAB) announced that the very famous investor Jim Rogers long beloved by Financial TV has joined the Board of Directors. Fab is a small cap trading under $5. They are in the digital media space in China and creating lots of cash flow. So why would Jim Rogers accept a seat on the Board. He is rich and another buck may not be as exciting as it used to be. If he truly believes in the potential and no one doubts his integrity why not just buy a lot of shares, let the market know you are long and wait to cash in.

The Chinese market is seductive and enigmatic. Digital is a real play for the future. Jim Rogers is long recognized as an astute commodities investor and China is a huge commodities buyer. So he gets into China with a digital play. Google (Nasdaq:GOOG) has difficulties in China. Yahoo (Nasdaq:YHOO) has stubbed its toe in China and is still not sure if it was cheated outright or just diddled a little in the back seat of puppy love. But someone with deep pocketed books will most likely appreciate all the heavy lifting that`s been done and open up the cheque book. Amazon (Nasdaq:AMZN) Netflix (Nasdaq:NFLX) Facebook (Nasdaq:FB) are all looking for big bold plays and think nothing of billion dollar acquisitions. So on a current market cap of $72 million the numbers will work out rather well.

The communist party is still totalitarian if it got pushed strongly enough. But the China market is huge and enticing.

Fab Universal is still readily unknown. The Wall Street Journal at time of writing still says no news on Fab for the past two years. So this is what I think Jim Rogers is up to as he swings for the fences.

Buy in and arrange some preferably financing.

Expand services and get yourself on the map. Annual revenues are just in the tens of millions. With a compelling product and enough working capital the China market can be very kind to shareholders.

So as you are expanding and growing and creating cash flow and profits you will attract the attention of the big dogs who will want to buy a growing concern in the China Market. That’s when the take-over offer is made at huge multiples and Jim Rogers cashes in yet again. So far so good. I can just see investors hit the buy button very hard.

Oh look here comes the Black Swan. We may have to wring its neck. The China market is not a private property driven liberal democracy with enshrined rights of ownership. They play by their rules which they make up as time goes on. Fab Universal will need to keep the Chinese political and economic power élite engaged, warm and fuzzy. If Beijing decides it wants to crown another king it will do so. The Chinese consumer will be switched over to other choices and forget about Fab.

The risk is political. We are speaking about media which politicians will watch over carefully. If Jim Rogers understands the China Market he needs to ensure the political factors are well ties down and stay in favourable trends as time goes on.

George Gutowski writes from a caveat emptor perspective.