Broadcom Agrees To Acquire VMware

Broadcom Agrees To Acquire VMware

Broadcom agrees to acquire VMware for $61 billion As we wrote previously, we believe this acquisition is a strategic blunder on the part of Broadcom (AVGO). Broadcom's acquisition of VMware (VMW) is essentially a "bet the company" type of acquisition given the amount of purchase consideration ($61 billion) and also given the fact that the … Continue reading Broadcom Agrees To Acquire VMware

Jerome Powell Will Talk Tough This Summer

Jerome Powell Will Talk Tough This Summer

Powell was confirmed for a second term as Fed Chair on May 12th. His nomination was held up for months in the Senate. Powell's confirmation will provide him with temporary courage - enough to talk in a hawkish manner, enough to take the Fed Funds Rate to 2% by summer's end - but not enough … Continue reading Jerome Powell Will Talk Tough This Summer

Bold Broadcom Pursues VMware

Bold Broadcom Pursues VMware

Last year Broadcom pursued an acquisition of SAS Institute (private) before SAS Co-founder and CEO Jim Goodnight withdrew. Now, the WSJ reports that Broadcom (AVGO) is working to acquire private cloud and infrastructure software provider VMware (VMW). While the SAS pursuit was bold and creative, the prospective VMW acquisition is bold, risky and lacks creativity. … Continue reading Bold Broadcom Pursues VMware

Facebook and The Blockchain

Facebook and The Blockchain

Here is our follow-up to our recent article Facebook Will Be Next. We have stated on a number of occasions that social media companies such as Meta/Facebook and Twitter overstate the number of active users given that the active user metric is a self-reported figure and given that no outside firm has the ability to … Continue reading Facebook and The Blockchain

The Fed Is To Blame, Not Private Equity

The Fed Is To Blame, Not Private Equity

The Justice Department's Antitrust chief Jonathan Kanter is misguided in his comments about the Private Equity industry. Mr. Kanter ought to look to the Federal Reserve for perverting markets through its actions over the past decade-plus, especially during the April 2020-March 2022 period. If Mr. Kanter wishes to place blame somewhere place it at the … Continue reading The Fed Is To Blame, Not Private Equity

Focus On Quality Management Teams

Focus On Quality Management Teams

As equity valuations pull back and recession looms investors ought to take cover by investing in industry-leading companies led by quality management teams. The universe of such investment opportunities can't be identified by PE or cash flow multiples, dividend yields or the like. While valuation metrics are a decent filter (example: I would never pay … Continue reading Focus On Quality Management Teams

Don’t Count On M&A To Bail You Out

Don’t Count On M&A To Bail You Out

CEOs and Institutional Investors should not count on strategic acquirers or PE firms to bail out underperforming stocks (or private company holdings for that matter). Not only is the cost of capital significantly higher for would-be acquirers, but target company revenue and profitability forecasts have substantially less visibility and therefore more risk today than they … Continue reading Don’t Count On M&A To Bail You Out

Boeing Requires An Overhaul

Boeing Requires An Overhaul

Boeing (BA) senior management and Board requires an overhaul. We first wrote that Boeing ought to replace its CEO and Board back in September 2020 and as recently as February 2021, well before Ryanair CEO Michael O'Leary voiced his opinion. Boeing is a Technology company that would do well to look to the Technology sector … Continue reading Boeing Requires An Overhaul

The Next Government Regulation to Hit Earnings

The Next Government Regulation to Hit Earnings

The SEC estimates that climate disclosures will cost small cap companies approximately $420,000 per year on average and $530,000 for larger public companies. The winners will be law firms, accounting firms and the SEC at the expense of companies. It is logical that this type of punitive legislation and time-consuming disclosure will push out IPO … Continue reading The Next Government Regulation to Hit Earnings