The Wall Street Journal reports today that traders were buying call options in 3Com shares at heavier-than-usual volumes yesterday.
The WSJ quoted Stacey Briere Gilbert, chief options strategist at Susquehanna Financial Group, who said traders were picking up options that allow them to buy the stock for $5, but with no apparent timeline in mind. Traders bought large amounts of calls that expire in November, December, and January.
Since 3Com isn’t due to report earnings again until December, the relative call-buying frenzy likely is related to the private-equity bidding war for the H-3C joint venture owned by 3Com and China’s Huawei Technologies Co.
Bids for H-3C, in which 3Com holds a 51-percent stake, have reached $1.5 billion to $2 billion, according to people familiar with the matter.
Originally, three private-equity firms were involved in bidding for H-3C, but the WSJ reported yesterday that Texas Pacific Group had withdrawn from the competition. Silver Lake Partners and Bain Capital Inc. are still in the running, with Bain said to be offering the higher bid.
3Com would like to buy out the balance of H-3C that it doesn’t own, but it doesn’t have the financial resources to compete against the financial heft of Silver Lake or Bain. Accordingly, 3Com has begun discussions with other private-equity firms in a bid to seek financial backing for its plan to take complete control of the joint venture.
Categories: 3Com · M&A · Private Equity · network infrastructure
It appeared as though Hewlett-Packard was recovering remarkably well from the self-inflicted public-relations catastrophe related to its ill-advised and legally dubious investigation into leaks from its board of directors to trade journalists and business reporters.
Perhaps HP remains well on its way to public rehabilitation, but two recent executive-level defections have made the news lately, and one of them might have been related to the corporate-espionage fiasco that saw HP proxies commit identity theft against board members and journalists.
Earlier this month, according to a report on MarketWatch.com, Todd DeLaughter, the former head of HP’s $1-billion OpenView software business, resigned from the company to become chief executive and president of Canadian business software company Opalis. DeLaughter had no known connection to the HP spying controversy, and his departure appears driven by a desire to be the CEO at an entrepreneurial startup rather than serve as head of a business unit within one of the technology industry’s largest players.
The other executive departure occurred this past Wednesday. It involved Steve Smith, senior vice president and general manager of HP Services, a $15.5-billion business unit that provides technology consulting, support, and outsourcing. According to an HP source, Smith, who joined HP in January 2005, resigned for "personal reasons."
When asked whether Smith’s sudden resignation was related to the company’s boardroom scandal, which has seen the departure of several high-profile HP executives, including General Counsel Ann Baskins, a company spokeswoman refused to comment.
If Smith’s departure had nothing to do with the boardroom scandal, HP should have replied with a simple "no" to that question. By issuing a terse "no comment," HP has assured that journalists will keep digging.
Categories: Hewlett Packard · Litigation
I have been wondering lately whether market researchers at firms such as Gartner, IDC, and Forrester should have to declare conflicts of interest when speaking for attribution with the trade press and business journalists about vendors with whom they have business relationships.
Market analysts at investment banks often are asked by journalists to disclose whether their firms have current or prospective business ties to technology vendors on which they pass comment. By revealing whether a relationship exists, the analyst provides the journalist and his or her readers with additional context in which to judge the objectivity of the commentary. It is a form of disclosure that adds to the credibility of both the article and the sources quoted in it.
I think the same practice should be applied to technology’s leading research houses. Journalists and their readers have a legitimate right to consider, for example, whether a business relationship Gartner or IDC has with Cisco, Oracle, or Microsoft might inhibit or otherwise color commentary and opinions that might be offered regarding a vendor’s product strategy, launch campaign, or prospects for continued success.
At the very least, such a practice would provide full disclosure to readers, so that they could more completely evaluate the pronouncements of the technology industry’s pundits. What do you think?
Categories: Gartner Group · Market Research & Intelligence · The Media Landscape
