|Crash and Burn |
But more cash on hand
1. Skid RowThe milestones are just flying by at General Motors ( GM).
On Thursday, the giant automaker posted its sixth straight quarterly loss. The Detroit company lost $323 million for its first quarter, including a $946 million deficit in its staggering North American operations.
Yet the quarter was
"The first quarter represented an important milestone in GM and GM North America's turnaround," said CEO Rick Wagoner. "Not only did we see significant improvement in the financial results of all our automotive units, we also announced numerous additional actions to improve our North American competitiveness and liquidity."
Of course, milestone achievements are nothing new at GM. Just two weeks ago the company agreed to
|UnitedHealthy and Wealthy |
A billion in options here...
2. Loose ChangeUnitedHealth ( UNH) is getting sick and tired of all this executive pay chatter.
The Minnesota-based health insurer and some other big companies have been under the gun for possibly giving execs sweetheart deals on stock options. The Wall Street Journal reports that top UnitedHealth execs repeatedly got options priced at or near the bottom of their stock's trading range, making the options more valuable and raising accounting and disclosure questions.
The Securities and Exchange Commission has contacted UnitedHealth about options pricing. This week saw a
UnitedHealth says its board is investigating options grant practices and that it believes it acted appropriately. That doesn't mean the company is happy about the attention, though.
"It is extraordinarily difficult and frustrating not to respond to media reports," CEO William McGuire said on UnitedHealth's earnings conference call, The Wall Street Journal reports. Making things stickier for UnitedHealth is the sheer size of McGuire's haul. UnitedHealth has been a strong performer, quadrupling its bottom line since 2001 and tripling its stock price over three years. But the Journal's report that McGuire is sitting on $1.6 billion worth of stock options had some observers questioning the board's independence. So McGuire fired back this week by suggesting that the company will suspend options grants to well-off top execs. "It was my recommendation that we consider terminating or slowing down or stopping at least for the foreseeable future stock options for the most senior employees," he told CNBC. That sounds like a good idea. And as for his personal fortune? "I've never made it a practice of looking for money," McGuire said Tuesday. Having $1.6 billion in options sitting around makes that less of a priority. Dumb-o-Meter score: 90. Now McGuire & Co. can look forward to defending a shareholder civil suit on the options grants, too.
3. Apple ShinerPortalPlayer ( PLAY) is suddenly showing a penchant for understatement. Shares of the San Jose, Calif., tech company got hammered Thursday after a key product
4. Penny AnteThe New York Times Co. ( NYT) is feeling the pinch of aggrieved shareholders. Big investors
|Chambers of Arabia |
Cisco and the Connected Kingdom
5. Prophet MarginCisco ( CSCO) is ready to strike black gold.
With the price of oil soaring into the low $70s, Cisco said Tuesday it would invest $265 million over five years in Saudi Arabia. Cisco plans investments staffing, leasing and finance, innovation hubs, public-private partnerships, education and philanthropy.
The Arab nation is the world's 29th largest economy and proud owner of a quarter of the world's oil reserves. But that's not what appeals to the San Jose, Calif., company's big-picture CEO, John Chambers (pictured at right).
"Saudi Arabia is experiencing a transformation as it expands its economic growth opportunities into new sectors using information technology," Chambers says. "Today's announcement of our investment plans in Saudi Arabia reflects our alignment with the country's focus on entrepreneurship, innovation and education, which we believe will help drive the 21st century global economy." Entrepreneurship and innovation may not yet be synonymous with Saudi Arabia. For now the kingdom may be better known for sex segregation, corporal punishment and religious restriction. But as always, Chambers is seeing well into what is certain to be a bright and profitable future. "As Saudi Arabia transforms itself into a Connected Kingdom, it is well-positioned to leapfrog more traditional markets in terms of technology adoption," Cisco's press release blares. "A recent Momentum Research Group study aimed at measuring the productivity effect of IT compared government and healthcare operations and services in Saudi Arabia to countries in Europe. The study found that Saudi Arabia was leading European countries in several areas, including the adoption of new technologies such as IP telephony and voice over IP and had a larger increase in the number of citizens using their services." Let no one accuse Cisco of repressing the profit motive. Dumb-o-Meter score: 75. Who knows, Chambers may call oil Texas Tea.