H&Q Notebook: Wind River Sucks In More Shares

The software company announces another buyback program. Also, items on Washington's new Net guru and Seagate.
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SAN FRANCISCO --

Wind River

(WIND)

CEO Ron Abelmann told investors at the

Hambrecht & Quist Technology Conference

Monday that Wind River's board authorized a $25 million share buyback.

The purchases will be in addition to the $16 million, or $4 million per quarter, that the company already buys back to offset stock options issued to employees, he says. The stock repurchasing programs come as Wind River's stock has fallen 59% since late January. The stock rose 1/16 to 13 7/16 Monday.

Abelmann, who last week said he would step down as president and CEO in late June, also told investors that he decided to step down because the company needed someone more "Internet savvy" than himself. Abelmann says he remains committed to the company and will stay on the board. The search for a new CEO will be taken on "with great urgency," he said.

-- Medora Lee

Meet the New Wonk, Same As the Old Wonk

In his first public address before the financial community, Elliot Maxwell played the student as much as the teacher. Perhaps that's a sound strategy when you're standing before a room full of people who have demonstrated a longstanding aversion to anything having to do with the government.

Maxwell, who bears the weighty title of special adviser to the secretary of commerce on the digital economy, portrayed himself as a sort of friendly ambassador extending a hand from a powerful and foreign land.

During his hour-long speech, Maxwell outlined the welter of policy issues facing the federal government: access to bandwidth, legal framework, electronic payment systems, consumer protection and privacy, to name a few. But like a good bureaucrat, he declined to stake out any positions or give a sense of where the government might come down on any of these contentious issues.

"There are many things I'd like you to do," said Maxwell. "The most serious of which is to take these issues seriously."

Maxwell stressed Uncle Sam's desire to forge a partnership with the technology industry, instead of ramming intrusive and unwanted legislation down its throat. "If you're involved, the solutions are likely to be more efficient," said Maxwell. "We want to know if we're doing the right things. More importantly, we want to know what we're doing wrong."

-- Spencer E. Ante

Will Seagate Come Back With The Tide?

One might think of the oft-quoted technology analyst Nick Moore as the

Wee Willie Keeler

of technology investing -- he hits 'em where they ain't. While other money managers were crowding into one Internet presentation after another here at the

Hambrecht & Quist Technology Conference

, Moore was digging in deep with, of all firms, the long-forsaken disk-drive maker

Seagate

(SEG)

.

Like the baseball Hall of Famer, Moore has performed for many teams (

Franklin Templeton,

Orbitex Funds

and now Oakland-based

Jurika & Voyles Funds

), and to each, he's brought a deep understanding of both technology and accounting. And those are the reasons he's attracted to Seagate.

"If you do the sum of the parts here," said Moore, "it suddenly gives you a shockingly great value." The demand for storage, of course, is growing rapidly, but falling prices have killed most disk-drive makers like

Quarterdek

and

Iomega

(IOM)

. In Seagate, Moore finds a different story -- one filled with hidden gems for anyone who wants to look.

Seagate has a huge cash position: Cash and short-term investments total $2.2 billion, according to

Market Guide

-- though Moore says much of that has been spent in a share repurchase. But that buyback has created yet another upside surprise within Seagate, a misperception on the Street of the number of shares outstanding. Seagate seems to have a P/E ratio of 40.

"But the thing is, the end of the quarter share count is actually high," said Moore. "I think that share buyback has brought that number down to about 223 million." Market Guide reports the shares outstanding at 244 million. A substantial decrease in Seagate's outstanding shares would edge its P/E higher.

Add to that Seagate's sizeable stake in

Veritas

(VRTS) - Get Report

, which Moore values at $2.8 billion. By his calculations, Seagate is trading at about 3 times gross cash flow. "That's why we own bags of it," said Moore. "We're talking about an industry leader here, not some stock that's gonna be an orphan someday."

Still, after Seagate's presentation Monday, shares of Seagate nudged up a mere 5/16 Monday to 28 13/16.

"I wouldn't go crazy and go long calls on this thing," said Moore, conscious of the favorite investment theme these days: Internet, Internet, Internet. "The fact remains this is not a market environment where people are doing math to make their investment decisions."

-- Cory Johnson