cote:

Dell is fond of greatly simplifying it’s strategy to a handful of phrases, or even just words. This is a nice slide from the Dell analyst summit going on covering the corporate strategy now: clearly, paying down the debt that financed going private, run things lean, grow existing businesses (and fix up GTM). While “come up with new stuff that people want to buy” isn’t there, in earlier Tom Sweet said that R&D spend had increased to 2.1% of revenue, up from 1.6% (before going private, I believe).

(via Twitter / lauriemccabe: @dell value creation #daac …)

Here’s my question: how much of that R&D percentage increase came from increased spend and how much came from revenue decline?

cote:

Dell is fond of greatly simplifying it’s strategy to a handful of phrases, or even just words. This is a nice slide from the Dell analyst summit going on covering the corporate strategy now: clearly, paying down the debt that financed going private, run things lean, grow existing businesses (and fix up GTM). While “come up with new stuff that people want to buy” isn’t there, in earlier Tom Sweet said that R&D spend had increased to 2.1% of revenue, up from 1.6% (before going private, I believe).

(via Twitter / lauriemccabe: @dell value creation #daac …)

Here’s my question: how much of that R&D percentage increase came from increased spend and how much came from revenue decline?

"Apple will continue to use the Beats brand, a rare move for a company that has almost always focused on its Apple brand."

Apple Agrees to Buy Beats - WSJ.com

Just in case you were wondering, it’s official…this is NOT Steve Jobs Apple anymore.

"AT&T Inc. T -0.31% agreed to acquire DirecTV DTV -1.02% for $49 billion, a deal that would make it a major player in pay television and increase its clout with media companies at a time when video consumption is moving online."

AT&T to Buy DirecTV in $49 Billion Deal, Creating Pay-TV Giant - WSJ.com

Things are definitely going to get interesting in the tech/media/telecom space in the next few years.

"Bonds perceived as safe have produced better returns than riskier ones for the first time since 2010 and the second time since 2006, according to data from Barclays BARC.LN -0.45% PLC. U.S. government bonds have rallied, high-grade corporate bonds have posted larger gains than junk bonds, and higher-rated junk bonds have risen more than more-speculative ones."

Bond Market Flips the Script on Risk and Reward - WSJ.com

Well, how are we going to quantitatively ease our way out of this one?

"The market for bonds supported by all types of car loans is accelerating, with sales of $39 billion worth of securities this year, according to J.P. Morgan Chase & Co. Issuance is on pace to exceed last year’s $78.9 billion. The bond sale taps investor demand for debt that is considered safe, as car-loan borrowers rarely default and the loans involved are backed by models with high resale values."

Porsche, Lamborghini, Bentley Bonds Have Investors Hitting the Gas - WSJ.com

It’s like we never learn. What could go wrong when investors pile into an asset class that performed well historically and, in the process, completely change the underwriting characteristics of the loans going forward?

"ArcelorMittal, MT -3.79% the world’s biggest steelmaker, is in “deep, deep discussions” with BHP Billiton BLT.LN -0.86% to acquire the Australian mining company’s stake in a major Guinean iron-ore deposit, two people familiar with the matter said Friday."

ArcelorMittal in Talks to Buy BHP Billiton Iron-Ore Asset in Guinea - WSJ.com

"Shares of the micromessaging platform tumbled Tuesday as a lockup expired on stock amounting to roughly two-thirds of its diluted share count. Some of those shares were held by early Twitter investors. Many were held by employees granted them to augment cash salaries. The massive expiration was, for many, the first opportunity to sell, making it a one-time event. But stock-based compensation will continue to weigh on Twitter. And the load could grow heavier if the share-price slide continues."

HEARD ON THE STREET: The Real Cost of Twitter’s Nose Dive - WSJ.com

China cutting capital reserve requirements for securities firms

SHANGHAI—China cut the capital-reserve requirement for securities firms and expanded the range of financial products they may invest in, as the government works to boost the sector amid a sluggish domestic stock market.

Lowering your risk cushion by 50% and being able to buy more illiquid products? What could possibly go wrong with that?

Sunny times ahead. Please pay no attention to the man behind the curtain.

(Source: The Wall Street Journal)

From the archives of history…

Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.

But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.

Amazon’s 1997 Letter to Shareholders (emphasis added)

Going back through the archives of annual reports has not dimmed my view of Jeff Bezos as one of the most visionary CEOs around. I’m constantly in awe of Amazon’s ability to go off in random directions almost haphazardly only to find them tying it back to their core business foundation years later.

Tags: AMZN

Tales from the Short-Side

The ceiling test requires the Company to use tax effected discounted cash flows using a present value technique. The sales prices used for the ceiling test were $103.52 per barrel for oil and $4.54 per thousand cubic feet of natural gas. Based on the calculations under the first step of the ceiling test, the Company determined that its oil and gas interests are recoverable.

Just a little tidbit in the footnotes of a random annual report I was reading. As of today WTI crude is hanging at ~$90/barrel, and Henry Hub’s natgas price can be obtained for around $3.39/Mcf and dropping.

Caveat Emptor!

Tags: short