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Mar 19, 2012

BreakingViews: So what’s Apple really going to do with its cash?

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

By Robert Cyran

NEW YORK, March 19 (Reuters Breakingviews) – Apple is finally giving its shareholders a bite of its cash pile. The company will hand out about $45 billion over three years, including some $30 billion of dividends and $10 billion of buybacks. While that’s a good start, Apple could make $50 billion in free cash flow in the fiscal year ending in September. With sales and profit rocketing — and the bulk of its huge cash hoard still stuck overseas — bigger payouts will surely follow.

Mar 19, 2012
via Breakingviews

So what’s Apple really going to do with its cash?

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apple is finally giving its shareholders a bite of its cash pile. The company will hand out about $45 billion over three years, including some $30 billion of dividends and $10 billion of buybacks. While that’s a good start, Apple could make $50 billion in free cash flow in the fiscal year ending in September. With sales and profit rocketing – and the bulk of its huge cash hoard still stuck overseas – bigger payouts will surely follow.

Apple had $98 billion of cash and investments on its books at the end of December. Close to two-thirds is held overseas, and repatriating it to the United States would involve a big tax hit. So Apple is keen to avoid tapping this, preferring to let it grow while it awaits a possible tax holiday.

Mar 15, 2012
via Breakingviews

Cisco’s John Chambers falls off the M&A wagon

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Cisco’s John Chambers has fallen off the M&A wagon. Less than a year ago, the networking giant’s chairman and CEO, in an unusual mea culpa to employees, forswore big deals and promised discipline. Now, Cisco is shelling out $5 billion for NDS Group, a pay TV software firm. But this acquisition might just deliver justifiable returns and fit nicely with Cisco’s revised strategy.

Cisco had a long history of overstretching prior to last year’s shift. The company’s deals had transferred oodles of Cisco cash to other firms’ shareholders, hurting Cisco’s valuation and leaving the firm sprawling and a struggle to manage. That distracted executives from core businesses in routers and switches, which were under attack from rivals like Juniper Networks and Huawei. Profit warnings ensued with alarming regularity.

Mar 13, 2012
via Breakingviews

Splitting AT&T CEO and chairman roles a no-brainer

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Randall Stephenson’s botched plan to buy T-Mobile USA came with a $4 billion tab. The board didn’t see fit to hold him fully accountable. But shareholders can have their own say – and should vote to strip Stephenson of his chairman title and install an independent.

Mar 12, 2012
via Breakingviews

Facebook’s underwriter friends are cheap insurance

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Facebook has friended a raft of new underwriters for its forthcoming initial public offering. According to the company’s latest filing, there are now 31 of them, up from an initial six. That may be overkill, but the social network’s clout means it can line up the extra resources and reputational buffing at little, if any, cost.

Mar 8, 2012

Apple’s latest iPad looks sufficiently incremental

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Apple’s (AAPL.O: Quote, Profile, Research) latest iPad looks sufficiently incremental. The new tablet device comes with a sharper screen, more powerful chip and better camera. The update is evolutionary, not revolutionary. That may have let down gadget fiends hoping for something more. But history suggests it should be plenty for Apple investors.

When the company now led by Tim Cook introduced the iPhone 4S in October, the fifth and most recent version of its mobile handset, there was similar disappointment. Its faster chip, voice recognition software and better graphics were nice, but many had anticipated a fresh design and a 4G wireless connection. The shares tumbled 5 percent as company executives showed off the device on stage.

Mar 2, 2012
via Breakingviews

Zynga has less to fear from mobile than Facebook

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Zynga’s investors worry about the company’s dependence on Facebook. So it’s no wonder they warmly greeted the company’s plans to diversify away from the social network, currently the source of more than 90 percent of Zynga’s revenue. But one trend affecting its giant symbiotic partner shouldn’t worry them much – the shift to mobile devices. Ad-dependent firms like Facebook, Pandora and Yelp could lose out, if only temporarily, but Zynga’s revenue model is different.

More and more people access the Internet on smartphones and tablets. Sales of these devices have now eclipsed desktops in the United States. Yet advertisers haven’t yet followed, for reasons ranging from conservatism to a lack of tools to measure the effectiveness of mobile advertisements. Facebook and Yelp, for example, still receive almost no revenue from mobile advertising even though half Facebook’s users access it on the go and about 6 million people use Yelp’s service on their phones.

Feb 29, 2012
via Breakingviews

Yelp IPO: four reviews, 2 stars out of 5

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Here are four ways to think about Yelp’s initial public offering, which set a price range earlier this month of $12 to $14 a share. At the top end of the range, the company would have a market value of nearly $850 million. All told, using the online review site’s own methodology, the stock sale merits just two stars out of five.

Feb 28, 2012
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$500 bln valuation may still be only half an Apple

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By Robert Cyran
The author is a Reuters Breakingviews collumnist. The opinions expressed are his own.Apple’s market capitalization is poised to ring the $500 billion bell. But even for the most valuable company in the world, that could just be a pit stop on the way to $1 trillion. A quick tour of Apple’s other eye-watering numbers explains why.

$100 billion: The company had nearly this much cash and investments on its books at the end of December. Investors give it little credit for this hoard.

Feb 28, 2012
via Breakingviews

Yahoo activist hasn’t yet earned four board seats

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By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Activist investor Dan Loeb correctly diagnosed Yahoo’s problem. After the Internet company spurned a juicy bid from Microsoft in 2008 at more than twice its current value and signed away the search business for a pittance, the Third Point founder turned his attention squarely onto the board – and has played a role helping to reform it. But he hasn’t yet provided a sound prescription to cure ailing Yahoo. Until he does, Loeb doesn’t deserve the four seats he wants on the board.