Monthly Archives: October 2015

Microsoft plans to issue over $10 billion bonds, 40 years for maximum duration

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It is reported that Microsoft is preparing to issue tens of billion dollars’ bones after it issued the largest scale bonds in August. Microsoft issued a total amount of $10.75 billion bonds in this February.

It is said that the issue of Microsoft bonds would be starting from Thursday at the soonest. It is supposed to issue 7 types of bones with different duration of service. The maximum duration is for 40 years. Microsoft is one of the 3A rated non-financial enterprises among the enterprises that issue bonds.

Jordan Chafin, the analyst of CreditSights estimated in his report released on 25 October, Microsoft might issue over $10 billion enterprise bonds. The capital it raises will be returned by stock buyback and dividend payout to its shareholders.

Microsoft stated in the documents it summited to US Seucrities and Exchange commision on Thursday that it will apply the captital as working capital, counter purchase of stocks and payback of due debts.

WFC’s analyst Nicole Black pointed out Microsoft might increase its coupon rate by 0.15% due to the uncertanty of current market in order to attract the investors to buy its bonds. It will work hard to finish the issuing of bonds by increasing coupon rate before Federal Reserve might increase interest rates.

Its share price was closing at $ 53.98 on the NASDAQ market on Wednesday. Microsoft’s share price has been accumulated increasing by 16% this year. The company’s market value reaches $426 billion.

PayPal credited granting $1 billion within two years

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PayPal announced on Tuesday that it credited granting $1 billion within two years for the program of small business loan. The overall growth is up to twice on the load market at the moment.

PayPal spokesman claimed at the conference concerned networking payment in Las Vegas, Paypal Working Capital will rise credit amount to $100 million each month for short-time loans, accounting for $ 3 million each day. The loan will be issued to the sellers or independent small business merchants on eBay platform.

PayPal was split from eBay early this year. Its CEO Dan Shulman suggested he would make full use of PayPal funding to offer affordable financial service to the small business merchants.

PayPa’s vice president and general manager concerns global credit Steve Allocca  implied that the biggest challenge for small business is hard to obtain load service. About 90% of the PayPal debtors would credit again.

Allocca said the debtors will pay back certain sum of the credit from its daily sales revenue. The outstanding amount for individual and small business is about $ 100 billion, and one-line loan takes up 3% of the total amount.

According to the statistics provided by PayNet, the default rate for one million dollars was about 1% among the small business in 2014. There is raise in the default rate as the new debtors require more credit amount.

PayPal is currently available in US, UK and Australia to offer credit service for enterprises.

 

 

 

Microsoft share rose, Gates regained the World’s Richest

Gates regained the World’s Richest according to the real-time list posted by Forbes on October 23 afternoon due to the increase of share prices, reported Spanish Daily Newspaper on October 23.

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Inditex’s founder, Amancio Ortega was the first time  ranked in the World’s Richest in the morning of October 23. He also owns the Spanish fashion brand ZARA.

From the figure reported by Forbes on October 23, Gates owns the evaluation of $79.4 billion property, while Ortega owns $78.7 billion. Gates’s property was worth $78.1 billion in the morning of October 23.

Forbes released the annual world’s wealthiest people list each March, and update the statistics with real-time data based on the stock market quotations. Microsoft’s share price increased in the afternoon of October 23, thus Gates regained the World’s Richest.

According to the stock market quotations, Warren Buffett ($ 64.6 billion) came as third, Carlos Slim ( $62.8 billion)was fourth and Jeff Bezos( $53.1 billion) was fifth.

When Forbes released the world’s wealthiest list this March, Ortega was ranked as fourth due to the increase of its share prices. Ortega holds over 59% of Inditex’s share.

The share prices of Inditex has increased by 44% this year. It becomes Spanish biggest listed enterprise. Inditex’s asset is over €105 billion, among €62 billion belongs to Ortega.

 

 

YouTube Red debuts on October 28, charging $9.99 per month

YouTube claims that its premium version YouTube Red will be rolled out on October 28. It charges the users $9.99 per month for subscription. Its release will contribute to make more profit to Alphabet by providing Internet entertainment content. And it enhance the competitiveness against rivals such as Netflix.

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Even though YouTube accounts can watch free videos, they have no acess to downoad the vidoes. When they watch the videos, there will be several ads cut-in.

Google works on persuading its subscribers to join YouTube Red and watch ad-free videos. Subscribers can both download videos and watch videos off-line via YouTube Red.

YouTube service is one of the three pillars of Alphabet performance. Video streaming media can bring extra revenue for Alphabet.

YouTube also released new version of YouTube Music on Wednesday. YouTube stated on its official blog that subscribers can enjoy more features via subscribing YouTube Red and YouTube Music.

Google launched its YouTube Music subscription service on Google Play. Robet Kyncl suggested that if user have Google Play Music accounts, then they be able to listen to all YouTube Red music via subscription service.

The competition becomes intense in the video streaming industry. YouTube rolled out a gaming application after Amazon merged Twitch. YouTube also sponsored several original plays. Those plays will be exclusively on YouTube Red for its subscribers.

Kyncl said YouTube is in prosperity. The launch of YouTube Red demonstrates our efforts on improving better service with more options and features.

Microsoft senior executives get salary adjustment

As reported, Satya Nadella, CEO of Microsoft gets salary adjustment. Its annual salary in 2015 declined to $18.3 million, declining 78% compared to last year. The main reason for this salary adjustment is that stock bonus cuts.

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His annual salary in 2014 got a raise due to the award of restricted shares when he was appointed as Microsoft’s CEO, increasing to $ 84.43 million. In a result, he became one of the highest paid senior executive in IT industry.

Enterprises must announce the fair value in related to the granted stocks. Those senior executives who are awarded the stocks might be cash in a few years later.

Till June 30, his 2015 annual basic salary increased by 31%, coming with $1.2million. Its cash bonus increased by 20%, up to $4.3 million.

Amy E. Hood, CFO of Microsoft gets a 16% decline on Total Remuneration, dropping down to $8.8 million. Kevin Turner, COO of Microsoft gets a 46 % decline, dropping down to %12.2 million. The salary cuts have relations to the stock bonus award.

Margaret L. Johnson, vice president for business development got an annual salary at $14.5 million in September, 2014, including $ 2.5 recruitment bonus.

Microsoft claims that it will nominate Sandra Peterson and Padmasree Warrior for Board directors. If they are successfully selected, its board of directors will increase to 11 members. What is more, Maria Klawe won’t run for re-election.

 

 

 

Lenovo declined Microsoft’s proposal to resell Surface Pro

Gianfranco Lanci, the COO of Lenovo claimed on Wednesday, Microsoft offer the proposal to Lenovo that resell its Surface Pro to enterprises one year ago. But Lenovo declined its offer.

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Lanci admitted in a statement that he definitely denied Microsoft when attended the Canalys Channel Forum which was held for PC retailers on Wednesday in Barcelona. Its intention is obviously, Microsoft wished to Lenovo, such PC giant publisher to resell and support Surface Pro 3.

He claimed that the proposal was denied directly. He added: ” Microsoft talked with me about reselling its Surface Pro one year ago. I denied it as I don’t think it is beneficial to Lenovo to resell Surface Pro.”

Dell as the third biggest PC publisher accepted Microsoft’s proposal. Dell opted to team up with Microsoft to resell Surface Pro 3, coming with no doubt. Microsoft did favor to Dell when it realized privatization in 2013, offering a $ 2 billion loan support.

Dell is now working on establishing profitable consulting business and moving to high-end product market. That is why Dell announced to purchase EMC at the expense of $67 billion early this week.

HP also made agreements to resell Surface Pro 3. Dion Weisler claims that its salesperson won’t get any commission to sell Surface Pro products. Microsoft and HP have cooperated for years. HP doesn’t hope to be rival with Microsoft. HP will help to resell Microsoft’s Surface Pro but not its priority.

Those senior mangers from PC industry who attended this Forum implied that they are on the alert of Microsoft’s next move. Lanci indicated that they all need to be careful as most of the PC publishers reply on Microsoft’s Windows OS.

EMC will pay Dell $2 billion if it stops the acquisition

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According to documents that EMC submitted SEC on October 13, if EMC stops the acquisition with Dell before December 12,2015, it will pay $2 billion to Dell as default sum bases on the agreements.

Dell announced on Monday that the company will attempt to gain the acquisition of EMC at cost of $67 billion. This is the biggest scale’s M&A transaction in the International technical market. This transaction includes a 60 days’ go-shop term. It allows EMC to get offers from other bidders so that to maximize its shareholders’ benefit. If EMC make deal with other company after 60 days’ go-shop term, then it will pay Dell default sum.

EMC claimed on Tuesday, if the company choose a better offer from another bidder after 60 days’ go-shop term, it would pay Dell $2.5 billion as compensation. If EMC make a final deal with another company after 12 months the acquisition ended with Dell, it will also pay Dell $2.5 billion as compensation.

It previously reported that IBM, Cisco, Oracle and HP are EMC’s potential bidders. According to informed sources, those companies might not offer better prices concerns acquisition.

The details also pointed out Dell will pay EMC $ billion default sum in certain circumstances and the default sum will up to $6 billion in some cases.

CEO of HP, Meg Whitman wrote in the internal memos, suggesting Dell will be limited with cash to develop and carry out its new policies after the acquisition. Dell will need to pay back interest at $2.5 billion each year.

EMC’s share declined 1.2% during the pre-market on Tuesday, closed at $28.

Windows 10 can not save its PC sales decline, reducing by 7% or more

Microsoft’s Windows 10 might bring new vigor and vitality into your computer, but it could not be the vigor and vitality for saving its PC sales this summer.

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Both assessment reports of Garter and IDC indicate that when the new Windows uprating was about to come, its PC sales in the third quarter season had been declined. Its sales declined by 7.7%-10.8% this year.

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During the third quarter season, Lenovo’s sales ranked first, HP and Dell came respectively as second and third. While Apple sales ranked in fourth, however, the sales volume has fallen a great deal in comparison to Dell’s. And its sales was just about one third of Lenovo’s.

Microsoft’s quick update lead to many PC publishers allows the existing PC devices to install Windows 10 operating system. But it could not be a must element to stimulate the purchase of new type PC. You may not consider to buy a new PC just because of it has a new operating system, were you? If the sales continue to decline rapidly in the new season, there may be serious concerns for the whole industry.

The analyst considers the reasons for the sales decline as it increased PC’s prices and transition of Windows 8 PC. In comparison to the figure at the same time last year, not all the publishers perform bad. Some PC publishers made excellent performance, such as Dell, Apple. The worst of PC sales came to Acer, reducing by about 20%. The sales of Lenovo and HP also declined at the same time last year, declining about 4%-5%. Asus did not make great sales performance in the third quater season this year either. Its sales declined by 10%,comparing to its last year’s figure at the same time.

We are not sure if Windows 10’s release will help to stop the PC sales decline. The computer industry has been prosperous for many years. We look forward to the miracles.

Dell reportedly takes advantage of VMware share to realize EMC acquisition

It is said that Dell will take advantage of its VMware share to realize the payment and acquisition of the data-storage company-EMC, costing $55 billion.

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According to the informed source on Friday that Dell will mostly pay the offer on cash, and it will pay EMC the rest of sum with VMware by means of the equal value of VMware’s 20% share.

The informed source also suggests that if Dell and EMC could successfully negotiate the financial terms and other agreements, they will be officially announced the acquisition news next week.

Dell, EMC and VMware did not make any official announcement on this issue yet. EMC’s share price closed at $27.86 on Friday, increasing by 2.5%. Except that share of VMware, Dell offered quoted price for per share at $27.25, reported Re/Code on Friday.

Michael Dell, the CEO of Dell, is currently working hard to transform this PC giant that has over 30 years’ history into an enterprise computing service provider. It would help Dell to enahnce its strength among the enterprise customer market if the acquisition of EMC comes true.

EMC has been facing much pressure from its investors. Elliott Management company has been requesting EMC to spin off VMware business. It feels that EMC has difficulties to realize much profit by managing several kinds of business sections.

According to the Toni Sacconaghi from Bernstein statement, Dell is in debt at the cost of $12 billion. Dell privatized its value in 2013, valuing at $ 25 billion at that time, while it is under half value of EMC current open market value.