6/11/07 China Business News reported: Wu Ying left UT Starcom. Rumors arouse again about UT Starcom’s buyout. Cisco, Alcatel-Lucent and Nortel Networks showed great interest in UT’s IPTV service. There is also possibility for private equity firms to buy the stakes and batch selling part of it later. The company’s six biggest stakeholders are Goldman Sachs 12.6%, Softbank 12.1%, Barclays Global Investors 10.4%, Brandes Investment Partners, LP 8.4%, Renaissance Technologies Corp. 8.4%, and Fidelity Investments 6.8%.
6/08/07 The Five Dumbest Things on Wall Street This Week
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5. Falling Starcom
UTStarcom (UTSI - Cramer's Take - Stockpickr) held an auction, and no one showed up.
Shares in the Alameda, Calif., telecom supplier sank 11% Monday after UTStarcom ended its eight-month-long search for a buyer. The stock has shed a third of its value since UTStarcom hired Merrill Lynch last October.
"After careful consideration of a number of short- and long-term alternatives," said Chairman Thomas Toy, "we have determined that our best course of action is to move forward with the company as it exists today."
And what a company it is. Since the beginning of last year, UTStarcom has restated its earnings to fix $50 million worth of revenue misstatements, repeatedly delayed financial filings to probe a possible options backdating problem, and announced some head-spinning management changes.
Last May, longtime top executive Hong Lu set plans to step down at year-end. UTStarcom said the head of its China business, Ying Wu, would "assume worldwide CEO responsibilities."
But with the Merrill hiring, Lu decided to stay on till UTStarcom found a buyer. Then in December, UTStarcom admitted that Lu faced possible Securities and Exchange Commission charges "in connection with an ongoing investigation into trading activities by third parties."
You'd think that the recipient of a so-called Wells Notice might make a poor choice to continue as CEO. But UTStarcom, which didn't return a call seeking comment, now says it's Wu who will leave the company -- leaving Lu, regulatory baggage and all, firmly in charge.
"In the course of analyzing our strategic alternatives over the last several months," Lu explained in last Friday's press release, "it has become apparent that there are differing opinions regarding the company's strategy to enhance shareholder value."
Gee, it's hard to imagine why.
Dumb-o-Meter score: 80. Shares have fallen 81% since Feb. 18, 2004, when Lu was named to Fast Company's list of "Fast 50" innovators denoting "individuals whose achievements have significantly advanced their companies or industries." |
