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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (42801)	1/19/2009 3:39:02 PM
From: Sam Citron	1 Recommendation Respond to of 95501

Good analysis, Jacob, but unduly harsh in contention 2 and 4. I doubt that a debt-based buyback of shares is going to happen, but I would agree that the CEO's answer was not reassuring or conservative. The dividend rate of nearly 7% is out of line with their peer group and does imply an excessive payout ratio in the immediate future as expected earnings are constrained by the recession. I expect the board to review this situation as warranted. I guess their current $4/share cash cushion and zero debt position gives them some breathing room for now to maintain what seems like a rather generous dividend. Problem with dividend cuts is that they signal to investors a lack of confidence by management, which results in a vicious cycle of further share price erosion. By maintaining the dividend they signal to investors that they expect earnings to recover. Tech companies like MXIM with zero debt, billions in cash sitting in the bank, and the ability to make money, albeit at a reduced rate, in one of the worst recessions in the last 60 years are probably not a bad place for investors to put their money, especially if the dividend makes it worth the wait, unless the management are crooks. So it all comes down to your contentions regarding their corporate governance: 2. The BOD are thieves. 3. The CEO is irresponsible. 4. Their SEC filings can't be trusted. These are pretty serious charges which I do not think you have sufficiently substantiated. [Without wishing to stifle your freedom of expression or pursuit of the truth and investor justice, I would humbly suggest that you dial down the rhetoric a bit and remind you that you are publishing in a public forum where libel and other laws still apply.] You seem to base your allegations mainly on the recent options grant improprieties plus the CEO's comments on the debt-based buyback. But stock options are the lifeblood of Silicon Valley and, without excusing their behavior, they certainly had a lot of company from Apple on down the food chain. MXIM suffered much more heavily than most companies that committed similar improprieties, resulting in CEO's departure, extensive restatements and exchange delisting for a considerable period of time. All this has already severely pummeled the share price, which today sits at 10 year lows. I tend to regard Maxim as a company that represents more of what is positive about America than what is negative. I see a company with a 25 year record of innovation extending the benefits of Moore's law way beyond the computer or consumer electronic segment, reducing power consumption, manufacturing and exporting chips with very low ASPs, creating thousands of good paying jobs in America and around the world, etc. While I sympathize with your emotions, I feel that your bile is misdirected in this particular case, and that you have been a bit harsh in your conclusions about MXIM's corporate governance. Sam

To: Jacob Snyder who wrote (42801)	1/20/2009 3:59:17 PM
From: Jacob Snyder	2 Recommendations Read Replies (3) \| Respond to of 95501

At a time when interest-rates are sinking toward zero around the world, the biggest currency traders are recommending countries that have the largest trade surpluses...Currencies of countries with trade surpluses are perceived as safer because governments don’t have to brave credit markets in a year when sovereign bond sales are likely to exceed $3 trillion...Switzerland’s current-account surplus was 8 percent of gross domestic product last year, while Japan’s was 3.8 percent and Norway’s 16 percent, according to the Organization for Economic Cooperation and Development. That compares with deficits of 4.9 percent of GDP in the U.S. bloomberg.com (2009 U.S. deficit will be about 10% of GDP...) A rally that sent U.S. Treasuries to their best year since 1995 is coming to an end, South Korea’s National Pension Service, the country’s biggest investor, said. U.S. government efforts to combat the recession will prompt the Federal Reserve to raise interest rates this year, said Kim Heeseok, who oversees $160 billion as head of global investments for the service in Seoul...“It’s time to sell U.S. Treasuries,” said Kim... bloomberg.com Ukraine Bonds Flag Default: Yields on Ukraine’s $105 billion of government and company debt are the highest of any country with dollar-denominated bonds except Ecuador, which defaulted in December. The currency, the hryvnia, weakened 38 percent in the past 12 months against the dollar. The benchmark stock index lost 85 percent in 2008... bloomberg.com Standard & Poor's cut its credit rating for Spanish government debt Monday...The move followed a similar-size cut for Greek government debt last Wednesday... S&P put both Ireland and Portugal on credit watch this month... online.wsj.com (Defaulting will be a major theme for 2009, by homeowners, retailers, countries. The banks won't default, because they are all going to be nationalized.) "We will harness the sun and the winds and the soil to fuel our cars and run our factories." "...the ways we use energy, strengthens our adversaries and threatens our planet..." - from Obama's inaugural address presidency.ucsb.edu

To: Jacob Snyder who wrote (42801)	2/5/2009 4:29:49 PM
From: Sam Citron	Read Replies (1) \| Respond to of 95501

RE: Option Backdating I think the Canadian penal system may be more efficient than ours in this context. Consider the lenient treatment that Steve Jobs has received in comparison to what happened at MXIM, where virtually the entire Board of Directors was forced to resign. I think it's obvious that Jobs has been treated with kid gloves, for fear of public backlash. But it's unfair AND inefficient. The best disincentive would be a sufficiently large fine (not covered by D&O liability insurance, of course) but without leading to termination, which in certain cases [Jobs/Apple] is just too steep a price to pay. Anyway here's the article: RIM Officers Pay Big Fine Over Options [WSJ] By STUART WEINBERG TORONTO-- Research In Motion Ltd.'s co-CEOs and other executives have agreed to pay nearly $75 million to settle charges tied to their role in stock-option backdating at the BlackBerry maker. The settlement, which was approved by an Ontario Securities Commission panel, calls for co-CEOs Jim Balsillie and Mike Lazaridis and two other executives to pay a fine totaling 38.3 million Canadian dollars ($31 million) due to the benefits they received for improper option grants. The executives also have to pay a total of C$44.8 million to defray the costs of RIM's internal investigation. However, the co-chief executives have already each paid C$7.5 million each, toward that amount. The will also pay C$9.1 million administrative penalty towards the cost of Canadian regulators' investigation. The penalty is the largest ever paid by individuals to the OSC. Previously, the largest individual payment was made by former Laidlaw chief executive Michael DeGroote, who paid C$23 million in 1993 to settle allegations of illegal insider trading, according to the Globe and Mail newspaper. The settlement also involves relatively smaller fines against several other RIM executives and directors. The OSC also formally reprimanded all individuals in the case. RIM can't indemnify the executives against the costs involved. John Richardson, RIM's lead director said, "RIM is pleased that the parties have resolved matters with the OSC and looks forward to resolving matters with the SEC." RIM said the company and the executives involved have also made settlement offers to the U.S. Securities & Exchange Commission, which SEC staff have recommended the agency approve. The backdating at RIM occurred over a 10-year period between December 1996 and July 2006, according to an OSC statement of allegations. During that time, about 1,400 of 3,200 stock-option grants made by RIM were made using incorrect dating practices. "The grant dates selected resulted in more favorable pricing for the options or 'in the money' grants," the OSC said. "In many instances, the lowest share price in a period was chosen using hindsight in order to set the grant date and, therefore, the exercise price." Stock options allow recipients to buy stock in the future at a set exercise price, generally the market price on the day the options were granted. Backdating involves pretending that a stock option was granted on an earlier date when the market price was lower, conveying an opportunity for extra profit. The total in-the-money benefit resulting from the incorrect dating practices for all RIM employees was about C$66 million, the OSC said in the statement of allegations. Of that amount, C$33 million hasn't been reimbursed or repaid to RIM or otherwise forfeited, it said. RIM's backdating problems became public in September 2006 when the company disclosed a voluntary review of its stock-option-granting practices. It said at the time that it had informed the OSC and the U.S. Securities and Exchange Commission of its review. Both regulators subsequently opened investigations into RIM's option-granting practices, and in April 2007, RIM disclosed that the U.S. Attorney for the Southern District of New York was also reviewing RIM's stock-option grants. In March 2007, RIM completed its internal review, finding that backdating did occur, but that there was no intentional misconduct. As a result of its findings, Mr. Balsillie was required to relinquish his role as RIM's chairman.