Facebook have unveiled the final Instagram purchase information in their 10-Q. The social network have stated that the final purchase of Instagram will sit in its accounting as $521 million. This figure came about by adding $300 million in cash that Facebook promised, as well as the 12 million vested shares of Class B common stock.
This common stock was given to "non-employee stockholders", such as investors, but not the staff itself. Facebook have issued 11 million un-vested shares to Instagram's employees, including founders. These shares will vest over a three-year period which have an "aggregate fair value of $194 million". Adding the $521 million and $194 million together, we find ourselves at $715 million.
We did see a $1 billion number floating about when this news hit the wire, but the stock of Facebook has slumped, considerably, since that time.
Nintendo recently found itself in some hot water over accusations that underage workers were employed by Foxconn and working at factories where Nintendo has the Wii U manufactured. This is against the policy that Nintendo requires its partners to agree and abide by, so they were quick to launch an investigation.
Today, they have released a statement regarding the results of that investigation. They found that Foxconn had employed under-aged interns to manufacture the Wii U. Foxconn has accepted complete responsibility for the incident and has "moved quickly to ensure that all affected individuals no longer work at Foxconn."
It's not just Apple who are being affected by the working conditions at Foxconn. Nintendo has been brought into the fray, but has acted quickly to rectify the issue.
The European Union is heavy on protecting consumers, and sometimes it seems as though they may overstep what is necessary and prudent. In this case, that line probably hasn't been crossed, and I'm sure you'll agree with them that Microsoft should give users a choice of which browser to install.
Unfortunately for Microsoft, it would appear that they breached the European Union's order that they offer multiple browsers to select from. The EU has now charged Microsoft for breaching an agreement made three years prior. In that agreement, Microsoft had made the concession to allow users to pick a browser upon the install of Windows 7.
The EU charges that even now, three years later, users still are not presented with the choice of browser. This charge applies to Windows 7 copies sold after February 2011. Microsoft claims a bug caused the choice screen to not display, but that it is, in fact, in the software. The EU competition commissioner Joaquin Almunia warned Microsoft should expect a fine, if found breaking the agreement.
This fine could be as high as 10 percent of Microsoft's earnings. This would be on top of the estimated €1.7 billion already spent fighting the EU.
Social networking site Facebook may now boast over 1 billion monthly active users, but what do those users actually give the social network in terms of profits? Well, the social network has beaten analyst expectations in their second earnings report after going public.
Analysts polled by Thomson Reuters expected Facebook to earn $0.11 per share on sales of $1.23 billion, but the social network reported third quarter earnings of $0.12 per share on revenues of $1.62 billion, and increase of 32% from their $954 million in the same quarter of 2011. Advertising remains the king of Facebook, as their main source of income, bringing in 86% of total revenue. Mark Zuckerberg, CEO and Facebook founder said:
As proud as I am that a billion people use Facebook each month, I'm also really happy that over 600 million people now share and connect on Facebook every month using mobile devices. People who use our mobile products are more engaged, and we believe we can increase engagement even further as we continue to introduce new products and improve our platform. At the same time, we are deeply integrating monetization into our product teams in order to build a stronger, more valuable company.
Struggling phone maker, Nokia, have announced that they will be issuing a new slew of convertible bonds that the company hopes will generate around $980 million. Nokia have posted losses for six consecutive quarters and is still going through their cash reserves.
Timo Ihamuotila, Nokia's Executive Vice President and CFO, has said that Nokia's actions have been:
Designed to further strengthen our financial position and liquidity profile while allowing us to benefit from the current attractive long-term financing opportunities in the convertible bond market.
The net proceeds generated from the $980 million of bonds is set to become the phone maker's shares in 2017, which will help the company manage their capital structure, as well as addressing their upcoming debt, all while maintaining existing assets.
The second hand gaming business can obviously be quite serious, with two North Carolina men found guilty of murder over a used Xbox 360 console. In Christmas of 2009, Justen Jarel King and Christopher Andrew Alexander headed to the house of Jason Lee Smith and roommate Emanuel Gantlin in Fayetteville, NC.
Gantlin had purchased an Xbox 360 console from Alexander, but now wanted the console back. So Alexander took King with him and headed to Smith's home, found the Xbox 360 and then started to disconnect the cables from the TV.
King pulled out a gun, cocked it, and it fired - hitting Smith in the chest. Smith didn't survive the shot to the chest and died. Both King and Alexander have pleaded guilty to second degree murder with King sentenced to more than 13 years in prison, while Alexander will see 10 years behind bars.
In a surprising move, Telstra have reportedly just purchased Adelaide-based Adam Internet in a deal that could be worth $50 million. The telco announced this morning that they had entered into an agreement to acquire the Adelaide-based ISP, but didn't disclose the exact amount of money on the table.
Adam Internet currently employ 200 staff and have over 80,000 customers, who should be all unaffected by the deal. Adam Internet would continue to operate as a stand-alone subsidiary of Telstra. Adam Internet's executive chairman, Greg Hicks, will stay on as a consultant to the company for twelve months if the deal goes through. Hicks said that Adam and Telstra "shared customer service philosophy was a pivotal reason behind today's announcement". He adds:
This agreement will help cement a strong future for the Adam brand, our people, and our customers and represent the next stage of Adam's growth. Adam will continue to provide excellent value-for-money broadband that doesn't compromise on service. The message for potential new customers is that, with Telstra behind it, Adam will be expanding nationally.
Apple's stock has interestingly not fared their press conference today very well, though it seems to be now making a recovery. Hot on the heals of the new iPad mini's announcement, and various other products, Apple's stock price has plummeted down to $619.63 at the time of writing. This is a loss of 2.25 percent.
It's not exactly clear what caused the drop in stock price. The new products seem to be rather revolutionary as opposed to evolutionary, though it could be a bunch of upset iPad 3G owners that are causing the misery for Apple's stock. I know I would be upset if I had purchased a brand-new device that was replaced only 6 months later.
It's definitely a good idea to keep an eye on Apple's stock today, because, even as I am writing this, it is rebounding some. However, the stock price is still below where it was before the announcement.
Amazon have reportedly wiped a single customers account, including all of her paid-for books, all without an explanation. The customer is a Norweigian woman who is identified by "Linn" on media commentator Martin Bekkelund's blog.
Linn approached Amazon who she discovered her Kindle had been wiped, where she informed by an Amazon customer relations executive that her account had been closed, all open orders had been cancelled and her content had been removed - and even up until today - she doesn't know why.
This mistake highlights the fact that DRM can be a dangerous thing, where manufacturers and publishers use it to limit the use of digital content once the consumer has purchased it. In this case, if Linn hadn't finished reading her ebooks - well, they're now gone. Amazon has told Linn:
We have found your account is directly related to another which has been previously closed for abuse of our policies. As such, your Amazon.co.uk account has been closed and any open orders have been cancelled. Please understand that the closure of an account is a permanent action. Any subsequent accounts that are opened will be closed as well. Thank you for your understanding with our decision.
Today sees Nintendo of America prevailing in a patent infringement lawsuit. At the center of the case was the Wii remote, Wii Balance Board, and Wii Fit software. Impulse technology claimed that these three devices or software infringed upon their patent (U.S. Patent No 5,524,637) which was issued in 1996.
The whole court battle started when Impulse claimed that Nintendo and other third-party studios infringed upon their 1996 patent that covered an "interactive system for measuring physiological exertion". Today, US District Court Judge James Gwin ruled against one of Impulse's legal arguments.
They didn't actually get a full ruling from the court. Rather, the court ruled that Impulse's argument wasn't exactly valid, so this resulted in the case being dismissed. Impulse also tried suing Microsoft and Kinect developers, saying the Kinect infringed on seven of its patents that were issued from 2010 to 2011.
Yahoo has been faltering in the wake of Google's massive successes. Advertising revenue has fallen, traffic has fallen, and they were continuing to produce many products that didn't see much use. They hired in former Googler Marissa Mayer as their new CEO to help turn the company around, and it appears to be working.
Yahoo performed better in the third quarter than analysts expected it to, a nice surprise considering Google and Microsoft both performed worse than expected. Sales only fell from $1.22 billion to $1.2 billion year-over-year. Earnings per share rose to $0.35, which is up from only $0.21 from the same period a year prior.
"Yahoo had a solid third quarter, and we are encouraged by the stabilization in search and display revenue," said Yahoo CEO Marissa Mayer. "We're taking important steps to position Yahoo for long-term success, and we're confident that our focus on quality and improving the user experience will drive increased value for our advertisers, partners and shareholders."
Stock prices weren't too affected by today's results, likely due to stock holders believing that Yahoo is still in a fragile state. After all, Mayer was only installed into the CEO position on July 16.
It looks like Apple's new data center has begun construction, with the Cupertino-based company's new data center in Prineville, Oregon beginning construction. Apple purchased a 160-acre lot for $5.6 million back in February and threw up a 10,000-square-foot data center temporarily.
Now they're starting work on their fourth major data center, with the first phase of the new data center costing $68 million. Prineville also houses Facebook's huge data centers, with companies flocking to the town because of their low energy, real estates costs and lower tax rates.
I'd love to walk through these data centers - who's with me? Group buy time?
The economy does not seem to be doing as well as everyone would like to portray as doing. Companies' earnings reports yesterday came in at less-than-expected results and many companies are instituting layoffs or continuing their plans in full force. Yesterday, we saw the announcement that AMD was axing part of its force, and now Sony is continuing with its plans to reduce its workforce by 10,000.
Sony had previously announced plans to layoff 10,000 employees by the end of this coming March. We now have more details on how they will achieve this end result. Sony announced that it will be cutting roughly 20 percent of its headquarters staff in addition to closing a factory that is located in Japan.
Previously, Sony had cut 1,800 jobs from its books by selling a chemical company to a state-run bank in Japan. The cuts at headquarters and the Gifu plant will amount to another 2,000 people. Reuters is also reporting that Sony plans to cut a further 2,000 employees in Europe, with roughly half of those cuts coming from the ending of its partnership with Ericsson.
Not only have we seen the usually invincible Apple, but Google, Microsoft and more have been posting losses not just in the last 24 hours, but over the last month or so. Tech doesn't seem to be doing too well in the market lately, and AMD is yet another victim.
We reported that there would be 10-15% layoffs in the near future, with the chipmaker confirming this after their Q3 financial results. AMD recorded a net loss of $157 million on a revenue of $1.27 billion. These numbers are worse than they were in the previous quarter, as well as Q3 2011. Revenue decline was cited for both its Computing Solutions and Graphics divisions.
AMD's gross margins were 31% which is a big drop from the 45% they were enjoying last quarter, and Q3 2011. A $100 million inventory write-down was noted, which mainly consisted of Llano-based A-Series APUs, but cited lowering demand for its CPUs as a problem. Looking into the future AMD are likely to axe 15% of their workforce in hopes of lowering costs. AMD projects the cuts will lead to a savings of $20 million for Q4 and $190 million for the entire of 2013.
Just before the Windows 8 bell rings next week, it looks like big Australian retailers in Dick Smiths and JB Hi-Fi are having mammoth sales. These two sales will be two of the best we'll see this year for electronics, as they pave the way for new hardware in the coming weeks.
Dick Smith's XXXL Sale, and JB Hi-Fi's Stocktake Sale details are below.
Dick Smith's XXXL Sale:
- Up to 30% off TVs
- Up to 30% off computers (excluding tablets, Apple computers and iPad)
- 10% off Apple computers (excluding iPad and built-to-order machines)
- 40% off Logitech and Microsoft mice, keyboards, headsets and webcams (excluding tablet/iPad keyboards and PC speakers/docks)
- 40% off headphones (excluding gaming, PC and mobile phone headsets, Junior range, Apple, Beats by DRE, Pioneer & Logitech UE)
- 25% off in-car GPS (excluding D4557 and D9174)
- 20% off Sony, Nikon and Olympus digital cameras
- 30% off gaming software (below $59.95)
- 20% off Home Theatre Systems
MegaUpload founder to encrypt data before putting it on Mega, should stop future lawsuits and raids, hopefully
With The Pirate Bay floating into the clouds to evade the incoming lawsuits and attacks, it looks like MegaUpload founder Kim Dotcom is now touting the same thing. Dotcom and his business partner Mathias Ortmann revealed plans for MegaUpload's success, dubbed 'Mega' to Wired magazine a day before the news of TPB moving into the clouds broke out.
Mega will see users encrypt data using an AES algoritm before it gets uploaded to the site, Mega will then provide the user a unique decryption key that will be required to upload the data. Encryption will hopefully keep users' data safe, with Mega being completely oblivious to what the user is uploading to their servers making them much safer to legal action than previously.
Mega also plans to operate servers in several different countries, mirroring the data from other locations - meaning that in the event that a bunch of servers go offline due to legal intervention, files will still be available to users from another location. Mega aren't expecting legal issues, but it looks like they're just trying to plan this from all angles, keeping the users data the most important thing at all times - which is how it should be.
Today has been a busy day for financial reporting. Microsoft adds to our boring financial news day with their own earnings report, which is also less than spectacular. The third quarter (Microsoft's Q1 2014) has not been nice to companies, with many missing expectations due to slumping sales and other issues.
For Microsoft's Q1 2014, the company posted revenues of $16.01 billion and earnings per share of $0.53. Revenue is down from last quarter's $18.06 billion, but earnings are up from last quarters loss per share of $0.06. It's important to remember that Microsoft took a $6.19 billion writedown last quarter because of the failed aQuantive acquisition.
"The launch of Windows 8 is the beginning of a new era at Microsoft," said Steve Ballmer, chief executive officer at Microsoft, in a canned statement today. "Investments we've made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners."
Analysts expected Microsoft to post revenues of $16.42 billion and earnings per share of $0.56. They also predicted that sales growth would be down (roughly -5.5 percent) as companies held off from upgrades due to Windows 8 being just around the corner. Microsoft has Windows 8, Windows Phone 8, and Surface tablets due to be released in this upcoming quarter, which will hopefully help the earnings report next time around.
It's that time of year. No, not Christmas. Companies are reporting their third quarter results, some with positive results, and some with negative. Unfortunately, Nokia falls into the latter category. For the third quarter, Nokia posted a massive $754 million loss, which is actually an improvement from previous quarters.
This loss marks the six consecutive quarter than Nokia has lost money. That's not a good thing for a company to be doing quarter after quarter, however, Nokia doesn't have much choice in the matter. Stephen Elop took over as CEO in early 2011 and has seemingly been doing a good job turning the company around as this loss is less than previous.
In Q4 2011, Nokia lost $1.3 billion, which is a massive amount of money. However, that was easily eclipsed in Q1 2012 when Nokia reported losses of $1.6 billion. Q2 2012 saw losses of just $1.1 billion, and Q3, in other words, this quarter, saw losses of just $754 million, a marked improvement.
Nokia saw a reduction in the number of Lumia's that it sold, and this makes sense since these devices are reaching the end of life. A new wave of Lumias are about to hit, so Nokia needs these to be a smashing success in order to keep this turn around going. Let's just hope AT&T's exclusivity for the Lumia 920 doesn't hurt Nokia further.
Google has come out with a statement which blames R.R. Donnelley, the financial printer, for the leak of their earnings statement earlier this morning. The document was not due to be published until trading had closed for the day. In fact, the leaked copy said "PENDING LARRY QUOTE" at the top, showing that it was not a final report.
Google's stock has suffered significant declines due to the early leak and Google has ordered trading to be halted for its stock. The Q3 results are not spectacular, but not terrible either. The earnings call, which is scheduled for 1:30 PM PT should bring context to these numbers. It's somewhat likely Google's stock will recover when trading resumes.
Earlier this morning R.R. Donnelley, the financial printer, informed us that they had filed our draft 8K earnings statement without authorization. We have ceased trading on NASDAQ while we work to finalize the document. Once it's finalized we will release our earnings, resume trading on NASDAQ and hold our earnings call as normal at 1:30 PM PT.
It's around that time again when companies report their third quarter earnings. Google is one of the earlier ones out of the gate and actually announced their earnings a few hours earlier than expected this morning. And, unfortunately, they were below expectations and the stock price has been decreasing.
Results fell short of the estimated earnings of $10.65 per share. Instead, Google only managed to pull in $9.03, which is a pretty big decrease (greater than 10 percent). Revenues were also lower than expected, though not by as much. They raked in $14.10 billion, down from estimates of $14.70 billion.
Stock prices have declined by 9 percent on the news of these lower-than-expected earnings.
What could ultimately turn into the best form of punishment for losers of lawsuits, Apple is forced to run ads in the UK stating that Samsung did not copy the iPad design. This comes after they lost the original court battle and a subsequent appeal. At the time, the judge ruled that they weren't as "cool" as the iPad.
The judge in the original court battle made the original ruling that a notice would have to be placed upon Apple's website for one month, along with adverts in the Daily Mail, Financial Times, T3 Magazine and other publications to "correct the damaging impression" that Samsung was a copycat.
The appeals court decided not to overturn this part of the original ruling. "The acknowledgment must come from the horse's mouth," they said. "Nothing short of that will be sure to do the job completely." Of course, Samsung has to be happy with the ruling. Not only were they found to be not infringing, Apple has to publicly humiliate themselves.
"We continue to believe that Apple was not the first to design a tablet with a rectangular shape and rounded corners and that the origins of Apple's registered design features can be found in numerous examples of prior art. Should Apple continue to make excessive legal claims in other countries based on such generic designs, innovation in the industry could be harmed and consumer choice unduly limited."