Mark McQueen co-hosts BNN

January 26th, 2012

For those of you who missed it today at 2pm, Mark McQueen was back as a regular guest co-host on the Business News Network’s “Business Day” with Kim Parlee. They discussed the perspective on the importance of routing and exporting Canadian oil after the Keystone XL delay.  They also gained insight into Potashcorp’s Q4 earnings with Bill Doyle, CEO, Potash Corp of Saskatchewan.  The first segment can be found here.

LFC

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Rigor In Mortis?

January 24th, 2012

That’s the plan? Do a better job of executing while promoting the same ops guy that led the team to a one year delay in the BB10?

I’m trying to imagine what the share price would have done had the following been announced by Research In Motion (RIM:TSX, RIMM:Q) yesterday:

- stay the course on the BBX and Playbook, with Mike and Jim still at the helm as Co-CEOs
- hire a new Chief Marketing Officer
- appoint Barb Stymiest as Board Chair
- recruit Prem Watsa to join the Board of Directors

The idea of appointing an independent Chair was a fait d’accompli following last June’s AGM, so no surprise there. Mr. Watsa is well known to the Canadian investment community, and with a 2.5% RIM stake acquired by Fairfax last Fall in the $22-40 share range, he has every reason to be a prime candidate to join the Board; Mr. Watsa’s familiarity with RIM Co-founder Mike Lazaridis likely dates to their membership in the University of Waterloo Chancellors’ club (hat tip RMQ).

The need for a new Chief Marketing Officer was so obvious that Kim Parlee and I even discussed it weeks ago on BNN as an immediate need; throwing sponsorship dollars at TNT so that Marv Albert will mumble “sponsored by Blackberry” during a NBA halftime show isn’t going to get us up off the U.S. marketshare mat.

Americans know about the BlackBerry; what they need to understand is why they should buy one. Watch how Apple markets the iPad; it might be as simple as showing people what the 9900 can do and they’ll have reason to get one (just as I did last August).

Had the aforementioned “plan” been announced on Monday morning, the stock might have sold off 10% as a result. But, despite the addition of a new CEO to the above list (who one has to assume had been part of most major operational decisions over the past 2 or 3 years), the stock is down about the same amount it would’ve been had Jim and Mike not succumbed to what I assume was the Board’s push for a break from the past. What a message Mr. Market is sending the Board: nothing was accomplished.

There was a school of thought that the time had come for a sea change, and the RIM authour himself (pere Rod McQueen) suggested some candidates in a blog last December: proposing John Wetmore, (a RIM director since 2007 and former CEO of IBM Canada) to be CEO and Patrick Spence, (who joined as a co-op student and is now managing director in London) as COO.

I, for one, have long since gotten comfortable with the idea that the guys that brought us to these P/E valuation depths might be able to get us out; or, at least, we might have to rely on that possibility. Rare as it is for the tailspin to be arrested in tech land, I’d back Mike and Jim to try to complete the task…at least if the alternative is merely the second in command taking on a bigger title while Mike and Jim continue to come to work each day.

To Jim’s credit, he made it clear in media interviews yesterday that the management move had nothing to do with the fact that the stock is down 90% from the highs, and that shareholders were demanding change. Mike and Douig Fregin may be the co-founders of RIM, but Jim (who arrived 8 years after inception and isn’t a co-founder, as the DTM often forgets) gives the company its backbone. Yesterday’s pugilistic approach to the topic was proof; or else evidence of something wild-eyed crazy-like.

Backbone’s what we need right now.

The Board may be lacking it, as demonstrated by a seven month process that crushed the stock just the same. And Mike’s role and heart will always be in the lab, regardless of his title. If the 12 month plan is really just “wait and see — we’ll prove everyone wrong”, all we have is our delightfully hard ass, tin ear, multi-focused, micro-managing Jimmy to ensure that the future we’re about to intercept doesn’t look like Palm’s recent past.

MRM
(disclosure – I own RIM)

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Mark McQueen co-hosts BNN

January 19th, 2012

For those of you who missed it this afternoon at 2pm, Mark McQueen was back as a regular guest co-host on the Business News Network’s “Business Day” with Andrew Bell and Kim Parlee. On today’s show, Alex Pourbaix, President, energy & oil pipelines at TransCanada discussed what’s next for Keystone as well as Lisa Raitt, Canadian Minister of Labour, discussed what lies ahead for labour relations in 2012.  The first segment can be found here.

LFC

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Make your 2012 fee budget — bid CSU

January 17th, 2012

It slipped by me at the time, but Constellation Software (CSU:TSX) took itself off the market two weeks ago, having announced last April that it was considering “strategic alternatives”. With two large shareholders in OMERS and Birch Hill Equity Partners (on behalf of TD Capital Canadian PE Partners), most assumed that a sale would come to pass last summer.

At the time of the “for sale” press release, with the stock at $65/share, the market cap was around $1.385 billion; before any takeover premium. That’s a hefty M&A bite for most software or service firms, leaving only big players such as INFOR as viable bidders. I’m sure that Merrill and BMO did a good job on the sell-side, but with a tough debt market limiting PE options and an apparently unwilling management team, the outcome might not have been much of a surprise. At least with the benefit of hindsight. Just because it has been a great investment post-IPO doesn’t guarantee a successful sale transaction, unusual as that is to say.

Now that the stock is over $84, thanks in part to a new 5% dividend that pushed the quote up despite being pulled off the market, perhaps there’s still a deal to be done at CSU. The two original backers still own 40.3%, or just over 7 million shares. What better time for a bought deal? It worked for Macdonald Dettwiler and CAI years ago, with improved liquidity rewarding existing and future shareholders. The stock is up almost exactly 30% from the time of the April “alternatives” announcement, which is kinda what a traditional M&A premium looks like to most of us.

So, if you run the tech practice at a local i-bank, dust of your bought deal letter and fire it off. Get the control block folks a bid north of $80 and they might just hit it. At 4% commish on almost $600 million of jointly-held stock, you’re staring at a $24 million fee pie. Keep 35% for yourself, and the 2012 revenue budget is made…and it’s not even the end of January.

Now that MKS is gone, Joe and Jill Retail need a new tech dividend name. And the dividend-oriented mutual fund managers will like the fact that it’s got a decent market cap to it, with stable cash flow. But with just 7,300 shares/day trading hands on average, how can any PM ever build a useful position?

Go get ‘em.

MRM

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Attn KO: Latour bargain on the horizon

January 16th, 2012

If you care about the world of fine wines, you’ll want to get yourself over to London next week for the Sotheby’s auction on January 25th. Featuring all of the “Finest and Rarest Bordeaux”, it is the perfect place for our rock star fund manager Kevin O’Leary to add to the collection in his kitchen wine fridge. Sotheby’s is offering up two different lots of the ‘90, each lot representing a case of 1990 Latour for an estimated $9,000 – $11,500. That’s as little as $750 per bottle.

Since he recently estimated his own 1990 version of the Latour to be “trading for $5,000″ per bottle (see prior post “O’Leary fact watch: a 1990 Latour trades for $5,000?” Oct 17-11), KO will definitely want to get his hands on a case or two of the stuff — particularly if he can get it for a delightful $4,250 off each bottle!

Would be a licence to print money, wouldn’t it?

Or, since he paid a reported $300 for his bottle, perhaps Mr. O’Leary might want to enter his precious bottle of Latour for sale in the Sotheby’s auction…before the price drops even further. The 1990 Latour went for ~US$833 each at a New York auction last Fall. Now it might settle for C$750 (before buyers’ premium). Such a bargain, but not if the price is soft. Does that make one a buyer or a seller?

Decisions, decisions.

MRM
(disclosure – this post, like all blogs, is an Opinion Piece)

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