Friday, March 27, 2009

I B M OR ABCDEF as long as it means getting paid$

Good summary of Tech industry/Investors and IBM SUN deal whether to the altar or not
Bnet complete article
http://industry.bnet.com/technology/10001120/ready-for-the-ma-gold-rush-but-will-it-be-fools-gold/

Tinyurl for you Twitters
http://tinyurl.com/d4v424


Summary:

I assume M and A = Marketing and Advertising

The importance of an IBM-Sun alliance cannot be overstated. “This would be an important transaction, and it would get a lot of notice and will be a discussion in every board room,” says Howard Lanser, an investment banker at Robert W. Baird. His firm has been predicting that two industries, technology and healthcare, would see an uptick in M&A activity.
“Technology is always going to be in demand particularly in downtimes when gaining efficiencies while losing headcount will be critical,” Lanser says. “Overall, the market has been looking for leaders. When you see large transactions, it’s a very good sign to the market that there are corporations that believe in their long-term prospects.” There are already companies like Cisco that are continuing their strategic acquisition activities.
As importantly, executives at other tech corporations that have been pulling in and not strategically investing get worried that they might find themselves competitive outsmarted. In that sort of situation, they tend to react by looking to acquire companies themselves as a rushed defensive move.
Unfortunately, that is just the atmosphere that drives hysteria, both in panicked moves on the part of buyers and desperate trolling for buyers by small or larger financially unstable companies. Walter Zweifler of Zweifler Financial Research has been getting call after call from small technology companies that are hungry to be bought. These companies often haven’t built up the equity or cash position to continue in a troubled market.“They’re desperate,” he says. “This will start the stampede of every Tom, Dick, and Harry start-up guy that wants to find somebody who’s got the cash to pay for them. In addition, all the mezzanine finances for these companies are going to say, ‘When I went into this, I was told it would be a two, three, or four year thing.’ They all want to cash out: Give me my cash. I’m scared and don’t want to wait [for the bigger money], and besides which, you probably don’t need me right now.”

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