Posts by Aaron Pressman

  • Yahoo shares bounce back as spinoff tax fears recede

    Aaron Pressman at Yahoo Finance 1 day ago

    Shares of Yahoo (YHOO) bounced back after a steep late day sell-off on Tuesday, as investors debated whether tax concerns might delay a planned spin-off of the company's stake in Chinese e-commerce giant Alibaba (BABA). Reports that the Internal Revenue Service was halting approvals for future tax-free spin-offs amid a review of its rules sent Yahoo shares into a rapid tumble on Tuesday. The stock dropped as low as $39.12 before closing at $40.98, down 8% on the day. The shares made up some of the loss on Wednesday, gaining 3% to $42.25 in morning trading. Yahoo is the parent company of Yahoo Finance. The stock plunge came on reports from Washington, D.C., of remarks by Isaac Zimbalist, senior technician reviewer at the IRS Office of Associate Chief Counsel. The IRS lawyer said the agency was concerned that some companies might be abusing the rules for tax-free spin-offs to avoid paying capital gains taxes. While the IRS reviews the rules, new requests for private letter rulings to approve tax-free spin-offs would be delayed, he said, but requests already filed would move forward, at least for now. Yahoo, which paid more than 40% in capital gains taxes when it sold shares of Alibaba in the past, has made plans to avoid the tax hit for its remaining 15% stake in the Chinese company. Instead, CEO Marissa Mayer said in January that Yahoo would spin off its remaining stake in Alibaba, valued at almost $34 billion, along with its small business unit in a tax-free distribution to shareholders. The deal would be completed in the fourth quarter, Yahoo said. [Get the Latest Market Data and News with the Yahoo Finance App] “The issue comes down to whether we’ve dropped a hot-dog stand or a lemonade stand into a business that is primarily publicly traded stocks, cash and other wonderful things that I call appreciated property,” Zimbalist said, according to a Bloomberg news report of his talk. After Zimbalist spoke, Yahoo said it had already filed its request for a private letter ruling from the IRS and didn't expect the agency to delay its plans. "Yahoo understands that the IRS’s statement is not specific to Yahoo’s planned Q4 2015 spin-off of its remaining stake in Alibaba Group and Yahoo Small Business, reflects no change in applicable law, and does not affect previously filed ruling requests," the company said in a blog post. "Yahoo continues to work toward completing the planned spin-off in Q4 2015." Before Zimbalist made his comments, Mayer spoke about the Alibaba spin-off at a JP Morgan investor conference in Boston Tuesday morning, assuring investors that it was on track for the fourth quarter. "The decision has been made, but there's a lot of work to do to make sure that that entity is ready and to really make sure that we achieve the tax efficiencies that we want. So things are on track, but there are a lot of people at Yahoo who are working very hard," Mayer said. Yahoo's take fit the narrative of Wall Street analysts who are bullish on the Internet company.

  • Samsung gains ground in patent wars, but Apple still ahead

    Aaron Pressman at Yahoo Finance 2 days ago

    It was the most memorable moment in an otherwise pretty dull patent fight -- a judge held up an Apple (AAPL) iPad and a Samsung (005930.KS) Tab and asked one of Samsung's lawyers if she could tell the difference from 10 feet away. "Not at this distance, your honor," she replied. But on Monday, an appeals court said the courtroom theatrics were irrelevant. The U.S. Court of Appeals for the Federal Circuit found no protection in U.S. patent law for the overall appearance of a tablet or smartphone as long as the shape and look improved the device's functionality, by making it easier to grip, for example. Apple also lost a similar claim for the shape and arrangement of icons on the iPhone's screen. That move overturned Apple's so-called trade dress patents win, a big piece of its 2012 $1 billion jury verdict victory over Samsung (later knocked down to $930 million). At the same time, the appeals court upheld other parts of Apple's victory, including patents covering more specific features, such as the color and arrangement of the elements on the front face of the iPhone and its bezel. Now, barring a settlement, the case goes back to the lower court to re-decide the damages. Samsung says the trade dress patents accounted for $382 million, so damages should fall to $548 million. Apple argues the full amount should still stand. The case is separate from another Apple patent win in court last year that resulted in a $120 million damage ruling against Samsung. Who's winning the patent war? So who ultimately won the patent wars initiated by Apple's late CEO Steve Jobs five years ago against his iPhone competitors?

  • Wall Street momentum adds to year of bitcoin legitimacy

    Aaron Pressman at Yahoo Finance 2 days ago

    A top secret bitcoin startup called 21 Inc. finally disclosed its business plan this week and the strategy points to the many uses of the virtual digital currency beyond the obvious. With $116 million of backing from top tier venture capital firms and former Treasury Secretary Lawrence Summers signed on as a strategic advisor, 21's emergence is also further proof that bitcoin has rapidly moved from fodder for weirdo science fiction to the realm of real business tools. The New York Stock Exchange's announcement on Tuesday of its own bitcoin price index, one that could be used as the basis for all manner of derivative contracts, is yet another signal of bitcoin's usefulness to mainstream businesses. The well-funded startup says it has created a dedicated computer chip that can be added to smartphones, tablets or almost any other type of computing device to allow for the processing of bitcoin transactions and the creation of new bitcoins. The feature could also be incorporated into chips made by other companies to add the same functionality. Currently, that's the realm of high-powered (and high-priced) computer rigs known as bitcoin miners. Every time a bitcoin is traded from one person to another, the transaction is recorded in a digital logbook known as the blockchain. Mining computers crunch the encryption equations needed to verify each transaction and verify the listings in the blockchain. New bitcoins, each really just a unique string of digits, are generated via the same process, providing an economic incentive for the miners to verify all of the transactions. Adding the bitcoin mining capability to any consumer's portable computing device opens an intriguing array of new functionality. Because bitcoin mining generates new bitcoins, 21's chips create a small, new revenue stream for any device. That revenue could go toward subsidizing Internet access or paying for online services. It could also go to a phone manufacturer or mobile carrier. And if the idea catches on, more than a billion smartphone owners could be crunching bitcoin transaction data on the phones in their pockets as they go about their day.

  • IBM's hacking database takes off with banks, retailers

    Aaron Pressman at Yahoo Finance 7 days ago

    IBM's (IBM) new cyberthreat data sharing project has attracted more than 1,000 companies in its first month, but the private sector effort doesn't reduce the need for new laws to encourage further sharing, IBM officials said.

    IBM's X-Force Exchange lets participants anonymously share information about hacking attempts and access IBM's 20 years of accumulated data. Participants include 5 of the 10 largest global banks and six of the 10 largest retailers, IBM said. Both industries have been hard hit by hackers -- last year crooks stole data on 83 million accounts from JPMorgan Chase (JPM) and 56 million credit card accounts from Home Depot (HD). Security experts have long advised companies to share data about hacking attacks so countermeasures can be developed more quickly. But antitrust, liability and privacy concerns have hampered those efforts even as Congress is considering legislation to create a safe harbor for some data sharing.

  • Parents can spy on teens' smartphones, but should they?

    Aaron Pressman at Yahoo Finance 8 days ago

    Kids today face a host of dangers that didn't exist as prior generations came of age. Whether it's sexting, cyberbullying or overly accessible and highly inappropriate content (aka porn), kids are faced with a whole new array of potentially risky behaviors, many just a click or text away on the ubiquitous smartphone. What's a modern parent to do? Ameeta Jain, the LA mom of teenagers and co-founder of Teensafe, thinks the answer lies in technology. Competing against a host of similar apps and services, the $15-per-month Teensafe program lets parents keep tabs on their kids' smartphone activities in detail.

  • Verizon focused on future growth with AOL bid

    Aaron Pressman at Yahoo Finance 10 days ago

    Verizon (VZ) and AT&T (T) both emerged from the fading telephone business in perfect position to dominate wireless. And with growth in mobile finally slowing, both surely want to avoid their old time roles as highly regulated utilities, the "dumb pipes" of the 20th Century. But the two giants are moving in almost opposite directions as they look for the next big thing. Verizon's plan to buy AOL for $4.4 billion marks another step away from the traditional communications business and towards the kind of markets being pursued by the likes of Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL). Meanwhile, AT&T is acquiring DirecTV (DTV), a satellite television service that hasn't changed much in decades.

  • Nasdaq's bitcoin plan will provide a real test of bitcoin hype

    Aaron Pressman at Yahoo Finance 10 days ago

    Bitcoin, the virtual digital currency, has been called the future of banking, a dangerous fad and almost everything in between, but we're finally about to get some solid data to help settle the debate. On Monday, the Nasdaq (NDAQ) stock exchange said it would try using bitcoin's globally distributed network for verifying virtual currency transactions as a logbook for tracking private company stock deals. Nasdaq is best known for running the $9.5 trillion exchange listing public companies like Apple (AAPL) and Google (GOOGL). But two years ago it started a market for trading in shares and options of private companies, such as music app Shazam and messaging service Tango. Keeping records of private stock transactions has sometimes been a haphazard affair and Nasdaq wants to bring more certainty, security and speed to the trades using bitcoin's network. Until now, bitcoin's popularity has been all too dependent on the currency's often-volatile price. It was all over the news when the price of a single bitcoin topped $1,000 back in November, 2013. And there was plenty of coverage of the subsequent crash, as the price dropped more than 75% last year. Currently, each bitcoin trades for about $245. The extreme ups and downs left many people puzzled about how bitcoin could ever be used as a reliable currency.

  • Fitbit files for an IPO – complete with real profits

    Aaron Pressman at Yahoo Finance 14 days ago

    Famed venture capitalist Marc Andreessen has said that software is eating the world, but for start-ups there may still be a few opportunities in hardware.

    Fitbit, one of the leading makers of fitness-tracking wristbands, filed to go public on Thursday, planning to raise $100 million. And its financial results in recent years stand out for one significant reason. Sure, the company increased its revenue almost ten-fold in just two years, hitting $745 million last year from just $76 million in 2012. And it’s dominating its market niche, with a 68% share by dollars of the fitness tracker market, according to NPD.

    But it’s the bottom line, for a change, that drew all the attention in the Thursday IPO filing. After losing money in the early years, San Francisco-based Fitbit turned a profit of $132 million last year and $48 million alone in the first quarter of 2015. And it’s not a sort of funny profit that excludes the cost of stock compensation, acquisitions, or other kinds of expenses that tech start-ups like to overlook when they report “adjusted” net income.

    That fallback came as competitors like inexpensive Chinese smartphone maker Xiaomi announced much cheaper knock-off cameras.

  • IBM, Facebook strike big data partnership

    Aaron Pressman at Yahoo Finance 16 days ago

    As retailers increasingly turn to IBM (IBM) for data analysis to help boost their marketing efforts, IBM is turning to a leading source of information about retailers' customers for that data: Facebook (FB). It's a natural fit between two partners who don't compete directly. Under the deal announced on Wednesday, retailers and other advertising customers of Facebook, like banks or phone companies, will be able to tap data about the giant social network's users for use in IBM's "big data" analysis service. No money is changing hands between the companies, IBM says. But the joint effort should make life easier for customers of both companies by "helping clients solve real problems," says Deepak Advani, general manager of IBM's Commerce unit that offers big data analysis. The analysis could uncover, for example, that a particular promotion from a department store chain appeals to customers with certain demographic traits. The retailer could then use IBM's analysis to find Facebook users with similar traits and offer them the promotion on the social network. The combined effort is the latest move by IBM under CEO Ginni Rometty to use a partnership to fill a void in the company's offerings instead of acquiring or building in-house businesses that don't play to IBM's strengths. The most prominent example was Rometty's decision last year to partner with Apple (AAPL) and make enterprise apps for the iPad instead of selling its own line of tablets. The IBM-Facebook partnership comes as retailers are relying ever-more on analyzing customer data to inform marketing and promotional campaigns. One IBM customer, Kohl's (KSS), spent $1 billion over the past few years upgrading its analytics, e-commerce and other IT and fulfillment infrastructure. Big store chains have long kept information about what customers purchase and combined it with demographic profiles obtained from data brokers. But lately, they've also been able to tap data from smartphone apps, whether their own or from third-parties like Facebook, to collect even more information about customer habits. Data used in the partnership will be subject to the same privacy safeguards that applied when it was collected, although that may not be enough to satisfy some privacy advocates. Facebook has been criticized for its extensive collection of data about its users, as well as frequent changes to its privacy policy and privacy settings. Last year, a group of more than 25,000 users sued the company in the European Union for improperly handling their data. IBM is also offering help with securing the data, after many retailers -- including Target (TGT) and Home Depot (HD) -- have suffered breaches by hackers. "Privacy is absolutely top of mind for a lot of our clients," says Advani. "If customers start losing trust in a brand, they're going to switch."

  • Cisco appoints lifelong sales guy to replace Chambers as CEO

    Aaron Pressman at Yahoo Finance 17 days ago

    What was it Steve Jobs used to say about why tech companies decline? That’s right, it’s when the sales guys start running the company. That may explain why investors are showing so little enthusiasm over Chuck Robbins, named the new CEO of Cisco Systems (CSCO) today replacing John Chambers starting in late July. The shares are up less than 0.5% at midday. By contrast, Microsoft (MSFT) shares jumped 7% on Aug. 23, 2013, after Steve Ballmer said he would retire. While Robbins isn’t quite Steve Ballmer, the target of Jobs’ digs back in that 2011 "60 Minutes" interview, he is the enthusiastic senior vice president in charge of Cisco’s field operations, which covers the internal sales teams as well as relations with the company’s vast network of third-party sellers. The 49-year-old has spent almost two decades rising through the ranks of Cisco’s sales side without garnering much attention. After starting his career as an applications developer at a big bank in North Carolina that eventually morphed into Bank of America, it’s been sales all the way for Robbins, who joined Cisco at the end of 1997. Robbins may be most known for his all-out efforts to beat Hewlett-Packard (HPQ) at the network equipment game. “Refuse to lose” was reportedly his mantra with Cisco’s third-party resellers at a conference in 2009.  "I am your personal deals desk," he told the group. That kind of all-out effort works wonders when a company has a product line-up that beats the competition. Cisco’s current challenges may be more on the innovation and development side, however, as upstarts try to woo away its customers with cheaper solutions based on open-source software.