It's all noise so the funds who got lured into the shares can get back out with less losses, but at the end of the day it's just another pump-n-dump Wall St. game to take advantage of the gullible retail investors who are foolish enough to buy the shares at these levels.
There is absolutely no way the company is going to be bought or divest in a major way as the valuation is in no way worthwhile, that is why those few activists and equity firms who have taken a look have repeatedly walked away. And if any major divesting occurred the remainder would sink like a rock valuation-wise, so the short answer is nobody is going to buy this sinking Titanic and there will be no major divesting, at least not without further injuring shareholders. Instead what is going to happen is some short-term smoke screens and then more of the same. The Board hired a banking firm to protect themselves while the continue down the path of Symantec 4.5 It will be a long, bumpy journey that still won't end well,
Just as I was spot on warning of the hyping sham of last year, and how it would end, rest assured the above will next prove to be correct.
The below from recent articles. Seriously, this is so obviously a pump-and-dump setup by insiders and funds trying to unload shares that anybody who enters at these levels deserves what they get. Some of the breakup noise and targets are entirely laughable. The only question in the near term is what kind of stunt the Board is going to pull to try and stem the otherwise unavoidable down-leg as earnings approaches. Should be entertaining, everything playing out exactly as I indicated following the big drop after CEO departure. Classic temporary bounce before the next blood letting.
Some private equity firms have approached Symantec in recent weeks to discuss deal possibilities, but the sources said there are no serious conversations going on. They cautioned that it was too early to tell if those conversations will even get any traction.
It was also not clear whether any activist had built up a stake in the company. Sources said at least two major activist investors had decided against building up positions in the company because they thought there were limited profits to be had from it.
Absolutely correct, this recent charade and press is a complete smoke-screen to let the big institutions and insiders unload their shares. They need fools to sell to, such as new longs on this board. The company will not be sold, far too expensive at the current levels and any sizable divesting will only make a mess of the final results. Targeted divesting with the proceeds used for M&A and then more hard decisions on cost-cutting and execution, which will take much time. Meanwhile, the company will be loosing share and falling behind the product & technology curve faster than they can innovate or purchase. SO in the end, the shares remain in the down channel and take a serious bath when the market adjusts this year.
If you are already in the shares in the mid teens then the wise strategy is to HOLD. But anybody else should steer as afar away from the shares as possible.
Shares are topped out near term, stock now strongly established in the downtrending channel, averages still coming down and any near-term rally is over. This small blip upward was entirely normal and predictable after such a recent drop. The shares are floating on speculation and hype, it won't hold up in the end. It would not be surprising to see some desperate magic tricks around the time of earnings to try and stem further decline, but once the dust settles the shares will almost surely be headed back downward to the $18 range before making a decision on where to head from there. Just as the smart money warned naive investors that the shares were being gamed last year and were going back to the teens, even when it sounded absurd, it in fact did so. And now, rest assured the shares will be heading back to a re-test of the $18 range at a minimum. A larger breakdown is still very possible, especially once the market decides to retract.
Symantec aside, it would be a wise expenditure of 2 minutes to pull up a chart of the Nasdaq and look at it on a historic timeline. A three year old child could see things are headed toward a near repeat of the dot-bomb bubble. Only fools would be going long at this time. While there MIGHT be some upside left, the downside potential is significantly greater.
Classic manipulation today again from one of the primary offenders - TheStreet. The article was clearly pre-loaded and ready to release in a pathetic attempt to bolster shares and trick investors into going long. How can you tell this? Simple. Look at the time of release (around 11:00am EST) as it used the near-low for the day as the discussion point. After panicking about the shares declining on more bad litigation news in the morning they released the next hype mechanism article in the queue to try and reverse the drop. Remember, they are one of the primary offenders who hyped this stock and never stopped even as it was way, way out of any realistic realm of FMV.
Utterly amazing no matter how many times they are warned, and even after the huge drop that was PREDICTED by others on this board for a while now, there are still fools falling for allegations of low valuation and breakups.
Exactly, many of the opinions and comments in that article are laughable. No breakup of any major upside is going to occur. They will probably try and divest a bit and then make an even further mess of the company. Real disappointed with Dan Ives' comments. He follows the sectors and has been burned repeatedly by Symantec, and this time around he was rightfully cautious. However, now even he is hyping with entirely unrealistic projections of company value. The company is worth less now than it was 18 months ago when detailed analysis was done and everybody walked away because the FMV was priced around $22 or so BEFORE $1-$2 costs that would be incurred. And believe when I say that if somebody like Silver Lake gets involved for a private equity shot, shareholders will definitely get reamed. The proposition just isn't viable any more, the Titanic has simply taken on too much water, ALL parts of the business are doing poorly and so inter-tanlged at this point there's no hope of separation without killing the patient or causing the remaining pieces to be largely worthless from a RORisk perspective.
Agreed, no telling where the bottom is but the top is definitely capped. The is going to be no break-up, if it was gong to happen it would have years ago. Investors need to realize there has already been a detailed analysis and consideration given to that notion and the FMV was in the $22 range MINUS overhead costs of $1-$2 per share. The company is in even worse condition now that it was when that analysis was done in terms of internal and external influences. So any notion of a breakup, or a least one that yields any kind of upside worth risking at this point is just plain crazy. Pure hype and baloney. There is a lot CYA going on right now because a LOT of institutional investors got burned buying at $22 and upward.
Agree to an extent. I think a tension was probably in place from the beginning. From what I've heard, there were conflicting opinions about the company direction and strategy when Bennett was still interim CEO. I suspect when Bennett finally stumbled there were people on the Board just waiting to pounce. So I don't think Bennett's ouster was directed at him as much as it was a disagreement of direction and strategy from the onset. Problem is, the company is now a mess. Anybody arguing to the contrary is an utter fool. The company is worth less now on a forward-looking basis than it was when Salem was ousted. Too much additional market share erosion, PC implosion, changing security landscape and now internal chaos introduced as well. So the same detailed diligence that was done a few years ago that indicated the price for a sell-off or break-up wasn't worthwhile is going to be even less so today. And in fact the shares are now right near that point already.
For the 100th time (at least), there is no greater ignorance than those who cite Symantec's P/E or other basic valuation metrics in claiming the stock is undervalued. P/E and FMV are related to a variety of factors, a major one of which is GROWTH and the ability to MAINTAIN it. Symantec has failed horribly in that regard and just on that metric alone the shares are now already at FMV, creeping toward being over priced again.
Anyone who has paid attention to the history of this company knows that those who have stepped in to buy and ignorantly cited P/E have gotten burned in the end, over and over again. Just like the many millions of investors who are now burned after having bought on hype-train all during last year a levels the shares had no business whatsoever residing.
Investors should be careful not to get lured on rumors of any activists or quick-fixes for Symantec. The shares are already at, or over, FMV and there is no fast resolution or magic solution to the many risks and challenges ahead. No credible investor, activist or otherwise, would get near the shares at the current levels. The shares are no bargain and carry way too much uncertainty, risk and challenges ahead for the company.
Just sharing more analyst commentary, this from a Fool article:
[...the company may face "another multi-year period of upheaval, management turnover and strategic uncertainty," according to MKM Partners' Israel Hernandez.]
Typical bounce, almost guaranteed not to last. There's a key down-channel in play since it came off the peaks and the shares have now broken through the bottom of it no less. So at this point we have to wait for confirmation but just guessing at the set-up in play it appears far more likely the stock will establish a range between $18 and $19 (and some change). Unless there is some sort of stellar earnings or major news, or the broader market starts rocketing even higher then it would be unlikely to see the shares much higher in the near or mid term.
As was entirely predicted, and always predictable, today some analyst crawls out from under a rock and starts bloviating about a divestiture. The interesting part of the report is that it basically admits there is very little chance of a breakup and only a few small pieces that might make sense divesting, but then goes on to say those pieces would then need to be used for M&A or buyback. That is the same failed strategy of the Salem era! And once again, the foolish sheep follow right into the dead cat bounce.
Once this temporary retracement completes, there will be another leg down. Could be days, weeks or months, but back down it will head until finally it settles down into a new trading range. Likely using the obvious MA's as top or bottom range resistance or support, we'll have to wait and see.
This is purely a desperate hyping and CYA maneuver by a firm (among many) who got their behinds handed to them pushing a company that was way overpriced on hot air.
Short term bounce will be over shortly, and the next leg down begins before the shares finally settle. No chance whatsoever of a meaningful breakup, small divestitures at best and proceeds must be used for M&A which is only going to create even more internal chaos and disruption.
Investors needs to be very alert to ignore any smoke-n-mirrors regarding any notion of a breakup or private equity engaging Symantec. These are no longer options. The company is far too entangled and integrated to split apart at this point. Such formal analysis has already been done and dismissed. And with the security side completely outdated and almost non-existent in the mobile and cloud space, that part of the business would sink like a rock valuation-wise if separated from the rest of the company. Looking at the storage side, the BackupExec product has stagnated the last few years, and fell victim to a permanently damaging 2012 release debacle. This has still not been corrected, and incurred sizable damage to customer loyalty and market share. Further, there are now other backup competitors who have begun rapidly gaining ground and reputation, at a fraction of the costs of Symantec's products. Interestingly, this was brought to light during a recent investor conference and Symantec really had no concrete answer as to how they planned to fend off this major oncoming threat. NetBackup is the other main storage product, but is enterprise focused. This product is by far the one most susceptible to the oncoming Cloud threat. Yes, threat. The cloud can only exist with cloud providers, and eventually there will only be a few major cloud providers, which most customers will rely upon. Those few cloud providers are going to have massive pricing leverage on the companies they purchase infrastructure from, which means a product like NetBackup is going to have the same pressures Symantec's anti-virus faced with major OEM partner contracts.
There is no magic pill. Symantec is not going to be able to bail water fast enough to grow organically, nor can it be broken up, nor can any material pieces be sold off. The only viable option is to go back to cost cutting and acquisitions for growth, however this has been tried already under Salem and failed.
And further to your0verlord's list.... Beer and Siefert were given compensation packages that are absolutely disgustingly overpriced. MORE OF THE SAME. This company is just a vehicle for the Board and Excecutives to get rich at the expense of everybody else, and the only time they really care to react to anything is when THEIR gravy train is put at risk.
There was once a time when the notion of a break-up made all the sense in the world and was actually possibly, but that option dimmed around two CEO's ago during JT's reign. And now, after what the last two CEO's (Salem and Bennett) have done, the company is so entirely integrated in so many complex ways there would be absolutely no way to separate things in a meaningful and proper fashion without killing the patient. Just like doing more acquisitions or more layoffs will be equally damaging. There is simply no where else to go at this point, there are no more viable fixes. The company is now cornered and sinking, with internal disruption under way from the Symantec 4.0 attempt.
Bank of America downgrades Symantec just days ago, wonder how much they knew...???
"We applaud the depth and breadth of the changes Symantec has embarked on to transform itself. However, following this deep dive, we come away believing that the 5/30 plan is unlikely to succeed. Our new $18 PO is now based on a 25% probability of the plan’s success vs 50% previously given our lower level of confidence. We believe the new CFO Thomas Seifert (starting on Mar. 17) could use the context of FY14/15 as transition years to reset expectations and lay out a more realistic plan, likely during the May 29 analyst day.”
Basically, this is a way of saying "Bennett's vision was clearly way too optimistic and the company has a long, risky road ahead."
This is why the shares are going back down to a level that more accurately reflects the TRUE state of the company.
It will be interesting to see how many more downgrades surface in the days and weeks ahead....
Cramer is indirectly connected at the hip with TheStreet editorial rag, and both have been hyping the heck out of Symantec over the last 18 months - but now both have huge egg on their face. Cramer was sour on Symantec for a long, long time until he fell for Bennett's hype.