CDOs could be Wall Street's next bogeyman
427512
After escaping a rising tide of subprime defaults earlier this year, leading U.S. investment banks and brokerages face an opaque offshoot of those risky mortgages.
652617
Lower sales, bigger losses, and a sneaky-looking accounting change mean investors should watch their wallets.
172615
(InfoWorld) - The specter of moderate global IT growth continues to hang over vendors' financial news, which this week includes IBM's stock buyback, distributorÂ CDW's plan to go private, andÂ layoff news from Motorola. These moves are examples of how tech companies are dealing with global IT growth that most analysts say will be moderate -- somewhere in the 6 percent to 7 percent range. That's not a bad growth rate for a mature industry but nowhere near the double-digit growth rates that IT saw in the late 1990s. In this climate, organic sales alone are often not enough to achieve the kind of growth that inspires investors and instills confidence in volume buyers. The types of moves announced this week often provide temporary excitement but leave questions about long-term consequences. IBM announced Tuesday it completed part of its previously announced stock buyback program, purchasing 118.8 million shares for $105.18 per share. That equals about $12.5 billion. IBM shares closed the day of the announcement at $105.91, up by $0.73. One reason investors like this sort of news is that with fewer outstanding shares on the market, companies find it easier to report robust per share growth. The long-term question, though, is whether companies would be better off spending money on product development, equipment, acquisitions, or other investments. IBM is considered an R&D leader, so in this case, the stock purchase was not criticized. Another way of dealing with the pressure of having to show steady growth quarter after quarter is to simply get out of the public stock market altogether. CDW's announcement this week that it entered into a pact to be acquired by private-equity investment firm Madison Dearborn PartnersÂ for $7.3 billion is one such move. With the announcement, on Tuesday, CDW followed in the footsteps of similar moves to go private by companies, such as electronic payments companyÂ First DataÂ and customer information management software developerÂ Acxiom. The advantage of going private is that it's easier to focus on long-term strategy when company managers have to deal with a small cadre of investors. But new owners sometimes strip company assets and sell them off or enact drastic cost cutting measures. To assuage customers (and employees) John Edwardson, CDW chairman and CEO, said in a conference call Wednesday that he didn't expect layoffs and that CDW management would stick around. CDW shares jumped to $83.11 on the day of the announcement, up from $75.56 the day earlier. Cost cuts are another way of dealing with a tight market and falling profits. On Wednesday, Motorola said it will lay off 4,000 workers, expanding previous plans for layoffs. The company, which lost money last quarter, said the latest move would save $600 million annually. While investors often applaud cost control measures, staff reductions ultimately do nothing for the central issue facing tech companies: product development and marketing. Addressing this issue Wednesday in an investors meeting, CEO Ed Zander said the company willÂ increase profits by developing an array of multimedia mobile devices rather than rely on single blockbuster products like its Razr phones. Investors took a "show-me" stance. Company shares lost ground on the day of the announcements. Dell fared better after it announced, late Thursday, thatÂ it will cut its 78,800-strong workforce by 10 percent. Within 30 minutes of the announcement, made as part of its quarterly report, Dell shares jumped in after-hours trading by $1.63. Dell profits have slipped over the past year, and it is still embroiled in an accounting inquiry, but investors have applauded cost-cutting moves by Dell over the last few months, especially because they have been accompanied by complementary plans to break with tradition and start selling through retail.ADVERTISEMENTIBM Information On Demand 2006Industrial Industry Leaders, please join us at IBM's premier information management global event, IBM Information On Demand 2006, October 15-20, Anaheim, CA. More IBM business and technical solutions content in one place than ever before! Select from  over 800 sessions. Register today!
645815
Wall Street is being spooked by the wrong fear. The ''I'' word is scarier
642292
Don't get lost in Wall Street's endless tally of buy/sell/hold.
585434
Even great companies can fall if Wall Street's expectations are too high.
124380
Searching for a signal amid the noise of analyst upgrades and downgrades.
176578
Some of the biggest names on Wall Street sold securities that they â apparently â barely understood themselves.
1624
A Fool peers in through Wall Street's out door.
233413
Wall Street would love to put the subprime mess behind it. Optimistic? You bet.
346015
Banks that produce complex and illiquid derivative products that have been at the heart of the credit squeeze might be forced to provide more information about their products on public stock exchanges.
68323
It is easy to dismiss JÃ©rÃ´me Kerviel, the rogue trader at SociÃ©tÃ© GÃ©nÃ©rale, as a fluke. So here is a sobering thought for Wall Street: There may be a bit of Mr. Kerviel in all of us.
163638
One reason Wall Street is poised to turn in a solid performance in 2006 may surprise you.
9154
Wall Street places its own interests above yours. Why play by its rules?
308306
Sarbanes-Oxley is a powerful tool for the SEC. It could also be very helpful for corporate raiders.
89471
Wall Street's right, but for the wrong reason.
540894
The real leaders and laggards may surprise you.