Thursday, July 03, 2008

Cohn & Wolfe Merges With GCI.

Cohn & Wolfe announced the merger of itself and GCI. These two big communications outfits found lots of laudable reasons to substantiate the merger. Maybe it is a good idea? But for investors who are used to a few metrics the press release missed the point.

Cohn & Wolfe is part of WPP which is approximately $10 billion plus in revenues. So what is the deal worth? What are the terms and conditions? Given that the ADR shares trade on NASDAQ there should be some adherence to Reg FD. Given that shareholders around the world like to count their money they would probably like to look at a few financial details.

Nvidia Has a Thermal Event

Nvidia (NVDA) just let investors know that the guidance they issued a short eight weeks ago no longer applies. The cold water on the face includes smaller margins and smaller sales. Ouch. The quote from the press release reads “The estimated decrease in revenue and gross margin is due to several reasons: end-market weakness around the world, the delayed ramp of a next generation MCP, and price adjustments of our GPU products to respond to competitive products.”

If that is not enough they let investors know they intend on taking a charge of $150 to $200 million because of higher failure rates than anticipated. They are not sure officially what the problem is but testing indicates a weak die/packaging material set. They are looking at their insurance policy and their broker probably does not want to answer the phone.

When it rains it pours. The question becomes was Nvidia trying too hard and pushed a supplier too far? Was the supplier perceiving pressure and started to cut corners somewhere? Or do mistakes just happen to the tune of $150 to $200 million and investors just need to live with it?

By the way they refer you to the 8k for more complete information. There is nothing more in the 8k to help you out.

Monday, June 30, 2008

China Automotive Systems Leaves Out the Numbers

China Automotive Systems (CAAS) issued a press release announcing what sounded like good news. The second paragraph reads as follows"\:

“The 2008 second quarter results were highlighted by solid performances across China Automotive Systems' business segments and strong cash flow from operations. China Automotive Systems has also renewed their contracts with all of its key customers.”

No financial statements of any description have been provided. They do not mention who the key customers are. If you know who the key customers are you will definitely develop a better insight than the average investor looking through the window. Also what are the terms and conditions? They have published who their major clients are in the past but a lot may slip between the cup and the lip.

Its just all too abbreviated.