Commodore Stock
8 messages in this thread
FMR Corp., disclosed late yesterday that they had purchased 7.38% of
Commodore International stock. The disclosure is a requiremnt of law. FMR
manages a number of mutual funds, the Fidelity group of funds, and the
purchases were made for the funds, and for investment purposes. Fidelity is
a highly visible, highly respected group of funds. Peter Lynch, who manages
one of the funds, recently wrote a book entitled "One Up on Wall Street."
Since mutual funds rarely, if ever, engage in takeovers themselves, this
purchase should not be construed in a way as a precursor for a takeover
attempt.
Dave, my understanding is Fidelity generally buys a basket of "sector'"
stocks with a 1-2 year 100% appreciation objective. Any indication of
whether they singled out CBM? Or are they the ones who pushed Apple up to
$42 and change today? Rob.
There are different fidelity funds, probably about 10 or more, each managed
by different people. The 7.3% stake is most probably a result of different
portfolio managers reaching the same opinion. Id say anyone who buys 2+
million shares of a given stock CERTAINLY singled it out.
Dave, you're right. FMR does not do takeovers. They do, however,
instantly sell their stock to any adequately financed raider, and they
almost always vote for that adequately financed raider if it gets to a
proxy fight designed to eliminate anti-takeover measures controlled by the
board.
OTOH, Lynch is one of the savyest players on Wall Street, and I would
suspect that FMR's purchase of a sizable amount of Commodore stock is a
very good sign vis a vis the outlook for CBM's financial health.
Further, if everything I've heard regarding Gould is correct, we might all
benefit if he were thrown out by a raider (many of these guys are very
sharp, and do know how to run businesses well).
FMR does not do takeovers, and in order to do a takeover, that assumes
someone is interested in doing a takeover. Neither Apple nor COMPAQ have
been taken over, nor were they taken over when they were much smaller and
much more vulnerable. I dont think that the PC industry, with whats going
on, is very fertile ground right now. Too much is up in the air to INSURE
that a takeover, with all its costs, would work out.
Regarding Lynch, he is only ONE fund manager (a highly visible one), and
there is no way to know how much of Commodore's stock he is holding, that
info should be made public by early June tho. I dont suspect that Lynch is
responisble for all of the buying, although he may hold some stock.
Regarding Irving Gould, I have alot of respect for him, and I think he's
taken somewhat of an unjustified bashing. In the past year, Commodore has
successfully dealt with a number of tough problems, and although a number
more still remain, Commodore has come a long way. Turning a company around
is not an instant process, it takes time, money, and persistence. Lets see
what happens in the next year or so; I think we all will be pleased.
I agree that CBM has made a lot of progress. I qualified my comment by saying
that, based on what I have heard, Gould might be a problem. Whenever the
conversation gets around to their really screwy advertising and PR efforts
(something I do for a living), Gould gets blamed. When the revolving door in
management gets talked about, Gould gets blamed. It may very well be unfair,
but that's what I'm hearing.
I also agree that Lynch doesn't do all the buying for FMR (no single person
could, they manage so many billions of dollars). However, in a takeover/proxy
fight situation, I assure you HE makes the ultimate voting decision. (My
current job is specifically doing the communications in M&A contests.)
Ray, Peter Lynch heads up the Fidelity Magellan fund. He really has nothing
to do with any of the others. Fidelity International has a large block of
Commodore, so basically we can already tell that he himself was not
responsible for the full 7.3% position.
Perhaps the "screwy" advertising and PR has something to do with the
"revolving door". In that sense, maybe Gould is a very good businessman
because he doesnt tolerate it, but instead, seeks out people who will do
the job.
Could be. Not having any kind of inside view, I can't personally make a
judgement on Gould. However, constant shuffling of top management is
generally not a good sign at any company. It too often means that the top
guy is either poor at hiring, or poor at letting the people he hires do
their jobs.