At any rate, promoting Steve Ballmer to CEO just formally acknowledges what everyone has already known. Ballmer has been running Microsoft's nuts-and-bolts business for quite awhile. Besides, 25 years as CEO is a long time for anyone, especially a company founder.
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Ferguson -- who isn't shy about touting his own resume -- founded Vermeer Technologies, which created the software that became Microsoft's FrontPage tool. High St@kes tells the story of Vermeer and its eventual sale to Microsoft for $130 million.
The author comes across as a jerk whose arrogance about his knowledge of technology is especially astonishing when you consider he's not an engineer but a policy wonk. He can't restrain his pedantic side, and the book suffers from dull, mostly non-insightful musings about the technology industry in general and Microsoft's monopoly in particular.
On the other hand, you need a big chip on your shoulder to be a successful writer, because you have to believe your words are worth publicizing. To his credit, Ferguson acknowledges his abrasive traits. And besides, you don't have to like the guy to enjoy his acidic comments about almost everyone mentioned in the book.
He offers a rare, close view of the venture capital industry, though I wonder how much of what he says still applies; when Vermeer started in 1994, VCs were in the driver's seat. Now there's so much money flowing into the VC market that would-be Internet companies have a lot more choices, much to the distress of old-time venture capitalists.
Still, Ferguson's experiences are worth reading for the personality, if nothing else.
You're seeing one today with Hadco (NYSE: HDC), a giant of manufacturing circuit boards and system assemblies. Yesterday Advest analyst Thomas A. Moro and his associate Scot C. Robertson downgraded Hadco to "buy" from a "strong buy" rating because of weakness in the company's value-added manufacturing. The "value add" comes mainly from design services, testing and materials management, areas that many contract manufacturers are trying to branch into, because growth in the traditional circuit board business isn't what it used to be.
A talk with Hadco management convinced Moro to cut his first quarter earnings estimate to 53 cents per share from 58 cents, and full year forecast to $2.68 from $2.81 per share. "Given our negative view of the entire contract manufacturing space, we believe this news will have an adverse effect on the stock," Moro writes.
And it did. Hadco shares dropped 2 3/16 yesterday, adding to a slump that began at the start of the year.
But maybe Thomas Weisel Partners analyst Jim Savage and associate Eric Gomberg saved the day, or at least convinced investors that Hadco had reached the bottom. This morning Savage upgraded Hadco to "strong buy" from a "buy" rating and the stock responded with a rebound, up 4 5/16 to 41.
Savage agrees that Hadco's value-added manufacturing needs improvement. Like Moro, he lowered his first quarter estimates to 53 cents from 58 cents per share.
On the other hand, Savage believes Hadco's problems are behind them, especially now that Y2K has come and gone. The Thomas Weisel analyst expects improved growth now. He also sees Hadco as cheap, since the stock trades at 10 times estimated calendar 2000 earnings.
Runnfeldt sees SierraCities earnings per share quintupling this year, to 55 cents per share from an estimated 11 cents per share in 1999. Loan originations should nearly double, he says.
"This rapid growth may cause some to regurgitate an old banking adage that the most rapid loan growth is only achieved by the most reckless lenders," Runnfeldt and Kaump write. "We believe the Internet threatens to turn that saying on its head, as the most reckless lenders of the future may be those left to serve less sophisticated borrowers, while the improved pricing, selection, and service provided by online lenders attract higher-end demographic customer groups."
More than 90 percent of SierraCities loans carry personal guarantees. And more impressive, just 0.79 percent of SierraCities total balances were delinquent, compared to 1.15 percent for the average commercial bank in the third quarter of last year. 22GO>