Archive for March, 2007

Acer considering buying, milking Gateway moocow

Tuesday, March 20th, 2007
Taiwanese computer maker Acer is prowling for acquisitions like a hungry lion and may be stalking embattled US computer maker Gateway. Last week, Acer CEO J.T. Wang told the Wall Street Journal that Acer is “looking at some candidates which we want to pick up.” Although he declined to name potential targets, he did say that an Acer team has had “certain discussions” with one company.

Analysts at ThinkEquity Partners, an investment banking and research firm, have fingered Gateway as the company referred to by Wang.

The last few years have been tumultuous—to say the least—for Gateway, which has seen its direct-to-consumer sales model collapse completely, resulting in the closure of its Gateway Country retail stores and the layoffs of thousands of employees. It subsequently began backing away from its heavy investment in consumer electronics while trying to carve out a retail presence at big-box retailers like Best Buy.

Since the closures, the company has made a number of moves in an attempt to increase its market share. The most significant of those moves was its purchase of budget PC maker eMachines in 2005. Gateway has also tried to be all things to all people, offering a budget $599 Media Center PC and pricey gaming rigs with overclocked Core 2 Duo or Core 2 Extreme processors.

As of the fourth quarter of 2006, Gateway was still the number-three PC maker in the US in terms of market share, but posted negative year-over-year growth of 1.1 percent. Its rather lackluster performance has fueled speculation that the company was ripe for a takeover. Indeed, in August 2006, eMachines founder Lap Shun Hui tried to buy Gateway’s retail division for $450 million in an attempt to shore up his recently-acquired Packard Bell brand. While Gateway spurned Hui’s advances, former Gateway CEO Edward Coleman was not willing to completely dismiss the buyout rumors.

Gateway has also been shaken by accusations that two former executives committed fraud and violated SEC record-keeping laws, with a jury ruling against former CFO John J. Todd and former controller Robert D. Manza earlier this month. The company is currently being run by an interim CEO and appears to be lacking direction. Last month, it announced plans to lay off more workers and slash up to $25 million from its operating expenses.

Acer management has said that its goal is to pass Lenovo and move into the number three worldwide market share position. As of the end of 2006, Acer trailed Lenovo by 0.3 percentage points. An acquisition of Gateway would go a long way to boost its retail presence in the US and would probably be enough to vault it past Lenovo. The financials make sense: Gateway has an enterprise value (market cap plus net debt) of $775 million and Acer has $1.1 billion in cash on hand and almost zero debt, making a cash or cash-plus-stock offer a distinct possibility.

Neither company would comment on the rumors, but Wall Street apparently likes the idea—Gateway shares jumped over 8 percent on Monday.

Spammer alert

Monday, March 5th, 2007

Hello everyone,

I need to make a personal announcement to ALL customers and users. We have had a massive influx of spammers joining our forum, and getting past our security verification. It is obvious to me that they are human, as a spam bot wouldn’t be able to read a verification image, unless it was generated by code. They all seem to be Russian, and post porn links. You MUST NOT click on ANY of them, they try to download a codec pack on your computer, which is actually very nasty spyware (i know, i tried it on my test machine last night)

I’m trying my best to delete them on joining, but if you DO see this kind of activity, PM me or email me immediately. DO NOT CLICK ANY LINKS IN POSTS THESE THINGS MAKE!! I can not be held responsible for damage because of these morons!