Tyco International Ltd shares fell for a second day as confidence in Chief Executive Officer Dennis Kozlowski waned after he reversed plans to split the conglomerate into four.
The stock dropped US$0.85 Friday, or 4.1 percent, to US$19.90, its lowest level in about four years. It fell 20 percent yesterday after Kozlowski said his idea to split the company was a mistake.
Tyco has lost more than US$75 billion in market value this year.
"Typically, as a CEO, you're given one chance to make a mistake," said Kevin McCloskey, who helps manage US$200 billion at Federated Investors Inc, which holds 3.9 million shares of Tyco. "Maybe this is his one chance."
Tyco said that it plans to sell shares in the CIT Group finance arm to the public for about US$7.1 billion as it cut profit forecasts for the year ending in September. Some worry that a cash crunch is possible if Tyco can't separate the finance unit fast enough.
"The company faces a daunting challenge to sharply increase its liquidity during a time of increased economic uncertainty," wrote Prudential Securities Inc analyst Nicholas Heymann, who has a "hold" on Tyco. "Until this is completed, we anticipate Tyco's share price will remain under significant pressure."
The shares began falling at the beginning of the year amid questions about Tyco's accounting methods, growth strategy and breakup plan. Kozlowski unveiled his plan Jan. 22.
Kozlowski built Tyco by making more than US$64 billion in acquisitions over an eight-year period ended last year. Investor and analyst suspicion about acquisition accounting has dogged Tyco off and on for more than two years. Tyco has always denied any misleading accounting.
In January, Kozlowski said the breakup was to "unlock shareholder value." Yesterday, he apologized to shareholders and took blame for not realizing the turn in strategy would take investors by surprise.
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Advanced Micro Devices Inc (AMD) suffered its biggest stock decline in more than a month after the company unveiled new artificial intelligence (AI) chips, but did not provide hoped-for information on customers or financial performance. The stock slid 4 percent to US$164.18 on Thursday, the biggest single-day drop since Sept. 3. Shares of the company remain up 11 percent this year. AMD has emerged as the biggest contender to Nvidia Corp in the lucrative market of AI processors. The company’s latest chips would exceed some capabilities of its rival, AMD chief executive officer Lisa Su (蘇姿丰) said at an event hosted by
TECH JUGGERNAUT: TSMC shares have more than doubled since ChatGPT’s launch in late 2022, as demand for cutting-edge artificial intelligence chips remains high Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted a better-than-expected 39 percent rise in quarterly revenue, assuaging concerns that artificial intelligence (AI) hardware spending is beginning to taper off. The main chipmaker for Nvidia Corp and Apple Inc reported third-quarter sales of NT$759.69 billion (US$23.6 billion), compared with the average analyst projection of NT$748 billion. For last month alone, TSMC reported revenue jumped 39.6 percent year-on-year to NT$251.87 billion. Taiwan’s largest company is to disclose its full third-quarter earnings on Thursday next week and update its outlook. Hsinchu-based TSMC produces the cutting-edge chips needed to train AI. The company now makes more
NEXT GENERATION: The new 3-nanometer chip has 28 percent more transistors and offers up to 80 percent faster language model performance than its predecessor MediaTek Inc (聯發科) on Wednesday launched a new flagship smartphone chip, Dimensity 9400, made with Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) enhanced 3-nanometer technology, aiming to bring more artificial intelligence (AI) applications to edge devices like phones. The Dimensity 9400 is the second smartphone chip using TSMC’s second-generation 3-nanometer technology, after Apple Inc’s A18 Pro chip for the new iPhone 16 series. The new mobile chip has 28 percent more transistors, offers up to 80 percent faster large language model performance and is up to 35 percent more power-efficient than its predecessor, Dimensity 9300, MediaTek said. Chinese smartphone makers Xiaomi Corp (小米),
RSS