Facebook’s Ambition Collides With a Harsh Market

The following is an excerpt from an article in 

The New York Times
Tuesday, August 21, 2012

Facebook’s Ambition Collides With a Harsh Market

By SOMINI SENGUPTA

MENLO PARK, Calif. — Inside Facebook’s headquarters, a red-and-white poster affixed to a wall asks bluntly: “What Could Go Wrong?”

Below, in black ink, someone has scrawled in tiny letters: “Everything.”

The poster, one of several displayed across this sprawling campus, is part of the company’s risk-taking start-up culture, as is the fact that management has not pulled down the defaced copy. But as the company loses its luster on Wall Street, this exchange on the wall points to the improbable turn that Facebook’s fairy tale has taken.

Once hailed as the most valuable technology company to hit Wall Street, Facebook is now worth just over half what it was three months ago, with shares closing at $20.01 Monday. Wall Street analysts are openly wondering whether its chief executive, Mark Zuckerberg, has the business skills to deliver on his promises.

Facebook’s troubles began in earnest with an exceptionally ambitious initial public offering. Even the grown-ups that Mr. Zuckerberg, 28, chose to run the business side of the company — Sheryl Sandberg, the chief operations officer, and David Ebersman, the chief financial officer — seem not to have been skilled enough to stave off that disaster. Nor were the bankers who handled the deal, including Goldman Sachs and Morgan Stanley.

“The company is suffering from a classic disease — it went public at too high a value,” said Dan Alpert, a partner with Westwood Capital, an investment bank that did not participate in the Facebook offering.

The challenge for Facebook executives, Mr. Alpert said, is to persuade the market that it is not a fad and that its managers have a blueprint for making money.

In what passes for good news for Facebook these days, Morningstar, the investment research firm, said shares were almost cheap enough to consider buying, but warned that the price had not yet hit bottom.

That twist of fate, in many ways, reflects the tension between two moneymaking cultures in America: Silicon Valley and Wall Street. They are as symbiotic as they are dismissive of each other. They are equally focused on making money, but their approaches are different.

For more, visit www.nytimes.com.

Facebook’s Stock Has Suffered, but Some Investors See Long-Term Value

The following is an excerpt from an article in 

The New York Times
Monday, August 13, 2012

Facebook’s Stock Has Suffered, but Some Investors See Long-Term Value

By SOMINI SENGUPTA

SAN FRANCISCO — The Facebook spring is over. The dog days of August have taken hold.

In May, when investors tripped over themselves to buy a piece of Facebook, not even the skeptics predicted what has happened. Three months after the offering, shares have lost more than 40 percent of their value, closing at just under $21.81 on Friday, from $38 on May 18.

The stock began to dip immediately after its debut on the public markets, and at first technical errors with the offering were blamed. But these problems did not account for the stock’s subsequent plunge, analysts and shareholders say. That decline, they say, can be traced to several factors, among them the sheer size and price of the initial offering, early exits by major investors and slowing growth.

Not least, the stock seems to have been jinxed by Facebook’s own fairy tale.

“The underwriters (and the media) did a great job of hyping Facebook leading up to the I.P.O., and the sell-side (including me) did a great job of hyping it after,” Michael Pachter with Wedbush Securities, an equity research firm, wrote in an e-mail.

Still, some investors remain bullish. Facebook is profitable, it keeps its nearly one billion users glued to their screens longer than any other Internet site, and it is aggressively experimenting with new ways to drum up advertising — its main source of revenue. Just this month, for instance, it began offering application developers a way to focus ads, and sought to diversify revenue by opening its site in Britain to online gambling.

For more, visit www.nytimes.com.

Nuance Prices $700 Million Offering of 5.375% Senior Notes

Press release:

BURLINGTON, Mass., – August 9, 2012 – Nuance Communications, Inc., (NASDAQ: NUAN) today announced the pricing of an offering of $700.0 million aggregate principal amount of its 5.375% senior notes due 2020 (the "Notes"). The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. persons pursuant to Regulation S under the Securities Act. The Notes will be fully and unconditionally guaranteed on a senior, unsecured basis by substantially all of Nuance’s domestic subsidiaries. The sale of the Notes is expected to close on August 14, 2012, subject to the satisfaction of customary closing conditions. Interest on the Notes will accrue at a rate of 5.375% per year, and will be payable in cash semi-annually in arrears, beginning on February 15, 2013.

The Notes will mature on August 15, 2020, unless earlier repurchased or redeemed. Holders may require Nuance to repurchase their Notes upon the occurrence of certain change of control events at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any.

The aggregate net proceeds to Nuance from the offering of the Notes will be approximately $687.6 million. Nuance intends to use the net proceeds for acquisitions and general corporate purposes, including working capital and capital expenditures.

This announcement is neither an offer to sell nor a solicitation to buy any of the foregoing securities, nor shall there be any sale of the securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The Notes will not be registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.

Nuance Communications, Inc. (NASDAQ: NUAN) is a leading provider of voice and language solutions for businesses and consumers around the world. Its technologies, applications and services make the user experience more compelling by transforming the way people interact with devices and systems. Every day, millions of users and thousands of businesses experience Nuance’s proven applications. For more information, please visit www.nuance.com.