Congress managed to muster the two thirds majority in both houses of Congress needed to overturn President Clinton’s veto of the Private Securities Litigation Reform Act of 1995 and the act has now passed into law despite the President’s misgivings: Silicon Graphics Inc’s profit and sales warning is being seen as an early test of the effect of the new law as under the old law, plaintiffs’ attorneys have routinely sued high-tech companies within hours of announcements of disappointing quarters, alleging that management failed to warn investors soon enough; under the new law, lawyers have to point to specific facts that allegedly prove companies intended to defraud investors; William Kelly, Silicon Graphics’s general counsel, told the Wall Street Journal that plaintiffs’ lawyers would have had difficulty justifying a suit even before the new law, because the company has repeatedly warned in its regulatory filings that quarterly results couldn’t be predicted – but that kind of defence seldom deterred frivolous, time-wasting and costly lawsuits under the old law.
The President and the Congress will drive America into recession if they don’t settle their petty wrangling and set a budget (didn’t Bill Clinton campaign on a platform to end gridlock in Washington?): integrator BTG Inc warns that the continuing shutdown of several major agencies of the US Federal Government will have an impact on the company’s third quarter earnings.
And the Information Technology Association of America lobby in Arlington, Virginia advises the President and Congress of the potentially devastating effect of a continued government shutdown on private sector companies: it points out that government employees are not the only workers being harmed by the shutdown, and that many dedicated, hard working individuals in the private sector have been laid off or will be laid off in the weeks that follow should this unprecedented impasse continue and that even those that are eventually recalled likely won’t be paid anything for the time they were idle.
Philips Electronics NV is to buy a 51% stake in Holland Advertising Nieuwe Media BV, a publisher of cable television news services and electronic consumer services: it also acquires a similar interest in Publiware BV, a software firm now owned by HANM, which specialises in automating electronic publishers.
Looking for another Netscape Communications Corp? Take a look at Xylan Inc, the New York Times suggests, without making any promises: the Calabasas, California company’s board has been meeting this week to choose an investment banker for an initial public offering, and the attraction of Xylan is its local network switch, which greatly increases the data carrying capacity of the network without the need for the network to be reinstalled; the company shipped its first product in January last year and by the end of the summer had scored $14m in sales, and looked to close its 1995 books on sales of around $30m; Digital Equipment Corp, Hitachi Ltd and Alcatel NV have all signed to take Xylan’s switches OEM, and Alcatel sealed a deal to take $125m of product over three years by paying $10m for a 10% stake in Xylan; only concern is that if there is so much excitement surrounding the flotation this early, the shares will end up being very full priced.
EMC Corp, Hopkinton, Massachusetts reckons it has now moved ahead of IBM Corp in one of IBM’s key markets, and that it is now the world’s top seller of disk storage systems for mainframe computers – it believes it shipped 40% of the world’s mainframe disk storage capacity versus IBM’s 37%, in terms of number of Tb shipped, based on statistics from International Data Corp; when EMC entered the disk storage market in 1990, it had a 0.2% share compared to IBM’s 76%, and for the first six months of last year IBM and EMC ran neck-in-neck, each shipping about 250Tb in a total 675Tb market.
Chelmsford, Massachusetts modem maker Telebit Corp says that the discussions regarding possible acquisition of Telebit by a third party, announced early last month, have evolved into a mutual intent to explore the licensing of Telebit’s Modem ISDN Channel Aggregation technology, which Telebit plans to make available to key participants in the remote access industry.
Samsung Electronics Co is not going to surrender over the failure to renegotiate its patent licence pact with Texas Instruments Inc, and it has responded to the suit by filing its own complaint against Texas.
General Motors Corp and its Electronic Data Systems Corp unit claim to be the world’s largest Lotus Development Corp Notes site, with more than 100,000 licensed copies.
A San Francisco homosexual rights group has decided it’s time for some Kraut-bashing after the German federal prosecutor succeeded in persuading CompuServe Inc to block worldwide access to over 200 sexually-explicit Internet discussion groups: it is calling for a boycott of two German-brewed beers to protest at censorship of the Internet; members of the group planned to start the boycott by pouring bottles of Beck’s and St Pauli Girl beer down the sewer in front of the Goethe Institute in San Francisco.
Meantime CompuServe Inc says it hopes to reopen access to 200 sexually oriented Internet fora to all but its German customers by the end of the month – it is working on a software fix that will prevent Germans from accessing the newsgroups; Munich’s senior public prosecutor, Manfred Wick, denied that he ordered a ban or gave CompuServe any list as part of his investigation of child pornography, although he acknowledged that police did ask CompuServe to scrutinise a list in December.
It’s most important to keep the fireside market happy these days, so IBM Corp is using the new 150MHz and 166MHz Intel Corp Pentiums in its Aptiva home computers, touting the multimedia performance when the chips are combined with TheatreSound and Total Image Video features of the machine; the Aptivas now also come with six-speed CD-ROM, four-speed CD changer that stores up to four disks, and disk capacity of up to 2Gb; they are out now at prices starting from $3,000.
Tandy Corp says that December sales at stores open a year ago rose a mere 2% on December 1994, but adds that it could see an earnings per share increase in 1995 of 7% to 10% on the $2.91 for calendar 1994.
Sprint Corp is offering small businesses one full year of free calls on Fridays to customers who sign up for specific long-distance calling plans: the Fridays Free programme includes outbound domestic and international long distance, cellular long distance where available, faxes, receiving toll-free calls and calling card calls; Fridays Free is available to new small business customers that sign up for at least a $50 per month plan, with maximum free usage of $1,000 per month, Sprint said; the programme is valid for 12 months; the effect of the plan on the firm’s annual $12,600m volume was not immediately known.
So many doomsayers and conspiracy theorists have something portentous to say about what Microsoft Corp will do to the Internet and vice versa that what I want to know, Barron’s quotes Bill Gates saying, is whether we go bankrupt before or after we take over the ‘Net.
