Cisco Systems Inc. (NASDAQ: CSCO) and Juniper Networks Inc. (NYSE:JNPR) said on Thursday that some of their products contain the "Heartbleed" bug, according to the Wall Street Journal.
The bad news is that this means hackers could possibly capture user names, passwords and other sensitive information as it moves across corporate networks, home networks and the Internet
According to the Wall Street Journal, Cisco said the security flaw affects routers, switches and firewalls used in businesses and at home. Security experts say ridding business systems of this bug can be more difficult than removing it from home computers because businesses are less likely to check and update the status of their network equipment.
This is the latest news from Cisco since it released its fourth-quarter results Feb. 21. Although they beat consensus estimates with earnings coming in at 47 cents a share compared with analysts’ estimates or 46 cents, the company’s poor showing in emerging markets is considered an Achilles’ heel for the networking giant’s future revenue growth, according to some industry experts.
Net Earnings and Gross Margins Dropping
Another disturbing trend brought to light in Cisco’s financials is the fact that it’s fourth-quarter net earnings dropped by 7% along with its gross margins, declining 19% as a result of lagging sales.
Still, of the 25 analysts covering Cisco, 16 recommend a "strong buy," 1 recommends a "buy," 7 recommend a "hold" and 1 recommends a "sell."
CSCO’s share value closed at $24.21 on Apr. 11, down 34 cents, from its close of $24.55 the previous day, on volume of 47,254,044 shares.
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Sirius XM Holding Inc.’s Senior Notes Upgraded
In other news, Sirius XM Holdings Inc. (NASDAQ: SIRI) stock volume continued to soar Apr. 11, with 89,953,672 changing hands, substantially higher than its three-month average volume of 66,759,999 shares.
This surge in volume could be a result of anticipating Sirius’ 2014 financial and operating results, which are going to be released on Thurs., Apr. 24, 2014. Plus, on Apr. 11, Sirius announced that the ratings on the 5.25% Senior Notes due 2022 issued by its subsidiary, Sirius XM Radio Inc., have been upgraded to investment grade by both Standard & Poor's Ratings Services and Moody's Investors Service.
"The upgrade of the ratings on the Notes to investment grade has the effect of eliminating many of the financial covenants contained in these Notes," said Sirius’ Chief Financial Officer, David Frear. "Most importantly, the limitation on restricted payments contained in the indenture governing the Notes is no longer applicable and these Notes no longer constrain our share buyback activity," added Frear.
Shares Trending Downward
The New York-based satellite radio company’s share value has been trending downward along with the recent tech malaise. Rumors are flying that its financials will be flat and concerns about Sirius facing competition in the Satellite radio market from Apple and others has had an eroding effect on its stock value.
On Apr. 11, SIRI’s share price closed at $3.16, up 6 cents from its closing price of $3.10 the previous day on volume of 66.9 million shares. Just a month about SIRI’s share value was $3.47 a share.
Still, the company has come a long, long way from the time its share price crashed at 5 cents in February of 2009.
Sirius’ strong recovery from its low point was evident in its fourth-quarter and full-year 2013 earnings reported on Feb. 4, 2014.
The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.
Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.
Potential Lawsuits Not Hurting SIRI
Despite a myriad of law-firm of Sirius XM for potential stockholder claims as a result of the satellite-radio investigations company’s proposed acquisition by Liberty Media Corp., its stock price is holding its own.
On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.
Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.
That’s because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It’s done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company’s anchor. Moreover, having new cars equipped with XM receivers has also boosted the company’s popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.
King Digital Entertainment’s Stock Continues to Lose Value
Since it debut on Wall Street, King Digital Entertainment Plc’s (NYSE: KING) share value has yet to equal its $22.50 IPO price since it went public a little over a week ago.
On Apr. 11, the stock continued to lose value, with KING closing at $17.53, down 70 cents from its close of $18.23 the previous day, on volume of 1,598,127 shares.
The chairman and CEO of King Digital Entertainment lost $230 million as a result of the company's weak performance in its first day of public trading, according to a Wealth-X estimate.
Still Early In the Game
Scrambling for reasons to explain the poor showing, some analysts say King’s IPO is weak because the company is a "one-trick pony," meaning it has no other monster gaming hits to back up Candy Crush when it eventually loses its popularity. However, such early critiques may be unfair and premature. Let’s remember that even such giants as Facebook (NASDAQ:FB) had a rocky start when they first came out of the gate.
Plus, there are more than 180 “game IPs” in King’s Digital library. Candy Crush has proved to be the company's money-maker with 97 million daily active users, according to the IPO prospectus. Candy Crush accounts for 78 percent of King's sales. But King's other popular games include Farm Heroes Saga and Bubble Witch Saga, each of which has fewer than 20 million daily users.
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