Sunday, 8 June 2014

What Our Commentators Think

Cassandra’s readers have had a lot to say since CSC’s full year results were published so we thought a summary of them would help.

: The share price is about where it was in March with an upward trend the last few weeks after a drop in value in the intervening period. At c.o.b. Friday 6th June it was $63.58. This seems to indicate the market is happy with the results. 

: More reductions in people and offshoring have been announced. Yet again CSC is announcing more cost and people reductions after reporting that is business rebuild is on track. Has the company lost the ability to forecast its business properly? How many more cost reductions programmes and staff reductions are yet to be announced?

: These people reductions seem to be in chaos across the globe as staff report confusion and lack of information as well as lack of consistency. Perhaps this is because HR itself has been through so many changes of leadership that no one is actually leading this sensitive task.
Late editorial addition on 19th June. We see a comment that an HR VP is suing CSC. Also some readers may recall this post from 2011 in which another HR VP goes missing under mysterious circumstances. Does explain why; according to employees, HR in many areas seems to be losing its grip?

: Sales continue to trend down ward with only a few crumbs of business coming CSC's way via tie-ins with the Big Boys.

: The Washington Business press has featured articles about issues within the company and its people management practises. Read more here 

: One commentator says that CSC is like IBM as shown in an article from Forbes Magazine. We can only but agree as the reported view of Cassandra these past few years is that company is hollowing itself out, asset stripping, and using all the opportunities presented by disposals and take overs to show its finances in the best light. Read more here

: The CEO of Bizcloud, Vahid Razavi is very upset with CSC as per these quotes "CSC has poached our Intellectual Property and they even filed a claim to invalidate our trademark based on meritless accusations that we are not in the cloud computing business,"
"We invite CSC BizCloud enterprise customers and partners from any geographic area, including the US, Australia, Europe and UK, and the public bodies such as NHS England, the US Federal Government and the GSA, to at least consider all options, including the genuine BizCloud offerings, before giving their next cloud computing project to CSC -- a corporation known for its unethical and questionable business practices outside and within the IT sector, including rendition flights of torture and its failed NHS contract,"
Read the full article here  and a companion article here.

: CSC’s last SEC filing was said by one commentator to be ‘as clear as mud’ and that They give so much information, repeated several times in the whole package, that it is difficult to sort the interesting from the dross. I did not see anything earth-shattering, although I could have missed something. But the way they have managed pension fund obligations is smart.’
Read the SEC filing here.
Why the obscure manner in which figures are reported, summed up and used in different ways? Has the CSC something to hide?

Our conclusion is that the financial institutions who hold CSC stock, and by our count two of them own about 35%, are only interested in ramping up the share price and getting a quick profit before handing this hollowed shell on to some dummies who do not know better.

Some might say this is a cynical thing to say. But just look at the behaviour of the banking fraternity who got the tax payer to bail out their hollowed shells when the global financial crisis hit. And by the way they are at it again via private companies that hold toxic debt bolstered by loans from the banks who do not have to ask too many questions of a private business or report the details to financial authorities.

As Warren Buffet says “Only when the tide goes out do you discover who's been swimming naked.”