Cisco likes Shanda? (SNDA)
**Correction, Feb. 17** Like a lot of folks, I took the news alerts regarding Cisco's SNDA position at face value and didn't dig deeper into the filings. Ooops. That was just an amended filing, Cisco owns the same number of shares of Shanda s they did a year ago. My general opinion still holds, that I like the fact that Cisco's involved with Shanda and I think they're likely interested in SNDA because of the home EZ box business, but obviously this wasn't a change and there's no reason for it to have moved the stock. Shoddy reporting by everyone, and shoddy followup by me
Here's the original post from earlier this week that no longer makes much sense, for what it's worth:**
Like everyone else, it seems, I was quite surprised to hear this morning that Cisco (CSCO -- click to register for free RT streaming quote) had acquired a significant stake in Shanda (SNDA) -- just under 10%, according to the news.
The China Stock Blog has a link to the filing and some notes from an analyst here. The very brief AP article is here. I last wrote about Shanda a few days ago when I highlighted it as one of my worst investments this year.
I'm not sure what to make of this news. Cisco picked up a little more than half of this through Softbank, and I presume they bought the rest on the open market, probably at prices significantly above today's depressed level if they picked up all their shares last year.
But regardless of how they picked up the shares, you'd have to say that holding about $100 million in SNDA shares is significant even for a huge company like Cisco, and they must have a reason.
My best guess is that this has something to do with Cisco's push into set-top home networking devices, which was really called to our attention with their purchase of Scientific Atlanta. I'm just guessing on this connection because Shanda's EZ Box product aims to do something similar, bring an integrated entertainment experience to the home through a box that provides access to online services for music and video and internet content as well as traditional cable TV.
On the whole, I see this as quite possibly very good news -- and the market certainly agrees, having bid up Shanda this morning by nearly 10%. What makes me optimistic about the deal is that this validates, in my mind, Shanda's product and approach -- I'm hoping that Cisco would not have bought in unless they thought the EZ system had promise, and perhaps there's hope for some kind of partnership with Scientific Atlanta, Cisco and Shanda to create a really compelling home device that can jump-start the home-based entertainment and connectivity market in China (especially now that they're cracking down on internet cafes).
I could be reading too much into this, but it's nice to at least imagine that Shanda's effort may not be just tilting at windmills -- Cisco has perhaps given them a little legitimacy that they could certainly use after a very bad six months. I'm hoping we'll hear more about this when Shanda releases earnings.
Here's the original post from earlier this week that no longer makes much sense, for what it's worth:**
Like everyone else, it seems, I was quite surprised to hear this morning that Cisco (CSCO -- click to register for free RT streaming quote) had acquired a significant stake in Shanda (SNDA) -- just under 10%, according to the news.
The China Stock Blog has a link to the filing and some notes from an analyst here. The very brief AP article is here. I last wrote about Shanda a few days ago when I highlighted it as one of my worst investments this year.
I'm not sure what to make of this news. Cisco picked up a little more than half of this through Softbank, and I presume they bought the rest on the open market, probably at prices significantly above today's depressed level if they picked up all their shares last year.
But regardless of how they picked up the shares, you'd have to say that holding about $100 million in SNDA shares is significant even for a huge company like Cisco, and they must have a reason.
My best guess is that this has something to do with Cisco's push into set-top home networking devices, which was really called to our attention with their purchase of Scientific Atlanta. I'm just guessing on this connection because Shanda's EZ Box product aims to do something similar, bring an integrated entertainment experience to the home through a box that provides access to online services for music and video and internet content as well as traditional cable TV.
On the whole, I see this as quite possibly very good news -- and the market certainly agrees, having bid up Shanda this morning by nearly 10%. What makes me optimistic about the deal is that this validates, in my mind, Shanda's product and approach -- I'm hoping that Cisco would not have bought in unless they thought the EZ system had promise, and perhaps there's hope for some kind of partnership with Scientific Atlanta, Cisco and Shanda to create a really compelling home device that can jump-start the home-based entertainment and connectivity market in China (especially now that they're cracking down on internet cafes).
I could be reading too much into this, but it's nice to at least imagine that Shanda's effort may not be just tilting at windmills -- Cisco has perhaps given them a little legitimacy that they could certainly use after a very bad six months. I'm hoping we'll hear more about this when Shanda releases earnings.
Labels: SNDA
This article posted by One Guy @ 2/17/2006 09:11:00 AM 0 comments
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