Global Reset

I really am honored to be working for a company whose CEO I have so much respect for. I found this recent interview with Jack Gifford which made me think I should post on it. All of Jack Gifford’s public comments on acquisitions, stock option expensing, outsourcing, and the future of US Tech have made me very proud to work for him.

One comment in particular in this interview reminded me of a discussion I had during the Whistler trip. I mentioned how incredibly stupid it seemed to me that Blockbuster was attempting to make a hostile bid for Hollywood video. Justin seemed to not agree with me, but Justin is getting his MBA… so he probably enjoys making a business case for just about anything. :) I didn’t do a very good job of defending my point at the time. Actually, I still think my point, as it was made, was a fine point, but it probably would have been taken much better by the group if I said it without the noticeable slurring of my speech due to the excessive consumption of alcohol. The main point I made was that Blockbuster is already everywhere… Buying out the guy who is only a few places doesn’t seem to add anything to their current chances for success. Sure they can convert some Hollywood video stores into Blockbuster stores and close down the ones they don’t need, but I really feel like it’s a waste of money and it reeks of desperation. They, basically, aren’t going to get what they pay for. I like the way Jack Gifford put it when he was asked about Maxim’s acquisition of Dallas Semiconductor:

You have gone on the record saying that acquisitions only tend to dilute the intellectual and financial value of a company, and that anything worth having will be overpriced, while anything affordable will be next to worthless. But given your success assimilating Dallas Semiconductor into the fold, are you tempted to try the same trick again? J G.:The short answer - no! I really wouldn’t want to put myself or the company through that again. It took a lot of hard work to make the acquisition a success, and this was more down to our pure tenacity than anything else. Dallas took about 10% of our revenue to buy, and now it is actually contributing 20% towards our revenue, so it has clearly been a good move for us. Nevertheless I will return to my old axiom - everything that you can afford to get isn’t worth it, and anything that has real value is going to be hugely overpriced. Mediocrity buys mediocrity. But if we paid slightly over the odds for Dallas, that nothing compared to what Texas Instruments paid for Burr Brown. I don’t think they can ever hope to gain back what they have had to invest into it.