Mahesh Sudula

Level 16
Verified
Malware Tester
  • Symantec, which has been plagued by management turnover and deteriorating earnings, is in talks to be acquired by Broadcom, according to Bloomberg.
  • The stock jumped after hours but prior to the report had lost about a third of its value in two years.
  • Greg Clark stepped down as CEO in May.
Symantec shares surged more than 20% in extended trading on Tuesday after Bloomberg reported that Broadcom is in advanced talks to acquire the security software vendor.

Symantec has been plagued in recent years by management turmoil and a flailing core business as cloud security companies have taken share of the enterprise market and a newer crop of companies have emerged to protect mobile devices.

Greg Clark was the most recent CEO departure in May. Clark said he wanted to spend more time with his aging father, but departed after the company missed revenue estimates for the fourth quarter. Symantec director Richard Hill, formerly CEO of Novellus Systems, was named interim president and CEO, effective immediately, according to a statement at the time.

Clark became CEO in 2016, replacing Michael Brown.

Shares of Symantec climbed to $27.35 after the Bloomberg story. The stock closed regular trading at $22.10, and had lost about a third of its value in the past two years.

Chipmaker Broadcom has been on an acquisition spree, buying CA Technologies for $19 billion last year. But its effort to purchase Qualcomm was blocked by the Trump administration.
 

Mahesh Sudula

Level 16
Verified
Malware Tester
Reasons is as follows (as per my view) :
Symantec consumer wide versions are costlier, and had never cared to voice the consumer opinion.
Though flagged with many vulnerabilities ( by Fortinet Labs). seems to take litreally several months to spun the vulnerability.
Doesn't seem to met with the taste and needs as per time for both consumer and enterprise might be "BLACKLISTED" them.
Heavy bankrupt, finanicial crisis might have plagged off symantec to reach this verdict. Acquistions might have played to some extent.
 

Burrito

Level 18
Verified
Although many don't recognize it... Norton AV has consistently been one of the top three AVs for over a decade. Kaspersky and Bitdefender round out the top three.

Its combination of detection ability, lightness, lack of software programming issues, lack of issues with privacy concerns.... has made it for me the best legacy AV of the last decade.

Unfortunately, the purchase by Broadcom may not bode well for Symantec. Broadcom is looking to squeeze the asset -- that is -- figure out ways to increase revenue and profit from the consumer and enterprise business divisions. That usually does not include an emphasis on making the product better.

I was in a Symantec brief where they went over what the Symantec Horizon3 lab is working on. I believe Symantec would have continued its detection dominance based on the ML, AI and other work they are doing. They are even looking at Deep Fake audio and video as they already have been used as a part of cyber attacks. That whole lab could just disappear as a part of cost-cutting.


Symantec shares soar? because of hope to better products with new owner?
Not at all. It's because stock shareholders (on a designated date) will get a premium on the shares they own (a windfall) if the purchase goes through.



Is this likely to improve or worsen the problem of Symantec acquiring fine products like K9 and PC Tools just to kill them?
It can be assumed that Symantec will have fewer acquisition dollars to purchase other technologies/capabilities -- as Symantec will no longer be The Company... the point of emphasis. They could now just be a profit-generating business unit.



 

Burrito

Level 18
Verified
You may be right @Burrito . It would be just another instance of venture/monopoly capitalism sucking the life out of a company.
Exactly.

Mitt Romney style vulture capitalism.

This analyst basically endorses the deal based on the vulture concept:

I see this buy as a follow-up to the CA buy because of one big thing: free cash flow.

If Wedbush and Oppenheimer are to be believed, this deal would go down valuing Symantec in the $15 billion - $20 billion range, so I'll use $17.5 billion as a starting point. Symantec has stable free cash flow around $1.2 billion, so Broadcom is looking at buying cash flow of roughly 7% per year (free-cash-flow divided by purchase price). Broadcom then takes that cash to buy back its own shares and pay a dividend to shareholders.

Obviously, it can use it to pay down debt as well and any debt below 7% essentially creates "free" money on the difference between the rate on the debt and 7%. We know it isn't truly free. There's risk involved in this deal, but Symantec would only equal about 10% of Broadcom's current market cap, so it has a reasonable limit.

In terms of upside, Symantec's consumer business, about half its revenue, is also stable despite facing heightened competition. I suspect the cost-cutting consolidation that we'd see on SG&A would be enough to maintain or even improve that stability. But it is the struggling enterprise business that could benefit from the merger.

Broadcom could fit the software (networking, cloud, and endpoint security) aspects of Symantec into its recent CA purchase for cross-selling and upselling. Add in some cost cuts here through the elimination of redundancy and that's where you'll find the upside potential.
The parts I bolded are euphemisms for... bleeding a companies assets and cash flow for short time gain..... cut business units that don't contribute to short term gain.... layoffs... salary and benefit cuts...

And the short term gains are all designed to benefit a relatively tiny number of people who hold the majority of the stock and stock options..

This is an aspect of our capitalist model that is sick and demented.

For anybody interested in the Mitt Romney demented capitalism reference, see this:
 

Lightning_Brian

Level 13
Verified
Content Creator
FCC better stop this merger/acquisition... Two large companies like this shouldn't be united. Broadcom makes lots of chips and Symantec holds a solid portion of security in the globe as being one of the main players in security. All eyes will be on this. A chip manufacture and one of the largest security companies in the globe united doesn't bold well... Especially given that Broadcom's chips is found in so many devices.

Can I see some benefit to the merger/acquisition - sure. Overall, this doesn't bold well - in my humble opinion. Personally I say this isn't good at all...

@Burrito I agree with you bud.

~Brian
 

Slyguy

Level 42
Verified
IMO this is basically the start of the end for Symantec. Remember, they lost their code a few months back, including their ML algorithms - allegedly.

Much of the data around the firms that had full compromises has been suppressed because they are the big US Firms. Symantec CEO resigned almost immediately after this breach came to the forefront, yet they denied it ever happened.

 

Lightning_Brian

Level 13
Verified
Content Creator
IMO this is basically the start of the end for Symantec. Remember, they lost their code a few months back, including their ML algorithms - allegedly.

Much of the data around the firms that had full compromises has been suppressed because they are the big US Firms. Symantec CEO resigned almost immediately after this breach came to the forefront, yet they denied it ever happened.

Hence why I'm looking to leave Norton for my main AV. Sad.......very sad... May be time for me to rip the band-aid off and just jump with the new AV.
 

Burrito

Level 18
Verified
Hence why I'm looking to leave Norton for my main AV. Sad.......very sad... May be time for me to rip the band-aid off and just jump with the new AV.
While it does not look good... don't leave yet. There is little to replace it that is as good wholistically.

But.... if the sale goes through, it's time to start watching for the signs of degradation.



Remember, they lost their code a few months back, including their ML algorithms - allegedly.
While they DID lie about it at first, turns out, the thieves got nothing -- which has even been verified by the thieves.

Symantec did confirm to The Guardian that one of its networks was compromised and data was indeed stolen. That network, however, was not connected to the rest of Symantec's operation. It was an isolated lab in Australia that was used for demonstration purposes.
Then there's the data. According to Symantec no sensitive files were taken. In fact a good chunk of what hackers accessed was bogus data used in testing and demos. Exposed "customer lists" were so old that some of the Symantec clients named in them no longer exist. Some were never Symantec customers at all. Hacked email messages were merely "dummies."

No current customer information was compromised, nor was any of the source code of Symantec's apps. That's reassuring, both for Symantec customers and the company itself.

Symantec is still treating the situation seriously, as it should. Unauthorized access is unauthorized access, and Symantec can't afford to appear soft on trespassers regardless of where they were snooping.
 

blackice

Level 9
Verified
IMO this is basically the start of the end for Symantec. Remember, they lost their code a few months back, including their ML algorithms - allegedly.

Much of the data around the firms that had full compromises has been suppressed because they are the big US Firms. Symantec CEO resigned almost immediately after this breach came to the forefront, yet they denied it ever happened.

AdvIntel admitted that they didn’t actually have solid proof for Symantec losing code in that sale. Just the claim from the hackers with no evidence.

Antivirus Makers Confirm—and Deny—Getting Breached by Hackers Looking to Sell Stolen Data [Updated]
 
Every company can break no matter how big the company is. and it doenst matter if its from america or not. it just needs one big scandal and a company can be doomed.
that's false, you know how many people and corporations use Symantec? It's as if you told me that Google or Amazon is going to die, computer giants.
 
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So google and amazon can not fall? Nothing is forever. Life is change and change is life. These companys maybe not there in 20 years, nobody knows.
If google or Amazon fall, the internet is over, and that will not happen, the same happens with a giant Symantec, what if it can happen is to buy another company and change the name, that is more realistic, than say that a company is going to die because the CEO resigns. Do not forget that the US controls 90% of the internet. If you tell me that a company dies because the CEO is worth it, Amd would not exist.
 
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If google or Amazon fall, the internet is over, and that will not happen, the same happens with a giant Symantec, what if it can happen is to buy another company and change the name, that is more realistic, than say that a company is going to die because the CEO resigns. Do not forget that the US controls 90% of the internet. If you tell me that a company dies because the CEO is worth it, Amd would not exist.
If google or amazon would fall, the internet is not over, not at all. And if so, than it should tell you that there is something realy big wrong there, because the internet belongs to the people, not some company that milks the **** out of it like always on everything in this capitalist world. Anyway, u can think what you want. But its a simple fact that every company can fall, no matter how big the company is. Have a good day.