From the Wall Street Journal's Heard on the Street column:
Siemens Chief Needs Less Drama
Siemens's Planned Job Cuts Are Nothing to Get Excited About, and New CEO Kaeser Still Has Much to Prove at the Drama-Prone Industrials Giant.
When it comes to drama, Siemens has given even the juiciest of soap operas a run for their money in recent years.And from Wall Street Cheat Sheet:
From 2008's bribery scandal to a string of missed profit forecasts, the cliff-hanger came in July when Chief Executive Peter Löscher was ousted in a boardroom tussle. But news Sunday that the German conglomerate plans to have cut 15,000 jobs by September 2014, 4% of its global work force, isn't as dramatic as it seems. The job cuts, quantified for the first time, are part of a two-year plan announced last November, which is expected to save €6.3 billion ($8.52 billion) in costs. New Chief Executive Joe Kaeser still has much to prove on the Siemens set.
Siemens's shares have risen 9% since the former chief financial officer's appointment on July 31 on hopes he will bring a greater focus on costs and more modest risk-taking. But he first needs to unpick his predecessor's poorly timed strategy. Mr. Löscher outlined plans in March 2011 to expand sales by almost a third to €100 billion within a few years. That was just as the global economy was stalling. Given Siemens added more than 30,000 to its head count as part of that strategy for sales that never materialized, more cuts may still be necessary, estimates J.P. Morgan Cazenove....MORE
Will a Restructuring Help Siemens?
...Siemens announced it will cut 7,500 jobs in the next fiscal year as the company undergoes restructuring to increase profitability and catch up to rival General Electric. CEO Joe Kaeser has said Siemens will cut 15,000 positions in total as a part of the reorganization, Bloomberg reports. Kaeser is working to regain investor confidence in the company after losses caused by his predecessor Peter Loescher, who lost his position after an announcement earlier this summer that Siemens would not reach its goal to make a profit equal to 12 percent of sales next year....
...Taking a look at the implied volatility (red) and implied volatility skew levels of Siemens options may help determine if investors are bullish, neutral, or bearish.
Implied Volatility (IV)
|
30-Day IV Percentile
|
90-Day IV Percentile
|
|
| Siemens Options |
23.06%
|
90%
|
89%
|
What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts as compared to the last 30 and 90 trading days.
Put IV Skew
|
Call IV Skew
|
|
| October Options |
Flat
|
Average
|
| November Options |
Flat
|
Average
|
As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months....MORE*When this news hit on Thursday July 25 SI got interesting again:
This Can't be Good: "Siemens Warns on Profit Margin" (SI)
The Siemens family own about 6% of the stock and may be ready to combine with the German institutional shareholders to shake things up in the CEO's office....Followed by "Siemens Board to Meet This Weekend to Discuss Leadership (SI)" on Friday:
...The U.S. traded ADR's recovered a bit today, up $2.46 to $106.59 after tanking $6.05 on Thursday....And "Siemens to replace CEO Peter Löscher (SI)" on Sunday.
"'In leaving, Siemens CEO seeks to take down chairman' and Analysts See Upside (SI)" on Monday:
The U.S. traded ADR's are down 1.21% at $105.29.And on Wednesday the 31st, "Mustache-less Kaeser expected to restore calm at Siemens (SI)":
The U.S.-traded ADR's are up 3.6% at $110.36....
...That concludes our short term (5 day) interest in German mustaches. Still beard-curious.
Sometimes half the trick is just paying attention.
