0D BUSINESS
Jeff Gill | Business reporter
770-718-3408 | jgill@gainesvilletimes.com
The Times, Gainesville, Georgia
Tuesday, October 30, 2018
IBM’s $34B Red Hat deal a risky bid to boost cloud business
BY MICHELLE CHAPMAN
AND MATT O’BRIEN
Associated Press
IBM’s plan to buy Red Hat is
both the biggest acquisition in
IBM’s century-long history and a
risky effort to position itself as a
major player in cloud computing.
The $34 billion stock deal trans
lates to $ 190 per Red Hat share — a
63 percent premium to the closing
price Friday for the Raleigh, North
Carolina, company. Red Hat Inc.’s
stock soared about 45 percent in
trading Monday.
The path for revitalization for
IBM may be found in cloud tech
nology, a driving force behind the
blockbuster deal for Red Hat over
the weekend.
“It’s a big bet but ultimately
they’re in a situation where they
needed to make a significant
acquisition to move them poten
tially forward,” Wedbush analyst
Daniel Ives said.
Cloud computing, in which
services are delivered over the
internet from remote computers,
accounted for nearly a quarter of
IBM’s total revenue over the past
year. But the company has been
overshadowed by top cloud rivals
Amazon, Microsoft and Google in
competing to sell its internet-based
computing services to businesses.
“This is about resetting the cloud
landscape,” IBM Chairman and
CEO Virginia Rometty said Mon
day in a conference call.
The hybrid cloud — when com
panies use a mix of on-site, private
and third-party public services —
is an emerging $1 trillion opportu
nity that the companies want to be
prepared for, Rometty said.
Ives said there’s still plenty of
room for growth as financial ser
vices, retailers and industrial firms
increasingly migrate their work
loads into the cloud.
IBM’s Red Hat acquisition fol
lows Microsoft’s recently com
pleted $7.5 billion purchase of
computer coding hangout GitHub.
Both deals will allow the larger
companies to tap into a broader
community of open-source soft
ware developers.
Red Hat, founded in 1993, has
built a software platform using
the open-source Linux operating
system that’s become “one of the
key paths for enterprises in their
moves to the cloud,” Ives said.
The deal requires the approval
of Red Hat shareholders as well
as U.S. regulators. It is targeted to
close in the second half of 2019,
but Stifel’s Brad Reback said oth
ers may wish to make a counterbid
given Red Hat’s strengths in data
centers.
That prospect sent shares up
$52.88 to $169.56, close to an all-
time high. The stock of IBM, which
is headquartered in Armonk, New
York, slipped nearly 5 percent.
On a whole new plane
Photos by RICHARD DREW I Associated Press
The Red Hydrogen One smartphone, Friday, Oct. 26, in New York. The new Hydrogen
One has a holographic screen that produces 3-D visuals without needing special glasses.
Can a holographic screen help a new phone break out from the pack?
BY ANICK JESDANUN
Associated Press
NEW YORK - Most lead
ing phones offer the same
basics: Big screens, decent
battery life and good cam
eras. So when a newcomer
brings something innovative
to the party, why is it difficult
to break through a phone mar
ket dominated by Apple and
Samsung?
One such smartphone
comes out this week from Red,
a company with roots in digital
cameras for movie produc
tions. The new Hydrogen One
has a holographic screen that
produces 3-D visuals without
needing special glasses. It
is launching with two major
movies converted to this for
mat and allows users to create
and share their own videos
shot with the phone.
Red’s goals are modest —
about 16 million units a year,
based on Red’s stated target of
0.5 percent of Samsung’s sales.
But Red will need custom
ers beyond the tech elite and
camera buffs; it’ll need their
friends and friends of their
friends. It doesn’t help that the
Hydrogen One carries a hefty
$1,295 price tag.
“The Red Hydrogen One
stands little chance of upset
ting the smartphone status
quo,” said Geoff Blaber,
a research analyst at CCS
Insight.
Chipping away at Apple’s
and Samsung’s dominance is
much harder than it used to
be because phone innovation
isn’t so much about hardware
any more, Creative Strategies
analyst Carolina Milanesi said.
What matters more, she said,
is the software and artificial
intelligence behind it.
Consider Apple’s new
iPhones. Sure, the new XR
and XS models all have decent
screens, battery life and cam
eras. But Apple has also been
emphasizing such software-
based features as augmented
reality, artificial intelligence
and automation using the Siri
digital assistant. Or take Sam
sung’s Galaxy Note 9. Signa
ture features include the use of
AI to automatically fine-tune
images.
While the Hydrogen One’s
screen is different, Milanesi
said, it’s not necessarily some
thing the mass market will
gravitate to.
Red founder Jim Jannard
said his phone is about making
waves in a sea of smartphone
sameness.
“We don’t buy the same
make, model or color of car
that our next-door neighbor
has,” he said. “It’s important
to keep this industry pushing
along... and give people some
new choice. What we’ve done
is pretty nuts.”
The phone starts selling Fri
day through AT&T and Veri
zon in the U.S.
Red calls the screen technol
ogy 4V, for four view, which is
another way of saying it’s dou
bling what twin-lens 3-D cam
eras produce by adding depth
data to each image. There’s
a special material under the
screen that lets 4V photos and
video appear to the viewer in
3-D. Images that aren’t shot or
converted to this format will
look the same as they do on
any other screen. Attempts to
photograph a 4V screen will
also produce images that don’t
look any different.
Yet the 3-D wizardry indeed
works, though it’s more pro
nounced in some scenes than
others. Images of a soccer
goalie blocking a shot feels
realistic, but a waterfall at
Yosemite National Park looks
like video taken with a regu
lar camera (though leaves in
the foreground looked 3-D).
The Red phone might remind
you of holographic stickers in
which the view shifts slightly
as you tilt them.
The Warner Bros, studio
is giving customers of parent
company AT&T two free 4V
movies: the first “Harry Pot
ter” prequel, “Fantastic Beasts
and Where to Find Them,”
and Steven Spielberg’s “Ready
Player One,” which is set in a
virtual world. The studio plans
to convert about a half-dozen
other movies initially. Red will
have tools for producers to
convert existing 3-D video into
the 4V format.
The Hydrogen One also
has twin lenses in the back to
capture 4V photos and video.
Trouble is, people you share
them with will get a normal
image unless they also have a
Hydrogen One.
The phone also has a hand
ful of 4 V games.
Red’s 4V could run into the
same problems virtual reality
has faced. People haven’t been
rushing out for headsets, while
video creators haven’t been
rushing out to make VR expe
riences. There’s a chicken-
and-egg problem at play.
Beyond the fancy screen,
the phone is thick at a time
Apple and Samsung make
thinner phones. That’s done
to fit a bigger battery, with 12
percent more capacity than
the super-charged Note 9. The
sides have ridges to improve
the grip. The phone has pins
for expansion modules, such
as an adapter for any stan
dard SLR lens. (Incidentally, a
major manufacturer that tried
this modularization approach,
LG, backed away from it after
a year.)
Associated Press
A clerk counts Chinese currency notes at a bank
outlet, Nov. 25,2016, in Huaibei in central China.
China’s yuan
at decade low
against dollar
BY JOE MCDONALD
Associated Press
BEIJING — China’s yuan sank to a 10-year
low against the dollar on Monday, coming close
to breaking the politically sensitive level of seven
to the U.S. currency.
The yuan declined to 6.9644 per dollar at mid
day, passing its most recent low in 2016 before
recovering slightly. It was the lowest level since
May 2008.
The currency’s weakness is one of a series of
elements fueling U.S trade complaints against
Beijing. The U.S. Treasury Department declined
this month to label China a currency manipulator
but said it was closely watching Beijing.
Chinese authorities have promised to avoid
“competitive devaluation” to boost exports amid
a tariff war with U.S. President Donald Trump
over Beijing’s technology policy. But they are try
ing to make the state-controlled exchange rate
more responsive to market forces, which are
pushing the yuan lower.
The level of seven yuan to the dollar has no
economic significance, but could revive U.S.
attention to the exchange rate.
Chinese authorities are likely to “stand their
ground” and prevent a “capitulation beyond the
7 level,” Mizuho Bank said in a report Monday.
The yuan, also known as the renminbi, or “peo
ple’s money,” has declined by almost 10 percent
against the dollar since April as China’s economy
cooled and U.S. and Chinese interest rates went in
opposite directions.
That helps exporters cope with tariffs of up
to 25 percent imposed by Trump on billions of
dollars of Chinese goods. But it raises the risk of
inflaming American complaints about Beijing’s
trade tactics.
“The last thing they will do is to escalate the
tension by starting a currency war amid a trade
war,” Macquarie Group said last week.
A Treasury report on Oct. 17 said China failed
to meet criteria to be labeled a currency manip
ulator, a status that can trigger sanctions. But it
said Beijing was, along with Japan and Germany,
on a list of governments whose currency polices
would be closely monitored.
A weaker yuan could encourage an outflow of
capital from the world’s second-largest economy.
That would raise borrowing costs at a time when
its leaders are trying to shore up cooling growth.
Stock Exchange Highlights
■ NYSE
11,942.51 -34.43
V Nasdaq
W 7,050.29 -116.92
Gainers ($2 or more)
Gainers ($2 or more)
Name Last Chg %Chg
Name Last Chg %Chg
RedHat 169.63
CooperTire 30.89
Genworth 4.22
MercGn 58.50
GlbShip pfB21.65
Towerlntl 28.08
Stonerdg 24.99
NordicAm 2.68
NavMH pfH 8.66
Kemet 17.75
+52.95 +45.4
+5.44 +21.4
+.61 +16.9
+7.87 +15.5
+2.67 +14.1
+3.36 +13.6
+2.43 +10.8
+.24 +9.8
+.76 +9.6
+1.47 +9.0
Losers (S2 or more)
Name
Last Chg %Chg
DBGIbHY23154.54-
DenburyR 3.32
DirxMexn 11.33
Standex 78.58 -
Revlon 22.78
FstDatan 18.01
AuroraC n 5.91
CanopyGr n33.07
Danalnc 14.43
DxLatBII s 21.80
49.46 -24.2
-1.03 -23.7
-2.81 -19.9
16.83 -17.6
-4.82 -17.5
-3.59 -16.6
-1.13 -16.1
-5.63 -14.5
-2.20 -13.2
-3.26 -13.0
Most Active ($1 on more)
Name Vol (00) Last Chg
GenElec
FordM
BkofAm
Petrobras
Weathflntl
FstData n
AT&T Inc
Twitter
Vale SA
DenburyR
1195037
921128
888322
599917
513801
494889
484330
406410
393034
391004
11.16
9.28
26.61
15.56
1.54
18.01
29.64
32.39
14.27
3.32
-.14
+.30
+.22
-.68
-.44
-3.59
+.55
+.03
-.80
-1.03
Diary
Advanced
Declined
Unchanged
Total issues
New Highs
New Lows
Volume
1,187
1,634
61
2,882
16
388
4,618,735,876
ElecVeh n 4.55
LogicBio n 10.73
PyxisTnkr 2.07
NF EngSv 6.26
DianaCnt rs 2.05
KandiTech 4.66
CASIPhrh 3.18
Euroseas rs 2.13
GoldBull n 7.22
LifewayFds 2.84
+2.37+108.7
+2.15 +25.1
+.40 +24.0
+1.10 +21.4
+.29 +16.5
+.66 +16.5
+.41 +14.8
+.26 +13.9
+.82 +12.8
+.32 +12.7
Losers ($2 or more)
Name
Last Chg %Chg
RmblOn B n 5.05
TowerSemi 13.98
ChampO hrs 9.84
MarinSft rs 2.21
Tilray n 90.68
Melinta rs 2.37
C00IHI rs 3.54
YulongE rs 6.16
Zynerba n 5.24
PriorTc un 10.82
-1.80 -26.3
-3.77 -21.2
-2.15 -17.9
-.46 -17.2
17.40 -16.1
-.43 -15.4
-.61 -14.7
-1.02 -14.2
-.86 -14.1
-1.74 -13.9
Most Active ($1 or more)
Name Vol (00) Last Chg
AMD
Microsoft
Apple Inc
Intel
MicronT
Comcast s
Facebook
Flex Ltd
Zynga
Cisco
941859
550041
456424
353866
335971
323101
312406
311700
283168
278017
16.85 -.78
103.85 -3.11
212.24 -4.06
45.40
34.66
35.99 +.75
142.09 -3.28
6.94 -.15
3.62 -.21
43.84 -.41
-.29
-.74
Diary
Advanced
Declined
Unchanged
Total issues
New Highs
New Lows
Volume
1,203
1,738
123
3,064
21
326
2,524,071,722
Stocks of Local Interest
Name Ex
YTD
Div Yld PE Last Chg %Chg
AFLAC S
1.04
2.5
13
42.28
+.58 0.0
Hershey
2.89
2.7
23
106.00
+3.48
-6.6
AT&T Inc
2.00
6.7
6
29.64
+.55 -23.8
HomeDp
4.12
2.4
23
173.20
+.97
-8.6
AbbottLab
1.12
1.7
29
67.31
+.32 +17.9
Intel
1.20
2.6
17
45.40
-.29
-1.6
AMD
16.85
-.78 +63.9
IBM
6.28
5.2
9
119.64
-5.15
-22.0
Altria
3.20
5.0
20
64.59 +1.50 -9.6
JohnJn
3.60
2.6
19
137.55
+.58
-1.6
Apple Inc
2.92
1.4
25
212.24
-4.06 +25.4
Lowes
1.92
2.1
19
92.86
-.92
-.1
ATMOS
1.94
2.1
18
94.49
+.87 +10.0
McDnlds
4.64
2.7
26
173.23
-.11
+.6
AuroraC n
5.91
-1.13 -21.1
Merck
2.20
3.1
27
71.45
+1.05
+27.0
AutoZone
16
747.05 +3.48 +5.0
MicronT
3
34.66
-.74
-15.7
AveryD
2.26
2.5
26
89.39 +1.27 -22.2
Microsoft
1.84
1.8
49
103.85
-3.11
+21.4
BB&T Cp
1.62
3.4
14
47.77 +1.29 -3.9
NorflkSo
3.20
2.0
24
161.09
-.85
+11.2
BP PLC
2.38
5.8
22
41.03
-.07 -2.4
OfficeDpt
.10
4.0
7
2.53
-.01
-28.5
BkofAm
.60
2.3
13
26.61
+.22 -9.9
Penney
23
1.36
-.02
-57.0
BarnesNob
.60
9.6
6.23
-.01 -7.0
PepsiCo
3.71
3.3
33
112.89
+2.44
-5.9
Boeing
6.84
2.0
31
335.59-23.68 +13.8
Pfizer
1.36
3.1
17
43.23
+.63
+19.4
BrMySq
1.60
3.2
49
49.73
-.70 -18.8
PhilipMor
4.56
5.0
22
90.46
+1.46
-14.4
CSX
.88
1.3
9
65.69
-.23 +19.4
Primerica
1.00
.9
13
108.76
+1.52
+7.1
CampSp
1.40
3.7
13
37.59
+.86 -21.9
ProctGam
2.87
3.3
22
88.24
+.38
-4.0
Caterpillar
3.44
3.0
11
113.98
-1.07 -27.7
RedHat
169.63+52.95
+41.2
ChesEng
6
3.72
-.10 -6.1
RegionsFn
.56
3.4
14
16.43
+.37
-4.9
Chevron
4.48
4.1
48
108.93
-2.60 -13.0
ResidioTc n
25.82
0.0
Cisco
1.32
3.0
22
43.84
-.41 +14.5
SiriusXM
.05
.9
31
5.62
-.05
+4.9
Citigroup
1.80
2.8
11
64.35
+.14 -13.5
SnapIncAn ...
5.99
-.29
-59.0
CocaCola
1.56
3.4
88
46.46
+.54 +1.3
SouthnCo
2.40
5.2
22
45.89
+1.03
-4.6
Comcast s
.76
2.1
17
35.99
+.75 -9.8
SwstnEngy
6
5.03
+.09
-9.9
ConAgra
.85
2.4
17
35.96
+.54 -4.5
SunTrst
2.00
3.3
10
60.18
+.62
-6.8
Cummins
4.56
3.5
37
131.38
+2.61 -25.6
SynovusFn 1.00
2.7
13
36.90
+.28
-23.0
DenburyR
3.32
-1.03 +50.2
3M Co
5.44
2.9
26
185.79
+.84
-21.1
Disney
1.68
1.5
15
113.04
-.15 +5.1
Torchmark
.64
.8
7
83.04
+.35
-8.5
DowDuPnt
1.52
2.9
17
52.07
+.07 -26.9
Twitter
32.39
+.03
+34.9
Equifax
1.56
1.6
17
96.62
-.57 -18.1
Tyson
1.20
1.9
11
61.56
+1.09
-24.1
ExxonMbl
3.28
4.3
16
77.05
-.48 -7.9
UtdCmBks
.60
2.4
14
24.77
+.99
-12.0
Facebook
27
142.09
-3.28 -19.5
UPS B
3.64
3.5
18
105.13
-.18
-11.8
FstData n
9
18.01
-3.59 +7.8
VerizonCm
2.41
4.3
7
56.48
+.97
+6.7
Flex Ltd
7
6.94
-.15 -61.4
Vodafone
1.82
9.7
18.79
+.17
-41.1
FordM
.60
6.5
5
9.28
+.30 -25.7
WalMart
2.08
2.1
24
99.80
+.86
+1.1
GenElec
.48
4.3
11.16
-.14 -36.1
Weathflntl
1.54
-.44
-63.1
GenuPrt
2.88
2.9
22
99.75
+1.19 +5.0
WeisMk
1.20
2.6
22
46.19
+2.71
+11.6
HP Inc
.56
2.4
8
23.02
-.11 +9.6
WellsFargo 1.72
3.3
13
52.23
+.98
-13.9
Haverty
.72
3.5
21
20.32
+.38 -10.3
YumBrnds
1.44
1.7
31
85.47
-.31
+4.7
HeliosM rs
.02
-.00-100.0
Zynga
60
3.62
-.21
-9.5
Name Ex
YTD
Div Yld PE Last Chg %Chg
Stock Footnotes: g = Dividends and earnings in Canadian dollars, h = Does not meet continued-listing standards. If = Late filing
with SEC. n = New in past 52 weeks, pf = Preferred, rs = Stock has undergone a reverse stock split of at least 50 percent within the
past year, rt = Right to buy security at a specified price, s = Stock has split by at least 20 percent within the last year, un = Units, vj
= In bankruptcy or receivership, wd = When distributed, wi = When issued, wt = Warrants. Fund Footnotes: m - Multiple fees are
charged, usually a marketing fee and either a sales or redemption fee. Source: The Associated Press. Sales figures are unofficial.
Stock Market Indexes
Dow Jones industrials
Close: 24,442.92
Change:-245.39 (-1.0%)
27,200
26,400
25,600
24,800
24,000
25,840
24,980
24,120 10 DAYS
M
J
J
A
S
O
52-Week
Net
YTD
12-mo
High
Low
Name
Last
Chg
%Chg
%Chg
%Chg
26,951.81
23,242.75
Dow Industrials
24,442.92
-245.39
-.99
-1.12
+4.69
11,623.58
9,420.16
Dow Transportation
9,896.11
-69.56
-.70
-6.75
+.95
778.80
647.81
Dow Utilities
740.24
+10.52
+1.44
+2.33
-1.62
13,637.02
11,847.79
NYSE Composite
11,942.51
-34.43
-.29
-6.76
-3.06
8,133.30
6,517.93
Nasdaq Composite
7,050.29
-116.92
-1.63
+2.13
+5.24
1,309.73
1,118.69
S&P 100
1,177.69
-11.37
-.96
-.46
+3.60
2,940.91
2,532.69
S&P 500
2,641.25
-17.44
-.66
-1.21
+2.66
2,053.00
1,769.73
S&P MidCap
1,788.59
-6.51
-.36
-5.89
-2.02
30,560.54
26,293.62
Wilshire 5000
27,228.07
-199.07
-.73
-2.04
+1.97
1,742.09
1,436.43
Russell 2000
1,477.31
-6.51
-.44
-3.79
-.91
Mutual Funds
Name
Total Assets
Obj ($Mlns) NAV
Total Return/Rank
4-wk 12-mo 5-year
Pet
Load
Min Init
Invt
Vanguard 500ldxAdmrl
LB
265,379
244.13
-9.3
+4.3/A
+10.5/A
NL
10,000
Vanguard TtlSMIdxAdmrl
LB
214,061
65.68
-9.8
+3.6/B
+10.0/A
NL
10,000
Vanguard TtlSMIdxinv
LB
135,625
65.65
-9.8
+3.5/B
+9.9/B
NL
3,000
Vanguard TtlnSIdxInv
FB
134,124
15.54
-10.5
-10.3/C
+1.3/B
NL
0
Vanguard TtlSMIdxins
LB
128,089
65.69
-9.8
+3.6/B
+10.0/A
NL 5
000,000
Vanguard Insldxlns
LB
126,438
240.86
-9.3
+4.3/A
+10.5/A
NL 5
000,000
Vanguard InsIdxinsPlus
LB
108,769
240.87
-9.3
+4.3/A
+10.6/A
NL100,000,000
Fidelity Contrafund
LG
101,686
12.28
-12.8
+4.0/D
+11.1/B
NL
0
Vanguard TtlnSIdxInsPlus
FB
100,878
104.00
-10.4
-10.2/C
+1.4/B
NL100,000,000
American Funds GrfAmrcA m
LG
94,075
49.59
-12.5
+3.6/D
+10.5/C
5.75
250
Vanguard WlngtnAdmrl
MA
88,474
69.88
-5.2
+1.2/A
+7.2/A
NL
50,000
Vanguard TtBMIdxAdmrl
Cl
85,309
10.30
-0.4
-1.4/C
+1.8/C
NL
10,000
Cl -Intermediate-Term Bond, FB -Foreign Large Blend, IH -World Allocation, LB -Large Blend, LG -Large Growth,
LV -Large Value, MA -Moderate Allocation, WS -World Stock, Total Return: Chng in NAV with dividends reinvested.
Rank: How fund performed vs. others with same objective: A is in top 20%, E in bottom 20%. Min Init Invt: Minimum
$ needed to invest in fund. Source: Morningstar.
