Thread regarding Citrix Systems Inc. layoffs

Hi Donna K - Any idea on the time lines ? Will they be announcing this month ?

We are going private. Subscription based companies do better as a private and not public company.

Interesting to see, Citrix buyback by funding $750M, buying back from insiders sale ?? highest in Q3

http://www.marketbeat.com/i/244744

Don't they need to present and get shareholders voting approval for these kind of stuff?

We know exactly what a buyback is... It is a way of moving company money out of the bank account into other people's pockets. I don't see what borrowing money to do this proves.

In any case, given the lack of historical dividends CTXS is hardly at a high. EM would have done better to leave their money in a current account...

hopefully these bonds are essentially payoff money to get EM out of citrix so the company can actually move on. Those EM crooks are a putrid pile of stinking of criminals...

I was thinking that Elliott told Citrix to do the buyback to get them their price, and it's possible that Citrix is buying back Elliott's shares with the $750M in bonds, according to this speculation.

Stifel questions if Citrix accelerated buyback a sign of Elliott exit plans Stifel analyst Brad Reback noted that Citrix announced the pricing of $750M of 4.5% senior notes being used to fund a $750M accelerated share repurchase transaction. Reback also pointed out that as part of the ASR, Citrix is going to pay the full $750M in cash to the ASR counterparty and will initially receive 7.1M shares, while noting that that Elliott owns 7.091M shares, according to FactSet. "While we are not aware whether Elliott is indeed involved in the ASR...we believe Elliott has achieved the vast majority of what it set out to do when it disclosed its original position in the company in June 2015," Reback wrote. The Fly notes that Elliott Management told Bloomberg that speculation that is exiting its stake in Citrix is "false."

Read more at: https://thefly.com/landingPageNews.php?id=2641902

TradeSquawk

$CTXS sTIFEL QUESTIONS IF accelerated bback is a sign of Elliott exit plans

I'd considering buying some bonds that pay 4.5% but there are a few problems.

Where is the money going to come from to pay them back? "The stable ratings outlook reflects the expectation of modest growth in revenues and cash flow..."

A Ba1 rating isn't confidence building. It wouldn't be too cool to have them default and you loose all of your money. They need to grow revenue to pay back the bonds and that's not looking good.

Citrix has spent over $1.2 billion on acquisitions in the last 5 years, but what do they have to show for it? Cloudplatform is gone. Octoblu is gone. Goto products are gone. XenServer is all but gone.

Citrix has spent over $4 billion on buybacks since 2012. Don't they have any ideas for increasing revenue? How about developing some new products or learning how to grow the acquisitions instead of killing them?

"The company's 0.5% $1.4 billion (face value) convertible notes are due in April 2019." Where is this money going to come from? Overseas cash flow is not available without incurring significant tax costs.

Citrix seems to be operating on a very short term time frame.

In the case of Citrix, it's a desperate move to get Elliot the stock price they want.

Yesterday, Moody's rated Citrix Ba1 to those notes. Not exactly an overwhelming endorsement:

https://www.moodys.com/research/Moodys-rates-Citrix-notes-Ba1--PR_375049?WT.mc_id=AM%7eWWFob29fRmluYW5jZV9TQl9SYXRpbmcgTmV3c19BbGxfRW5n%7e20171113_PR_375049&yptr=yahoo

"... RATINGS RATIONALE

The Ba1 Corporate Family Rating reflects Citrix's leading market positions in several segments of the virtualization, mobile application and network infrastructure markets and stability and scale of free cash flow generation, tempered by the evolving technology landscape and the company's share buyback and acquisition appetite. Citrix is a leading player in the desktop and application virtualization markets but growth is slowing due to the evolution in approaches to virtualization and application delivery as well as competitive pressures. Citrix is also a strong number two player in the application delivery controller (ADC) market. Growth in the ADC market is slowing as more applications are delivered via the cloud.

While Citrix generates strong levels of free cash flow, share buy backs and acquisitions could well exceed domestic cash generation and overseas cash flow is not available without incurring significant tax costs. Inclusive of this debt issuance and buyback, Citrix has spent over $4 billion on buybacks since 2012 and over $1.2 billion on acquisitions. As a result of buyback and acquisition appetite, leverage could approach 3.5x, though we expect cash and liquid investment levels will also remain robust. Activist investor, Elliot Management owns an interest in Citrix and has had board representation since 2015.

The stable ratings outlook reflects the expectation of modest growth in revenues and cash flow with occasional increases in debt to fund buybacks and acquisitions. The ratings could be upgraded if Citrix continues to grow its business and demonstrates an extended track record of conservative financial policies under the current management team. The ratings could face downward pressure if performance were to deteriorate materially or leverage was expected to exceed 4x on other than a temporary basis. ..."

Really? Undervaluation? CTXS is within $1 of it's all time high. Lower capital costs by paying 4.5 % interest on $750 million of bonds to buyback stock? Where does the money for payback of the bonds come from? If you are not growing revenue it comes from cost cutting. Layoffs! Dividends are optional for the company. They don't get forced to pay them. However dividends are real money paid to long term shareholders and a sign that the company cares about long term shareholders. How is spending money to reduce the number of shares a better idea than investing in product innovation. How will a company grow revenue by failing to produce new products, by divesting products, by laying off engineers? Buybacks serve one purpose, to reduce the number of shares hoping that the share price will go up if the same money is chasing fewer shares and the earnings per share ratio looks better. However investors are not stupid. They know nothing real has changed, and that buybacks didn't create revenue or innovation. Buybacks only help short term stock sellers.

I don't think you know what a buyback is. It's used primarily for two reasons...the first is to take advantage of undervaluation and secondly, its used to lower cost of capital so the company doesn't have to pay out massive dividends if it doesn't need the public funding. In the end it's a good business decision and shows some strength in the company.