Watch-List: Microsoft (MSFT), Twitter (TWTR), Medtronic (MDT)

Albany, New York (10/06/2014) – Microsoft Corporation (NASDAQ:MSFT) makes more than $1 billion a year from licensing Android OS to Samsung Electronics. The details of the royalty payments that have remained scanty for a very long time since the signing of the Android licensing deal in 2011 were revealed in a lawsuit. MSFT sued Samsung for breaching their patent contract, especially by making late royalty payments. It is seeking $6.9 million in interests from Samsung for late royalty payment. A quick check of MSFT’s income sources reveals that the company makes more money from the patent deal with Samsung than it does from Skype, Xbox and Windows Phone combined. Microsoft Corporation (NASDAQ:MSFT) also licenses Android to HTC and other device makers, but income from those partners are still not known.

Twitter Inc (NYSE:TWTR) was upgraded to “overweight” from “neutral” at JP Morgan. Its target price was also raised to $64 from $54. Douglas Anmuth highlighted various reasons that support the upgrade. First, the analysts cited that the shift to mobile advertising is happening in favor of Twitter Inc (NYSE:TWTR). Anmuth is also confident that TWTR will still continue to grow its active user-based, which is currently very much dwarfed by Facebook Inc (NASDAQ:FB)’s more than 1.3 billion active users. Additionally, the analyst noted that TWTR enjoys greater margin expansion potential than say its archrival Facebook Inc (NASDAQ:FB).

Medtronic, Inc. (NYSE:MDT) conceded that its deal to acquire Covidien plc (NYSE:COV) had become more costly, but promised to push it to a successful completion. The medical devices maker had hoped to use its cash held in offshore accounts, about $14 billion, to fund the cash component of the $43 billion acquisition deal. However, the passing of new Treasury rules has made it harder to use cash held abroad for inversion deals. As such, Medtronic, Inc. (NYSE:MDT) has been forced to take a loan of about $16 billion to fund the deal. That means that the cost of the acquisition has become higher than originally anticipated. However, MDT not only promised to push forward with the deal, but also expects greater benefits from relocated its tax offices to Ireland.

About the Author

Sally joined the US Markets Daily News Team in April 2011 as a Multimedia Journalist.

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