Well, the 3Par bidding war saga looks to be coming to an end as HP's final $33 offer has been accepted and Dell has pulled out of the race.

It makes you wonder about the "efficient market" theory, doesn't it? I mean, here is a stock that was trading around $10 and basically flatlined for about a year, only to suddenly increase by more than 300% in a period of three weeks. The market certainly wasn't efficient at pricing 3Par shares.

Here are the latest stats on 3Par at the current near-$33 level:

Market Cap: $2B

Forward P/E: 122

Revenue (TTM) $203M

Price/Sales (TTM): 9.84

Enterprise value/EBITDA: 294

Hmmm. Not sure I'd call that a bargain.

Onto the rest of the news:

• The Atlantic coast of the U.S. is prepping for Hurricane Earl (New York Times).
• Andy Roddick is out at the U.S. Open (Wall Street Journal). But the real reason to cite this story is because of this great line: "Andy Roddick’s early exit breaks the hearts of T.V. producers dependent on repeated Brooklyn Decker reaction shots"
• 3G Capital is acquiring Burger King (Wall Street Journal). Will that yield downloadable mobile burgers?
• Bernanke admits he "wasn't straightforward" on Lehman (Bloomberg). According to my thesaurus, here are some synonyms for being "not straightforward": dishonest, crafty, crooked, deceitful, evasive, fraudulent, oblique, shady, shifty, sly, surreptitious, tricky.
• Jobless claims decline (CNNMoney.com). Barely.
• Ten questions and answers on Apple TV (PCMag). Silliest uestion: Does Apple have a Twitter killer?
• In case you haven't refinanced yet, you might want to note the current 30-year mortgage is at 4.32% which is a new all-time record since records starting being kept in 1971 (did they not have mortgages before 1971?) (Wall Street Journal).
• Most interesting financial headline of the day: "I'm selling the house and piling the proceeds into Greek government bonds." (Telegraph)
• The verdict is in: People hate the new Digg (Mashable). Yes, I do too.

 

If only you could have the problem of having a 2% investment in a company whose share price has gone to the moon, right? Well, that's where Cisco is with VMware. While its equity stake looks smart at this stage, in the longer term Cisco is going to have to make a bid for either EMC (VMWare's parent company) or figure out the next step to get in the virtualization game.

Here's the problem: Virtualization and cloud computing, VMware's bread-and-butter, is the technology flavor of the decade, and Cisco is relying heavily on a strategic partnership with VMware to get it done. Sources in Silicon Valley are chattering about what Cisco will do about virtualization, a party its been largely left out of. As VMWare's price has shot up while Cisco's share price has stagnated, it's now become all but unaffordable to for Cisco -- VMware now has a market capitalization of $33B.

What's on my mind this morning? Litigation. Like, Paul Allen suing everybody. And everybody suing Facebook.

What's up with that? Has the economy gotten so bad that the world is looking to lawyers to boost buisness activity?

In other news:

Genzyme rejects Sanofi bid (Wall Street Journal)

Intel to buy Infineon's wireless outfit for $1.4B (CNN Money).

Blackberry gets a stay in India (BBC). Quick -- figure out how to let people spy!

HP authorizes $10B buyback (Bloomberg). Bidding wars, buybacks -- who needs all that cash, anyway.

Government to propose new fuel economy stickers (USA Today). They'll come with pretty new graphics! Yay, now that's what I call bureaucracy at work...

Most people don't want to be located (NY Times). Especially me. Right now.

Google plans pay-per-view films (Financial Times).

Cisco is reportedly trying to buy Skype before its IPO (TechCrunch).

This bidding war between HP and Dell for 3Par says something to me about big technology companies: They are stuck. They can't grow internally, so they have to look outside the company.

If you think about the evolution of all big industries, they trend toward consolidation and giant companies eating up new companies in the search for growth and innovation. This certainly appears to be the case with players like HP, Dell, Microsoft, and Cisco. The new innovation is not coming from within, it's coming from outside.

Is there a more explosive economic concept than combining iProducts with China? Didn't think so. In that vein, MarketWatch reports that China Unicom starts to ship iPhone 4 in China next month.

Our mind is boggled by the concept of hundreds of millions of frenetic Chinese citizens roaming the fastest growing country on earth clutching iPhones and iPads.

On to the rest of the news:

Hopefully one of these mornings we'll wake up to learn that they've stopped the oil leaking into the Gulf of Mexico. Depressing stuff, it is.

Meanwhile, while the oil spills, Google and Microsoft are sparring, with Google launching an anti-Windows campaign. Here's what's in the news today:

• BP shares plunge after top-kill effort fails (Reuters). Now, you would think they would have had a plan to stop this. It appears they don't.
  
• BP tries again with the dome (New York Times).
• The White House Tries to control the PR damage (Washington Post). Good luck wid that.
• As if there's not enough going on, we now have another conflict off the coast of Israel (AOL News).
• Hewlett-Packard is taking a hefty axe to the workforce -- to the tune of 3,000 workers (Reuters). Let me get this straight -- company doing great, but taking a $1B charge and cutting 3,000 workers?
• Stocks were boosted by manfacturing data (Reuters). For about 30 minutes, after which point they started to fall again.
• ZipCar files for $75 million IPO (Reuters).
  
• The Financial Times says Google is ditching Windows because of security issues. Eric Schmidt got tired of all those uninvited pop-ups.
• Microsoft responds by mocking Google (Business Insider).
• Meanwhile, Google is talking about something called a sensor revolution. Check it out.
  

HP is starting to sound like the first year of the Obama Adminstration. They have their own version of fixing the economy, winning a war, and giving everybody health insurance -- it's beating Cisco with 3Com and then conquering the mobile-phone market with today's announcement that they'll buy Palm for $1.2B. Is HP biting off more than they can chew? Can't say we were right about Palm, or were we? HP did the deal at $1.2B. It surprises me. My premise was that paying over $1B for a company that is losing money and market share, with a negative book value, and $400B in debt is just slightly nutty, but what do we know. Apparently the HP CFO knows more than me.

LAS VEGAS -- Demonstrating HP's feisty attitude in its escalating networking row with Cisco, HP Network Chief Technologist Paul Congdon attacked Cisco's dominant position in the networking business, saying it is leading to "crazy behavior" and overpriced products. At the top of Congdon's  list of industry problems? "Lack of Competition." This is leading to "crazy behavior... causing you to pay too much for your networking equipment," said Congdon, on a panel titled " Why Networking Must Change," Congdon did not name Cisco by name. But it was clear who it was when he remarked that "In most industries, the market share is separated by 10 percentage points..." Take a look at the chart below and conclude what you may. Congdon's solution for customers? "Open up and write your own RFPs." More standardization would help too. But Congdon's contribution wasn't all Cisco bashing. He also had a  list of trends for the industry. Other than "Cisco Charges Too Much," Here are the rest... * Growing complexity in networks is breeding inefficiency * Massive growth in Internet- connected devices, projecting to 20 million new video-enabled mobile devices in 2010 alone * Scaleability requiring more networking intelligence on the edge of networks * Applications need to be dynamically adaptable to the network, rather than vice-versa Did Cisco respond? Not really. Thomas Scheibe, Director of Data Center Switching, the Cisco representative on the panel, remained civil -- and boring. He kept to a script that involved heap of Layer 2 switch fabrics, mobility, and virtualization. Congdon's got a point -- though it's not really clear how easily HP or anybody else can do anything about it. Networking upstarts have been trying to create "best-of-breed" products with more aggressive price/performance technology to take on Cisco -- and not making a lot of progress. See the chart below. Doug Gourlay, VP of Marketing from Arista Networks, took another jab at Cisco: "Many of the incumbents have used switching and routing technologies as cash cows to  fund entrance into marketing adjacencies to bring us wonderful technologies such as Flip cams." That drew laughter from the audience, which then went back to taking notes on future data-center virtualization.

With the recent acquisition of 3Com under its belt, HP is positioning itself as an alternative to Cisco Systems and expects it to be a two horse race. Given the acquisition, how does HP stack up against Cisco? While the question is simple, the answer is not. In aggregate, the combined HP-3Com company is positioned favorably against the networking giant Cisco. In Monday's industry analyst call, Dave Donatelli, Executive Vice President, Enterprise, said HP would win in the industry for five reasons: 1. HP has superior technology that empowers business innovation. 2. HP has an architecture built on open standards so clients can leverage best in class solutions and market driven innovation, while adopting an evolutionary approach to a simpler, more flexible network environment. 3. HP has an end-to-end product portfolio - from the network edge to the core of the data center - under a single pane of glass management that significantly lowers operational costs. 4. HP has networking as part of the Converged Infrastructure to deliver a complete strategy and portfolio for building the data center of the future today. 5. HP offers our customers lower total cost of ownership (TCO). In a later slide, HP claimed 30-65% TCO savings depending on the category.

Good morning on this fine third work day of 2010. Why is it that 2010 already seems old? Maybe it's just that I'm getting old. Senators are retiring, Microsoft is trying to front-run Apple at CES, and it's time to put away the holiday decorations and get down to work.

• Powerful Senator Christopher Dodd -- yeah that's the guy whose snow-white hair looks as if it's made of wax -- is retiring (Bloomberg) Big news, given the fact the our esteemed senators are considering gigantic, 10-ton pieces of legislature including healthcare reform, financial reform, and trillions of dollars in potential fiscal deficits. Hmmm. Yes, I can see why now's the time to get out of dodge...
• GOP to oppose proposed consumer financial protection agency (Huffington Post). Democrats consider countering with a new Agency Protection Agency (APA) that will manage the creation of  other protection agencies.
• Microsoft and H.P. are rumored to be launching tablet-slate-like computing devices at CES (N.Y. Times). That's ahead of Apple's much vaunted iPad, the digital personal hygiene device.
• Gold is up nearly $12 and other metals are rallying (Bloomberg). Looks like all the newly empowered gold bears are scurrying to cover their shorts.
• The ADP report on jobs cuts shrunk (BusinessWeek) . No, I don't mean the report shrunk (bad writing), the job cuts shrunk. Good news.
• VentureBeat has some photos of the "cool stuff" at CES.
• Extremely speculative story about hopen source, the iPhone, and Android (I think) (CNET). Still not sure what it means. But worth reading if you are bored, and open-source gets you excited.
• Okay, I got it. Only Apple and Google mean anything anymore (PC World). That is, only if you are a tech trade journalist.
• Ready for 3D motion-sensor gaming? I am. (Asahi.com translated by PCWorld).
• The 8-gazillion-dollar Hubble telescope has allegedly spied one of the universe's youngest galaxies (USA Today). My question: how the heck do we know?
• The Big Unit is retiring (MLB.com). Very happy I never had to face his slider.
• There is a new crab species that looks like a strawberry (Telegraph). Yummy!
• Steve from 'Blue's Clues' teaches kids to hate Sarah Palin (Big Hollywood).  Now, that's not so bad, is it?
• Microsoft has dumped upgrade pricing for Office 2010 (ComputerWorld). Bastids.
• Air Force Completes Micro-done (Wired.com). Now if they can just figure out how to shrink the budget