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Joe Kiani, CEO, Masimo

Scott Mlyn | CNBC

Politan Capital’s Quentin Koffey sent a letter to Masimo CEO Joe Kiani on Wednesday, demanding information about the health-tech company’s proposed spinoff of its consumer business.

Koffey, who won a seat on Masimo’s board last year through a proxy fight, said that, despite his “repeated requests,” he has “not received information as basic and fundamental as even the name of the contemplated JV partner,” weeks after the company first announced it was exploring a split.

Masimo acquired consumer audio company Sound United in 2022 for $1 billion, a deal that led to a 37% drop in its stock price the day of the announcement. The purchase was a catalyst for Politan’s first proxy fight at the company.

Last month, Masimo said it would spin off its consumer business, spurring a rally in the stock.

Koffey said in his letter that Masimo management has asked “that directors sign a non-disclosure agreement” to get access to information around the deal. Koffey, who’s gearing up for a second proxy fight to get full control of Masimo’s board, warned Kiani that if the company delayed or denied his request, he would pursue legal action.

The activist is also seeking information on any financial and leadership opportunities Kiani has been promised at the spinout. The business units Masimo is proposing to spin off are expected to generate between $700 million and $780 million this year, according to the company’s most recent guidance.

Masimo CFO Micah Young said on a call with analysts on Tuesday that executives are working “diligently” and will present their findings on the deal structure and joint venture partner to the full board in the coming months. 

A spokesperson for Politan declined to comment beyond the content of the letter. Representatives for Masimo weren’t immediately available for comment.

Politan is Masimo’s second-biggest shareholder, with about 9% ownership, trailing only Fidelity. Kiani is the largest individual investor, with a 7.5% stake in the company.

Masimo shares are up 2.4% this year, closing Wednesday at $120.02. They plummeted 49% in 2022 and another 21% last year.

WATCH: Masimo CEO on potential split and proxy battle

Masimo CEO on potential split, proxy battle and spinning off consumer business

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X rival Bluesky gains 1.25 million users following U.S. election

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X rival Bluesky gains 1.25 million users following U.S. election

In this photo illustration, the Bluesky Social logo is displayed on a cell phone in Rio de Janeiro, Brazil, on September 4, 2024. 

Mauro Pimentel | AFP | Getty Images

Micro-blogging startup Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election. 

Bluesky’s influx of users shows that the app has been able to pitch itself as an alternative to X, formerly Twitter, which is owned by Elon Musk, as well as Meta’s Threads. The bulk of the new users are coming from the U.S., Canada and the United Kingdom, the company said Wednesday. 

“We’re excited to welcome everyone looking for a better social media experience,” Bluesky CEO Jay Graber told CNBC in a statement.

Despite the surge of users, Bluesky’s total base remains a fraction of its rivals’. The Seattle startup claims 15.2 million total users. Meta CEO Mark Zuckerberg in October said Threads had nearly 275 million monthly users. Musk in May claimed that X had 600 million monthly users, but market intelligence firm Sensor Tower pegged X’s monthly base at 318 million users in October.

Created in 2019 as a project inside Twitter, when Jack Dorsey was still CEO, Bluesky doesn’t show ads and has yet to develop a business model. It became an independent company in 2021. Dorsey said in May of this year that he’s no longer a member of Bluesky’s board.

“Journalists, politicians, and news junkies have also been talking up Bluesky as a better X alternative than Threads,” wrote Similarweb, the internet traffic and monitoring service, in a Tuesday blog.

Some users with new Bluesky accounts posted that they had moved to the service due to Musk and his support for President-elect Donald Trump. 

“It’s appalling that Elon Musk has transformed Twitter into a Trump propaganda machine, rife with disinformation and misinformation,” one user posted on Bluesky. 

This is Bluesky’s second notable surge in the last couple of months. 

Bluesky said it picked up 2 million new users in September after the Brazilian Supreme Court suspended X in the country for failing to comply with regional content moderation policies and not appointing a local representative.

Watch: Cramer’s Mad Dash: Alphabet and Meta.

Cramer’s Mad Dash: Alphabet & Meta

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Cisco reports fourth straight quarter of declining revenue

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Cisco reports fourth straight quarter of declining revenue

Cisco CEO Chuck Robbins speaks at The Wall Street Journal’s Future of Everything Festival in New York on May 21, 2024.

Dia Dipasupil | Getty Images

Cisco reported a fourth straight quarter of declining revenue even as results topped analysts’ estimates. The stock slipped 2.5% in extended trading.

Here’s how the company did in comparison with LSEG consensus:

  • Earnings per share: 91 cents adjusted vs. 87 cents expected
  • Revenue: $13.84 billion vs. $13.77 billion expected

Cisco’s revenue dropped 6% in the quarter ended Oct. 26, from $14.7 billion a year earlier, according to a statement. Net income fell to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the same quarter a year ago.

Networking revenue plunged 23% to $6.75 billion, slightly below the $6.8 billion consensus of analysts surveyed by StreetAccount.

Security revenue doubled to $2.02 billion, topping the StreetAccount consensus of $1.93 billion. Cisco’s revenue from collaboration was $1.09 billion, a bit below the $1.04 billion consensus estimate.

Cisco CEO Chuck Robbins said on the earnings call on Wednesday that orders from large-scale clients for artificial intelligence infrastructure exceeded $300 million in the quarter. Server makers such as Dell and HPE have also focused on sales of hardware that can help clients implement generative AI.

“We have earned more design wins and remain confident that we will exceed our target of $1 billion of AI orders this fiscal year from web-scale customers,” Robbins said.

Cisco has announced hardware containing Nvidia’s graphics processing units, which are widely used for training AI models, Robbins said.

“Over time, you’ll see us support other GPUs as the market demands,” he said. “But that partnership is still going fine. It’s still early. And I think 2025 is when we’ll start to see enterprise real deployment of some of these technologies.”

For now, enterprises are updating data center infrastructure to prepare for AI and the widespread deployment of AI applications, Robbins said.

U.S. government agencies have delayed deals with Cisco, rather than scrapping them altogether. The Fiscal Responsibility Act of 2023, which became law in June of last year, has limited U.S. government spending, said Scott Herren, Cisco’s finance chief.

Herren said that with Republicans poised to control the White House and both houses of Congress, he expects “to get a budget in place relatively soon.”

During the quarter, Cisco acquired security startups DeepFactor and Robust Intelligence.

Cisco lifted its full-year guidance to $3.60 to $3.66 in adjusted earnings per share on $55.3 billion to $56.3 billion in revenue, up from a prior forecast of $3.52 to $3.58 in EPS and $55 billion to $56.2 billion in revenue. Guidance would indicate projected revenue growth of 3.3% at the middle of the range.

Analysts expected adjusted earnings for the year of $3.58 per share on $55.89 billion in revenue.

As of Wednesday’s close, Cisco’s stock was up 17% year to date, while the S&P 500 index is up around 26% over that stretch.

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The Earnings Setup: Cisco Systems, Applied Materials and Disney

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Trump victory may provide TikTok a lifeline to remain in the U.S.

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Trump victory may provide TikTok a lifeline to remain in the U.S.

Republican presidential nominee, former U.S. President Donald Trump, (C) greets attendees during a campaign stop to address Pennsylvanians who are concerned about the threat of Communist China to U.S. agriculture at the Smith Family Farm September 23, 2024 in Smithton, Pennsylvania. 

Win Mcnamee | Getty Images

After Donald Trump won the U.S. presidency last week, tech CEOs including Apple‘s Tim Cook, Meta‘s Mark Zuckerberg and Amazon‘s Jeff Bezos publicly praised the president-elect.

One name was conspicuously missing: TikTok CEO Shou Zi Chew.

His absence was notable considering that of all the top tech companies, TikTok faces the most immediate and existential threat from the U.S. government. In April, President Joe Biden signed a law that requires China’s ByteDance to sell TikTok by Jan. 19. If ByteDance fails to comply, internet hosting companies and app store owners such as Apple and Google will be prohibited from supporting TikTok, effectively banning it in the U.S.

Trump’s return to the White House, though, may provide a lifeline for Chew and TikTok. 

Although both Republicans and Democrats supported the Biden TikTok ban in April, Trump voiced opposition to the ban during his candidacy. Trump acknowledged the national security and data privacy concerns with TikTok in a March interview with CNBC’s “Squawk Box,” but he also said “there’s a lot of good and there’s a lot of bad” with the app.

Trump also leveraged TikTok’s shaky future in the U.S. as a reason for people to vote against Democrat Vice President Kamala Harris.

“We’re not doing anything with TikTok, but the other side is going to close it up, so if you like TikTok, go out and vote for Trump,” the president-elect said in a September post on his Truth Social service.

Since his election, Trump hasn’t publicly discussed his plans for TikTok, but Trump-Vance transition spokeswoman Karoline Leavitt told CNBC that the president-elect “will deliver.”

“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail,” Leavitt said in a statement. 

Trump’s rhetoric on TikTok began to turn after the president-elect met in February with billionaire Jeff Yass, a Republican megadonor and a major investor in the Chinese-owned social media app.

Yass’s trading firm Susquehanna International Group owns a 15% stake in ByteDance while Yass maintains a 7% stake in the company, equating to about $21 billion, NBC and CNBC reported in March. That month it was also reported that Yass was a part owner of the business that merged with the parent company of Trump’s Truth Social.

TikTok’s CEO Shou Zi Chew testifies during the Senate Judiciary Committee hearing on online child sexual exploitation, at the U.S. Capitol, in Washington, U.S., January 31, 2024. 

Nathan Howard | Reuters

If ByteDance doesn’t sell TikTok by the January deadline, Trump could potentially call on Congress to repeal the law or he can introduce a more “selective enforcement” of the law that would essentially allow TikTok to continue operating in the U.S. without facing penalties, said Sarah Kreps, a Cornell University professor of government. “Selective enforcement” would be akin to police officers not always enforcing every single instance of jaywalking, she said.

At TikTok, meanwhile, Chew has remained quiet since Trump’s victory, just as he had been in the lead-up to Election Day. 

The Chinese-owned company may be taking a neutral approach and a wait-and-see strategy for now, said Long Le, a China business expert and Santa Clara University associate teaching professor.

Le said it’s hard to foresee what Trump will do. 

“He’s also a contrarian; that’s what makes him unpredictable,” Le said. “He can say one thing, and the next year he’ll change his mind.”

TikTok didn’t respond to requests for comment.

Mark Zuckerberg, CEO of Meta testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024 in Washington, DC.

Alex Wong | Getty Images

‘Facebook has been very bad for our country’

When it comes to social media apps, Trump’s campaign comments suggest he’s more concerned with TikTok rival Meta. 

In his March interview with “Squawk Box,” Trump said Meta, which owns Facebook and Instagram, posed a much bigger problem than TikTok. He also said a TikTok ban would only benefit Meta, which he labeled “an enemy of the people.”

“Facebook has been very bad for our country, especially when it comes to elections,” Trump said.

But Trump’s negative views on Meta may have changed after comments by CEO Mark Zuckerberg over the past few months, Cornell’s Kreps said. 

Zuckerberg described the photo of Trump raising his fist following a failed assassination attempt in July as “one of the most badass things I’ve ever seen in my life.” And after Trump’s win, Zuckerberg congratulated him, saying he was looking forward to working with the president-elect and his administration.

“My sense as an armchair psychologist of Trump is that he really likes people who sing his praises, and so his view on Zuckerberg and Meta, I would imagine, has changed,” Kreps said. “He might then just revert to his American economic nationalism here and say, ‘Let’s protect American industry and continue with the Chinese ban.'”

Meta didn’t respond to a request for comment.

Maintaining support of the TikTok ban could also win Trump political favor with lawmakers concerned about China’s global political and business influence, said Milton Mueller, a professor at Georgia Tech’s School of Public Policy.

“I don’t see him scoring big points politically by standing up for TikTok,” Mueller said, noting that few lawmakers, like Sen. Rand Paul, R-Ky., have opposed the ban.

Even if Trump does provide a lifeline for TikTok, it’s unclear how much damage that would do to his administration since many politicians are reluctant to publicly criticize him, Le said.

“They’re not going to challenge him because he just got so much power,” Le said. 

Since launching his TikTok account in June, Trump has amassed over 14 million followers. Given his social media savvy, Trump may not want to make a decision that results in him losing the public attention and influence he’s gained on TikTok, Le said.

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