SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Cypress Semiconductor Corporation
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
232806109
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(CUSIP Number of Class of Securities)
Daniel S. Loeb
Third Point LLC
390 Park Avenue
New York, NY 10022
(212) 224-7400
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copies to:
Michael A. Schwartz, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019-6099
(212) 728-8000
July 31, 2007
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(Date of Event which Requires
Filing of this Schedule)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box: [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 240.13d-7 for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
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CUSIP No. 232806109 Page 2 of 11 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Third Point LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
0
--------- ------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 7,674,000
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,674,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,674,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
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14 TYPE OF REPORTING PERSON*
OO
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SCHEDULE 13D
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CUSIP No. 232806109 Page 3 of 11 Pages
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel S. Loeb
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
--------------------- --------- ------------------------------------------------
7 SOLE VOTING POWER
0
--------- ------------------------------------------------
NUMBER OF 8 SHARED VOTING POWER
SHARES
BENEFICIALLY 7,674,000
OWNED BY --------- ------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 0
--------- ------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,674,000
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
7,674,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
----------- --------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
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14 TYPE OF REPORTING PERSON*
IN
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This Schedule 13D is being filed on behalf of Third Point LLC, a Delaware
limited liability company (the "Management Company"), and Daniel S. Loeb, an
individual ("Mr. Loeb", and together with the Management Company, the "Reporting
Persons"). This Schedule 13D relates to the Common Stock, par value $0.01 per
share, of Cypress Semiconductor Corporation, a Delaware corporation (the
"Company"). Unless the context otherwise requires, references herein to the
"Common Stock" are to such Common Stock of the Company. The Management Company
is the investment manager or adviser to a variety of hedge funds and managed
accounts (such funds and accounts, collectively, the "Funds"). The Funds
directly own the Common Stock to which this Schedule 13D relates, and the
Management Company and Mr. Loeb may be deemed to have beneficial ownership over
such Common Stock by virtue of the authority granted to them by the Funds to
vote and to dispose of the securities held by the Funds, including the Common
Stock.
Item 1. Security and Issuer
This statement on Schedule 13D relates to the Common Stock of the Company
and is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The address of the principal executive
offices of the Company is 198 Champion Court, San Jose, California 95134.
Item 2. Identity and Background.
(a) This statement is filed by the Reporting Persons. Daniel S. Loeb is the
Chief Executive Officer of the Management Company and controls the Management
Company's business activities. The Management Company is organized as a limited
liability company under the laws of the State of Delaware.
(b) The address of the principal business and principal office of the
Management Company and Mr. Loeb is 390 Park Avenue, 18th floor, New York, New
York 10022.
(c) The principal business of the Management Company is to serve as
investment manager or adviser to the Funds, and to control the investing and
trading in securities of the Funds. The principal business of Mr. Loeb is to act
as the Chief Executive Officer of the Management Company.
(d) None of the Reporting Persons, nor, to the best of their knowledge, any
of their directors, executive officers, general partners or members has, during
the last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the Reporting Persons, nor, to the best of their knowledge, any
of their directors, executive officers, general partners or members has, during
the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Mr. Loeb is a United States citizen.
4
Item 3. Source and Amount of Funds or Other Consideration
The Funds expended an aggregate of approximately $171,003,240 of their own
investment capital to acquire the 7,674,000 shares of Common Stock held by them.
The Funds effect purchases of securities primarily through margin accounts
maintained for them with Goldman, Sachs & Co., Citigroup Global Markets, Inc.
and UBS Securities LLC, which may extend margin credit to the Funds as and when
required to open or carry positions in the margin accounts, subject to
applicable Federal margin regulations, stock exchange rules and the firm's
credit policies. In such instances, the positions held in the margin accounts
are pledged as collateral security for the repayment of debit balances in the
accounts.
Item 4. Purpose of Transaction
The purpose of the acquisition of beneficial ownership of the securities by
the Funds is for investment, and the acquisition was effected because of the
Reporting Persons' belief that the Company represents an attractive investment
based on the Company's business prospects.
The Reporting Persons generally support the existing strategy of the
Company and believe that the Company's management team and its Board of
Directors (the "Board") have, since the beginning of 2006, been very effective
in identifying and enhancing the value of Sunpower for the benefit of the
Company's shareholders (which the Reporting Persons believe has already been
reflected in the valuation of the Common Stock) and in significantly increasing
the value of the Company's semiconductor business (which the Reporting Persons
believe has not yet been reflected in the valuation of the Common Stock).
Specifically, the Company's management has taken important steps in divesting
money-losing, underperforming, non-core and commodity semiconductor units over
the past 18 months and in materially reducing the physical infrastructure
associated with the semiconductor business, resulting in a large and permanent
reduction in capital spending requirements. The Company's management has also
refocused the semiconductor business on fast-growing, value-added and
higher-margin products, which the Reporting Persons believe will result in
strong free cash flow generation by that business. In addition, from a corporate
finance perspective, the Company has "refinanced" its convertible debt
advantageously and sold Sunpower shares, allowing it to repurchase Common Stock
on an opportunistic and accretive basis.
However, during this same period, as management has made these many
positive strategic moves, the implied value of the semiconductor business
embedded within the Common Stock market price has declined by about 15%,
significantly underperforming the semiconductor indices, which have risen. Given
this sustained period of underperformance by the "semiconductor portion" of the
Common Stock, and given that further buybacks of Common Stock at current levels
would not be nearly as accretive as those in the past, (as Sunpower now makes up
roughly 80% of the value of the Common Stock), we believe that it is time for
management and the Board to aggressively pursue various strategies that should
cause the significant value of the Company's semiconductor business to be fully
reflected in the market price of the Common Stock. While the Reporting Persons
appreciate that management has committed to distributing the Company's stake in
Sunpower no later than 2009, the Reporting Persons believe that there are
tax-efficient mechanisms to do so sooner and believe that the
5
Board (which the Reporting Persons understand is well aware of these issues)
should expedite its review of these mechanisms in order to implement as soon as
practicable a strategy that will allow the Company's shareholders to realize the
value of the semiconductor business well before 2009.
The Reporting Persons intend to make themselves available to the Board to
discuss in depth their views on this extremely important issue, as well as the
metrics by which the Reporting Persons have concluded that the financial markets
are materially undervaluing the Company's semiconductor business today. In
general, the Reporting Persons observe that the implied value of the Company's
semiconductor business (as measured by the total market capitalization of the
Company, minus the value of the Sunpower holdings, minus the net cash position
at the semiconductor business) currently stands at roughly $800 million. The
Reporting Persons believe that this implied valuation understates by at least
50% the fundamental value of the Company's semiconductor business, based on key
metrics such as price-to-sales, price-to-earnings and free-cashflow-yield - as
compared to its relevant semiconductor peers. Moreover, the Reporting Persons
believe that the current implied valuation of the Company's semiconductor
business is well less than one-half of the valuation the Reporting Persons
understand was ascribed to it during advanced LBO discussions that took place in
the fall of 2006 - and that this business has only become more valuable since.
Given their belief that this valuation "disconnect" could persist until a
distribution date for the Company's Sunpower holdings draws nearer, the
Reporting Persons believe that the Cypress Board must expeditiously continue to
follow its successful path of doing what is best for the Company's shareholders,
which has already resulted in significant gains for stakeholders. Specifically,
the Reporting Persons ask that the Board immediately consider all means to cause
the full value of the Company's semiconductor business to be appropriately
reflected in the current share price - which the Reporting Persons believe could
result in an increase in the market price of the Common Stock of 25% from
current levels.
The Reporting Persons are engaged in the investment business, and in
pursuing this business, the Reporting Persons analyze the operations, capital
structure and markets of companies, including the Company, on an ongoing basis
through analysis of documentation and discussions with knowledgeable industry
and market observers and with representatives of such companies (often at the
invitation of management). The Reporting Persons have had conversations with
members of the Company's management and, depending on prevailing market,
economic and other conditions, one or more of the Reporting Persons may from
time to time, among other things, hold discussions with third parties or further
discussions with management of the Company in which, or as a result of which,
the Reporting Persons may suggest or take a position with respect to potential
changes in the operations, strategy, management or capital structure of such
companies as a means of enhancing shareholder value. Such suggestions or
positions may relate to one or more of the transactions specified in clauses (a)
through (j) of Item 4 of Schedule 13D under the Exchange Act, including, without
limitation, such matters as disposing of or selling all or a portion of the
Company or acquiring another company or business, changing operating or
marketing strategies, adopting or not adopting certain types of anti-takeover
measures and restructuring the Company's capitalization or dividend policy.
Except as described in this Schedule 13D, the Reporting Persons presently do not
have any plans or proposals that relate to or would result in any of the actions
required to be described in Item 4 of Schedule 13D. Each of the Reporting
Persons may, at any time, review or
6
reconsider its position with respect to the Company and formulate plans or
proposals with respect to any of such matters.
The Reporting Persons intend to review their investment in the Company on a
continuing basis and, depending upon the price and availability of the Company's
securities, subsequent developments concerning the Company, the Company's
business and prospects, other investment and business opportunities available to
the Reporting Persons, general stock market and economic conditions, tax
considerations and other factors considered relevant, may decide at any time
(via the Funds or otherwise) to increase or decrease the size of their
investment in the Company or to sell any or all of the securities of the Company
that they hold.
Item 5. Interest in Securities of the Issuer
(a) As of the date of this Schedule 13D, the Management Company and Mr.
Loeb beneficially own 7,674,000 shares of Common Stock (the "Shares"). The
Shares represent 5.1% of the 151,188,267 shares of Common Stock outstanding as
of May 1, 2007, as reported in the Company's Quarterly Report on Form 10-Q for
the quarterly period ended April 1, 2007. The percentages used herein and in the
rest of this statement are calculated based upon this number of outstanding
shares.
(b) The Management Company and Mr. Loeb share voting and dispositive power
over the 7,674,000 shares of Common Stock held directly by the Funds.
(c) Schedule A hereto sets forth certain information with respect to
transactions by the Funds, at the direction of the Reporting Persons, in the
Common Stock during the past 60 days. All of the transactions set forth on
Schedule A were effected in open market transactions on the New York Stock
Exchange. Except as set forth on Schedule A, during the past 60 days there were
no transactions in the Common Stock effected by the Reporting Persons, nor, to
the best of their knowledge, any of their directors, executive officers, general
partners or members.
(d) Other than the Funds which directly hold the Shares, and except as set
forth in this Item 5, no person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting
Persons have entered into an agreement with respect to the joint filing of this
statement, and any amendment or amendments hereto.
Except as set forth herein, there are no contracts, arrangements,
understandings or relationships among the persons named in Item 2 or between
such persons and any other person with respect to any securities of the Company.
7
Item 7. Material to be Filed as Exhibits
99.1. Joint Filing Agreement, dated as of August 9, 2007, by and between the
Reporting Persons.
99.2. Power of Attorney granted by Mr. Daniel S. Loeb in favor of James
Kelly, Justin Nadler, Zachary Snow and Keith Waller, dated December 1,
2006.
[Signatures on following page]
8
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: August 9, 2007
THIRD POINT LLC
By: Daniel S. Loeb, Chief Executive Officer
By: /s/ Justin Nadler
--------------------------------
Name: Justin Nadler
Title: Attorney-in-Fact
DANIEL S. LOEB
By: /s/ Justin Nadler
--------------------------------
Name: Justin Nadler
Title: Attorney-in-Fact
[SIGNATURE PAGE TO SCHEDULE 13D WITH RESPECT TO
CYPRESS SEMICONDUCTOR CORPORATION]
Schedule A
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(Transactions by the Funds in Common Stock
during the past 60 days)
Date Transaction Shares Price Per Share($)
---- ----------- ------ ------------------
------------------ ------------------- ------------------ ----------------------
06/14/07 BUY 258,300 21.850
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06/15/07 BUY 100,000 22.040
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06/18/07 BUY 170,400 22.128
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06/20/07 BUY 130,000 22.981
------------------ ------------------- ------------------ ----------------------
06/20/07 BUY 100,000 22.998
------------------ ------------------- ------------------ ----------------------
06/20/07 BUY 20,000 23.018
------------------ ------------------- ------------------ ----------------------
06/22/07 BUY 600,000 23.648
------------------ ------------------- ------------------ ----------------------
06/22/07 BUY 194,000 23.682
------------------ ------------------- ------------------ ----------------------
06/25/07 BUY 300,000 23.687
------------------ ------------------- ------------------ ----------------------
06/25/07 BUY 236,000 23.856
------------------ ------------------- ------------------ ----------------------
06/26/07 BUY 185,000 23.504
------------------ ------------------- ------------------ ----------------------
06/26/07 BUY 200,000 23.404
------------------ ------------------- ------------------ ----------------------
06/27/07 BUY 415,000 23.242
------------------ ------------------- ------------------ ----------------------
06/28/07 BUY 200,000 23.598
------------------ ------------------- ------------------ ----------------------
06/28/07 BUY 170,000 23.563
------------------ ------------------- ------------------ ----------------------
06/29/07 BUY 330,000 23.372
------------------ ------------------- ------------------ ----------------------
06/29/07 BUY 400,000 23.257
------------------ ------------------- ------------------ ----------------------
06/29/07 BUY 36,200 23.290
------------------ ------------------- ------------------ ----------------------
06/29/07 SELL (36,200) 23.290
------------------ ------------------- ------------------ ----------------------
07/02/07 BUY 400,000 23.861
------------------ ------------------- ------------------ ----------------------
07/03/07 BUY 235,000 24.083
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07/05/07 BUY 40,000 24.275
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07/09/07 BUY 50,000 24.973
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07/09/07 BUY 25,000 25.001
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07/10/07 BUY 35,000 24.768
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07/11/07 BUY 86,000 24.805
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07/12/07 BUY 16,500 24.709
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07/16/07 BUY 15,500 25.369
------------------ ------------------- ------------------ ----------------------
0723/07 BUY 97,000 25.851
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07/24/07 BUY 100,000 25.348
------------------ ------------------- ------------------ ----------------------
07/25/07 BUY 3,500 24.520
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07/25/07 BUY 175,600 24.490
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07/25/07 SELL (175,600) 24.490
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07/26/07 BUY 150,000 24.431
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07/26/07 BUY 446,500 24.189
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07/27/07 BUY 100,000 24.490
------------------ ------------------- ------------------ ----------------------
07/30/07 BUY 400,000 25.506
------------------ ------------------- ------------------ ----------------------
07/31/07 BUY 150,000 25.779
------------------ ------------------- ------------------ ----------------------
08/02/07 BUY 24,000 25.167
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