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Javier E

Zuckerberg Bombshell: Did Facebook Bankers Quietly Slash Forecasts Before IPO? - The Da... - 0 views

  • Two days after a disastrous initial public offering, shares in Facebook are collapsing. They’re down to $33, well below the IPO price of $38.
  • The larger picture is that a powerful company, one that is collecting more information about more people than any organization in history, one that has 900 million members, making it the third-largest country on earth, is in the control of a 28-year-old man who has a history of being, well, less than forthright. Will it ever occur to people that so many who rub up against Facebook later notice that their watch and wallet are missing?
Javier E

Does Facebook's IPO Prove That Zuckerberg Isn't Up to the Job? - The Daily Beast - 0 views

  • The IPO disaster simply creates an incentive to pry even deeper into the lives of users, “the one thing people hate most,” Wadhwa says. Facebook can track people even when they’re not on the site, watching where they go and what they do. That information, sliced and analyzed the right way, could be of great value to advertisers.
  • Placing ads next to Google search results works well because people using Google are already searching for products. Advertising on Facebook is less effective because people go to the site to talk to their friends, not look for products.
  • nobody would be complaining if Facebook stock had gone up instead of down, a feat the company could have accomplished so easily, just by selling fewer shares at a lower price. But Facebook didn’t want to leave money on the table. Zuckerberg and his bankers let hubris, self-delusion, and ego get the better of them.
Javier E

More Bad News Piles Up for Facebook - Business - The Atlantic Wire - 0 views

  • nearly half of the respondents now have less favorable opinion of Facebook than they used to simply because the IPO has been such a disappointment. Even thought the declining share price and frustrating technical troubles had zero affect on most Americans (or even the average investor) simply giving off the impression of a bumbling, unpopular company can change the customer's perception of it
  • Part of the reason the stock is struggling is because the public offering has exposed some of the cracks in the armor of Facebook's business model. Ads are awkward and under-performing and revenue is not growing at the rate it once was, particularly when matched against the site gigantic user base. (The site makes a little over a dollar per user, each quarter.) That makes consumers less interested in the site, which depresses the ad market even more, which drives down share prices, which turns off consumers... and so on. The stock opens on Tuesday at $26.90, still well below its IPO price of $38. 
Javier E

Megan McArdle - Authors - The Atlantic - 0 views

  • Steve Pearlstein has a piece on bank compensation that points out something that I took on last year:  the absurdly high fees that investment banks charge to do deals. 
  • What we want to know is, why? Unless you know that, any project to put an end to these excess profits will stall out. 
  • There are standard answers that I find implausible, like "oligopoly".  Or rather, saying that they have a cosy anti-competitive club simply restates the question; it doesn't actually answer it.  Oligopolies aren't particularly stable--the Big Three persisted for so long arguably only because the UAW kept them from competing on labor costs. 
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  • Explanations I do find plausible, or maybe plausible:1.  The sums are so large and the stakes so huge that it doesn't make any sense to shop on price  This is what I focused on in my article.  Think of an IPO as the biggest, most expensive wedding ever planned, and you can perhaps grasp some of the price insensitivity.
  • 4.  The losses on the fees are too small for any one person to care This is a special case of number 1. 4% of an IPO is a lot of money in absolute terms.  But to whom is it a lot of money?  Not to the management, who are not going to risk millions over 4%.  Not to the stockholders, who do not care that much whether they pay $400 or $416 for their shares. 
  • it will probably persist for quite some time.  Individual markets will become more and more efficient as the assets are better understood--stocks used to be risky and complicated, and now they're mundane.  But finance as a whole, like Hollywood and professional sports, will continue to offer many opportunities to become obscenely wealthy.
woodlu

Where Is Jack Ma? Alibaba's Founder Has Kept a Low Profile Since October - WSJ - 0 views

  • the billionaire businessman disappeared from the public limelight following brushes with Chinese regulators in recent weeks.
  • The 56-year-old former English teacher founded Alibaba Group Holding Ltd. from a small apartment in eastern China in 1999.
  • The startup grew from a fledgling internet business matching wholesale buyers and sellers into a fast-growing technology empire,
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  • nnual sales in excess of $86 billion.
  • Until recently, Mr. Ma, who is a Communist Party member, was held up as a role model by the Party for his contribution to the “digital economy.”
  • Regulators regarded the speech as a direct attack against them, and Ant’s public debut was halted just two days before its big day, with Chinese leader Xi Jinping personally intervening to scuttle the market listing,
  • spoke at a financial forum in Shanghai.
  • delivered a speech that was highly critical of Chinese regulators, who he said had stifled innovation in the financial industry.
  • Shortly after the speech, regulators scrapped a planned initial public offering of Ant that would have been the world’s largest to date, raising more than $34 billion from listings in Hong Kong and Shanghai.
  • Mr. Ma last appeared publicly in late October,
  • Beijing is now looking to shrink Mr. Ma’s technology and financial empire and potentially take a larger stake in his businesses,
  • Alibaba is now facing an antitrust probe by Chinese market regulators, who are investigating claims that the company abused its dominant position in the e-commerce industry to pressure some merchants to work only with its platforms.
  • In November last year, Mr. Ma didn’t appear on an episode of a television show in which he was set to appear as a judge,
  • An Alibaba spokeswoman said his absence was due to a scheduling conflict, and declined to comment on Mr. Ma’s activities.
  • t isn’t uncommon for Chinese billionaires to disappear from the public eye for long periods during legal and regulatory investigations.
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  • Its market capitalization dropped in the final days of 2020 to less than $600 billion, from a high of $859 billion just before the Ant IPO was scuttled.
  • Alibaba owns one-third of Ant. Its shares have fallen by a further 2% so far in 2021.
lilyrashkind

Start-up investors issue warnings as boom times 'unambiguously over' - 0 views

  • Y Combinator said companies have to “understand that the poor public market performance of tech companies significantly impacts VC investing.”
  • Slow your hiring! Cut back on marketing! Extend your runway!The venture capital missives are back, and they’re coming in hot.With tech stocks cratering through the first five months of 2022 and the Nasdaq on pace for its second-worst quarter since the 2008 financial crisis, start-up investors are telling their portfolio companies they won’t be spared in the fallout, and that conditions could be worsening.
  • It’s a stark contrast to 2021, when investors were rushing into pre-IPO companies at sky-high valuations, deal-making was happening at a frenzied pace and buzzy software start-ups were commanding multiples of 100 times revenue. That era reflected an extended bull market in tech, with the Nasdaq Composite notching gains in 11 of the past 13 years, and venture funding in the U.S. reaching $332.8 billion last year, up sevenfold from a decade earlier. according to the National Venture Capital Association.
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  • As it turns out, technology demand only increased and the Nasdaq had its best year since 2009, spurred on by low interest rates and a surge in spending on products for remote work.
  • “Companies that recently raised at very high prices at the height of valuation inflation may be grappling with high burn rates and near-term challenges growing into those valuations,” Shakir told CNBC in an email. “Others that were more dilution-sensitive and chose to raise less may now need to consider avenues for extending runway that would have seemed unpalatable to them just months ago.”
  • “Our companies heeded that advice and most companies are now prepared for winter,” Lux wrote.
  • “This time, many of those tools have been exhausted,” Sequoia wrote. “We do not believe that this is going to be another steep correction followed by an equally swift V-shaped recovery like we saw at the outset of the pandemic.”Sequoia told its companies to look at projects, research and development, marketing and elsewhere for opportunities to cut costs. Companies don’t have to immediately pull the trigger, the firm added, but they should be ready to do it in the next 30 days if needed.
  • And among companies that are still private, staff reductions are underway at Klarna and Cameo, while Instacart is reportedly slowing hiring ahead of an expected initial public offering. Cloud software vendor Lacework announced staffing cuts on Friday, six months after the company was valued at $8.3 billion by venture investors.“We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment,” Lacework said in a blog post.
  • Shakir agreed with that assessment. “Like many, we at Lux have been advising our companies to think long term, extend runway to 2+ years if possible, take a very close look at reducing burn and improving gross margins, and start to set expectations that near-term future financings are unlikely to look like what they may have expected six or 12 months ago,” she wrote.
  • Lux highlighted one of the painful decisions it expects to see. For several companies, the firm said, “sacrificing people will come before sacrificing valuation.”But venture firms are keen to remind founders that great companies emerge from the darkest of times. Those that prove they can survive and even thrive when capital is in short supply, the thinking goes, are positioned to flourish when the economy bounces back.
  • conditions.”CORRECTION: This story was updated to reflect that cloud software vendor Lacework raised $1.3 billion in growth funding at a valuation of $8.3 billion.
julia rhodes

U.S. Citizens Renouncing Skyrocket---The Tina Turner Effect - Forbes - 0 views

  • America is a great land and lures immigrants worldwide, yet record numbers of U.S. citizens and permanent residents are giving up their citizenship or residency.
  • And this year that trend is up by at least 33%  from the previous high in 2011.
  • Since then, the tax and other consequences do not depend on why one leaves. Yet after Facebook co-founder Eduardo Saverin departed permanently for Singapore with his Facebook IPO riches, there was an angry backlash.
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  • Meantime, are people following Tina Turner’s lead? No, and not Eduardo Saverin’s either. Most expatriations are probably motivated primarily by factors such as family and convenience. Many people like Ms. Turner have built a life somewhere else and may not plan to need a U.S. passport.
  • Although statistics are not available for why people say a final good-bye, many now find America’s global income tax compliance and disclosure laws inconvenient and nettlesome.
  • What’s more, U.S. reporting is based on their worldwide income, even though they are paying taxes in the country where they live.
  • . It requires an annual Form 8938 to be filed with income tax returns for foreign assets meeting a threshold. And foreign banks are sufficiently worried about keeping the IRS happy that many simply do not want American account holders. Americans abroad can be pariahs shunned by banks for daily banking activities.
  • To exit, you generally must prove 5 years of tax compliance in the U.S. Plus, if you have a net worth greater than $2 million or have average annual net income tax for the 5 previous years of $155,000 or more (that’s tax, not income), you pay an exit tax.
runlai_jiang

Softbank plans $18bn share sale of its mobile business - BBC News - 0 views

  • Softbank plans $18bn share sale of its mobile business
  • Japanese giant Softbank is planning to list its mobile phone business in Tokyo and overseas, according to the Nikkei newspaper. The listing on the Tokyo Stock Exchange and possibly in London aims to raise 2 trillion yen ($18bn; £13.1bn).Softbank confirmed in a statement that the share sale is an option but no decision has yet been made.
  • SoftBank would use the proceeds to invest in growth, such as buying into foreign information-technology companies, the Nikkei said.The Japanese telecommunications giant is one of the world's biggest technology companies and is run by its founder, Japanese entrepreneur Masayoshi Son.It has previously acquired Vodafone's Japanese operations and the US telecoms company Sprint.In 2016, Softbank bought UK technology firm ARM Holdings for $24bn ($32bn).
Javier E

Opinion | Fake Meat Will Save Us - The New York Times - 0 views

  • At a moment when animal-based agriculture is near the top of planet-killing culprits, ditching meat for substitutes, faux or otherwise, is the most effective thing an individual can do to fight climate change, according to a study in the journal Science.
  • More than 500 million years after life took hold on earth, humans are having such a drastic effect on it that we are now the dominant geologic force. This designation comes not from the usual concerned voices seeking recognition from distracted media and political elites, but from a key body within the international union of geological scientists. As these folks like to say: rocks don’t lie.
  • Industrial agriculture to produce meat is the coal-mining of food production. Producing a single beef burger takes about 660 gallons of water — equivalent to a full week of water use by the average household in the United States
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  • Vegans and vegetarians make only about 8 percent of the population, a static number.
  • ollan is a fan, saying fake meatballs might help save the world.
  • the free market — judging by soaring sales and a bullish roar from Wall Street to Beyond Meat, a company that was briefly worth more than Macys or Xerox by market capitalization one day this week — is lining up with the environment on this one, as carnivores take notice.
Javier E

Opinion | The Next Decade Will Be Just as Bad - The New York Times - 0 views

  • We will remember the 2010s as a grifter’s paradise. These were the years when our collective sense of objective reality totally fell apart and when politics, business, technology, culture and even ordinary life fell fully under the sway of a new breed of swindler, huckster, influencer, troll and hacker.
  • this was the big lesson of the 2010s: Almost nothing is as it seems. Doubt everything. Trust no one.
  • pervasive doubt could just as well bring on civilizational ruin.
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  • Getting through modern life seems to require adopting a corrosive view of society that makes a hash of our fundamental ideas about the value of cooperation and trust among our fellow humans
  • We’re bringing on a death-spiral of distrust
  • Our information system has slipped its moorings, and as a result, lying and scheming and fraud has simply become too effective a life strategy. As I argued in March, when the celebrity college admissions scandal broke, we’re seeing the “uberization” of corruption — bending the rules is becoming routine and pervasive, a push-button cheat code for modern life.
  • The grift wasn’t limited to politics. The tech industry welcomed hucksters with open arms. Look at WeWork, Uber and Theranos — once high-flying start-ups that promised to change the world in big ways and small, each unmasked for peddling false prospects, unreal tech or hiding systemic corruption and abuse
  • Facebook and other social media services were not just a haven of state-sponsored disinformation; with dodgy, easily gamed stats, social media increasingly came to provide a false view of the world.
  • Why are we being overrun by scams? Society’s signals for judging reputation and trustworthiness haven’t caught up with the changing tech.
  • rather than the establishment foiling Trump, his slippery style and overwhelming blizzard of lies would so fully alter political and media culture that by the end of the decade, members of the G.O.P. would be embracing and echoing his conspiracy theories as a way to forestall his removal from office.
  • It’s not a big leap from “Trust no one” to “swindle everyone.”
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