Bilibala: it is hard to tell the future, but i wish Eric will stay with Google and help it to grow even bigger.
http://www.reuters.com/article/idUSTRE70O2TE20110125?feedType=nl&feedName=ustechnology
(Reuters) - Google's Chief Executive Eric Schmidt said he expected to spend another 10 years at the company, after his surprise handover last week to co-founder Larry Page.
Schmidt, who from April will focus on deals and government outreach as executive chairman, also said the group would hire thousands of people this year, rejecting accusations that it has struggled to keep its best talent from leaving for Facebook and other Silicon Valley rivals.
"I'm very personally excited about my next decade at Google," Schmidt, who oversaw Google's meteoric rise, told the DLD media conference in Munich on Tuesday.
He told Reuters on January 21 that his move was an effort to speed up decision-making.
"In strategy we agree. There's no disagreement," Schmidt said of his relationship with Page, in a news conference following his DLD appearance.
"In character, he's fundamentally a deeper thinker than anybody else," he said. "He sees a few moves deeper than I do."
Schmidt is also set to get a $100 million equity award, his first since joining the company in 2001, which will vest over four years and includes stock units and options.
Google last week reported earnings and revenue that far exceeded expectations.
But while Google has dominated Internet search, it has struggled with social networking and is facing stiff competition from companies like Facebook and Twitter, which are stealing web traffic and perceived to be poaching engineering talent.
Schmidt rejected the notion that Google was losing key people. "Our retention has been actually the same and our turnover has been exactly the same for seven years," he said. "We're going to be hiring many thousands of people this year."
Schmidt said that in his new role he would be able to spend more time on government issues and Google's public image, among other things.
"We've got very complicated government issues, he said, adding however that Google's position in China appeared to be stable for the time being, following a renewal of its license there last June.
Google threatened to pull out of China after a high-profile hacking incident but eventually came to an agreement with the government and now runs a reduced service.
"I think it's stable, he said, before adding: "You never know. It's possible for the government of China to cause us not to work."
Schmidt said Google had considered stopping indexing confidential cables released by WikiLeaks, but had decided to carry on. Some other U.S. organizations have bowed to government pressure to stop cooperating with the controversial site.
"Has Google looked at the appropriateness of indexing WikiLeaks? The answer is yes, and we decided to continue," he said. "Because it's legal."
(Reporting by Georgina Prodhan; Editing by Jane Merriman and Jon Loades-Carter)
1.25.2011
Google 4q10 earning release & management resturcture
Bilibala: I think the management resturcture is more like an annoucement to help the shareholders to have a clear understand about Google's senior management team's role & responsiblities.
4q10 results looks great even assume FX rate are constant.
http://www.reuters.com/article/idUSTRE70I0BX20110121?feedType=nl&feedName=usmorningdigest
Google's Page brings change and questions
Reuters) - Larry Page will need a rare combination of vision and solid management skills when he takes over at Google in April.
One day after Google's surprise announcement that Page would replace Eric Schmidt as chief executive officer, investors and industry insiders are grappling with how the change will affect the world's No.1 Internet search company.
"What's going to change under Larry?" said BGC Partners analyst Colin Gillis, asking the question on the minds of executives from Silicon Valley to New York City.
"In our opinion, Larry is likely to increase investments as a priority. It could be a long-term positive, but short term it's a negative."
The company hopes 38-year-old Page will help streamline decision-making as it tries to deal with tougher competition from Facebook and Twitter.
Within technology circles, the move to replace Eric Schmidt left some wondering if Page can make a successful comeback to the company he helped create during the first dot-com boom. For a list of tech executive departures and hires see: r.reuters.com/pyh67r
"Founder becoming CEO ... Is this like a Steve Jobs returning or a Jerry Yang returning?" tweeted Chris Dixon, a technology veteran who has invested in Skype and Foursquare.
Steve Jobs returned to Apple Inc in the 1990s to save the company he founded. Yahoo Inc's Jerry Yang made a similar comeback, returning to his Internet company during a troubled stretch, but failed to restore its fortunes.
"It is important to note that, although the titles have changed, the core team remains the same ... this new team structure makes a lot of sense and could result in faster decision making," JP Morgan analysts led by Imran Khan said.
Some analysts believe Google's stock could gain another 20 percent from current levels.
Brokerage UBS said it was bullish on Google's long-term prospects and expects the company's focus on its emerging display network business, YouTube, Android and enterprise customers to deliver healthy returns in 2011.
Fourth-quarter operating margins were slightly weaker than expected at 53 percent on higher sales and marketing expenses.
JP Morgan's Khan, who lowered his 2011 operating margin estimates by less than a percentage point to 52.4 percent, said the expenses are necessary to promote future growth.
Evercore Partners, however, said it was still concerned about Facebook's growth trajectory and deepening integration with third party sites. Investors have speculated Facebook could cut into Google's business if advertisers shift to the social network.
Google Inc shares -- which gained 2 percent following Thursday's better-than-expected quarterly results and the announcement of the CEO change -- finished Friday's regular trading session 2.4 percent down at $611.83. The shares of Mountain View, California-based Google have risen 16 percent since Google reported third-quarter results mid-October and are up almost 45 percent from its 52-week low of $433.63 touched in July 2010.
(Reporting by Paul Thomasch in New York, Alexei Oreskovic in San Francisco and Sayantani Ghosh and Mary Meyase in Bangalore; editing by Joyjeet Das, Phil Berlowitz and Andre Grenon)
4q10 results looks great even assume FX rate are constant.
http://www.reuters.com/article/idUSTRE70I0BX20110121?feedType=nl&feedName=usmorningdigest
Google's Page brings change and questions
Reuters) - Larry Page will need a rare combination of vision and solid management skills when he takes over at Google in April.
One day after Google's surprise announcement that Page would replace Eric Schmidt as chief executive officer, investors and industry insiders are grappling with how the change will affect the world's No.1 Internet search company.
"What's going to change under Larry?" said BGC Partners analyst Colin Gillis, asking the question on the minds of executives from Silicon Valley to New York City.
"In our opinion, Larry is likely to increase investments as a priority. It could be a long-term positive, but short term it's a negative."
The company hopes 38-year-old Page will help streamline decision-making as it tries to deal with tougher competition from Facebook and Twitter.
Within technology circles, the move to replace Eric Schmidt left some wondering if Page can make a successful comeback to the company he helped create during the first dot-com boom. For a list of tech executive departures and hires see: r.reuters.com/pyh67r
"Founder becoming CEO ... Is this like a Steve Jobs returning or a Jerry Yang returning?" tweeted Chris Dixon, a technology veteran who has invested in Skype and Foursquare.
Steve Jobs returned to Apple Inc in the 1990s to save the company he founded. Yahoo Inc's Jerry Yang made a similar comeback, returning to his Internet company during a troubled stretch, but failed to restore its fortunes.
"It is important to note that, although the titles have changed, the core team remains the same ... this new team structure makes a lot of sense and could result in faster decision making," JP Morgan analysts led by Imran Khan said.
Some analysts believe Google's stock could gain another 20 percent from current levels.
Brokerage UBS said it was bullish on Google's long-term prospects and expects the company's focus on its emerging display network business, YouTube, Android and enterprise customers to deliver healthy returns in 2011.
Fourth-quarter operating margins were slightly weaker than expected at 53 percent on higher sales and marketing expenses.
JP Morgan's Khan, who lowered his 2011 operating margin estimates by less than a percentage point to 52.4 percent, said the expenses are necessary to promote future growth.
Evercore Partners, however, said it was still concerned about Facebook's growth trajectory and deepening integration with third party sites. Investors have speculated Facebook could cut into Google's business if advertisers shift to the social network.
Google Inc shares -- which gained 2 percent following Thursday's better-than-expected quarterly results and the announcement of the CEO change -- finished Friday's regular trading session 2.4 percent down at $611.83. The shares of Mountain View, California-based Google have risen 16 percent since Google reported third-quarter results mid-October and are up almost 45 percent from its 52-week low of $433.63 touched in July 2010.
(Reporting by Paul Thomasch in New York, Alexei Oreskovic in San Francisco and Sayantani Ghosh and Mary Meyase in Bangalore; editing by Joyjeet Das, Phil Berlowitz and Andre Grenon)
1.19.2011
Wells Fargo 4q10 earning release
Bilibala: 4q10 EPS $0.61 sightly off than what I expected $0.63. Mainly because its net interest income $11.1B looks flat compare to 3q10. While loan provision down further by 14% to 3.0B, its non interest expenses also move up to 13.3B or 8%. Excluded the 0.4B of the expense related to a 3 years charible donation, expenses up 5%, still higher than expected.
To Bilibala, i think Wells Fargos price over book ratio 1.38 is higher than peers, and since price move up from around $25 (3 months ago) to $32 now, I will change my recommendation from Strong Buy to Buy.
http://www.reuters.com/article/idUSTRE70I3FN20110119?feedType=nl&feedName=usbusinessearly
(Reuters) - Wells Fargo & Co (WFC.N) and U.S. Bancorp (USB.N) said low interest rates were squeezing lending profits, but improving credit quality helped both banks post higher fourth-quarter earnings.
Analysts and investors shrugged off the bottom-line figures and focused on the impact of low interest rates and a reluctance by businesses to tap their credit lines.
"It's a mixed bag looking at these banks," said analyst Shannon Stemm of Edward Jones in St. Louis. "There's improving fee income, but loan demand and interest income still remains weak."
Shares of Wells Fargo, the No. 4 U.S. bank by assets, fell 2 percent to $31.81, while U.S. Bancorp, the fifth-largest U.S. commercial bank, fell 2.9 percent to $26.52.
The banking industry is making more new loans to consumers and businesses.
U.S. Bancorp said average total loans increased 2 percent from a year earlier, and Wells Fargo said total loans grew 0.4 percent from the third quarter.
Analysts and economists have said an uptick in business borrowing is a key cog in the continuing economic recovery. But early fourth-quarter figures suggest businesses -- while taking out new loans -- are hesitant to use them.
U.S. Bancorp said companies were getting credit lines from the bank, but were not actively borrowing on them.
Commercial line utilization -- or the amount of money businesses borrowed under available credit -- fell to 26 percent in fourth quarter, an all-time low and down from 30 percent in the third quarter.
"We're looking forward to the day usage goes up," U.S. Bancorp Chief Executive Officer Richard Davis said on a conference call with analysts.
ASSET QUALITY
Analysts said that despite the slow loan growth, banks' balance sheets were beginning to show signs of health after three years of crisis and recession.
"The banks are building a foundation back to normal earnings," said Guggenheim Securities LLC analyst Marty Mosby. "Right now, asset quality has to get healthy, and that's happening at a much faster rate than I think a lot of us expected."
Wells Fargo's fourth-quarter profit increase stemmed in part from the release of $850 million in loan loss reserves, as the bank said its problem loans continued to shrink. Net charge-offs declined 29 percent from a year earlier.
U.S. Bancorp released $25 million in loan loss reserves during the period, the company's first such move since 2008.
Citigroup (C.N) also took a large reserve release in the fourth quarter, raising concerns among analysts about the quality of its results.
MARGIN PRESSURE
But improving credit did not offset the squeeze in net interest margin, or the money a bank receives in interest from loans against what it pays for deposits.
As the Federal Reserve continues to hold U.S. interest rates at record low levels, banks have little leeway on what they charge for loans and what they pay out for deposits.
Heading into 2011, both U.S. Bancorp and Wells Fargo said net interest margins would remain stagnant or shrink.
Davis said U.S. Bancorp's net interest margin of 3.83 percent, which declined from 3.91 percent in third quarter, would continue to contract at the same rate in the first three months of 2011.
Wells Fargo's net interest margin also shrank, to 4.16 percent from 4.25 percent in third quarter.
The bank posted a 21 percent increase in fourth-quarter profit to $3.4 billion, or 61 cents a share, meeting analysts' expectations, according to Thomson Reuters I/B/E/S.
U.S. Bancorp posted a 61 percent jump in net income. Earnings per share of 49 cents beat the analysts' average estimate by 3 cents.
Hudson City Bancorp (HCBK.O) and Fifth Third Bancorp (FITB.O) also reported results on Wednesday.
Hudson City beat expectations, but warned that net interest margins in 2011 may decline from fourth-quarter levels. Hudson shares sank 8.5 percent.
Fifth Third beat analysts' expectations, as delinquencies hit their lowest level in nearly four years. The bank also said it would launch a stock offering and use the proceeds to repay the aid it received under the government's Troubled Asset Relief Program.
(Reporting by Joe Rauch and Jonathan Spicer; writing by Ben Berkowitz and Joe Rauch; Editing by Lisa Von Ahn, John Wallace, Phil Berlowitz)
To Bilibala, i think Wells Fargos price over book ratio 1.38 is higher than peers, and since price move up from around $25 (3 months ago) to $32 now, I will change my recommendation from Strong Buy to Buy.
http://www.reuters.com/article/idUSTRE70I3FN20110119?feedType=nl&feedName=usbusinessearly
(Reuters) - Wells Fargo & Co (WFC.N) and U.S. Bancorp (USB.N) said low interest rates were squeezing lending profits, but improving credit quality helped both banks post higher fourth-quarter earnings.
Analysts and investors shrugged off the bottom-line figures and focused on the impact of low interest rates and a reluctance by businesses to tap their credit lines.
"It's a mixed bag looking at these banks," said analyst Shannon Stemm of Edward Jones in St. Louis. "There's improving fee income, but loan demand and interest income still remains weak."
Shares of Wells Fargo, the No. 4 U.S. bank by assets, fell 2 percent to $31.81, while U.S. Bancorp, the fifth-largest U.S. commercial bank, fell 2.9 percent to $26.52.
The banking industry is making more new loans to consumers and businesses.
U.S. Bancorp said average total loans increased 2 percent from a year earlier, and Wells Fargo said total loans grew 0.4 percent from the third quarter.
Analysts and economists have said an uptick in business borrowing is a key cog in the continuing economic recovery. But early fourth-quarter figures suggest businesses -- while taking out new loans -- are hesitant to use them.
U.S. Bancorp said companies were getting credit lines from the bank, but were not actively borrowing on them.
Commercial line utilization -- or the amount of money businesses borrowed under available credit -- fell to 26 percent in fourth quarter, an all-time low and down from 30 percent in the third quarter.
"We're looking forward to the day usage goes up," U.S. Bancorp Chief Executive Officer Richard Davis said on a conference call with analysts.
ASSET QUALITY
Analysts said that despite the slow loan growth, banks' balance sheets were beginning to show signs of health after three years of crisis and recession.
"The banks are building a foundation back to normal earnings," said Guggenheim Securities LLC analyst Marty Mosby. "Right now, asset quality has to get healthy, and that's happening at a much faster rate than I think a lot of us expected."
Wells Fargo's fourth-quarter profit increase stemmed in part from the release of $850 million in loan loss reserves, as the bank said its problem loans continued to shrink. Net charge-offs declined 29 percent from a year earlier.
U.S. Bancorp released $25 million in loan loss reserves during the period, the company's first such move since 2008.
Citigroup (C.N) also took a large reserve release in the fourth quarter, raising concerns among analysts about the quality of its results.
MARGIN PRESSURE
But improving credit did not offset the squeeze in net interest margin, or the money a bank receives in interest from loans against what it pays for deposits.
As the Federal Reserve continues to hold U.S. interest rates at record low levels, banks have little leeway on what they charge for loans and what they pay out for deposits.
Heading into 2011, both U.S. Bancorp and Wells Fargo said net interest margins would remain stagnant or shrink.
Davis said U.S. Bancorp's net interest margin of 3.83 percent, which declined from 3.91 percent in third quarter, would continue to contract at the same rate in the first three months of 2011.
Wells Fargo's net interest margin also shrank, to 4.16 percent from 4.25 percent in third quarter.
The bank posted a 21 percent increase in fourth-quarter profit to $3.4 billion, or 61 cents a share, meeting analysts' expectations, according to Thomson Reuters I/B/E/S.
U.S. Bancorp posted a 61 percent jump in net income. Earnings per share of 49 cents beat the analysts' average estimate by 3 cents.
Hudson City Bancorp (HCBK.O) and Fifth Third Bancorp (FITB.O) also reported results on Wednesday.
Hudson City beat expectations, but warned that net interest margins in 2011 may decline from fourth-quarter levels. Hudson shares sank 8.5 percent.
Fifth Third beat analysts' expectations, as delinquencies hit their lowest level in nearly four years. The bank also said it would launch a stock offering and use the proceeds to repay the aid it received under the government's Troubled Asset Relief Program.
(Reporting by Joe Rauch and Jonathan Spicer; writing by Ben Berkowitz and Joe Rauch; Editing by Lisa Von Ahn, John Wallace, Phil Berlowitz)
1.18.2011
Disney Narrows Loss in Hong Kong
Bilibala: Disney park in France are still in loss position, to me, it is challenging for HKG Disney to break even. However, with all other Disney products & services such as Studio & consumer products, I think porfit or loss is not a concern, at least not for Disney's shareholders.
On the other hand, for HKG government, haha, they should know what they investing before invested. They are not investing in Disney stock which will go up, but invested in Disney Park, which may take years to reduce to a lower losses. How much Disney can indirectly benefit HKG's tourism & economy? I don't think that's a lot if you replace it with another park similar to Ocean Park.
http://www.businessweek.com/news/2011-01-18/disney-narrows-loss-in-hong-kong-expects-profit-fairly-soon-.html
Jan. 18 (Bloomberg) -- Walt Disney Co. narrowed the annual loss at Hong Kong Disneyland and said it expects the business to turn profitable “fairly soon” as visitor numbers rise and the park expands.
The net loss shrank to HK$720 million ($93 million) in the 12 months ended Oct. 2 from a HK$1.3 billion loss a year earlier, according to a statement distributed in Hong Kong today. Park attendance increased 13 percent to 5.2 million visitors, boosting sales 19 percent to HK$3 billion.
The theme park benefited from a 27 percent surge in arrivals from mainland China in Hong Kong last year as wealth generated in the world’s fastest-growing major economy spurred outbound tourism. New areas of the park scheduled to be completed in 2014 may lure more visitors.
“We hope they can accelerate the expansion and add more rides,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council.
The park, a venture between Hong Kong’s government and the Burbank, California-based company, plans to add rides including “Toy Story Land,” “Grizzly Trail” and “Mystic Point” after the city approved the conversion of part of its loan to the park into equity in 2009 and Disney agreed to pay HK$3.5 billion.
“The expansion is very crucial to our profits in the future,” Hong Kong Disneyland managing director Andrew Kam told reporters today.
China Visitors
Hong Kong’s government owns about 53 percent of the theme park. Disney, the world’s largest media company, owns the rest.
The expansion plan is on time and on budget as the park signed most of the outsourcing contacts in 2009 that allow it to avoid a rise in raw-material costs, Kam said. “Toy Story Land” will be completed this year, he said.
The share of Hong Kong Disneyland visitors coming from mainland China rose to 42 percent from 36 percent, while Hong Kong’s contribution declined to 33 percent from 41 percent.
The park had earnings before interest, taxes, depreciation and amortization of HK$221 million. Hotel occupancy increased 12 percentage points to 82 percent.
Ticketing generates the most profit, Kam said, followed by merchandising, food and beverage and hotel businesses.
Total visitor arrivals to the former British colony surged 22 percent to 36 million in 2010, according to the government- backed Hong Kong Tourism Board. China’s National Tourism Administration said outbound tourism increased 17.5 percent last year to 56 million people, Xinhua News Agency reported Jan. 12.
Hong Kong Disneyland expects attendance to grow 10 percent in 2011, in line with a forecast from the city’s Tourism Board, Kam said.
--With assistance from Marco Lui in Hong Kong. Editors: Suresh Seshadri, Terje Langeland
On the other hand, for HKG government, haha, they should know what they investing before invested. They are not investing in Disney stock which will go up, but invested in Disney Park, which may take years to reduce to a lower losses. How much Disney can indirectly benefit HKG's tourism & economy? I don't think that's a lot if you replace it with another park similar to Ocean Park.
http://www.businessweek.com/news/2011-01-18/disney-narrows-loss-in-hong-kong-expects-profit-fairly-soon-.html
Jan. 18 (Bloomberg) -- Walt Disney Co. narrowed the annual loss at Hong Kong Disneyland and said it expects the business to turn profitable “fairly soon” as visitor numbers rise and the park expands.
The net loss shrank to HK$720 million ($93 million) in the 12 months ended Oct. 2 from a HK$1.3 billion loss a year earlier, according to a statement distributed in Hong Kong today. Park attendance increased 13 percent to 5.2 million visitors, boosting sales 19 percent to HK$3 billion.
The theme park benefited from a 27 percent surge in arrivals from mainland China in Hong Kong last year as wealth generated in the world’s fastest-growing major economy spurred outbound tourism. New areas of the park scheduled to be completed in 2014 may lure more visitors.
“We hope they can accelerate the expansion and add more rides,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council.
The park, a venture between Hong Kong’s government and the Burbank, California-based company, plans to add rides including “Toy Story Land,” “Grizzly Trail” and “Mystic Point” after the city approved the conversion of part of its loan to the park into equity in 2009 and Disney agreed to pay HK$3.5 billion.
“The expansion is very crucial to our profits in the future,” Hong Kong Disneyland managing director Andrew Kam told reporters today.
China Visitors
Hong Kong’s government owns about 53 percent of the theme park. Disney, the world’s largest media company, owns the rest.
The expansion plan is on time and on budget as the park signed most of the outsourcing contacts in 2009 that allow it to avoid a rise in raw-material costs, Kam said. “Toy Story Land” will be completed this year, he said.
The share of Hong Kong Disneyland visitors coming from mainland China rose to 42 percent from 36 percent, while Hong Kong’s contribution declined to 33 percent from 41 percent.
The park had earnings before interest, taxes, depreciation and amortization of HK$221 million. Hotel occupancy increased 12 percentage points to 82 percent.
Ticketing generates the most profit, Kam said, followed by merchandising, food and beverage and hotel businesses.
Total visitor arrivals to the former British colony surged 22 percent to 36 million in 2010, according to the government- backed Hong Kong Tourism Board. China’s National Tourism Administration said outbound tourism increased 17.5 percent last year to 56 million people, Xinhua News Agency reported Jan. 12.
Hong Kong Disneyland expects attendance to grow 10 percent in 2011, in line with a forecast from the city’s Tourism Board, Kam said.
--With assistance from Marco Lui in Hong Kong. Editors: Suresh Seshadri, Terje Langeland
1.17.2011
Jobs's health to overshadow quarterly Apple sales
Bilibala: a Corporation won't fall cuz of a person, there are many employees quit from Mircosoft, Mircosoft is still here; there are many employees quit from Google, Google is still growing. What about Apple without Steve Jobs? Apple will not fall, however, will it continue growing with new creative, innovative, customer beloved minds & products which in return with high gross margin & huge amount of profits? That's another story.
http://www.reuters.com/article/idUSTRE70G2Y320110118?feedType=nl&feedName=usbeforethebell
(Reuters) - The health of Apple Chief Executive Steve Jobs was set to overshadow quarterly sales numbers on Tuesday from the consumer electronics powerhouse, whose iPhone and iPad excited holiday shoppers.
The world's most valuable technology company said on Monday Jobs was taking a medical leave of absence without specifying a return date or detailing his condition.
Apple shares, up 62 percent in the last 12 months, dropped 4.5 percent in premarket trade on Tuesday. The U.S. market was closed on Monday for a holiday. In European trading, shares rose more than 4 percent, regaining some of the 6 percent lost after the announcement on Monday.
Aside from Jobs's health, the company is entering 2011 on a roll, a cash-generating machine with surging sales across its product lines. Wall Street has forecast Apple's quarterly revenue to rise more than 50 percent to $24.4 billion after a bumper holiday shopping season.
James Cordwell, an analyst at London-based Atlantic Equities, said investors were realizing Apple was more than Jobs. "His absence is unlikely to affect the company's performance over the next two years or so give the strong position they have in the market."
Other analysts, however, said Jobs's influence in the company he co-founded could not be overstated, particularly in guiding product development.
"Steve Jobs is seen by the market to be a major force in Apple's strategic direction," said Richard Windsor, global technology specialist at Nomura. "If his pancreatic cancer has returned, one could be quite worried."
Jobs's leave came nearly two years after he took a six-month break to undergo a liver transplant. He also took time off after pancreatic surgery in 2004.
Apple has not dwelt on Jobs's health, and Jobs himself asked for respect for his privacy in a memo to employees made public on Monday.
In Jobs's absence, it will be up to chief operating officer Tim Cook to decide how much to tell investors about the absent chief executive, and what Apple plans to do with its $50 billion-plus pile of cash and investments.
Less of a showman than Jobs, the 50-year old Alabama native was not expected to make any grand pronouncements. Cook is regarded as a safe pair of hands for the company, having stood in for Jobs twice before.
In Asia, tech shares gained, helped by hopes of a recovery in chip prices and expectations that nimble firms may slow the runaway success of Apple after the news on Jobs.
Rivals' hopes could be misplaced, however. "Apple's roadmap is all set and its iPhone 5 is ready to go, leaving little room for competitors to cut into its share," said Bonnie Chang, an analyst at Yuanta Securities in Taipei.
HUGE HOLIDAY SEASON
Apple's advantages are well-documented: the global spread of the iPhone, expected to sell more than 60 million units this year; the rise of the iPad which single-handedly created the tablet computing market; and continued strong growth from the resurgent Mac line of computers.
http://www.reuters.com/article/idUSTRE70G2Y320110118?feedType=nl&feedName=usbeforethebell
(Reuters) - The health of Apple Chief Executive Steve Jobs was set to overshadow quarterly sales numbers on Tuesday from the consumer electronics powerhouse, whose iPhone and iPad excited holiday shoppers.
The world's most valuable technology company said on Monday Jobs was taking a medical leave of absence without specifying a return date or detailing his condition.
Apple shares, up 62 percent in the last 12 months, dropped 4.5 percent in premarket trade on Tuesday. The U.S. market was closed on Monday for a holiday. In European trading, shares rose more than 4 percent, regaining some of the 6 percent lost after the announcement on Monday.
Aside from Jobs's health, the company is entering 2011 on a roll, a cash-generating machine with surging sales across its product lines. Wall Street has forecast Apple's quarterly revenue to rise more than 50 percent to $24.4 billion after a bumper holiday shopping season.
James Cordwell, an analyst at London-based Atlantic Equities, said investors were realizing Apple was more than Jobs. "His absence is unlikely to affect the company's performance over the next two years or so give the strong position they have in the market."
Other analysts, however, said Jobs's influence in the company he co-founded could not be overstated, particularly in guiding product development.
"Steve Jobs is seen by the market to be a major force in Apple's strategic direction," said Richard Windsor, global technology specialist at Nomura. "If his pancreatic cancer has returned, one could be quite worried."
Jobs's leave came nearly two years after he took a six-month break to undergo a liver transplant. He also took time off after pancreatic surgery in 2004.
Apple has not dwelt on Jobs's health, and Jobs himself asked for respect for his privacy in a memo to employees made public on Monday.
In Jobs's absence, it will be up to chief operating officer Tim Cook to decide how much to tell investors about the absent chief executive, and what Apple plans to do with its $50 billion-plus pile of cash and investments.
Less of a showman than Jobs, the 50-year old Alabama native was not expected to make any grand pronouncements. Cook is regarded as a safe pair of hands for the company, having stood in for Jobs twice before.
In Asia, tech shares gained, helped by hopes of a recovery in chip prices and expectations that nimble firms may slow the runaway success of Apple after the news on Jobs.
Rivals' hopes could be misplaced, however. "Apple's roadmap is all set and its iPhone 5 is ready to go, leaving little room for competitors to cut into its share," said Bonnie Chang, an analyst at Yuanta Securities in Taipei.
HUGE HOLIDAY SEASON
Apple's advantages are well-documented: the global spread of the iPhone, expected to sell more than 60 million units this year; the rise of the iPad which single-handedly created the tablet computing market; and continued strong growth from the resurgent Mac line of computers.
Wall Street's benchmarks for Apple's fiscal first quarter, which includes the holiday shopping season, are sales of roughly 15.5 million iPhones, 5.5 million iPads and 4 million Mac computers.
After the close of regular trading hours on Tuesday, Apple was expected to report earnings of $5.40 a share, according to Thomson Reuters I/B/E/S.
According to StarMine's SmartEstimate, which places more weight on recent forecasts by top-rated analysts, Apple should post EPS of $5.47 on revenue of $24.5 billion.
Even so, an out-sized surprise in Apple results has become an article of faith among investors. The company has beaten Wall Street's estimate by an average 29 percent over the past two years, and bested on revenue by 9 percent on average.
"The only surprise in earnings is if there is anything less than glorious news," said Barry Jaruzelski, a partner at consulting firm Booz & Co, last week.
1.14.2011
JPMorgan profit rises 47 percent, beating estimates
Bilibala: I haven't read through JP Morgan's financial release yet, but improvement in bank performance to me is kind of expected, that's why the stock price do not have a big jump after the news.
With QE2.0 the issue is not lack of cash, but too many funding with no where to invest: T-bill earning almost zero? lead out to ppl who are not credit worthy? invest in commodities? or what?
http://www.reuters.com/article/idUSTRE70D2BM20110114?feedType=nl&feedName=usbusinessearly
(Reuters) - JPMorgan Chase & Co reported a 47 percent increase in quarterly earnings, but much of the gain came from dipping into money previously set aside to cover bad loans.
The gradually recovering U.S. economy is allowing JPMorgan to keep less money on hand for loan losses. Profit and revenue was stronger than analysts had expected, and the bank made more loans.
But JPMorgan is still wrestling with the aftermath of the mortgage crisis -- it set aside another $1.5 billion to cover legal settlements mainly linked to U.S. home loan foreclosures.
"Hopefully it's going to be a good year," said JPMorgan Chief Executive Jamie Dimon on a conference call with journalists, adding that the economy looks better now than it did 12 months ago.
JPMorgan shares rose 10 cents to $44.55 in early trading on the New York Stock Exchange.
Analysts said the results could indicate headwinds for major banks reporting next week. The largest U.S. bank, Bank of America Corp, reports on Friday January 19, while Citigroup, the third largest, reports on Tuesday. Goldman Sachs Group reports on Wednesday.
JPMorgan said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Analysts on average expected $1 a share, according to Thomson Reuters I/B/E/S.
Fewer bad loans meant the bank could reduce loan-loss reserves for its credit card unit by $2 billion, or 30 cents a share after tax.
"The loan-loss reserves are something that bugs me," said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor. "I would love to see a bank hit their numbers without taking from loan-loss reserves for once," he added.
Revenue rose 6 percent to $26.7 billion on a managed basis, which adjusts for an accounting change for off-balance sheet entities. That was higher than the $24.37 billion expected by analysts.
HIGHER INVESTMENT BANKING REVENUE
In JPMorgan's investment bank, revenue rose 26 percent to $6.21 billion. Compensation expense per employee for the full year, a measure of how investment banking bonuses will fare, dropped 2.7 percent to $369,651.
Merger advisory revenue fell 31 percent from the fourth quarter 2009 to $424 million, but Chief Financial Officer Douglas Braunstein said revenue in this area should rise in 2011 because of the large number of deals in the pipeline.
Fixed-income trading revenue, at $2.88 billion, was 5 percent higher than the fourth quarter of 2009 but down 8 percent from the third quarter of 2010.
Some analysts expect Goldman Sachs and Morgan Stanley to post 10 percent to 15 percent declines in fixed income trading revenue, so JPMorgan's results could mean the business is not as bad as feared.
The bank benefited from a turnaround in its retail banking unit, which reported a profit of $708 million compared with a loss of $399 million in the year-earlier quarter.
Still, JPMorgan had to put aside $1.5 billion of additional litigation reserves related to soured mortgages it sold to investors and homes it may have improperly foreclosed on.
Bank of America Corp last week agreed to pay $2.8 billion to mortgage finance giants Fannie Mae and Freddie Mac to settle claims that it sold bad home loans to them.
Many investors fear that other banks will have to make similar settlement with the two government-backed entities.
(Additional reporting by Maria Aspan in New York and Dominic Lau in London; Editing by Lisa Von Ahn and Steve Orlofsky)
With QE2.0 the issue is not lack of cash, but too many funding with no where to invest: T-bill earning almost zero? lead out to ppl who are not credit worthy? invest in commodities? or what?
http://www.reuters.com/article/idUSTRE70D2BM20110114?feedType=nl&feedName=usbusinessearly
(Reuters) - JPMorgan Chase & Co reported a 47 percent increase in quarterly earnings, but much of the gain came from dipping into money previously set aside to cover bad loans.
The gradually recovering U.S. economy is allowing JPMorgan to keep less money on hand for loan losses. Profit and revenue was stronger than analysts had expected, and the bank made more loans.
But JPMorgan is still wrestling with the aftermath of the mortgage crisis -- it set aside another $1.5 billion to cover legal settlements mainly linked to U.S. home loan foreclosures.
"Hopefully it's going to be a good year," said JPMorgan Chief Executive Jamie Dimon on a conference call with journalists, adding that the economy looks better now than it did 12 months ago.
JPMorgan shares rose 10 cents to $44.55 in early trading on the New York Stock Exchange.
Analysts said the results could indicate headwinds for major banks reporting next week. The largest U.S. bank, Bank of America Corp, reports on Friday January 19, while Citigroup, the third largest, reports on Tuesday. Goldman Sachs Group reports on Wednesday.
JPMorgan said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Analysts on average expected $1 a share, according to Thomson Reuters I/B/E/S.
Fewer bad loans meant the bank could reduce loan-loss reserves for its credit card unit by $2 billion, or 30 cents a share after tax.
"The loan-loss reserves are something that bugs me," said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor. "I would love to see a bank hit their numbers without taking from loan-loss reserves for once," he added.
Revenue rose 6 percent to $26.7 billion on a managed basis, which adjusts for an accounting change for off-balance sheet entities. That was higher than the $24.37 billion expected by analysts.
HIGHER INVESTMENT BANKING REVENUE
In JPMorgan's investment bank, revenue rose 26 percent to $6.21 billion. Compensation expense per employee for the full year, a measure of how investment banking bonuses will fare, dropped 2.7 percent to $369,651.
Merger advisory revenue fell 31 percent from the fourth quarter 2009 to $424 million, but Chief Financial Officer Douglas Braunstein said revenue in this area should rise in 2011 because of the large number of deals in the pipeline.
Fixed-income trading revenue, at $2.88 billion, was 5 percent higher than the fourth quarter of 2009 but down 8 percent from the third quarter of 2010.
Some analysts expect Goldman Sachs and Morgan Stanley to post 10 percent to 15 percent declines in fixed income trading revenue, so JPMorgan's results could mean the business is not as bad as feared.
The bank benefited from a turnaround in its retail banking unit, which reported a profit of $708 million compared with a loss of $399 million in the year-earlier quarter.
Still, JPMorgan had to put aside $1.5 billion of additional litigation reserves related to soured mortgages it sold to investors and homes it may have improperly foreclosed on.
Bank of America Corp last week agreed to pay $2.8 billion to mortgage finance giants Fannie Mae and Freddie Mac to settle claims that it sold bad home loans to them.
Many investors fear that other banks will have to make similar settlement with the two government-backed entities.
(Additional reporting by Maria Aspan in New York and Dominic Lau in London; Editing by Lisa Von Ahn and Steve Orlofsky)
1.13.2011
Too good to be true - Judge approves on Madoff's case
Bilibala: u may lost a lot if u invest with a bad advisor or a poor investment vehicle, and through Madoff, I learn another lesson: u may lost everything if the advisor's performance is too good to be true.
Aviod too good to be true, even it is really attactive.
http://www.reuters.com/article/idUSTRE70C4SG20110113?feedType=nl&feedName=usdai
(Reuters) - A U.S. judge approved a $7.2 billion settlement on Thursday to pay former customers of the Madoff firm, the largest yet in the worldwide search for money lost in Bernard Madoff's multibillion-dollar Ponzi scheme.
The settlement with the estate of longtime Madoff friend and investor Jeffry Picower could be appealed after U.S. Bankruptcy Court Judge Burton Lifland in New York dismissed objections to the deal, which was announced on December 17.
"I can almost never satisfy their positions," Lifland said of the objectors. "I'm concerned about the broader grouping of people that are impacted by everything going on here."
Thousands of small and large investors were financially ruined by Madoff's decades-long scheme. A Ponzi scheme is one in which no actual trades in securities take place and early investors are paid with the money of new clients.
Investors who objected to the Picower deal are challenging the trustee in an appeals court over his method of calculating the "net winners" of the fraud. The "net winners" are clients who took out more than they deposited over the years from Bernard L. Madoff Investment Securities LLC (BLMIS).
Madoff, 72, is serving a 150-year prison sentence after pleading guilty in March 2009 to orchestrating the scheme. When he was arrested in December 2008, U.S. prosecutors estimated that the scheme took in about $65 billion over at least two decades.
Picard has put the amount of principal that investors lost in the fraud at about $20 billion. With the Picower settlement, Picard and his team of lawyers have secured about $10 billion.
Philanthropist Picower died of a heart attack in Florida at the age of 67 in October 2009. His wife, Barbara, agreed to the settlement for his estate.
In court on Thursday, David Sheehan, a lawyer for the trustee, commended Barbara Picower and said it was a "unique" and "great day" for BLMIS customers.
"The goal of this trustee is not just to get the 20 billion back," Sheehan told the judge. "We then have the net winners and net losers ... they have 45 billion in claims together ... it is the goal of this trustee to recover all of that."
The objectors to the Picower settlement argued in court that their claims against Picower were personal to them. They include claims for taxes paid on fictitious income and claims for the money stolen from them.
Their lawyer, Helen Chaitman, said an injunction in the settlement that would prevent her clients from individually suing the Picower estate left them no choice but to appeal.
"The devastation that has been caused is truly heinous and Mr Picower is being asked not to accept liability," Chaitman argued.
The money recovered in the settlement is to be distributed to investors under the auspices of the U.S. Department of Justice and the Securities Investor Protection Corporation, an agency established by Congress to help investors of failed brokerages.
The cases are Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court for the Southern District of New York No. 08-1789 and Picard v. Jeffry M. Picower No. 09-01197.
(Reporting by Grant McCool. Editing by Andre Grenon and Robert MacMillan)
Aviod too good to be true, even it is really attactive.
http://www.reuters.com/article/idUSTRE70C4SG20110113?feedType=nl&feedName=usdai
(Reuters) - A U.S. judge approved a $7.2 billion settlement on Thursday to pay former customers of the Madoff firm, the largest yet in the worldwide search for money lost in Bernard Madoff's multibillion-dollar Ponzi scheme.
The settlement with the estate of longtime Madoff friend and investor Jeffry Picower could be appealed after U.S. Bankruptcy Court Judge Burton Lifland in New York dismissed objections to the deal, which was announced on December 17.
"I can almost never satisfy their positions," Lifland said of the objectors. "I'm concerned about the broader grouping of people that are impacted by everything going on here."
Thousands of small and large investors were financially ruined by Madoff's decades-long scheme. A Ponzi scheme is one in which no actual trades in securities take place and early investors are paid with the money of new clients.
Investors who objected to the Picower deal are challenging the trustee in an appeals court over his method of calculating the "net winners" of the fraud. The "net winners" are clients who took out more than they deposited over the years from Bernard L. Madoff Investment Securities LLC (BLMIS).
Madoff, 72, is serving a 150-year prison sentence after pleading guilty in March 2009 to orchestrating the scheme. When he was arrested in December 2008, U.S. prosecutors estimated that the scheme took in about $65 billion over at least two decades.
Picard has put the amount of principal that investors lost in the fraud at about $20 billion. With the Picower settlement, Picard and his team of lawyers have secured about $10 billion.
Philanthropist Picower died of a heart attack in Florida at the age of 67 in October 2009. His wife, Barbara, agreed to the settlement for his estate.
In court on Thursday, David Sheehan, a lawyer for the trustee, commended Barbara Picower and said it was a "unique" and "great day" for BLMIS customers.
"The goal of this trustee is not just to get the 20 billion back," Sheehan told the judge. "We then have the net winners and net losers ... they have 45 billion in claims together ... it is the goal of this trustee to recover all of that."
The objectors to the Picower settlement argued in court that their claims against Picower were personal to them. They include claims for taxes paid on fictitious income and claims for the money stolen from them.
Their lawyer, Helen Chaitman, said an injunction in the settlement that would prevent her clients from individually suing the Picower estate left them no choice but to appeal.
"The devastation that has been caused is truly heinous and Mr Picower is being asked not to accept liability," Chaitman argued.
The money recovered in the settlement is to be distributed to investors under the auspices of the U.S. Department of Justice and the Securities Investor Protection Corporation, an agency established by Congress to help investors of failed brokerages.
The cases are Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC, U.S. Bankruptcy Court for the Southern District of New York No. 08-1789 and Picard v. Jeffry M. Picower No. 09-01197.
(Reporting by Grant McCool. Editing by Andre Grenon and Robert MacMillan)
1.11.2011
Tipping point in mobile internet users
Bilibala: i can see a tipping point since mid last year as everyone convert their old cell phone to smart phone. I personally convert mine in Jul last year too and i really have a PC everywhere experience. As users increase there data usage, it should benefit the wireless providers, the phone/tablet manufactures and interest search / gaming / advertising corporation.
http://www.reuters.com/article/idUSTRE70A2JS20110111?feedType=nl&feedName=ustechnology
(Reuters) - Mobile broadband subscriptions are on track to surpass 1 billion in 2011 only months after reaching half a billion, Ericsson said on Tuesday, highlighting a key growth driver for the telecom sector.
"During the course of 2010, a significant milestone in terms of mobile broadband subscriptions was reached as their number surpassed the half-a-billion mark globally," Ericsson, the world's biggest mobile network gear maker, said in a statement.
"Ericsson estimates that this number will double before 2011 ends."
Internet use on-the-go has soared in recent years, driven by cheap laptop computers, tablet computers such as Apple Inc's iPad and smartphones such as the iPhone.
Growing data traffic is seen driving revenue for telecoms operators and leading to increased investment in networks, boosting revenues for gear suppliers like Ericsson.
Asia Pacific is expected to account for the greatest number of subscriptions, around 400 million, followed by North America and western Europe with more than 200 million each, Ericsson said.
The group said that in 2008, mobile internet subscribers totaled around 200 million. By 2015, Ericsson believes mobile broadband subscriptions will top 3.8 billion, indicating the pace of growth is picking up.
The trend has already started boosting operators' revenues. Nordic telecoms firms TeliaSonera, Telenor and Tele2 all pointed to rising smartphone and mobile internet use as helping earnings last year.
Network providers like Ericsson, Nokia Siemens Networks and China's Huawei hope demand for on-line gaming, video streaming and watching TV will push operators to upgrade networks to boost capacity and speed.
(Reporting by Simon Johnson; Editing by David Holmes)
http://www.reuters.com/article/idUSTRE70A2JS20110111?feedType=nl&feedName=ustechnology
(Reuters) - Mobile broadband subscriptions are on track to surpass 1 billion in 2011 only months after reaching half a billion, Ericsson said on Tuesday, highlighting a key growth driver for the telecom sector.
"During the course of 2010, a significant milestone in terms of mobile broadband subscriptions was reached as their number surpassed the half-a-billion mark globally," Ericsson, the world's biggest mobile network gear maker, said in a statement.
"Ericsson estimates that this number will double before 2011 ends."
Internet use on-the-go has soared in recent years, driven by cheap laptop computers, tablet computers such as Apple Inc's iPad and smartphones such as the iPhone.
Growing data traffic is seen driving revenue for telecoms operators and leading to increased investment in networks, boosting revenues for gear suppliers like Ericsson.
Asia Pacific is expected to account for the greatest number of subscriptions, around 400 million, followed by North America and western Europe with more than 200 million each, Ericsson said.
The group said that in 2008, mobile internet subscribers totaled around 200 million. By 2015, Ericsson believes mobile broadband subscriptions will top 3.8 billion, indicating the pace of growth is picking up.
The trend has already started boosting operators' revenues. Nordic telecoms firms TeliaSonera, Telenor and Tele2 all pointed to rising smartphone and mobile internet use as helping earnings last year.
Network providers like Ericsson, Nokia Siemens Networks and China's Huawei hope demand for on-line gaming, video streaming and watching TV will push operators to upgrade networks to boost capacity and speed.
(Reporting by Simon Johnson; Editing by David Holmes)
1.06.2011
Let's face it
Bilibala: Facebook is a great social network site, thx to it, i found all my primary & high school friends. In terms of an investment, will it be too high to price this company at $50B?
The answer is unknown. The issue rely on whether Facebook can generate enough sales growth & able to increase profit margin from almost zero to say 20%.
During Google's IPO, it was priced at $52B while its revenue is about $3.2B. Price per sales was at 16.5 which is 33% more "attractive" than Facebook, its sales grows 642% from 2004 to 2009 while gross margin up from 20.1% to 35.1%.
If Facebook can do a similar great job, i guess it is worth to invest.
http://www.reuters.com/article/idUSTRE7055A520110106?feedType=nl&feedName=ustechnology
(Reuters) - Remember Webvan? The online grocer, whose initial public offering in March 2000 was among the most hotly anticipated during the dot-com boom, is now viewed as one of the greatest disasters of the era.
Fast forward 11 years and the feeding frenzy around Facebook and its exponentially expanding valuations are conjuring fears of a Bubble 2.0.
Goldman Sachs bankers have offered their private wealth clients less than a week to decide whether they want to hand over $2 million apiece for a sliver of the Web darling du jour: Facebook at a $50 billion valuation.
For one Goldman client, who was expecting a 100-page financial document on Facebook to be hand-delivered on Thursday, hours before the deadline to invest in the company -- the whole thing "felt a bit like 1999."
Thanks to Goldman Sachs' latest cash infusion of about $450 million with a commitment to raise another $1.5 billion, Facebook has become the lightning rod for debate over whether these new Internet hotshots possess the profit-generating muscles to justify Wall Street's unforgiving expectations.
Twitter and Groupon, an online coupons site considered by some as the fastest growing company in Web history, are also mulling plans for IPOs well ahead of Facebook's potential offering at the end of 2012, investment bankers have told Reuters.
LinkedIn is wasting no time. The social network for professionals, with 85 million members, has hired bankers to go public this year.
For Facebook, which generated about $2 billion in revenue in 2010, according to media reports, the $50 billion valuation means investors have awarded it a multiple of 25 times sales, compared with a nine-times multiple for Google, and Amazon.com's 2.5-times multiple.
Facebook generates $4 per user, compared with Google's $24 per user and Yahoo's $8 per user, according to a recent report by JPMorgan.
All that makes Facebook look expensive in the eyes of investors who measure businesses using traditional financial yardsticks, said Ken Sawyer, the managing director of venture capital firm Saints Capital, which owns shares of Facebook.
Investors will need to look past existing financial returns to focus on the company's business-transforming potential.
"It depends on your view of the world," said Sawyer. "If you believe that the ability to leverage this social network fabric will change the way companies acquire customers, then the valuation looks cheap."
Just as Google's search advertisements revolutionized the way businesses reach customers, Facebook's audience of a half-a-billion members has allowed companies like social gaming service Zynga and online dating service Zoosk to sign-up tens of millions of customers of their own in record time, Sawyer said.
As Facebook devises more ways to make money from that capability, such as by taking a cut of transactions made by other companies on its platform, the opportunity could be substantial, he said.
GLOBAL PHENOMENON
Facebook, born as a Harvard dorm-room project to help students to stay connected, has evolved into a global phenomenon, whose users include nearly as many people over 45 years of age as it does people under 24 years old.
In 2010, Facebook displaced Google as the most visited website in the United States, and nearly one out of every four graphical display ads viewed in the United States in the third quarter was on Facebook's website, according to analytics firm comScore.
Other young social networking businesses are experiencing similar growth.
Twitter, the microblogging service that has become an indispensable tool for celebrities and politicians to connect with fans, now counts more than 175 million users and fetched a $3.7 billion valuation in a recent round of venture capital funding.
Online coupon service Groupon recently announced plans to raise up to $950 million, implying a valuation that one research firm estimated could be as high $7.8 billion.
Premium valuations for top-tier players like Facebook and Groupon are usually worth it, wrote Google "developer advocate" Don Dodge in a widely read blog post on Tuesday. The potential for a bubble comes when investors bid up prices for third-tier companies, whose business prospects aren't as solid, he wrote.
Unlike in the late 1990s, shares of today's Web sensations are privately held and not available to the general public. But a growing secondary market has developed in which investors meeting certain criteria, such as minimum net worth, can buy and sell shares.
Goldman Sachs plans to raise up to $1.5 billion to invest in Facebook through a special purpose investment vehicle marketed to its private wealth management customers.
Such trading in companies that are not required to provide investors with the same kind of detailed financial reports and updates as public companies is raising alarms.
"It feels a little irrationally exuberant with some of these transactions, some of these values, particularly given the level of disclosure," said Robert Ackerman, the founder of early-stage venture capital firm Allegis Capital.
"Maybe with Facebook that's well placed," he said, "but what about all the other companies that are going to ride on Facebook's coat-tails."
The laws of gravity are also different in the private markets in which the new generation of Web superstars trade.
Because there's no way to short shares of private companies, the shares are subject to upward pressure but not downward pressure, noted BGC Financial analyst Colin Gillis.
"There's no counterbalance," he said.
(Additional reporting by Matthew Goldstein in New York; Editing by Kenneth Li and Steve Orlofsky)
The answer is unknown. The issue rely on whether Facebook can generate enough sales growth & able to increase profit margin from almost zero to say 20%.
During Google's IPO, it was priced at $52B while its revenue is about $3.2B. Price per sales was at 16.5 which is 33% more "attractive" than Facebook, its sales grows 642% from 2004 to 2009 while gross margin up from 20.1% to 35.1%.
If Facebook can do a similar great job, i guess it is worth to invest.
http://www.reuters.com/article/idUSTRE7055A520110106?feedType=nl&feedName=ustechnology
(Reuters) - Remember Webvan? The online grocer, whose initial public offering in March 2000 was among the most hotly anticipated during the dot-com boom, is now viewed as one of the greatest disasters of the era.
Fast forward 11 years and the feeding frenzy around Facebook and its exponentially expanding valuations are conjuring fears of a Bubble 2.0.
Goldman Sachs bankers have offered their private wealth clients less than a week to decide whether they want to hand over $2 million apiece for a sliver of the Web darling du jour: Facebook at a $50 billion valuation.
For one Goldman client, who was expecting a 100-page financial document on Facebook to be hand-delivered on Thursday, hours before the deadline to invest in the company -- the whole thing "felt a bit like 1999."
Thanks to Goldman Sachs' latest cash infusion of about $450 million with a commitment to raise another $1.5 billion, Facebook has become the lightning rod for debate over whether these new Internet hotshots possess the profit-generating muscles to justify Wall Street's unforgiving expectations.
Twitter and Groupon, an online coupons site considered by some as the fastest growing company in Web history, are also mulling plans for IPOs well ahead of Facebook's potential offering at the end of 2012, investment bankers have told Reuters.
LinkedIn is wasting no time. The social network for professionals, with 85 million members, has hired bankers to go public this year.
For Facebook, which generated about $2 billion in revenue in 2010, according to media reports, the $50 billion valuation means investors have awarded it a multiple of 25 times sales, compared with a nine-times multiple for Google, and Amazon.com's 2.5-times multiple.
Facebook generates $4 per user, compared with Google's $24 per user and Yahoo's $8 per user, according to a recent report by JPMorgan.
All that makes Facebook look expensive in the eyes of investors who measure businesses using traditional financial yardsticks, said Ken Sawyer, the managing director of venture capital firm Saints Capital, which owns shares of Facebook.
Investors will need to look past existing financial returns to focus on the company's business-transforming potential.
"It depends on your view of the world," said Sawyer. "If you believe that the ability to leverage this social network fabric will change the way companies acquire customers, then the valuation looks cheap."
Just as Google's search advertisements revolutionized the way businesses reach customers, Facebook's audience of a half-a-billion members has allowed companies like social gaming service Zynga and online dating service Zoosk to sign-up tens of millions of customers of their own in record time, Sawyer said.
As Facebook devises more ways to make money from that capability, such as by taking a cut of transactions made by other companies on its platform, the opportunity could be substantial, he said.
GLOBAL PHENOMENON
Facebook, born as a Harvard dorm-room project to help students to stay connected, has evolved into a global phenomenon, whose users include nearly as many people over 45 years of age as it does people under 24 years old.
In 2010, Facebook displaced Google as the most visited website in the United States, and nearly one out of every four graphical display ads viewed in the United States in the third quarter was on Facebook's website, according to analytics firm comScore.
Other young social networking businesses are experiencing similar growth.
Twitter, the microblogging service that has become an indispensable tool for celebrities and politicians to connect with fans, now counts more than 175 million users and fetched a $3.7 billion valuation in a recent round of venture capital funding.
Online coupon service Groupon recently announced plans to raise up to $950 million, implying a valuation that one research firm estimated could be as high $7.8 billion.
Premium valuations for top-tier players like Facebook and Groupon are usually worth it, wrote Google "developer advocate" Don Dodge in a widely read blog post on Tuesday. The potential for a bubble comes when investors bid up prices for third-tier companies, whose business prospects aren't as solid, he wrote.
Unlike in the late 1990s, shares of today's Web sensations are privately held and not available to the general public. But a growing secondary market has developed in which investors meeting certain criteria, such as minimum net worth, can buy and sell shares.
Goldman Sachs plans to raise up to $1.5 billion to invest in Facebook through a special purpose investment vehicle marketed to its private wealth management customers.
Such trading in companies that are not required to provide investors with the same kind of detailed financial reports and updates as public companies is raising alarms.
"It feels a little irrationally exuberant with some of these transactions, some of these values, particularly given the level of disclosure," said Robert Ackerman, the founder of early-stage venture capital firm Allegis Capital.
"Maybe with Facebook that's well placed," he said, "but what about all the other companies that are going to ride on Facebook's coat-tails."
The laws of gravity are also different in the private markets in which the new generation of Web superstars trade.
Because there's no way to short shares of private companies, the shares are subject to upward pressure but not downward pressure, noted BGC Financial analyst Colin Gillis.
"There's no counterbalance," he said.
(Additional reporting by Matthew Goldstein in New York; Editing by Kenneth Li and Steve Orlofsky)
RIM announces 4G PlayBook tablet
Bilibala: Apple 1st, then Google & Samsung was in, follow by RIM, Dell & Toshiba. I think the market is big enough to have healthy competition & everyone can make some profit out of it.
As a consumer, I can have a laptop & a tablet, there is no conflict between the two because it fit for 2 different purposes - laptop serves @ at home or at office, tablet serves on the way.
http://www.reuters.com/article/idUSTRE7050VJ20110106?feedType=nl&feedName=ustechnology
Corporate interest in Research in Motion's new tablet was "massive," the company said, as it announced plans to launch a 4G version of the device this summer with Sprint Nextel.
RIM for the first time on Wednesday provided a hands-on demonstration of the PlayBook, a seven-inch touchscreen tablet that will go head-to-head with Apple's iPad when the Wi-Fi-only version ships, likely in March.
"In large companies, they're talking deployment in the tens of thousands, right off the bat," said Jeff McDowell, senior vice president of enterprise and platform marketing for RIM.
He said corporations are viewing the PlayBook as a tool as essential to employees as a phone or a PC. "It's not something that they want to trickle in."
RIM's tablet is perhaps the most anticipated iPad rival in a sea of new competitors bent on challenging Apple and stealing a piece of a fast-growing market expected to top 50 million units next year.
McDowell said RIM decided to go with Sprint for its first high-speed wireless compatible tablet because it has most "ubiquitous 4G network at this point."
The choice of No. 3 U.S. mobile service Sprint as RIM's first carrier was an interesting one given that Sprint uses a high-speed wireless technology that is incompatible with networks being built by the top two U.S. mobile operators.
The PlayBook -- which sports a fast dual-core processor -- performed smoothly as it went through its paces, loading websites and applications quickly and playing Flash-based videos on the Internet with ease.
The PlayBook weighs less than one pound (400 grams) and is less than 10 millimeters thick, with a thin rubber coating.
Its software allows for multi-tasking and features a rotating "carousel" that shows all the programs that the device is running. A simple finger swipe up brings up the home screen, while a swipe out closes programs.
There has been plenty of debate in recent weeks about the PlayBook's battery life, a key point of competition in the tablet market. The 10-inch iPad boasts more than 10 hours of battery life.
McDowell said the PlayBook's battery will last as long or longer than other 7-inch tablets, although he declined to be more specific.
He said concerns about Flash programs draining battery life were "absurd generalizations." Apple has derided Flash as a battery hogging technology, and the iPad does not support the widely-used multimedia software.
TABLET WARS BEGIN
RIM is betting that its reputation for security and reliability will make the PlayBook a favorite in corporate IT departments.
But Apple CEO Steve Jobs has singled out the PlayBook for criticism, saying that seven-inch tablets will be "dead on arrival" when they hit the market.
McDowell said the PlayBook will launch with a library featuring "thousands" of apps available for download. When asked, he said RIM is looking at different screen sizes for the PlayBook, but declined to comment further.
The company has previously said it would sell the PlayBook for "under $500" but has not yet provided a specific price tag. The iPad starts at $499.
Analysts, on average, forecast RIM will sell fewer than 4 million PlayBooks in the 12 months after its launch.
Apple has sold more than 7 million iPads since launching the device in April and analysts predict that the company sold as many as 6 million in the December quarter.
RIM has plenty riding on the PlayBook. Once a darling of Wall Street, the company is having a hard time convincing investors that it is well-positioned to combat Apple and Google in the booming market for smartphones and tablets.
Shares in RIM spiked sharply in heavy volume in the last hour of Nasdaq trade to end the session 4.8 percent higher at $61.92. RIM's Toronto Stock Exchange-listed shares closed 4.4 percent higher at C$61.70.
(Editing by Anshuman Daga and Lincoln Feast)
As a consumer, I can have a laptop & a tablet, there is no conflict between the two because it fit for 2 different purposes - laptop serves @ at home or at office, tablet serves on the way.
http://www.reuters.com/article/idUSTRE7050VJ20110106?feedType=nl&feedName=ustechnology
Corporate interest in Research in Motion's new tablet was "massive," the company said, as it announced plans to launch a 4G version of the device this summer with Sprint Nextel.
RIM for the first time on Wednesday provided a hands-on demonstration of the PlayBook, a seven-inch touchscreen tablet that will go head-to-head with Apple's iPad when the Wi-Fi-only version ships, likely in March.
"In large companies, they're talking deployment in the tens of thousands, right off the bat," said Jeff McDowell, senior vice president of enterprise and platform marketing for RIM.
He said corporations are viewing the PlayBook as a tool as essential to employees as a phone or a PC. "It's not something that they want to trickle in."
RIM's tablet is perhaps the most anticipated iPad rival in a sea of new competitors bent on challenging Apple and stealing a piece of a fast-growing market expected to top 50 million units next year.
McDowell said RIM decided to go with Sprint for its first high-speed wireless compatible tablet because it has most "ubiquitous 4G network at this point."
The choice of No. 3 U.S. mobile service Sprint as RIM's first carrier was an interesting one given that Sprint uses a high-speed wireless technology that is incompatible with networks being built by the top two U.S. mobile operators.
The PlayBook -- which sports a fast dual-core processor -- performed smoothly as it went through its paces, loading websites and applications quickly and playing Flash-based videos on the Internet with ease.
The PlayBook weighs less than one pound (400 grams) and is less than 10 millimeters thick, with a thin rubber coating.
Its software allows for multi-tasking and features a rotating "carousel" that shows all the programs that the device is running. A simple finger swipe up brings up the home screen, while a swipe out closes programs.
There has been plenty of debate in recent weeks about the PlayBook's battery life, a key point of competition in the tablet market. The 10-inch iPad boasts more than 10 hours of battery life.
McDowell said the PlayBook's battery will last as long or longer than other 7-inch tablets, although he declined to be more specific.
He said concerns about Flash programs draining battery life were "absurd generalizations." Apple has derided Flash as a battery hogging technology, and the iPad does not support the widely-used multimedia software.
TABLET WARS BEGIN
RIM is betting that its reputation for security and reliability will make the PlayBook a favorite in corporate IT departments.
But Apple CEO Steve Jobs has singled out the PlayBook for criticism, saying that seven-inch tablets will be "dead on arrival" when they hit the market.
McDowell said the PlayBook will launch with a library featuring "thousands" of apps available for download. When asked, he said RIM is looking at different screen sizes for the PlayBook, but declined to comment further.
The company has previously said it would sell the PlayBook for "under $500" but has not yet provided a specific price tag. The iPad starts at $499.
Analysts, on average, forecast RIM will sell fewer than 4 million PlayBooks in the 12 months after its launch.
Apple has sold more than 7 million iPads since launching the device in April and analysts predict that the company sold as many as 6 million in the December quarter.
RIM has plenty riding on the PlayBook. Once a darling of Wall Street, the company is having a hard time convincing investors that it is well-positioned to combat Apple and Google in the booming market for smartphones and tablets.
Shares in RIM spiked sharply in heavy volume in the last hour of Nasdaq trade to end the session 4.8 percent higher at $61.92. RIM's Toronto Stock Exchange-listed shares closed 4.4 percent higher at C$61.70.
(Editing by Anshuman Daga and Lincoln Feast)
Subscribe to:
Posts (Atom)