Qualcomm activist spat a lesson for Silicon Valley 13 Apr 2015 Jana Partners wants the $114 bln chip maker to consider a breakup and reform its board. Hiding behind dual-class stocks, as some tech rivals do, may limit such meddling. But it wouldn’t fix Qualcomm’s problem of a sleepy board and entrenched management running it below potential.
Uber CEO’s aggressive driving proves contagious 9 Apr 2015 Travis Kalanick keeps defying rules of the road to grow his $40 bln ride-hailing app. Drivers are taking his cues, refusing riders with undesirable destinations and suing to become employees with benefits rather than contractors. Uber’s culture could yet come back to hurt it.
LinkedIn adds mission creep to its bulging résumé 9 Apr 2015 The job-seekers’ social network is buying online learning company lynda.com for $1.5 bln. LinkedIn claims both companies share the same ambition: “help professionals be better at what they do.” That fuzzy goal may encourage the firm to take on jobs for which it’s not suited.
Zynga’s multi-level StockVille proving hard to win 9 Apr 2015 When founder Mark Pincus stepped down as CEO in 2013, the FarmVille maker’s market value jumped. It tumbled again on the news that Pincus, who controls Zynga with three classes of stock, was coming back to officially run it. The super-voting share game is a treacherous one.
Guest view: What’s holding technology M&A back? 9 Apr 2015 Though deal-making is near boom-time highs, most of it’s not about making bold bets on the future, says Andreessen Horowitz’s managing partner. Activism plays a role. But as newly public tech firms that are more resistant to external pressure mature, the dynamic will shift.
Bankers may slink past patrolmen with $5.3 bln LBO 7 Apr 2015 BofA, Goldman and five other lenders are financing the year’s biggest buyout. The valuation of Informatica, at 18 times EBITDA, by Permira and a Canadian fund implies leverage beyond regulatory caps. The tech company’s cash flow and deferred revenue should make the math work – just.
Tencent’s discount to Facebook harder to justify 7 Apr 2015 The Chinese social media giant generated about the same revenue as its U.S. counterpart last year and was more profitable, despite having fewer users. Yet it trades at a lower multiple of earnings. As the two business models converge, the valuation gap needs a rethink.
Request for IBM activism likely falls on deaf ears 6 Apr 2015 Some big shareholders are begging for a Big Blue shake-up. They have reason to be dissatisfied – 11 quarters of falling revenue have sent the shares into a slump. Snag is IBM has already exhausted the typical activist playbook of tapping the balance sheet, buybacks and disposals.
Etsy priced robustly for handcrafted profitability 2 Apr 2015 The online marketplace for homemade stuff is targeting a $1.8 bln valuation in its IPO. Etsy is certainly growing its top line fast. But for investors to profit, the Brooklyn firm will need to prove it can stitch together eBay-ish returns from selling knit caps and the like.
New IPO rules won’t keep India’s Alibabas at home 31 Mar 2015 The regulator wants to ease standards to discourage start-ups from listing abroad. The catch is that the rules only apply to a junior market. Though that’s unlikely to tempt the likes of Flipkart and Snapdeal, it stops India joining the race to the bottom on governance.
Silicon Valley’s noble goals hit home in Indiana 30 Mar 2015 Apple, Google and other technology companies often fall short of promises to make the world a better place. Opposing discriminatory laws in the Hoosier State and elsewhere could make up for lost ground. An economic boycott helps put weight behind the industry’s lofty ideals.
Silicon Valley trials start as sexism lawsuit ends 28 Mar 2015 Venture capital firm Kleiner Perkins beat gender discrimination allegations, but the likes of Facebook and Twitter face similar lawsuits. The court of public opinion also has yet to deliver its verdict. Scrutiny of how the tech world treats women is just getting under way.
Sharing benefits may be lost on real economy 27 Mar 2015 The likes of Uber and Airbnb are rising fast. A new report projects, for example, the new breed of lodging services alone will grow nearly 20-fold over the next decade, to over $100 bln of bookings. Sharing is also cutting prices. The effects could elude official GDP figures.
Alibaba deal spree strains its financial strength 24 Mar 2015 The e-commerce giant barely explained its recent investments in an Israeli venture capital fund or U.S. chat app Snapchat. Similar purchases absorbed 75 pct of Alibaba’s operating cash flow in 2014. Though its core business is robust, returns on the new ventures are uncertain.
Rob Cox: If only GE had an activist who cared 17 Mar 2015 The problem with Jeff Immelt’s conglomerate isn’t inertia, bad managers or crummy assets. GE faces a harder nut to crack: Investors don’t seem to give a damn. As Microsoft’s experience before Satya Nadella suggests, the perception of a stock as dead money is hard to shake off.
Unicorn fantasy thrives at asset managers’ expense 17 Mar 2015 Venture capitalists have occasionally given birth to private firms worth more than $1 bln. Now the process is going mainstream, with the likes of Fidelity investing in Pinterest. The ballooning size and number of these companies may leave shareholders with unhealthy beasts.
Intel is back to being downwardly mobile 12 Mar 2015 The $146 bln company just slashed sales forecasts, signaling a false dawn on PCs last quarter. Similar warnings from Microsoft and HP, and Intel’s bloated receivables, underscore the reality. It exposes anew the chipmaker’s hole and means other suppliers are vulnerable too.
Silicon Valley sexism case tests new M&M color 11 Mar 2015 Venture capitalists at Kleiner Perkins didn’t slip the candy down blouses, behavior that cost one tech law firm big bucks in 1994. But they’re accused of unfairly blocking a woman’s rise. It’s a subtler but more toxic flavor of discrimination that suggests how little has changed.
Wood Mackenzie’s pipeline defies oil rout 10 Mar 2015 The research firm is fetching $2.8 bln, or 17 times EBITDA, from U.S. analytics company Verisk. WoodMac has gushed profit for several buyout firms. The global energy squeeze presents a risk for the new owner, but demand for data seems to persist regardless of crude supply.
Investors pay $20 bln for Apple’s $17,000 watch 9 Mar 2015 That’s the peak-to-trough slide in the iPhone maker’s market cap during its big reveal on Monday. Though the Watch starts at $349, it’s still Apple’s most overt fashion accessory yet. Shareholders may once again be underestimating the staying power of the company’s margins.