Posts Tagged ‘Stocks’


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HTC, founded only in 1997 and for the first 11 years of its existence was a little-known contract manufacturer for other brands, was valued at $33.8bn after the close of trading in Asia on Thursday,
HTC’s market value is also bigger company than either Sony or LG Electronics, according to Thomson Reuters data, but it remains smaller than Apple or Samsung Electronics, although unlike those two companies, the smartphone is the Taiwanese company’s sole business.
HTC shares are now a third higher than they were at the start of the year, while Nokia’s shares have fallen by a fifth over the same period

HTC overtakes Nokia in market value

FT.com / Telecoms – By Robin Kwong in Taipei
Published: April 7 2011 12:54 | Last updated: April 7 2011 12:54

Taiwan’s HTC has overtaken Nokia to become the third most valuable maker of mobile phones, highlighting the speed with which touchscreen-based smartphones have become a mass-market product in Europe and the US.
The growth of HTC, which was valued at $33.8bn after the close of trading in Asia on Thursday, also highlights the slide in value of Nokia which has failed to innovate in the new smartphone market.
The problems facing the Finnish mobile phone maker, which had a market capitalisation of $33.4bn based on Wednesday’s closing prices, were highlighted by Moody’s on Thursday.
The credit agency downgraded Nokia’s debt rating from A2 to A3, citing the company’s weakened market position and uncertainty over its transition to Microsoft’s Windows Phone software.
HTC’s market value is also bigger company than either Sony or LG Electronics, according to Thomson Reuters data, but it remains smaller than Apple or Samsung Electronics, although unlike those two companies, the smartphone is the Taiwanese company’s sole business.
HTC shares are now a third higher than they were at the start of the year, while Nokia’s shares have fallen by a fifth over the same period.
Nokia remains the world’s biggest producer of mobile devices by volume, with a 28.9 per cent global market share at the end of last year, according to Gartner.
But Nokia has fallen behind rivals in the smartphone market where Apple’s iPhone and Android-based phonemakers such as HTC have taken market share.
Nokia’s failure to compete culminated in a high-profile management reshuffle last year, with Steven Elop becoming the first non-Finnish chief executive of the company in its 145-year history.
Mr Elop, who joined Nokia from Microsoft, likened the company’s predicament to a man on a “burning platform” as he outlined a plan to transform the company and make it more competitive.
The American is now seeking to reinvent Nokia as a provider of premium smartphones based on Microsoft’s Windows Mobile platform.
HTC’s rapid rise reflects the speed with which touchscreen-based smartphones have become a mass-market product in Europe and the US.
Its sales last year was T$278.8bn ($9.6bn) and it shipped 24.7m units last year, according to Gartner, compared with 46.6m units of iPhones shipped last year.
While growth is expected to slow this year compared with 2010, the global smartphone market is still expected to grow by 50 per cent, according to IDC.
Unlike HTC, which was positioned from the start to take advantage of this trend, many other mobile phonemakers were caught off-guard by this rapid change.
HTC was founded only in 1997 and for the first 11 years of its existence was a little-known contract manufacturer for other brands. But since it made the world’s first Android-based phone for T-Mobile in 2008, the company has proved quick to adapt to the market’s changes.
HTC took advantage of the 18-month period in which it was the sole producer of Android-based phones to grow quickly in size. C.K. Cheng, analyst at CLSA, the equity brokerage, says that HTC’s scale means that “in times of tightness in the supply chain, such as now after the Japan earthquake, all the suppliers are going to ensure that Apple and HTC get their orders filled first rather than Motorola or Sony Ericsson”.
The rally in HTC’s shares also reflects the fact that it has been quick to fill the nascent market for phones running on much faster, fourth-generation networks. In the US, HTC’s Evo Shift, for Sprint’s network, and its Thunderbolt, for Verizon, are the only two 4G smartphones available on the market, although competing devices will soon be launched.
“Even if it is just a one or two-month lead, it is still a significant advantage,” Mr Cheng said.
However, some analysts, such as Morgan Stanley’s Jasmine Lu, worry that HTC will face increasing headwinds as competitors catch up, and may see its profit margins fall if low or mid-ranged smartphone models grow in popularity at the expense of premium models.

Copyright The Financial Times Limited 2011
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Vivendi to Buy Vodafone SFR Stake for $11.3 Billion

Vivendi, the French media conglomerate, announced on Sunday
that it had taken full control of SFR, a large cellphone
service provider, buying Vodafone’s 44 percent stake in
the company for $11.3 billion in cash.

The deal gives Vivendi full control of one of its biggest
business units, a longtime goal for the company. SFR is one
of the biggest cellphone carriers in France. It earned
nearly 4 billion euros in profit last year and had about 20
million mobile service customers as of Sept. 1.

DEALBOOK:
http://dealbook.nytimes.com/2011/04/03/vivendi-to-buy-vodafones-stake-in-sfr-for-11-billion/?nl=business&emc=dlbka9


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LinkedIn’s IPO to test appetite for Facebook

LinkedIn CEO Jeff Weiner talks during an interview during the Reuters Technology Summit in San Francisco, California May 17, 2010. REUTERS/Robert Galbraith

NEW YORK/SAN FRANCISCO | Thu Jan 27, 2011 10:21pm EST 

NEW YORK/SAN FRANCISCO (Reuters) – LinkedIn Corp announced plans to go public this year in what could be a test of investor appetite for social networking websites ahead of a highly anticipated Facebook offering.
LinkedIn announced its intention to go public on Thursday, setting the stage for the company co-founded in 2002 by ex-PayPal executive Reid Hoffman to become the first social network to plant a flag on Wall Street.

But many investors will be watching LinkedIn’s IPO to gauge the appetite for Facebook, now valued at $50 billion as the world’s most dominant social network, and other Internet IPOs.
“Facebook has definitely escalated people’s interest in the sector and I think there’s a lot of demand (for more Internet IPOs),” said Rory Maher, an analyst with Hudson Square Research.

The number of shares to be offered and the price range have not yet been determined, according to the form S-1 registration statement that LinkedIn filed with the Securities and Exchange Commission.

Investor interest and valuations are surging for privately held Web companies like Facebook, Zynga and Groupon. LinkedIn revealed its plans a day after newly public Internet company Demand Media Inc saw its shares jump roughly 33 percent in their first day of trading.
Just this week, Groupon Chief Executive Andrew Mason said the company was considering an IPO and was in talks with bankers.

Facebook, the world’s No. 1 Internet social network, recently raised $1.5 billion in funding in a deal that valued the company at $50 billion.

Facebook said recently it planned to publicly disclose its financial results by April 2012, a regulatory requirement triggered by the company’s number of shareholders and a move that some believe could lead to a public offering.

LinkedIn’s net revenue nearly doubled to $161.4 million in the first nine months of 2010, with $1.85 million in profit, according to the filing.

In contrast, Facebook, which has far more users worldwide, had $1.2 billion in revenue in the first nine months of 2010 and $355 million in profit, according to a Goldman Sachs prospectus pitching the company earlier this month to investors.

LinkedIn, which caters to professionals, has 90 million users, compared with the more than 500 million users of Facebook’s mainstream social networking service.

Morgan Stanley, Bank of America and JPMorgan are among the book runners for the LinkedIn offering.

A portion of the shares will be issued and sold by the company, while a separate portion will be sold by certain stockholders of LinkedIn, the filing said. No specific details were disclosed.
LinkedIn’s investors include Greylock Partners, Bessemer Venture Partners, Goldman Sachs and Sequoia Capital, a venture capital firm that has backed Yahoo, Google, Apple Cisco Systems and Oracle.

(Reporting by Nadia Damouni in New York and Alexei Oreskovic in San Francisco; Editing by Bernard Orr, Gary Hill)

LinkedIn’s IPO to test appetite for Facebook | Reuters

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The Value of a Piece of Facebook

September 28, 2010, 3:00 am
 

Mark Zuckerberg’s donation of $100 million to the troubled schools of Newark made waves last week, but now it’s time to look a gift horse in the mouth, The New York Times’s Andrew Ross Sorkin writes in his latest DealBook column.
The $100 million is coming as shares in Facebook, a company that has yet to go public, whose books aren’t open for the world to see, and whose stock can only be traded on the obscure secondary market. So Mr. Zuckerberg’s noble act has prompted another round of that cherished parlor game of the tech world: How much is Facebook worth? And how many shares will it take to make $100 million?
While recent transactions in Facebook shares suggest a market value of $33 billion, judging by minority stakes can skew estimates of a company’s total worth, Mr. Sorkin writes.
Read the column here, or after the jump.
The Value of a Piece of Facebook
By ANDREW ROSS SORKIN
Yep, it was another deal hatched in Sun Valley.
During Allen & Company’s annual mogul-fest in the Idaho mountains in July, Mark Zuckerberg, the founder of Facebook, devised a plan with Mayor Cory A. Booker of Newark to donate a $100 million challenge grant for the city’s troubled schools.
The gift, announced with much fanfare Friday on “The Oprah Winfrey Show” (with all the requisite swooning over the 26-year-old Mr. Zuckerberg’s desire to give anonymously), attracted $40 million in matching gifts so far by Monday from the likes of William A. Ackman, the hedge fund manager, and John Doerr, the venture capitalist.
But Mr. Zuckerberg’s donation has some scratching their heads.
How is he going to pay for it? After all, Facebook has yet to go public. In Silicon Valley’s parlance, Mr. Zuckerberg is “paper-rich, cash-poor.”
While Mr. Ackman and Mr. Doerr are probably making their charitable gifts in cold hard cash, Mr. Zuckerberg is doing something different. He’s giving away $100 million worth of Facebook shares to Startup: Education, a new foundation he has started and on whose board he will sit. The foundation, in turn, will sell the shares for cash in what’s known as the “secondary market,” a nebulous world where big-time investors buy into companies before they go public — through the back door.
It turns out that there is a robust market for Facebook shares, even though most people can’t buy them. The going price has been about $76 a share, The Financial Times reported last month, implying a market value of $33 billion. Dozens of employees have sold their shares in the secondary market.
Elevation Partners, the buyout firm that counts Bono of U2 as a partner, paid $120 million for Facebook shares in June at an implied valuation of $23 billion. If the secondary market is accurate, Elevation has already made a pretty penny.
And Yuri Milner, a Russian entrepreneur, has managed to amass a 10 percent stake in Facebook largely through the secondary market. His Digital Sky Technologies paid $200 million for a 2 percent stake, then raised that amount by buying up shares from employees.
The party may soon be ending. Once more than 500 individuals or institutions own shares in Facebook, securities laws mandate that the company go public. Google staged an I.P.O. in part because it hit that same threshold.
But all this share counting raises a new question: Is Mr. Zuckerberg’s $100 million donation really worth just that?
Facebook isn’t saying how Mr. Zuckerberg, or the New Jersey school system, plan to value his shares. (Cynics have suggested that the donation is a publicity stunt to polish Mr. Zuckerberg’s image ahead of Friday when “The Social Network,” a fictionalized story of Facebook’s founding, opens in theaters. Give the guy some credit, he just gave $100 million to a needy school system.)
People involved in the donation process say that the Facebook shares pledged will be worth $100 million based on the company’s own internal valuation, not the value assigned by the secondary market.
It’s probable that Mr. Zuckerberg’s valuation of the shares will be much lower than that of the secondary market. As a result, the donation might ultimately be worth even more than his initial pledge once the foundation seeks to sell those shares, possibly over a period as long as five years.
And indeed, a look at the secondary market suggests that shares frequently trade at a premium to their real value — because there are so few of them.
The topic has ignited quite a bit of debate on the Internet, including on sites like GigaOm.
“Minority investment evaluations aren’t real,” David Heinemeier Hansson, a partner in the software developer 37Signals, contended on his blog, adding that Facebook’s secondary market valuation was “entirely based on what starstruck minority investors have paid for a tiny slice of the company.”
That prompted Joel Spolsky, another software developer, to reply that Mr. Hansson’s post was “so economically bizarre and incorrect that I don’t even know where to start. It’s like you wrote a blog post arguing that it is incorrect to refer to a five-foot-tall boy as five feet tall because he’s often sitting down. Every single day every single public company in the world is valued by the last share traded, usually for a tiny fraction of the company.”
In truth, Mr. Hansson is probably right. With so few shares available, it’s hard to extrapolate Facebook’s real market value. Microsoft directly invested $240 million for a slice of Facebook two years ago, valuing the social network at $15 billion. That might have been accurate — or might not have been. After all, Microsoft’s deal was partly a defensive move meant to block Google from forming a strategic alliance with the company.
Of course, one of the secondary market’s great disadvantages is that a company like Facebook doesn’t have to disclose its financials, so all these valuations are a bit of a guessing game.
But every stock sale in the secondary market has to be blessed by Facebook: it has the right of first refusal to buy the shares itself, and has used that provision to prevent shares from getting in the wrong hands, according to a person briefed on one such transaction.
What Facebook will ultimately be worth — $23 billion? $33 billion? $3 billion? — is anyone’s guess. But given the immense interest in the company, it’s hard to imagine that Mr. Zuckerberg wouldn’t be able to find $100 million in cash for some of his shares. The question is, how many will he have to give up?
Go to Column from The New York Times »

Sorkin: The Value of a Piece of Facebook – NYTimes.com

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Friday Look Ahead: Tech a Focus for Stocks Friday, as Gold Dazzles Investors

Published: Thursday, 16 Sep 2010 | 9:10 PM E
By: Patti Domm
CNBC Executive Editor
Some good news from the tech sector could be a positive for stocks Friday.

Outside the New York Stock Exchange in lower Manhattan.
Photo: Oliver Quillia for CNBC.com
Outside the New York Stock Exchange in lower Manhattan.

Both Oracle and Research in Motion reported strong earnings after Thursday’s bell. Separately, Texas Instruments boosted its $0.12 dividend by a penny and said it would buy back another $7.5 billion shares. All three stocks were higher in after-hours trading.

Stocks Friday morning could feel the effect of the quadruple expiration of futures and options. Traders expect the expiration to be low key at the open, and if anything, the impact should be slightly positive.
CPI, at 8:30 a.m., is expected to show a 0.3 percent increase in August consumer prices. Consumer sentiment is expected to improve slightly to a reading of 70, from 68.9 last month, but economists say the strong performance of the stock market this month could push that number a bit higher. August’s sentiment reading was the second lowest of the year. Consumer sentiment is released at 9:55 a.m.
Stocks drifted on both sides of the unchanged mark Thursday. The Dow ended up 22 at 10,594, and the S&P 500 was off less than a half point at 1124.  The dollar weakened against the euro, and dollar/yen was barely changed after the Bank of Japan intervened to curb the yen’s rise Wednesday.
“This intervention might have higher chances of succeeding, assuming we continue to see relatively acceptable U.S. economic data. That’s the critical thing,” said Boris Schlossberg of GFT Forex. “…as long as the idea of double dip keeps receding, Treasury yields should stabilize and go back up and that will be critical to dollar/yen.”
On the other hand, if we see the 10-year yield move to 2.5 percent, or dip below 2.5 percent, I don’t think any amount of money will stem the (dollar) decline,” he said.
Barry Knapp, chief equities portfolio strategist at Barclay’s, said the initial stock market reaction after a big intervention is often a short-term decline. “For the first couple of days, the market goes down a little bit..the first reaction is to look at the dollar,” he said.
The view is “if the dollar is going up, that’s bad for earnings, so sell it. Dollar’s going down, that’s good. That’s a very simplistic approach. I don’t think it’s right at all,” he said. “If you look back at 2003, when the Japanese were intervening dramatically, the initial reaction was that the stock market sold off, and then it regained its footing.”
Knapp said the intervention at that time was about $360 billion, and he estimated this round could total $250 billion. The BOJ was reported to have bought more than $20 billion Wednesday.
“If somebody puts $250 billion into the markets, event though that money won’t be buying riskier assets, it can trigger an effect,” he said.
The impact on Treasurys could also be noticeable, he said. Traders have been speculating the Japanese will park their dollar holdings in shorter duration Treasurys. “Initially the Treasury curve steepens, but then that tends to drive investors who were in 2s and 5s to extend out the curve and it starts to flatten. Then it triggers a whole position rebalancing.”
All that Glitters
Gold continued to dazzle investors Thursday, scoring its second record settlement of the week. Investors are betting it could try to break the $1,300 level, maybe even as early as next week depending on the outcome of the Fed’s meeting Tuesday.  Gold Thursday rose about a half percent to settle at $1273.80.
Gold has faced some high-profile criticism this week, including from investor George Soros who called it a bubble. “If you think about a world where every major country is trying to find a way to devalue its currency, gold looks pretty good in that environment. Personally I think the dollar is going down more. There’s lots of reasons why gold will continue to rise. I don’t know if I’d buy it, but I know I wouldn’t short it,” Knapp said.

 http://www.cnbc.com/id/39223276



By Albert Edwards, Société Générale, London 

The current situation reminds me of mid 2007. Investors then were content to stick their heads into very deep sand and ignore the fact that The Great Unwind had clearly begun. But in August and September 2007, even though the wheels were clearly falling off the global economy, the S&P still managed to rally 15%! The recent reaction to data suggests the market is in a similar deluded state of mind. Yet again, equity investors refuse to accept they are now locked in a Vulcan death grip and are about to fall unconscious.

The notion that the equity market predicts anything has always struck me as ludicrous. In the 25 years I have been following the markets it seems clear to me that the equity market reacts to events rather than pre-empting them. We know from the Japanese Ice Age and indeed from the US 1930’s experience, that in a post-bubble world the equity market merely follows the economic cycle. So to steal a march on the market, one should follow the leading indicators closely. These are variously pointing either to a hard landing or, at best, a decisive slowdown. In my view we are poised to slide back into another global recession: the data is slowing sharply but, just like Japan in its Ice Age, most still touchingly believe we are soft-landing. But before driving off a cliff to a hard (crash?) landing we might feel reassured when we pass a sign that reads Soft Landing and we can kid ourselves all is well

Read the rest of the story here  >  > >

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