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Archive for January, 2009

From GigaOm

Following in the footsteps of Apple and its iTunes App store, several mobile companies have announced plans to launch their own storefronts. Research In Motion is looking to launch its store relatively soon, and it took a major step forward when it started accepting applications from app writers to have their apps included in the new Blackberry Storefront.

While RIM already has a wide variety of applications available for its platform, it doesn’t have the momentum of Apple, which recently noted that more than 500 million apps were downloaded to its iPhones and iTouch devices. RIM has its work cut out for it; the company is fighting with the likes of Apple, Google, Palm and Symbian to get a toehold with developers. The company had launched a special VC fund to help find and grow apps for its platform. (Related posts: Watch the Future of mobile apps and economics of the platforms video at Mobilize 08 conference.)

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The popularity of netbooks, Acer’s rise, Lenovo’s fall, the struggles of component makers to sell virtually anything — it all makes for a crazy time in the personal computer market these days.

The major PC component suppliers –- companies like Intel, Advanced Micro Devices, Nvidia, Seagate and Western Digital –- are reeling as hardware sales dry up. The credit crunch took its toll on business spending, then American corporations shut down in December in a bid to save money and now companies in China have halted their spending as the Chinese New Year approaches.

As Auguste Richard, a chip analyst with Piper Jaffray, told me, “There is nothing going on right now. This is as dark and deep as it goes, with companies not buying or selling anything.”

Read the full article here.

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Indispensable? No one is, we’re told. Times change, people move on and the notion of the irreplaceable individual is a myth. That is irrefutable, at least in the cosmic sense of Charles de Gaulle’s grim reminder: “The cemeteries of the world are full of indispensable men.”

Yet there are moments in history, or institutions, that are so shaped by the extraordinary contributions of a single person that it is hard to imagine one without the other. So the indispensable-man debate was fueled anew last week when Steven P. Jobs said he was taking a leave of absence from Apple until July because his health problems were “more complicated” than he first thought.

Since he returned to Apple in late 1996, Mr. Jobs has been the product team leader, taste arbiter and public face of a company that has been a stylish breath of fresh air in the personal computer business. With the introduction of the iPod, iTunes and the iPhone, Apple has shaken up the music and cellphone industries as well.

Read the full NY Times article by Steve Lohr here

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Steven R. Gerbsman, Principal of Gerbsman Partners and James Skelton, a member of Gerbsman Partners Board of Intellectual Capital, announced today their success in maximizing stakeholder value for a technology company that has been the leading provider of archival storage technology to the global IT market. Gerbsman Partners provided Crisis Management leadership, facilitated the sale of the business unit, associated Intellectual Property and assets and recovered substantial receivables. Due to market conditions, the senior lender made the strategic decision to maximize the value of the business unit and Intellectual Property. Gerbsman Partners provided leadership to the company with:

  • Crisis Management and Technology experience in developing the strategic action plans for maximizing value of the business unit, Intellectual Property and assets;
  • Proven domain expertise in maximizing the value of the business unit and Intellectual Property through a targeted and proprietary Date Certain M&A plan;
  • The ability to “Manage the Process” among potential Acquirers, Lawyers, Creditors Management and Advisors;
  • The proven ability to “Drive” toward successful closure for all parties at interest.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. In the past 60 months, Gerbsman Partners has been involved in maximizing value for 51 Technology, Life Science and Medical Device companies and their Intellectual Property and has restructured/terminated over $770 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.2 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, San Francisco, Europe and Israel.

For more information, please contact: Steve@GerbsmanPartners.com

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Look closely. Do you see the onset of another Great Depression? Maybe it’s all in your mind.
By Tyler Cowen, Money Magazine contributing writer.

(Money Magazine) — If you think you’re immune to market panic, consider this experiment.

Recently, Jennifer A. Whitson of the University of Texas at Austin and Adam D. Galinsky at Northwestern University asked a group of people to recall situations when they felt out of control. Then they asked those people to find patterns in a series of blurry pictures. People in a control group were asked to find patterns in the same images but weren’t told to recall stressful situations first.

Turns out, the people who had imagined the stressful events said they could identify more patterns in the pictures than did the control group. The pictures, by the way, were completely random. The patterns didn’t exist.

The academics weren’t finished. They showed one group a headline that read “Rough Seas Ahead for Investors” and showed another group the headline “Smooth Sailing Ahead for Investors.” The two groups then received some fragmentary information about a couple of companies. You guessed it: The group that was worried about “rough seas” spun out more unwarranted theories about what was going on with the companies than the other group did.

These studies reconfirm what psychologists have been saying for years now: The more we feel out of control, the more our brains imagine patterns that don’t really exist.

Doing that, the theory goes, helps us manage our stress. Maybe we haven’t come so far from the rain dances common in agricultural societies. It’s precisely because they don’t control the drops falling from the sky that many people construct elaborate rituals to pretend that they do.

It makes sense, then, that conspiracy theories become more popular in bad or stressful times. Many people want to think that at least someone is in control even if that isn’t the case.

Of course, some patterns really are there. For instance, volatile markets tend to remain volatile for months on end. That’s why we saw many big daily shifts in the Dow in the fall of 2008, not just one or two. But if you want to make the smartest money moves in tough times – and who doesn’t? – you would do well to factor in the reality that you probably aren’t assessing things as well right now as you usually do.

Read the full article here.

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Here is an excellent read from GigaOm:

By now, most agree that this recession is likely be longer, deeper and fiercer than those in the past, rendering smaller, newer companies especially vulnerable. Such vulnerability is already playing out in the public markets: Over the past three months, the Russell 2000 has fallen much further than the Dow.

There is, however, a way for startups to not only stand out in this recession, but thrive in it: By being as disruptive as possible.

The me-too business model that fared pretty well during good times will be toxic this year. Venture-backed IPOs grew scarce last year and there will likely be few in 2009; merger activity is also expected to remain sluggish. Startups with little or no revenues or a high burn rate may not make it through December.

In an economy where risk is shunned, boldness is a risk that still offers a shot at success. It’s much easier to say this than to make it happen. But there is reason to believe that 2009 will allow original ideas, and companies behind them to come forth.

Click here to read the whole article at GigaOm

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Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various Balance Sheet issues for their portfolio companies. These companies were not necessarily in Crisis, had CASH (in some cases significant CASH) and/or investor groups that were about to provide additional funding. In order stabilize their go forward plan and maximize CASH resources for future growth, there was a specific need to address the Balance Sheet and Contingent Liability issues as soon as possible.

Some of the areas in which Gerbsman Partners has assisted these companies have been in the termination, restructuring and/or reduction of:

  • Prohibitive executory real estate leases, computer and hardware related leases and senior sub-debt obligations – Gerbsman Partners was the “Innovator” in creating strategies to terminate or restructure prohibitive real estate leases, computer and hardware related leases and senior and sub-debt obligations. To date, Gerbsman Partners has terminated or restructured over $750 million of such obligations. These 75 deals were a mixture of both public and private companies, and allowed the restructured company to return to a path of financial viability.
  • Accounts Trade payable obligations – Companies in a crisis, turnaround or restructuring situation typically have accounts and trade payable obligations that become prohibitive for the viability of the company on a go forward basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize enterprise value based on the reality and practicality of the situation.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property. In the past 60 months, Gerbsman Partners has been involved in maximizing value for 50 Technology, Life Science and Medical Device companies and their Intellectual Property and has restructured/terminated over $750 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception, Gerbsman Partners has been involved in over $2.2 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington, DC, San Francisco, Europe and Israel.

For more information, please contact Steven Gerbsman at steve@gerbsmanpartners.com

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