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Archive for May, 2009

IT Forecast: “The Great Restructuring” On Horizon

Posted in Board Of Intellectual Capital, Business models, Market research, tagged , , , , on May 21, 2009| Leave a Comment »

Here is some good news posted at WSJ Venture dispatch. Please visit them for the whole article by clicking here.

“When chief information officers from across the country gathered Wednesday in Cambridge, Mass., for the sixth annual Massachusetts Institute of Technology Sloan CIO Symposium, talk was of virtualization and cloud computing, and the forecast was for a reconstruction of business IT infrastructure made more urgent by the economy’s troubles.

One panelist, MIT Professor Erik Brynjolfsson, even went so far as to say this period could become known in information technology lore as “the great restructuring.” He said it would have three elements, experimentation, measurement and building on scale.

Author James Champy, chairman of consulting at Perot Systems Corp., said many industries have overbuilt IT capacity and face a three-to-five-year challenge to right-size. He advised CIOs to reduce the cost basis of the enterprise to remove top line uncertainty across the business and to generate cash to invest in innovation.”

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Facebook Turns Down Funding at $8 Billion Valuation

Posted in Board Of Intellectual Capital, boic, Business models, FaceBook, Gerbsman Partners, Investments, Market research, Social Networks, Strategy, Uncategorized, Venture Capital, Wireless 2.0, tagged , , , , , , , , , , , , on May 20, 2009| Leave a Comment »

I guess that the economic crisis only apply to some. Here is a report by way of Digital media Wire.

“Palo Alto, Calif. – Facebook, the online social network with more than 200 million members, earlier this month turned down funding that would have valued the company at $8 billion, the blog TechCrunch reported on Tuesday, citing a source “with direct knowledge of the proposed transaction.” The company reportedly turned down the $200 million in proposed funding because of a stipulation that would have required it to give up a board seat, with founder Mark Zuckerberg intent on keeping control of the board, according to TechCrunch.

The blog also reported that “investors are now being told the company expects $550 million in 2009 revenue,” well above previous projections of up to $400 million”

Read the full article here.

Related article can be found here: TechCrunch, Blogrunner, Social Median, Seeking Alpha, Dintz,

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How to save the US banking system?

Posted in Board Of Intellectual Capital, Distressed Intellectual Property, Economy, Gerbsman Partners, Market research, tagged , , , , , , on May 18, 2009| Leave a Comment »

RGE recently pubsliched a lengthy article on what needs to happen to save tu US banking system. It makes for a good read and I highly recommend it.

“Many important US banks are currently in a dangerous halfway house between public and private, fragile and failed. This is unprecedented in scale, but not in situation. The United States faced a very similar problem with our Savings and Loan crisis of the mid-1980s, Japan and Sweden had systemic banking crises during the 1990s, and a host of less advanced economies have suffered from this type of problem.”

It continues…

“The ongoing accumulation of nonperforming loans and the resulting continued decline in solvency of many American banks has been a significant drag on growth and will only get worse absent government action. Properly capitalized banks will face losses from the recession no matter what, but will not roll over bad loans because they would have enough of their own capital at risk and can bear the costs of writing off bad loans. The costs to the US economy of leaving its financial system undercapitalized are enormous in terms of lost growth, missed investments in new firms and projects (due to the bias towards rolling over old loans to avoid write-offs by undercapitalized banks), and low returns on savings.

The Obama administration has announced that it will do strict examinations of the 20 biggest banks’ balance sheets starting this week. If anything close to current asset values are used to evaluate those books, and they should be, many of these banks will need public capital injections or closure. The reluctance to pull the trigger appears to be based on the fact that such forced write-offs would require the unpopular steps of another injection of public funds and/or round of closures, either way involving government ownership of those banks, a.k.a. nationalization. Failing to be so strict and leaving current shareholders and top management in control will just lead to further losses and repeated suspicions about some banks’ viability, as we saw in the stock market last week.”

Read the full article here.

Others covering this topic: Peterson Institute, Steve Lendman Blog, Institutional Partners and The BaseLine Scenario.

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Hopes of bailout stall investments in cleantech

Posted in Uncategorized, tagged , , , , , , , , , on May 15, 2009| Leave a Comment »

Here is a worrying story in regards to investments in the cleantech sector. As the bailout programs makes their way around unfit companies, cleantech investments have taken a dive.

One may think that boards and investors are looking to cash in on this crisis before orivate equity is put up. Here is  some quotes from a IBT article posted this week.

“Cleantech companies received less than half venture capital (VC) investments in the first quarter of 2009 than they did a year ago, but the industry looks forward for government funds for recovery, according to industry analysts.

During the period through March, venture capitalists invested in 24 clean energy deals raising $227 million, a decline of 63 percent in capital and 48 percent in terms of deals compared to the same period of 2008, according to an Ernst & Young LLP analysis.

“Despite the intense challenges of raising capital during the past four months, government initiatives and corporate commitments are points of light for cleantech companies,” said Joseph A. Muscat, Americas Director of Cleantech, Ernst & Young LLP.”

A quite possible reason for this might be the government plan of putting the TARP funds to use in this sector as well.

“Government funding from the U.S. stimulus package is expected to pour more than $100 billion dollars in direct spending, loan guarantees and incentives into cleantech in energy, water and environment, Ernst & Young noted.”

Read the full article here.

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“Maximizing Enterprise Value through Balance Sheet Restructuring & Date Certain M&A Process”

Posted in Board Of Intellectual Capital, boic, Economy, Gerbsman Partners, tagged , , , on May 14, 2009| Leave a Comment »

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 $770 million of such obligations. These 77 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.

Date Certain M&A Process

Gerbsman Partners developed its proprietary “Date Certain M&A Process” in 2002. Since that time, the process has evolved into a 4-6 time frame vehicle for maximizing enterprise value for venture backed Intellectual Property based companies. A description of this proven process can be reviewed on the Gerbsman Partners website.

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. Since 2001, Gerbsman Partners has been involved in maximizing value for 52 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 in 1980, 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, Alexandria, VA, San Francisco, Europe and Israel.

For additional information please visit www.gerbsmanpartners.com

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