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Archive for the ‘Board Of Intellectual Capital’ Category

Trouble Brewing for Cleantech IPOs?

Posted in Board Of Intellectual Capital, Business models, cleantech, tagged , , , , , on February 5, 2010| Leave a Comment »

Here is an interresting article from Seeking Alpha.

“By Rob Day

Haven’t had much time to go through the various recent cleantech IPO filings, and so haven’t talked about them much. Also just generally hoping they do well, for the sake of the overall industry.

But in a meeting today someone put up some stats that were pretty sobering.

Taking a basket of 4 high profile recent IPOs and filings, the total across the four companies was:

– Trailing twelve month revenues = $319M

– Trailing twelve month EBITDA = -($343M)

– Total venture dollars put into all four companies to date = approximately $1.5B

Like I said, I hope all of these companies do well and grow into great companies. But this type of profile for IPO isn’t the norm. So you have to wonder about it.

Someone today mentioned that they think these companies have to IPO now because they need yet more capital and the private equity world is tapped out. I disagree, I think companies with prospects like these would be able to raise more capital, if not from traditional VCs, then from non-traditional private equity players. Cleantech private equity is down, but far from tapped out.”

Read the full blogpost here.

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Moody’s warns US of credit rating fears

Posted in Board Of Intellectual Capital, tagged , , , , on February 4, 2010| Leave a Comment »

Here is a article from Financial Times.

“Moody’s Investors Service fired off a warning on Wednesday that the triple A sovereign credit rating of the US would come under pressure unless economic growth was more robust than expected or tougher actions were taken to tackle the country’s budget deficit.

In a move that follows intensifying concern among investors over the US deficit, Moody’s said the country faced a trajectory of debt growth that was “clearly continuously upward”.

Steven Hess, senior credit officer at Moody’s, said the deficits projected in the budget outlook presented by the Obama administration outlook this week did not stabilise debt levels in relation to gross domestic product.

“Unless further measures are taken to reduce the budget deficit further or the economy rebounds more vigorously than expected, the federal financial picture as presented in the projections for the next decade will at some point put pressure on the triple A government bond rating,” the rating agency added in an issuer note.

This week, the White House forecast a $1,565bn budget deficit for 2010, which represents 10.6 per cent of gross domestic product and is the highest such ratio of debt to GDP since the second world war.

While the budget gap is forecast to fall to about 4 per cent by 2013, it is based in part on economic growth not falling below government expectations, Congress agreeing to tax rises and a spending freeze on non-security discretionary spending.

Crucially, projections of the overall debt-to-GDP ratio for the US are seen rising from 53 per cent in 2009 to 73 per cent in 2015 and 77 per cent by 2020.

Moody’s, however, says this understates the overall US debt level.”

Read the full article here.

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Silicon Valley faces fierce global competition in cleantech

Posted in Board Of Intellectual Capital, cleantech, Gerbsman Partners, Investments, Market research, Strategy, Technology, Venture Capital, tagged , , , , , , , , , , , , , on February 3, 2010| Leave a Comment »

Here is a Cleantech article from Mercury News.

“In other tech revolutions of recent decades, Silicon Valley became the uncontested global leader. The region’s ability to innovate its way to the top in cleantech, though, is far from guaranteed. Competition is fierce and global, with trillions of dollars at stake.

One of the valley’s greatest challenges comes from here. China’s drive to be a dominant power in the emerging global cleantech industry was on display one recent morning on the campus of the nation’s third-largest solar-panel maker, Trina Solar. New assembly-line employees, in an exercise designed to instill discipline, marched military-style around the grid-like campus, chanting responses to a drill leader dressed in army fatigues.

But China’s ambitions in cleantech reach far beyond piecing together solar panels. The central government has committed more than $100 billion a year to green technology research. It also has put in place incentives to create markets for everything from electric cars to rooftop solar water heaters to jump-start homegrown cleantech companies.

Provincial and local governments also are investing heavily in cleantech. Leaders in Jiangsu Province, where Trina Solar is located, are placing big bets on the solar industry, inspired by the municipal government of Wuxi. That Jiangsu Province city financially backed Suntech Power, now a global solar leader.

“China is moving very aggressively,” U.S. Energy Secretary Steven Chu said during a visit to Google’s Mountain View headquarters last fall. “They want to be a leader in this new industrial revolution.”

A group of valley tech executives, including former Intel CEO Andy Grove, recently sent a letter to Chu urging the energy secretary to “sound the alarm bell to make America aware — clearly and unequivocally — of how rapidly other nations, particularly China, are moving on clean energy.

“Unless we move quickly and commit substantial resources on a sustained basis, we risk becoming an energy also-ran, and risk developing a new dependency,” said the letter, also signed by Michael Splinter, CEO of Applied Materials, and John Doerr, a partner at venture capital firm Kleiner, Perkins, Caufield & Byers.

They urge the government to provide financial assistance to clean energy industries, including incentives for replacing polluting power plants with renewable sources of energy.

U.S. is lagging

Currently, only five of the world’s top 30 companies in the solar, wind and next-generation battery markets are based in the United States, according to John Denniston, also a partner with Kleiner.

U.S. government incentives — such as tax breaks and a regulation requiring utilities to buy power from solar and wind energy companies — were slowly eliminated in the 1980s after helping California become a global cleantech leader, said Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory. Around the same time, Denmark, Germany and Spain — whose governments adopted policies and incentives to jump-start cleantech enterprises — were emerging as global leaders.”

Read the full article here.

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Atlas 2009 Year End Hotel Survey . . . and what it means

Posted in Board Of Intellectual Capital on February 2, 2010| Leave a Comment »

Hotel Lawyers with grim reports from the field. If lenders are looking for some encouraging news on their distressed hotel asset sales prospects, they are not going to get it anytime soon. That is what the Atlas 2009 Year End Hotel Survey shows, but it does offer some valuable tips for dealing with continued distress in 2010.

This was written by James R. Butler, Esq., Partner at Jeffer, Mangels, Butler and author of www.HotelLawBlog.com and hotel lawyer. We’ve done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from troubled hotel transactions. Who’s your hotel lawyer?

Here is an executive summary.

Atlas Hotel Survey 2009 Year End Summary

Atlas Hospitality Group specializes in the sale of California hotels. It was founded by Alan X. Reay in 1997. Since its inception, Atlas has sold more hotels in the state than any other brokerage firm. Their annual survey of hotel transactions covers only California hotel deals, but we believe it is reflective of consistent national trends.

The 2009 annual survey has just been released, and it showed dismal results for 2009:

  • The number of California hotel sales dropped to a new low, plunging 52% from 2008 and 73% from 2007.
  • The dollar volume dropped 75% from 2008 and 85% from 2007.
  • The median price per room declined 30% from 2008 and 38% from 2007.
  • The median price per room in Southern California dropped 40%.
  • The median price per room in Northern California declined 24%.
  • Los Angeles County, down 82%, had the steepest median price per room drop.
  • Los Angeles County had the biggest drop in transactions, down 90%.

Sadly, the year end results validate the predictions made by Atlas in early 2009, except that the number of hotel sales were down 51% (as opposed to the predicted 10-20% decline), and median prices per room declined 30% (against a forecast 20-40% fall).

What is happening?

I asked Alan Reay, President and founder of Atlas Hospitality Group, what he thought was causing the record low number of hotel transactions his survey reported. Alan attributes the dearth of transactions to 2 factors:

  • Sellers are not pricing properties to market.
  • Lenders continue to delay definitive action to realize on their collateral, whether by foreclosing, appointing a receiver to sell the property, or selling REO.

Alan says that even though the number of foreclosed hotels now equals 73% of the entire number of 2009 sales transactions, the vast majority of these have not been resold by lenders.

Alan says unequivocally that the restraint on sales is not liquidity or lack of buyers. It is due to lenders and other potential sellers holding back and waiting, or pricing the properties unrealistically.

What will 2010 bring for hotel sales?

Given the success in predicting what happened in 2009, what does Alan Reay predict for 2010? Here are the highlights:

  • Sales activity will increase dramatically from the 2009 record low; we expect to see 150-175 transactions.
  • Dollar volume will also increase, almost double 2009’s number.
  • Prices will decline 10-20%.
  • The sale of hotel loans will rise substantially.
  • Lender sales will account for over 50% of transactions.

Click here to download a copy of the Atlas 2009 Year End Summary, and if you would like to speak directly with Alan Reay about the Atlas Surveys or get a copy of them, he can be reached at (949) 622-3409, alan@atlashospitality.com or www.atlashospitality.com. You are also welcome to contact me at jbutler@jmbm.com.

What do the hotel lawyers at JMBM’s Global Hospitality Group® advise?

Do the math yourself! Run a present value analysis of likely cash flows on 3 alternate scenarios. Decide whether you have the stamina and capital for a long haul if you intend to hold. Or decide that you are a gambler.

Be realistic. And if you are going to be a seller, then sell quickly. Many experts see values continuing to decline until at least 2011 or, more likely 2012. Some think values recover peak levels by 2014 and others think recovery to 2007 levels is TWO real estate cycles from now (given that a typical hotel cycle lasts 7 to 8 years, this could possibly be 10 to 16 years, i.e. 2019 to 2025).

We would be happy to help you evaluate your options and develop the best plan from here.
This was written by Jim Butler, author of www.HotelLawBlog.com and hotel lawyer. We’ve done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from troubled hotel transactions. Who’s your hotel lawyer?

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Central heating – Is China’s economy growing too fast?

Posted in Board Of Intellectual Capital, Business models, Community, tagged , , , , on January 27, 2010| Leave a Comment »

Here is an interesting article from The Economist.

“BEIJING recently suffered its lowest temperature in 59 years, but the economy is sweltering. Figures published on Thursday January 21st showed that real GDP grew by 10.7% year on year in the fourth quarter. Industrial production jumped by 18.5% in the year to December, while retail sales increased by 17.5%, boosted by government subsidies and tax cuts on purchases of cars and appliances. In real terms, the rise in retail sales last year was the biggest for over two decades.

A year ago many economists were fretting about unemployment and deflation. Now, with indecent haste, they have shifted to worrying that the Chinese economy is overheating and inflation is taking off. The 12-month rate of consumer-price inflation rose to 1.9% in December, an abrupt change from July when prices were 1.8% lower than a year before.

The recent rise in inflation was caused mainly by higher food prices as a result of severe winter weather in northern China. In many cities, fresh-vegetable prices have more than doubled in the past two months. But Helen Qiao and Yu Song at Goldman Sachs argue that it is not just food prices that risk pushing up inflation: the economy is starting to exceed its speed limit. If, as China bears contend, the economy had massive overcapacity, there would be little to worry about: excess supply would hold down prices. But bottlenecks are already appearing. Some provinces report electricity shortages and stocks of coal are low. The labour market is also tightening, forcing firms to pay higher wages.”

Read the full article here.

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