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Posts Tagged ‘boic’

“Bailout” in need of more bailout!

Posted in Board Of Intellectual Capital, boic, Economy, Investments, Market research, Strategy, tagged , , , , , , , , , , , , , , , , , , , , , , , , , , on May 7, 2009| Leave a Comment »

Putting cash into unhealthy business has long been understood as a bad deal. With the Bailout programs and the TARP initiative, some might have thought that the problem was solved – think again. Poor business remain poor business.

Here are some good quotes taken from NY Times.

“The results of the bank stress tests have been trickling out for days, from Washington and from Wall Street, and the leaks seem to confirm what many bankers feel in their bones: despite all those bailouts, some of the nation’s largest banks still need more money.

But that does not necessarily mean the banks will get that money from the government. The findings, to be released Thursday by the Obama administration, suggest that the rescue money that Congress has already approved will be enough to fill the gaps. If so, the big bailouts for the banks may be over.But hopes that the tests will be a turning point in this financial crisis electrified Wall Street on Wednesday and some overseas markets the next day. Financial shares soared, lifting the broader American stock market to its highest level in four months. The Dow Jones industrial average rose 101.63, or 1.2 percent, to close at 8,512.28 Wednesday, while Japan’s Nikkei index rose more than 4 percent by midday Thursday.”

Good news indeed, but…

“After news this week that Bank of America and Citigroup would be required to bolster their finances again, word came Wednesday that regulators had determined that Wells Fargo and GMAC, the deeply troubled financial arm of General Motors, would need to do so as well. But regulators decided that American Express, Capital One, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase and MetLife would not need to take action. The official word is due at 5 p.m. Thursday.

The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital?”

Read the full article here.

Other helpful sources on this issue can be found here: Huffington Post, Barrons Blogs, Wall Street Journal, Seeking Alpha, 24/7 WallStreet

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Few IPO candidates makes VC´s worried

Posted in Board Of Intellectual Capital, Business models, Economy, Gerbsman Partners, Intellectual capital, Investments, Market research, Strategy, Venture Capital, tagged , , , , , , , , , , on May 6, 2009| Leave a Comment »

A giant investment dilemma is coming into play as of late – the market, Silicon Valley especially, is running short on IPO candidates. The jackpots including Intel, Apple, Netscape, eBay, Yahoo and Google are all history by now. With few candidates, the payoffs look smaller and the real problem shows – where will the money come from for new investments?

Here are a good analysis taken from Silicon Valley.com.

“So how might a Facebook or LinkedIn IPO perform when the time is right? Or what will Skype’s IPO look like, assuming eBay proceeds with plans to spin it out in 2010 as a separate company?

“We’re seeing a rebuilding and stabilization of the IPO market, so that Silicon Valley firms will be able to participate.” said Jeff Grabow of the accounting firm Ernst & Young’s San Jose office, which issued its quarterly U.S. IPO Pipeline report Tuesday.”

It continues…

“The IPO is vital to the valley’s economy, promising a potential jackpot for VCs that compensates for investments that don’t pan out. Not so long ago, the valley seemed to pop out an IPO every few weeks. But since early 2008, the pipeline has been more like a sieve. The venture industry is now pushing for tax breaks and regulatory relief from Washington to revive the market.

Ernst & Young’s report offers a snapshot of the situation. Privately held companies get in the IPO pipeline by filing S-1 forms with the Securities and Exchange Commission that signal their plans to sell stock on public markets. There were 57 companies in the pipeline Dec. 31, but only 44 on March 30.

In the first quarter, 16 companies exited the pipeline — only two made Wall Street debuts. Among the others, 10 registrations had surpassed the one-year expiration for inclusion in the study, which suggests they may just be biding their time in a chilly market. Three registrants withdrew their S-1s, and one postponed. Three companies filed S-1s, including San Francisco-based OpenTable, the online restaurant reservation service.

When OpenTable filed in January, it seemed like wishful thinking in such a dreadful economy. Because SEC rules require “a quiet period” for companies that file for IPO, I couldn’t ask CEO Jeff Jordan why OpenTable was making such a move. How good could the restaurant business be with credit crunched and people pinching pennies?”

Read the full article here.

Other covering the issue: Techmeme, TechSheep, Congoo

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M&A Strategies

Posted in Board Of Intellectual Capital, boic, Business models, Investments, Strategy, Venture Capital, tagged , , , , , , , , on May 5, 2009| Leave a Comment »

Here is some interesting viewpoints from Venture Capital Dispatch – a WSJ Online blog written by Scott Austin.

“Last August, Hewlett-Packard Co. signed a letter of intent to pay $360 million cash for LeftHand Networks Inc., a venture-backed provider of storage systems. A few weeks later, Wall Street’s collapse sent the economy in a tailspin and threatened to knock the screws out of the deal.

But after a two-week pause the two sides got back together and in November closed the acquisition on the same terms.”

The article continues…

“LeftHand was able to hold its ground because it had proven itself valuable well before Hewlett-Packard offered to buy it. H-P had been reselling LeftHand’s software on some of its servers for nearly three years, and realized it couldn’t do without it.

The deal signifies the importance of setting up strategic relationships with possible acquirers, especially in this environment, said the aforementioned investor, Matthew McCall, a managing director with Draper Fisher Jurvetson Portage Venture Partners.

“When your hair’s on fire as a corporation, you’ll try anything to make the pain go away,” he said. “Now’s a great opportunity [for start-ups] to enter partnerships, distribution agreements, and dialogues with larger corporations.”

Matthew McCall´s advice continues:

  • Form a strategic relationship with a potential buyer,
  • Look at it from the acquirer’s perspective,
  • Identify the alternatives,
  • Finally, make sure at least two mortal enemies are bidding on your start-up.

Read the full article here.

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Obama Declares War on Capital

Posted in Uncategorized, tagged , , , on May 4, 2009| 1 Comment »

Here is some interesting viewpoints from NationalReview.

“Obama’s first 100 days have occasioned a number of dispiriting moments, but yesterday’s attack on Chrysler’s bondholders represented a new low. In a speech announcing the company’s bankruptcy filing, President Obama blasted “a group of investment firms and hedge funds [that] decided to hold out for the prospect of an unjustified taxpayer-funded bailout.” That is nothing short of a lie. The consortium wasn’t holding out for a bailout. It was holding out for a bankruptcy. The administration tried desperately to keep Chrysler out of bankruptcy court; in the process, it demonstrated exactly why that institution is so valuable.

Obama’s auto task force attempted to browbeat Chrysler’s creditors into taking a terrible deal in order to spare the United Auto Workers union as much pain as possible. The large banks, which owe their continued existence to the $700 billion Troubled Asset Relief Program (TARP), caved and agreed to take a massive haircut on their secured Chrysler debt. But a group of smaller firms, calling themselves “The Committee of Chrysler Non-TARP lenders,” refused to play ball.”

And it continues:

For resisting this expropriation and following the law, the non-TARP lenders were publicly denounced as vicious Benedict Arnolds by a sitting American president. “I stand with Chrysler’s employees and their families and communities,” Obama said — not “those who held out when everybody else is making sacrifices.” He stands, he said, “with the millions of Americans who own and want to buy Chrysler cars.” If millions of Americans wanted to buy Chrysler cars, the company wouldn’t need the president of the United States to be its pitchman.

Liberals took their cue from the president and immediately denounced the holdouts as “vultures,” too consumed with greed to think of the national interest. But the law compels these firms to act in their shareholders’ interest. Bank of America’s Ken Lewis ignored this responsibility and paid the price. Henry Paulson and Ben Bernanke all but forced Lewis to go ahead with the acquisition of Merrill Lynch even after he learned that the firm was in deep trouble. Lewis finally broke his silence this month, and Bank of America’s shareholders promptly stripped him of his chairmanship.”

Read the full article here.

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The end of doom and gloom?

Posted in Uncategorized, tagged , , , , on April 30, 2009| 1 Comment »

Here is an interesting editorial by way of The Deal and David Broadwin, Foley Hoag.

“I like my doom and gloom as much as the next guy, but a whole year of unrelenting morbidity in the venture capital industry may be overdoing it just a wee bit. In some way, Sequoia Capital‘s famous “RIP Good Times” slide deck set the venture community off into a deep funk. How else to respond to the gravestone warnings to portfolio companies that they brace for a protracted slump, eliminate all but the most vital costs and learn to live without follow-on financings.

No less encouraging was the photo of a pig’s carcass with a butcher’s knife embedded into the animal’s fatty side.

Of course, there were many economic factors that were merely reflected in those slides. The lack of good exits (just five or six venture-backed initial public offerings for all of 2008), coupled with the steep drop in M&A activity and complete shut-down of the credit markets, significantly chilled investment activity, a frost that continues.”

To read the full article, click here.

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