David Kirkpatrick

June 15, 2010

Facebook to IPO in 2012?

Filed under: Business, Technology — Tags: , , , , , , — David Kirkpatrick @ 12:55 pm

Maybe so.

From the link:

To be sure, Facebook has focused on increasing its membership, and it has been wildly successful on that score: the number of Facebook accounts is now nearing 500 million. So the sheer size of the Facebook audience is attractive to advertisers and app makers; and as a bonus, Facebook provides data tools to advertisers that help them make meaningful impressions on members of that audience.

But the company is deeply indebted to its venture capital backers, who, while already seeing dividends from Facebook’s current business, are looking forward to a big payday (investment plus return) at some visible point in the future. For now, Facebook’s investors are giving Zuckerberg and company plenty of time. People familiar with the situation say that you won’t see a Facebook IPO this year or next year, but you probably will see one in 2012.

May 27, 2010

Apple’s market cap passes Microsoft

Filed under: Business, Technology — Tags: , , , , — David Kirkpatrick @ 3:01 pm

Interesting. Probably not all that meaningful, but interesting.

From the link:

On Wednesday, Apple’s market capitalization edged past its longtime rival’s as investors made official what consumers have long suggested: Microsoft is no longer the industry’s alpha dog.

Just last month, Microsoft’s market cap exceeded Apple’s by about $25 billion, but now Apple is in the lead by nearly $3 billion.

May 21, 2010

Tesla Motors gets big boost from Toyota

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 12:26 am

Try a $50 million investment on for size.

From the link:

The heads of Tesla Motors Inc. and Toyota Motors Corp. surprised the auto world Thursday by announcing a partnership to develop and build electric cars at a recently shuttered auto plant in the San Francisco Bay area.

Akio Toyoda, CEO of the world’s largest automaker, said Toyota will invest $50 million in Tesla when the company begins selling stock to the public, and Tesla CEO Elon Musk said his company will purchase the New United Motor Manufacturing Inc. factory, known as Nummi, in Fremont where the Model S electric sedan will be built.

”We’re going to create electric cars together,” Musk told a news conference at Tesla’s office in Palo Alto. ”It’s a great honor to work with a company like Toyota, one of the automobile leaders of the world and one I’ve personally long admired.”

December 11, 2009

Americans richer — on paper

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 3:58 pm

As far as this goes, it’s good news. It’s also a nice reminder that a lot of personal economic woes are purely paper losses (and then gains when things start rebounding like right now.) Not to understate the real pain being felt out there, but when the media starts tossing gigantic numbers around it’s always a good idea to keep a little perspective.

From the first link:

Americans got wealthier for a second straight quarter in the fall, thanks to gains in stock investments and home values.

Net worth — the value of assets such as homes, bank accounts and investments, minus debts like mortgages and credit cards — rose 5% from the second quarter to $53.4 trillion, the Federal Reserve said Thursday.

Yet even with that gain, Americans’ net worth remains far below the revised peak of $64.5 trillion reached before the recession began. That underscores the vast loss of wealth over the past two years. Net worth would need to rise an additional 21% just to return to its pre-recession peak.

And many analysts don’t expect a repeat of the strong second- and third-quarter gains anytime soon. That’s why Scott Hoyt, senior director of consumer economics at Moody’s Economy.com, thinks household wealth won’t match its pre-recession peak until about 2012.

November 7, 2009

Do exchange-traded funds create investment bubbles?

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 6:30 pm

More specifically, bubbles in emerging markets — short answer, no.

From the link, a bit more behind the short answer:

So what does all this mean for investors? ETFs probably haven’t caused a bubble, and they might even help a bit to prevent one from forming. But many will remain superconcentrated bets on very risky markets. If you invest in an ETF with most of its assets in a few stocks and think you have made a diversified bet, the real bubble is the one between your own ears.

September 4, 2009

The latest investment bubble?

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 1:53 pm

Gold.

April 16, 2009

Top ten tech investments

This list comes courtesy of a survey by Robert Half Technology, so take this release for what it’s worth. Certainly food for investment thought, particularly since some analysts see tech on the rebound.

The release from the first link:

Top 10 Tech Investments – Information Security Leads List, CIO Survey Shows
TORONTO, April 15 /CNW/ – Despite a challenging economy, three-quarters (76 per cent) of chief information officers (CIOs) interviewed recently said their companies will invest in information technology (IT) initiatives in the next 12 months. Information security topped the list of projects executives expect their firms to invest in, with 57 per cent of the response, followed by virtualization (36 per cent) and data center efficiency (33 per cent).

The survey was developed by Robert Half Technology, a leading provider of IT professionals on a project and full-time basis, and conducted by an independent research firm. It was based on telephone interviews with 270 CIOs across Canada.

Following are five areas of IT investment that were cited most frequently by CIOs interviewed*:

 

<< 1. Information security (57 per cent): In any economy, protecting the confidentiality, integrity and availability of information is a must- have for companies of all sizes. Technology executives in the business services and professional services sectors cited security most often, with 96 per cent and 88 per cent of the responses, respectively. 2. Virtualization (36 per cent): Added budget pressures are forcing many companies to focus on more cost-effective solutions for servers, storage and networking. Virtualization tools enable greater consolidation, lower hardware costs, and reduced space and power requirements. Four in 10 CIOs at large (1,000+ employees) and 38 per cent of CIOs at midsize (500 to 999 employees) companies plan to invest in this area. 3. Data center efficiency (33 per cent): Improving efficiency within the data center to achieve longer-term cost savings is a top priority for organizations pressured to cut back on IT spending. Companies are realizing that by not improving efficiency, it will result in the need for more costly expansions and upgrades in the future. 4. Voice over Internet Protocol (VoIP) (32 per cent): Lower monthly phone bills, greater network flexibility and unified messaging, which allows users to more efficiently retrieve messages, are among the benefits that companies realize when they invest in VoIP technology. 5. Business Intelligence (28 per cent): Companies are investing in business intelligence software that allows them to squeeze greater cost efficiencies from their existing resources and processes, and to identify and mitigate business risk. *CIOs were asked, “Which areas, if any, will your IT department be investing in over the next 12 months?” Multiple answers were permitted. Percentages reflect responses from 76 per cent of the 270 CIOs who plan to invest in IT. The survey was conducted in January 2009. >>

 

“Despite increased budgetary pressures, many companies recognize that investing in IT initiatives leads to improved security, efficiencies and revenues,” said Sandra Lavoy, a vice president with Robert Half Technology. “Enhancing IT infrastructure will help organizations better prepare for growth when the economy rebounds.”

 

<< Rounding out the top 10 list of IT investment areas: 6. Outsourcing (26 per cent) 7. Software as a Service (SaaS) (23 per cent) 8. Web 2.0 (18 percent) 9. Social networking technology (18 per cent) 10. Green IT (16 per cent) About the Survey —————- The national survey was developed by Robert Half Technology, a leading provider of information technology professionals on a project and full-time basis, and conducted by an independent research firm. The survey is based on more than 270 telephone interviews with CIOs from a random sample of Canadian companies with 100 or more employees. About Robert Half Technology —————————- >>

With more than 100 locations worldwide, Robert Half Technology is a leading provider of information technology professionals for initiatives ranging from web development and multiplatform systems integration to network security and technical support. Robert Half Technology offers online job search services at http://www.rht.com.

March 30, 2009

October 18, 2008

Venture capitalists get energetic

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:08 am

As in putting dollars into the energy sector, including the green energy sector.

The release:

U.S. Venture Investment Drops 7% to $7.37 Billion in 3Q08

Dow Jones VentureSource Finds VC Focus Shifts to Existing Portfolio Companies; Renewable Energy Attracts Record $1B; SF Bay Area See Most Investment Since 2001

SAN FRANCISCO and NEW YORK, Oct. 18 /PRNewswire/ — As the economy weakened during the third quarter, venture capitalists continued to rein in investments in U.S.-based companies, according to the Quarterly U.S. Venture Capital Report from Dow Jones VentureSource (www.venturecapital.dowjones.com). The third quarter of 2008 saw $7.37 billion in venture capital invested into 583 deals, 7% less than the $7.94 billion put into 673 deals during the same period last year and the second consecutive quarter of year-over-year declines.

“Clearly, the current economic crisis is already impacting the venture industry, which has traditionally been relatively insulated from fluctuations in the broader economy,” said Jessica Canning, Director of Global Research for Dow Jones VentureSource. “With the IPO market likely to be shut down for some time, venture capitalists are pulling back on investments in technology companies as well as in areas like business and financial services and media, content and information that are likely to suffer from a decline in advertising and enterprise spending.  At the same time, VCs are allocating more resources to energy deals, which stand to benefit from a shift in federal and state energy policies.”

Renewable Energy Investment Breaks $1B Mark for First Time

Most notably, the data showed that investments in the energy and utilities industry reached a record $1.18 billion in 32 deals during the third quarter of 2008, up 90% over the $620 million invested in 35 deals during the same quarter last year.  Specifically, 18 deals in the renewable energy category accounted for a record $1.08 billion in investment with the majority of that capital going to solar companies.

“While there are a relatively small number of deals being done for solar power and other renewable energy companies compared to traditional VC areas like software and IT, they’re attracting huge amounts of capital and that’s to be expected,” said Ms. Canning.

One of the top venture deals in the third quarter belonged to a solar company, SolarReserve of Santa Monica, Calif., which raised $140 million in its second round.

IT, Web Companies Suffer; Health Care Flat

The data shows that the information technology (IT) industry saw deal flow fall to its lowest point in more than a decade, dropping 21% from 342 deals in the third quarter last year to 270 in the most recent quarter.  Likewise, IT investments dropped 21% from $3.44 billion to $2.73 billion year-over-year.  Software accounted for the bulk of investment with $1.15 billion invested in 125 deals, down 13% from the $1.32 billion put to work in 149 similar deals during the same period last year.

For the first time in nearly three years, the information services sector saw a decline in interest from venture capitalists with $501 million put into 64 deals, 11% less than the $561 put into 83 similar deals during the third quarter of 2007.  Information services include many of today’s “Web 2.0″ companies, most of which rely on advertising as a source of revenue.

The Web-heavy consumer services industry also saw investment pull back, declining 47% from $286 million to $151 million in the most recent quarter while deal count fell from 32 to 20.  The travel and leisure sector (down 79% to $28 million) accounted for most of the decline.

After two consecutive down quarters, the health care industry rebounded to post a virtually flat quarter with investment down 2% to $2.16 billion in 152 deals during the third quarter of this year.  The biopharmaceuticals sector saw investment tick up 4% from $1.13 billion in the third quarter of 2007 to $1.17 billion with the deal count remaining relatively unchanged at 70.  Medical device companies posted their third-consecutive down quarter as investment fell 17% from $876 million to $727 million in the most recent quarter while the deal count held steady at 55.

According to the report, the business and financial services industry saw investment drop 26% from some $1 billion in the third quarter of 2007 to $740 million in the most recent quart as the financial institutions and services sector took a hit in the face of the economic crisis.

The consumer goods industry posted its best quarter on record with investment skyrocket to $223 million — up 233% from $67 million — on the back of larger cleantech-related deals in the vehicles and parts sector.

Focus Shifts to Older, Later-Stage Companies

The quarterly report also confirmed that many venture capitalists are choosing to focus on established portfolio companies as second and later-stage rounds dominated investment with $5.89 billion, or 82% of the quarter’s investment total, put to work in 368 rounds — versus the third quarter of 2007 when second and later-stage rounds accounted for 77% of capital investment.

Specifically, second rounds saw the largest gain with 150 deals and $1.88 billion, the highest investment total for these kinds of deals in two years. Conversely, investments in seed and first rounds dipped to $1.30 billion invested in 203 rounds, a two-year low in terms of investment.

The overall median size of a venture capital deal in the U.S. —including all stages of development — held steady with 2007 at $7.5 million, still the highest total on record.

Regional Perspectives

California dominated the venture capital activity in the third quarter of 2008, representing 45% of the nation’s deal flow with 261 deals completed and nearly 56% of the capital invested with $4.10 billion. By major region, the report showed:

  –  The San Francisco Bay Area saw a 22% jump in overall venture
      investment with $3.17 billion invested in 195 deals with much of the
      growth driven by record investments in health care and energy.  This
      marks the highest investment total for the region since the first
      quarter of 2001.
  –  Despite seeing investment drop nearly 10% to $867 million in 56 deals
      — its lowest deal count since 2005 — Southern California was the
      second most-popular region for venture investment, once again beating
      out New England, which saw investment fall 23% to $769 million in 78
      deals.
  –  The New York Metro region attracted $559 million in 49 completed
      deals, 14% less than the $647 million invested in the third quarter
      last year.
  –  The Potomac region saw capital investment fall 27% to $264 million
      with 21 deals closed in the quarter.
  –  Investment in the Washington State dipped 10% to $210 million invested
      in 18 deals.
  –  Texas recorded its second down quarter in a row as investment fell 73%
      to $119 million in 16 deals
  –  Capital investment in the Research Triangle region jumped 124% from
      $33 million last year to $74 million with 10 deals closed in the most
      recent quarter.

For more information about Dow Jones VentureSource or to arrange a personal demonstration, visit www.venturecapital.dowjones.com or call 866-291-1800.

The investment figures included in this release are based on aggregate findings of Dow Jones proprietary U.S. research and are contained in VentureSource. This data was collected by surveying professional venture capital firms, through in-depth interviews with company CEOs and CFOs, and from secondary sources. These venture capital statistics are for equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice. Copyright (C) 2008

ABOUT DOW JONES

Dow Jones & Company (www.dowjones.com) is a subsidiary of News Corporation (NYSE: NWS, NWS.A; ASX: NWS, NWSLV; www.newscorp.com). Dow Jones is a leading provider of global business news and information services. Its Consumer Media Group publishes The Wall Street Journal, Barron’s, MarketWatch and the Far Eastern Economic Review. Its Enterprise Media Group includes Dow Jones Newswires, Factiva, Dow Jones Client Solutions, Dow Jones Indexes and Dow Jones Financial Information Services. Its Local Media Group operates community-based information franchises. Dow Jones owns 50% of SmartMoney and 33% of Stoxx Ltd. and provides news content radio stations in the U.S.

Source: Dow Jones & Company
   

Web Site:  http://www.dowjones.com/
http://www.newscorp.com/
http://www.venturecapital.dowjones.com/

September 23, 2008

Venture capitalists not concerned about green tech bubble

Filed under: Business, et.al., Science, Technology — Tags: , , , , , — David Kirkpatrick @ 10:07 am

I’ve blogged about VC funding and green technologies here, and this release from today on a KPMG study seems to bear out the idea that venture capital investment will continue to flow into the greentech space.

The release:

Venture Capital Community Not Worried About Greentech Investment Bubble, See Significant Increase in 2009 Funding, KPMG Study Finds

VCs hedging their bets across greentech sub-sectors, see Brazil and Israel as attractive targets; project crude oil prices to end year over $120 per barrel

NEW YORK, Sept. 23 /PRNewswire/ — The venture capital community is not worried about a greentech investment bubble, and expect investment in the greentech sector to significantly increase in 2009, according to a recent survey by the U.S. audit, tax and advisory firm KPMG LLP.

In polling 301 venture capitalists, corporate executives, entrepreneurs and bankers, KPMG found that 91 percent of respondents indicated they expect venture capital activity in the greentech sector to continue rising in 2009, compared to only 76 percent who indicated the same the previous year. In fact, some 50 percent of respondents say investment activity in greentech will increase by 20 percent or more over 2008 levels, while another 34 percent expect  investment levels to increase by 10-19 percent range.

According to the KPMG study, 67 percent of respondents say the focus on greentech is a sustainable investment cycle, not another investment bubble.

“There is no doubt that the greentech sector is very active with many companies receiving significant funding,” said Packy Kelly, KPMG partner based in Silicon Valley and co-leader of its venture capital practice. “Our data showed that investments are being made across all sub-sectors of the greentech space”

When asked which sub-sectors of greentech would receive the most investment over the next two years, the responses indicate that investments will be diversified.  Fifteen percent of respondents say energy storage (fuel cells, batteries, etc.) will see the most funding, followed by clean coal and wind with 14 percent each.  Alternative fuels and solar rounded out the top five with 11 percent and 10 percent respectively. Interestingly, when asked what will become the dominant clean-air energy source in the next 20 years, 39 percent of venture capitalists say solar, 27 percent say nuclear and 18 percent say wind.

Fifty-three percent of respondents to KPMG’s survey expect end of year crude oil prices to be higher than $120 per barrel – only 13 percent expect oil prices to drop below $100.  Moreover, 47 percent of respondents feel that oil prices won’t peak until after 2010, while 24 percent expect we will see the peak in this second half of 2008.  Fourteen percent think the peak will come in 2009.

With regard to where greentech investment will be spread geographically in the United States, 60 percent of respondents say it will be directed toward the West, followed by 14 percent for Southwest, 13 percent for Midwest, and nine and four percent for the Northeast and Southeast respectively.  Outside the U.S., and beyond China and India, venture capitalists expect greentech investment to be geographically diverse, but Brazil, selected by 28 percent of respondents, and Israel, 27 percent, are the clear areas of opportunity. Russia (11 percent) and South Korea (10 percent) were the only other countries to top double digit response rates.

“As with any good long-term investment strategy, diversification is essential,” said Brian Hughes, KPMG partner based in Philadelphia and co-leader of its venture capital practice. “With technology innovation taking place across the globe, venture capital investors are focused on capturing emerging-market opportunities.”

KPMG conducted the survey in partnership with AlwaysOn, the venture capital new media organization, in advance of the GoingGreen conference taking place in San Francisco on September 15-17.

KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International. KPMG International’s member firms have 123,000 professionals, including more than 7,100 partners, in 145 countries.

 
Source: KPMG LLP
 

Web site:  http://www.us.kpmg.com/

August 8, 2008

Google’s AOL investment …

Filed under: Business — Tags: , , , — David Kirkpatrick @ 5:24 pm

… looks to be heading south. Google is just another company sucked in the financial black hole that is America Online.

Google filed with the SEC yesterday its 5% $1 billion investment from 2005 may be “impaired.”

From the link:

The Mountain View-based company disclosed in a quarterly report filed late Thursday with the Securities and Exchange Commission that the 5 percent AOL stake that it bought in 2005 “may be impaired.” Impairment is an accounting term used to describe an acquisition or investment that has eroded.

Unless there is an about-face, the acquiring company eventually must absorb a charge on its books to account for the diminished value of its holdings.

Google acknowledged for the first time that it might have to recognize a loss on its 5 percent stake in AOL, whose struggles have made it a financial albatross for its owner, Time Warner Inc.

“There can be no assurance that impairment charges will not be required in the future, and any such amounts may be material,” Google said of its AOL investment.

January 18, 2008

James Fallows on Chinese US investment

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 5:12 pm

James Fallows has an excellent article titled “The $1.4 Trillion Question” in the January/February 2008 Atlantic. He covers the controversial subject of China’s investment in the United States, particularly in T-bills.

He also blogs at the Atlantic’s website and posted a follow-up to the story here. This post is titled “The $1.53 Trillion Question” to reflect the increase in China’s foreign holdings between the time he authored the magazine article and when the issue hit the stands.

China is now investing about $1 billion each day and if that trend continues one fact in the article would substantially change. He wrote China’s US investment is the equivalent of each American borrowing $4000 from the Asian nation. The revised figure, according to Fallows, means, ” … on average, each American would not have borrowed about $4,000 from China; the figure would be closing in on $6,000.”

On the whole this shouldn’t be a great concern because as many economic analysts have opined, clearly China has a very vested (or should it be invested) interest in the stability of the US dollar and economy.

On the other hand, Chinese politics are extremely opaque throwing a great deal of uncertainty over any future. And the article notes the Chinese do pay attention to our government and media. Fallows goes on to cite an example of Lou Dobbs on CNN criticizing “Communist China” and Chinese officials being “shellshocked” their investment in the US might be resented.

I recommend reading both Fallows’ blog post and the entire article for a thorough rundown of this issue and its implications.

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