Raj Sargule

eBay: Still Clouds over Skype IPO

Wonder how could eBay's claims that Skype business will be affected regardless of an alternative help them well with their plans to spin off Skype. With trial date set for June 2010, one would not expect a spinoff at least for a year. Guess eBay is confident that it will win this dispute. With 480 million Skype users all over the world, there is a lot to lose.

AmEx (AXP) offers select customers (read: deadbeats) $300 to cancel their accounts and get their risk off its books. Of course there's still the risk of "adverse selection" - i.e. the ones who pay off their balances and take the cash are the ones who can.

Surely they can't be deadbeats.Wonder what is the average debt of these select customers. Assuming its around $2000 (source creditcards.com), Amex is trying to pay $300 to get back its 2K, or 85 cents to a dollar. If it works, its a good deal - getting rid of these risky assets at that price in this market. The question is, who would want to take on this debt? Because Amex trying to get rid may signal that these are highly risky loans/customers.

PC Makers Face Netbook Peril - Barron's

May be a boon for SAAS/web services providers?

SAAS providers could offer provide services that compensate for notebooks limited features.
Imagine having all the data in a cloud, accessible from these notebooks, which would be used to save temporary data only.
No more risking losing data through notebook thefts. As more data goes into the cloud, there will be newer security needs. Good news for security vendors!

McAfee Battles Internet Bugs, Bigger Rivals - Barron's

I would bet on better earnings for Mcafee.
As per Forrester's report
www.forrester.com/ER/P...
IT Spending is on the rise. Even if it was flat, security spending seems to continue to grow as companies are getting more aware of security as a separate practice. Companies have started view security more from a strategic level than just a tactical measure. (evident from interest at the board/executive level). And they are realizing the long term reputation and financial consequences from a security breach. Look at some of the recent data breaches. TJMaxx - with over 40Million records stolen, and the weaknesses in IT security at Soc Gen that were apparently exploited in its £3.9bn trading fraud!

Are IPOs Heating Up? A123 Files.

What's striking is the R&D expenses of $7 Million for three months ended Mar 08, compared to $13M for year 2007. At this rate, 2008 R&D amounts to $28M! They do mention in their S-1 that they anticipate increased R&D due to personnel expansion. But with $50M spent on R&D so far, one would expect some returns and/or same level of R&D spending if not more.

Rackspace IPO Settles for Half Its Hoped-For Price

It closed at 10.90
If its true that an IPO is normally priced at about 10-15% discount to cover some downside for initial investors, then given the $12.5 final price, it should have closed atleast at 12.5.
The current market/economic situation could have contributed to its lower than expected closing. But shouldn't that have been considered while deciding the final price?
Seems like its almost impossible for anyone to feel the market pulse.

Merrill CDO Deal: How Can It Book a 'Sale'?

I guess Merrilll is betting on Lone Star's credibility. What are the chances that Lonestar would default? If it is less than the probability of CDO's losing its value below the already discounted 22 cents to a dollar, this deal seems fair.

Carl Icahn: Raider or Trader?

Depends on who is asked the question. People near and dear to Yahoo (mgmt) may:
- Not want Yahoo to go away.
- Not want Yahoo to go to Microsoft.
- Not like being threatened by outsider.
- Not feel Yahoo is rightly valued
- Feel Yahoo could go above $35 as a standalone entity.

However, from a shareholder’s profit maximizing view, all the above may seem irrational, emotional, somewhat egotistical. No doubt, Yahoo’s presentation to SEC was well done. Unfortunately, at the end of the day, the majority shareholder calls the shots.

Takeover defenses may make it extremely difficult to raid, but a right premium can change everything.

Yahoo Reorganization: It's Official

A little too late for strategic realignment?

Seems to me like a desperate attempt to regain ground after its blotched merger deal with Microsoft. If this realignment seems so promising to Yahoo, they should have done it earlier. Guess they were either hoping that their merger with Microsoft would go through, and must have decided to use this as leverage during negotiations, or they were not so sure that this strategy would give them a higher value than Microsoft’s $31 a share bid.

Starting a cloud computing group at a stage when other established players are much into the game seems like an uphill task.

Looks like they have no other option now but to execute this strategy regardless of its outcome. The only thing that they have on their side is their long standing Internet presence and their brand if it could help them turnaround their situation.

Regarding Amazon's 'New' PayPal Killer

Both Amazon and Paypal are reputed in their own businesses. One could see the benefits of integrating payment model with online retailing. However, given Paypal's extensive experience in payment operations (both domestic and international), it would have sophisticated risk modeling based on years of collected customer data. Amazon would take long to be where Paypal is today. Given the minimal switching costs for customers in this business, Amazon could get there. But then, would Paypal keep quiet and do nothing till then?

LinkedIn: A Billion Dollar Bet on Professional Networking

Hard to imagine that valuation. They claim their business model is based on ads and member revenues. Unlike other social networking sites, this site is in a niche market, and members don't spend as much time on the site. (not good for advertisers)
A million new members per month does not necessarily translate to a high revenue increase rate. Wonder what is the VC's exit strategy.

Analyzing Four Futures for Yahoo

I doubt if it will be different from $33. If it goes up, Microsoft won't be able to justify such a hefty premium, plus it will be seen as a desperate move. Going below $33 would hurt Yahoo's ego, and Microsoft as well since mkt would doubt its earlier offer. Depends on who is more desperate. Both parties need this merger for their good. This price will atleast assure an amicable merger.