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9 Comments

    • Are IPOs Heating Up? A123 Files. [view article]
      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. Aug 12 10:12 PM
    • Rackspace IPO Settles for Half Its Hoped-For Price [view article]
      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.
      Aug 12 09:41 PM
    • Merrill CDO Deal: How Can It Book a 'Sale'? [view article]
      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.
      Jul 30 12:49 PM
    • Carl Icahn: Raider or Trader? [view article]
      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.
      Jul 10 08:40 AM
    • Yahoo Reorganization: It's Official [view article]
      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.
      Jun 30 04:02 PM
    • Japanese Banks Ramp Up Overseas Investment [view article]
      Seems like Sumitomo is taking a cautious step by investing just $1B of the $8B needed by Barclays, which may be provided by CDB, QIA and Singapore SWFs. Still, not sure if this is the right time given that financials are still getting hammered. Looking at SWFs which invested in Citibank when it was around $25 (now at around $19), Sumitomo appears to be extra conservative in its approach. Jun 20 10:28 PM
    • Regarding Amazon's 'New' PayPal Killer [view article]
      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? Jun 19 08:24 PM
    • LinkedIn: A Billion Dollar Bet on Professional Networking [view article]
      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.       Jun 19 07:42 PM
    • Analyzing Four Futures for Yahoo [view article]
      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. May 30 07:52 PM
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