May 29, 2012
courtenaybird:

Tech stocks that would have been an awesome investment 10 years ago

courtenaybird:

Tech stocks that would have been an awesome investment 10 years ago

4:14pm  |   URL: http://tmblr.co/ZlVyHyMNICql
  
Filed under: tech investing 
May 18, 2011
Transactions on SecondMarket heating up

Second Market published some very interesting graphs relating to trading of private company shares of some of the hottest tech companies.  Check it out below.

Feel free to check out the link below:

https://www.secondmarket.com/discover/reports/q1-2011-private-company-report

May 18, 2011
Yahoo got Wahaha’d: Alibaba / Yahoo and the Dangers of Investing in Chinese Companies

The conflict between Yahoo and Alibaba represents a huge story in my opinion.  Either Yahoo’s management is completely inept and deserves to all be fired immediately or Jack Ma engaged in unethical activity and deserves to be in prison.  I can’t see how there could be any middle ground. 

Alibaba said earlier Thursday that it moved ownership of the online-payment unit Alipay to an entity controlled by Alibaba founder and Chief Executive Jack Ma in response to rules issued last year by the People’s Bank of China, or PBOC, that could potentially bar foreigners from owning controlling stakes in Chinese Internet-payment services.


Read more: http://online.wsj.com/article/SB10001424052748704681904576319000833038480.html#ixzz1MhSRGC7D

The move hurts Yahoo! because it owns 43pc of Alibaba - considered one of its most valuable assets.

Oppenheimer Equity Research estimated that Alipay represents about $1.7bn of Yahoo’s market value of about $24bn.

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digital-media/8508625/Yahoo-shares-suffer-after-Alibaba-chief-Jack-Ma-takes-full-control-of-key-asset-Alipay.html

There is no way, you can allow a $1.7 billion asset be transferred outside of your partnership without knowing.  That $1.7 billion figure might be a conservative estimate as well when you consider that Paypal was purchased for $1.4 billion in 2002).  Alipay being the market leader of online payments in China could be worth substantially more. 

This is absolutely inexcusable especially when Jerry Yang has a board seat at Alibaba.  Unless a major decision like this wasn’t brought up before Alibaba’s board of directors, which would bring up larger concerns about investing in China itself if this was an acceptable practice.

Of course this still doesn’t clarify what really happened before Alipay’s unceremonious transfer out of Alibaba Group, part of which seems to have taken place without a clear vote by the group’s board.

Here’s some of what we don’t know: We don’t know how extensively Ma and Tsai discussed this issue with fellow board members Jerry Yang, the Yahoo co-founder, and Masayoshi Son, Softbank’s chairman. We don’t know exactly when and in what detail Yang and Son were informed of the transfer (which happened in two stages, in July 2009 and August 2010), and whether or not they objected vigorously. We don’t know why privately held Alibaba Group kept including Alipay’s financials in its overall reports through the first quarter of this year. Finally and crucially, we don’t know whether Ma would try this sort of transfer with the much more valuable Taobao — the Chinese e-commerce giant and the jewel in Alibaba’s crown.

http://blogs.forbes.com/gadyepstein/2011/05/16/yahoo-alibaba-spat-over-alipay-jack-ma-needs-to-say-more/

So we are talking about Alipay’s transfer occurring as early as July, 2009 without the awareness of Yahoo.  That’s over two years ago.  How in the world could Yahoo’s management not know about this and be fiercely against this transfer?  Giving up the Paypal of the Chinese market bewilders me.  The fact that critical assets could voluntarily transfer to an executive personally would destroy any trust in investing in any Chinese assets.  Unless of course, Yahoo’s management were informed but didn’t see the importance of this issue, in which case none of Yahoos management or board members should retain their jobs.

The whole situation reminds me of the Danone and Wahaha conflict which you can read more about in the links below.  If that case study was any indication, Yahoo is going to end up caving in.

May 11, 2011
LinkedIn is Underestimated and Undervalued

LinkedIn is undervalued.  I realized this after reading an article on emarketer, but the idea just sponataneously coaleced in my mind today after I looked up an article about LinkedIn’s current valuation on mashable.

LinkedIn shares are being sold for $30 apiece on secondary market SharesPost, which puts the business-oriented social network’s valuation at almost $3 billion, Bloomberg reports, citing three people familiar with the matter.

http://mashable.com/2011/01/21/linkedin-valuation-3-billion/

So how is $3 billion undervalued?  Look at the graph below:

Facebook has a stranglehold, which is nothing new.  However, the strength of linkedin is relatively surprising.  As a social network, it is focused towards professional life, and its tight focus is starting to exude large benefits.  It is gaining steadily and at this point might be underestimated relative to other networks. People don’t write about it in the press anymore but it is the de-facto social network for all things career related (and is just as dominant as facebook in a sense).  This leads to the big thought I had today:

  • Linkedin is becoming a lot more social - especially with its groups and twitter like update platform
  • Linkedin is the clear market leader world wide for all things career related.  Part of this is attributed to the fact that linkedin is not political.  So countries can’t ban linkedin, unlike facebook, google’s gmail or other other U.S. based platforms.  So while facebook has a bunch of imitators because it is being blocked for all things personal life related, no one is going after LinkedIn! 
  • You can log into LinkedIn from work.  Many workplaces ban facebook.  What is the significance of this?  Well from a time perspective, LinkedIn can start dominating impression time and potentially act as a primary portal for people while they are at work.  That is very valuable.  They haven’t yet, but they can and social norms in the workplace allow employees to do so.

When you combine these factors, LinkedIn starts to look more and more profitable.  LinkedIn isn’t just a place where you can keep a database of professional contacts anymore.  It is starting to become much, much more.  It’s been around for so long, that people have payed attention to the significance of all the minor tweets to the linkedin platform.

Part of the reason for this relates to concerns about mixing career life vs personal life (there have been numerous stories of people losing jobs or blowing jobs due to facebook).   So it makes sense that people would split their identities online between professional vs personal.  Despite facebook’s dominant position, they really dropped the ball by making oversharing the default, which has provided a great opening for linkedin to assault in the professional end.

So what happens when the entire white collar office world has linkedin open all the time?  Well for one, start thinking about the advertising potential.

  • Advertisers would know exactly what industry people are working in
  • Based on years of work experience, they can extrapolate age.
  • They also know where people are based geographically
  • They also know what a person’s interests are.  This is a big deal that is forgotten.  LinkedIn has a line item for interests and people fill it out.  How many people do you know on facebook that deleted everything about their interests when privacy concerns started popping up?  Well, the opposite is happening on LinkedIn, people are revealing more and publicly.
  • If facebook’s social graph is valuable because it has personal relationships, shouldn’t LinkedIn’s social graph also be valuable because of all the professional interconnections?

Of course, there is still the matter of execution, but if LinkedIn does things right, I see bigger and better things for them.  The media is sleeping on them because they aren’t “sexy” but I wouldn’t.

Here’s an analogy: LinkedIn is the enterprise focused company of the social media space and Facebook is the consumer focused company of the social media space.  We saw this play out in a previous generation too with Microsoft (market cap of 216.47 billion ) and Cisco (market cap of 98.34 billion).

Now facebook is estimated to be valued around $50 billion… I’m not saying LinkedIn is worth $25 billion necessarily (at least not yet).  But at $3 billion, I think it is undervalued on a relative basis.  All they need to do is start making things more social and encouraging it.  Maybe implement a LinkedIn Chat function that resembles facebook chat or gchat (except unlike their chat competitors, they would be acceptable in the work place).  LinkedIn has a lot of potential that people aren’t considering in my opinion.

May 9, 2011
Rant: Tumblr is the hottest tech startup + A lot of Tech Investors are clueless

Facebook - $50 billion Groupon - $25 billion  Living Social - $2.9 billion Tumblr - $135 million

One of the companies above is MASSIVELY undervalued.  Guess which one?

I don’t understand the hype around groupon and Living Social relative to tumblr.

Groupon Inc. has held talks with banks about an initial public offering that would value the online-coupon company at as much as $25 billion, according to two people with knowledge of the discussions.

http://www.bloomberg.com/news/2011-03-17/groupon-is-said-to-discuss-ipo-valuation-of-up-to-25-billion.html

Financial details of daily deals service LivingSocial were recently leaked — revealing the company’s valuation at $2.9 billion and total revenue of $50 million per month.

http://venturebeat.com/2011/04/16/livingsocial-valuation-leaked/

At $50 billion, Facebook would be worth more than Boeing, the 100th largest publicly-traded company in the world. But the world’s largest social network didn’t make Forbes Magazine’s 2010 list of the largest private companies in America.

http://www.wired.com/epicenter/2011/01/facebook-valuation/

Tumblr, the lightweight blogging company, has raised between $25 million and $30 million in new VC funding, Fortune has learned. The valuation is in the ballpark of $135 million.

http://finance.fortune.cnn.com/2010/11/19/tumblr-dives-into-a-boatload-of-money/

What I don’t understand, is how tech investors can be so clueless.  Tumblr right now is valued at 5% of Living Social, and half a percent of GroupOn.  This makes no sense to me.

Tumblr has a userbase engagement that is on par with Facebook or twitter (maybe even better).  Tumblr users log onto Tumblr all the time.  It’s addicting to share things you are interested in, and also to learn about things you are interested in from people who are equally passionate.  Tumblr allows users to do that.  Users log on Tumblr a few times a day sharing pictures, videos, music and thoughts and have engagement from millions of others.  In a sense, they (Tumblr) are doing what facebook wishes its users would do: openly sharing media, interests and ideas with the public.

In a few years: Facebook, Google and twitter could be rolling out group purchasing platforms to their engaged userbases and utterly annihilate GroupOn / Living Social.  Do tech investors not see that?  Are they not concerned?

If I were a major VC firm / tech growth equity fund in the U.S., I would be begging and pleading to invest in Tumblr.  At a $135 million total valuation, it is completely undervalued , I would be on my knees begging to give $135 million for 10% of the company. If Tumblr accepted it, I would be completely ecstatic.

At the same time, I would be shared shitless at the prospect of being eaten up alive if I was investing in GroupOn or Living Social: which has no engaged user base and minor network effects going for them.  I’ve ranted about this before, but…

  • Google has the advantage of search + google maps (which is the premier map service in the world + dominant market leader).  You combine these two things and local group discount campaigns should be a cakewalk to enter and create.  You add to that economies of scale related to data management of the google superstructure.  What can GroupOn or Living Social do against this?  Nothing, dead in the water.
  • Facebook has an engaged userbase across the world where people log in multiple times a day.  They have great infrastructure and control what you see impression wise.  What’s stopping facebook from rolling out an internal platform and shutting out Groupon or Living Social?  Nothing, dead in the water.
  • Twitter has a engaged userbase that persistently interacting with short messages.  You know something short messages could be used for?  Sharing deals for group buying promotions.  Why’s stopping twitter from eating up market share with their own in-house group discount purchasing platform?  Nothing.

On the other hand, you have tumblr, a company that should be inspiring fear into the hearts of facebook + twitter execs because of its potential to act as internet user’s primary portal and it has a pathetically low $135 million valuation.  How is this happening?  How do these tech investors still have jobs?  /End Rant

November 2, 2010

fred-wilson:

the truth hurts

So hilarious and yet so true.