Thursday, December 12, 2013

Hey VC's . . . Are You Still Buying Violin Memory $VMEM Trading Below Cash Value?

Why is Violin Memory $VMEM Trading Below Cash Value?
Will These VC Funds & Corporate Investors let this company fail?  
Windcrest, Juniper Networks, Toshiba, SAP Ventures, GE Capital, Highland Capital

I have often said the Venture Capital is a game of getting bigger and dumber money to follow smart money.  This one takes the cake.  Violin Memory has priced its IPO of 18,000,000 shares at $9 per share for a value of $162 million. J.P. Morgan, Deutsche Bank Securities, EM Securities and BofA Merrill Lynch are underwriting the IPO, with Barclays serving as a joint book-running manager. Baird and Pacific Crest Securities are also co-managers. Based in Mountain View, Calif., Violin Memory, which is backed by SAP Ventures, Highland Capital Partners, Toshiba and Juniper Networks, is a provider of memory-based storage solutions.

Revenue Growth Looks Good But Spending Money For Sales Expansion

If you can dismiss their last quarter below guidance based on not closing a few Government contracts and their CTO leaving the story looks pretty interesting bringing on 30+ new customers in the quarter.  This chart looks horrible but it feels like an interesting public venture capital growth opportunity if you don't mind trying to catch a falling knife of a pretty good growth opportunity. 
The $VMEM IPO Priced at $9 and now it trading at $2.6?  
Is this an overreaction?

Here are Silicon Valley’s 10 most in-demand startups
Big Data Storage Companies:  Cloudera, Nimble Storage, Dropbox, Violin Memory

Violin Memory $VMEM currently has market cap of $100M and $NMBL $1.5B which is a difference of 15x. Nimble and Violin have similar tech, customers, industry, revenue, losses. Go figure Wall Street due your due diligence before investing.

Tuesday, December 03, 2013

When Will Visa or Mastercard Buy a Mobile Phone Company?

 
When are credit card phones going to become reality?  I have be been waiting almost a decade for this to happen and we still only have Google Wallet that is not widely used.  Mastercard $MA and Visa $V now both have market caps of  $92B and $157B respectively.  Mastercard does $8B in annual sales and Visa does $12B and pay a huge dividends.  

If credit cards are eventually going to be on mobile phones why don't these companies just buy a company like Blackberry that has a market cap of $3B and does $12B in annual sales?  Do these greedy credit card / banks have to wait until a smart company like Google figures out the technology before actually creating value for their customers?   Come on bankers lets start to innovate!  Get your heads out of your asses and do something to create value for your customers.  Plastic credit cards are useless and full of fraud.  Do something disruptive and innovative for once in your life.  Buy a mobile company instead of paying such a huge dividends and screwing consumers with your lousy interest rates.  




Thursday, November 21, 2013

Why The Fed's 0% Interest Rate Policy Hurts The Economy & Savers



Hedge Fund Manager David Einhorn explains how $200 billion per year is not being spent in the economy by savers because of the 0% interest rate policies.  Janet Yellen said yes our policies hurt savers but helps the overall economy?  I frankly think the Feds theories are incredibly flawed.  Gains in the stock market and housing are not being spent and the whole wealth effect theory only benefits a few people and not the masses.    

Wednesday, November 20, 2013

The Best Eastern Conference NHL Team Would Not Qualify For The Playoffs in the Western Conference

The Western Conference NHL has clearly been beating up on the Eastern Conference in the first 22 games of the season.  

Tuesday, November 19, 2013

What Is The Best Bitcoin Wallet or Exchange Service?

Where is the Best Places to Buy & Trade Bit Coins?
What Wallets and Exchanges Are Certified?
How Are Merchant and Bitcoin Owners Vetted?

Bitcoin is the World's first decentralized digital monetary system and "bitcoins" are the currency units used. A decentralized system is essentially a P2P or pier to pier system versus a centrally managed system like PayPal.  The system has existed since January 3rd, 2009 and is used in every Country in the World. Bitcoins are created and controlled by advanced mathematics and cryptography, instead of by governments or banks (no government, bank, or corporation owns or controls Bitcoin). Bitcoins as a currency unit are created over time at a diminishing rate, and there will never be more than 21 million of them in existence (though they are highly divisible).

Bitcoin is different from any other payment system because:
  • It is decentralized (no group has monopoly control over it) 
  • It is not tied to US dollars or other government fiat currencies 
  • It is impossible to suffer chargebacks or frozen accounts 
  • It is (relatively) anonymous 
  • Fees are optional (you may pay to make your transactions process slightly faster)
  • Merchants can accept payments easily with hardly any fees.
Other virtual currencies do exists and are used for other services such as video games.  It will be interesting to see how this phenomenon evolves and if it will ever become commercially viable in the United States due to the enormous protection of the existing US banking laws.  China is one of the leading countries in World using and exchanging bitcoins.  The US is lagging far behind other countries in the World with adoption.  

US Governments officials and regulators will obviously be interested in stopping / regulating this for the following reasons:  
  • Cutting Off Terrorism Funding
  • Leakage of Tax Revenue 
  • Money Laundering 
  • Tax Evasion 
  • Exchange of Illegal Goods and Services
Would love to learn more about these services and would appreciate the feedback below.  Please add links and comments.  

The Entire US Economy is Built on a House of Heavily Manipulated Cards

Was The 2010 Election Job Creation Data Manipulated Also?

2012 Pre-Election Employment Participation Rate Suddenly Dropped 

The Federal Reserve is also basing their interest rate and bond buying (Quantitative Easing) assumptions on an incredibly delusional set of assumptions.  Jobs data that is manipulated and fabricated possibly prior to the the 2010 and 2012 elections.   Census faked jobs data.  Unemployment Rate Falls to 7.8%, Big Upward Revision to Last Month

Wednesday, November 13, 2013

Federal Reserve Whistleblower Says "Insiders Know Quantitative Easing Doesn't Work"

Andrew Huszar: WSJ Oped:  Confessions of a Quantitative Easer We went on a bond-buying spree that was supposed to help Main Street. Instead, it was a feast for Wall Street.  Posted at the WSJ. Mr. Huszar, a senior fellow at Rutgers Business School, is a former Morgan Stanley managing director. In 2009-10, he managed the Federal Reserve's $1.25 trillion agency mortgage-backed security purchase program.

Monday, November 11, 2013

Has the Fed Lost Control of Interest Rates & the Bond Market?


Is the 10 Year about To Breakout of This Long Term Monthly Range into the 5-6% Range?

Is the 30 Year about to Breakout of this Long Term Monthly Range to 8%?

TLT is the 30 Year Bond vs S&P 500


Value of the Dollar Decline

Liquidity Bubble?

Easy money (restrictions to borrowing relaxed by governments and lending institutions), falling interest rates, printed money (money created by government printing presses rather than fundamental economic activity), a massive build up of consumer debt, Government debt and to a lesser extent business debt. This combination allowed asset prices to rise well beyond realistic levels and resulted in both the collapse of asset prices and took the global economy itself to the brink of collapse. Stimulus packages, quantitative easing and general printing of money by central banks are short term fixes to the long-term problems of spending money you don't have.  Charles Ponzi would be proud.    

Related Articles:

Thursday, November 07, 2013

Is Twitter's "Real Time Search" a Threat to Google?


Is Twitter finally the first threat to Google's search dominance?   Twitter's IPO is set to start trading today under the ticker $TWTR.  Twitter raised $1.82B and will likely have a market cap of around $18B when it begins trading around $26 per share.  They sold around 70M shares.

Real time search is relatively new.  Its no surprise that Twitters previous agreement in 2001 with Google gave the search engine access to public tweets.  The agreement expired in July of 2011 and was not renewed.  This was a bold move by Twitter and it looks like its paying off in a big way.

Some investors like George Zachary, a partner at Charles River Ventures think Twitter could be even bigger than Facebook.  Twitter is a platform where anyone can reach out to anyone using Twitter.  Over the long-term it will have a big impact on the World.

Since then Twitter has made a lot of progress bringing on new users.    Since then Twitter has educated its user base about the value of using #hashtags.  So much so that Facebook and Google+ started using hashtags so that users could publish and search for content easier.

These filters are what makes Twitter unique and an incredible real time search and discovery tool.  I use it everyday to keep up with the stock markets and also web sites that I manage.  Google, Bing and Yahoo are still great tools but most of their search results are delayed and indexed by algorithms.

The billion dollar question is will advertisers receive long term value of paying to be inserted into Twitter feeds and hashtag searches.  This business model is very similar to the Google Ad Words business model which is a multi-billion dollar business.  I still kick myself to this day questioning how Google was going to make money when it went public in 1999 at $100 per share.

I am tempted to buy Twitter based on its growth and disruption of the search space.  I think real time search is just the beginning.  

Monday, November 04, 2013

Google Domains & Google Apps for Business Billing is Confusing

Google Domains & Google Apps for Business Billing is Confusing

I have been using Google domains for over 2 years and gladly pay $10 per year for this domain registration service.  However, now I mysteriously got a bill from Google Apps for Business charging me $10 for a service I don't use.

I never opted into this service and had to sign up for it when I registered the domain.  Their subscription billing is completely confusing and does not tell me I am required to subscribe to Google Apps for Business to use their domain services.

Hopefully, someone from Google will find this blog post and clear up the issues I cannot find in any of their forums or technical support.  

Wednesday, October 30, 2013

Historical Chart Fed Interest Rates vs SPX 1971 to 2013

This chart alone should tell you how much impact the Federal Reserve has on the overall economy.  The Fed can obviously influence bankers but they have little trickle down effect on the overall economy.  Housing market bubbles yes but business growth and jobs no.   

 Is the economy 27x stronger than it was in 1971?  Or is this a ponzi scheme spending and debt policy that have simply propped up markets artificially. Is the value created over the last 40 years at risk to collapse? 
Historical US Unemployment Rate
Duration of Unemployment 
Labor participation rate is collapsing.  


Saturday, October 05, 2013

Tuesday, May 07, 2013

New Phony Fed Stimulus Financial Paradigm = Deflation Not Inflation

Fed Stimulus = Long Term Deflation Not Inflation 

The Fed has created another bubble that will likely pop but this time all the hedge funds are all long the market and not short.  Is the business environment REALLY getting any better with all the Fed Stimulus, QE1, QE2 or QE3?  Not really if you ask me and it has created a phony sense of reality with the over inflated equity markets.  Historically, investors would value buying stocks based on that company making money.  Today, investors are making stock purchasing decisions based on liquidity, yield and price action.  The Fed wants investors to chase equities and bonds higher so we feel wealthy and spend more.  But their intentions to create inflation could have the opposite effect on those who actually create the jobs and invest.  

Sustainable jobs are created through organic growth and Venture Capital.  It is not the job of Government to decide which industries succeed or fail.  Our latest Fed policy has created a false sense of safety and has indirectly propped up businesses that historically would be failing.  Business failure is actually a good thing for a capitalism and for investment because it moves people and money to new areas which we call the business cycle.  It also allows the leaders to succeed more quickly by flushing out the weak competition.  Flushing out crappy businesses in crowded industries is what our economy is lacking right now and thus why businesses are not seeing any benefits other than low interest rates.  

Most industries are not experiencing earnings and revenue increases as quickly as the stock market leads us to believe.  There are exceptions like real estate but for the most part industries are suffering from the lack of organic investment and job creation.  If we had normal business cycles we might actually experience inflation in business and wages.  We are not seeing that right now because most of the billionaires don't want to invest  for the long term when they know it could come all crashing down.  How about giving some money to the Venture Capital industry that creates jobs?  Read this previous article we wrote back in 2010.   How about some QE for the Venture Capital industry that is actually shrinking?  



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