True Value

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Palantir co-founder Alexander Karp. Photo by Bloomberg.
True Value

Investor Question: How to Define Palantir

By Alfred Lee and Steve Nellis · Oct 13, 2016 10:02am PDT · 3 comments
Question: Is data analytics firm Palantir a software or services company? The answer may determine whether you think it’s worth $20 billion or $8 billion.Palantir uses software it has designed to mine data on behalf of companies and government agencies, helping address everything from cybersecurity to supply chain efficiency. While... Question: Is data analytics firm Palantir a software or services company? The answer may...
Honest Co. founder Jessica Alba. Photo by Bloomberg.
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Why Honest Company’s Value May Have Dropped

By Alfred Lee · Sep 20, 2016 10:02am PDT · 4 comments
The Honest Company has reportedly been in talks to sell itself at a price well below its last valuation of $1.7 billion. Some back-of-the-envelope math gives a hint why its valuation may have come down—and suggests investors will make out fine anyway.Investors who bought in at that higher valuation might have been banking on Honest Co.... The Honest Company has reportedly been in talks to sell itself at a price well below its last...
At Nasdaq on the day Etsy went public. Photo by AP.
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Employee Stock May Offer Clues to IPO Prices

By Alfred Lee · Sep 14, 2016 1:04pm PDT · 1 comment
If you want to gauge where a tech company will price an upcoming public offering, don’t bother looking at the value of its last fundraising. Instead, check out the employee stock option price.For instance, enterprise software firm Apptio said on Monday it expects to go public at a price range of between $13 and $15 a share. That’s... If you want to gauge where a tech company will price an upcoming public offering, don’t...
Tesla CEO Elon Musk. Photo by Bloomberg.
The Debt Hurdles Facing Elon Musk
By Alfred Lee · Sep 8, 2016 11:33am PDT
Tesla CEO Elon Musk. Photo by Bloomberg.
True Value

The Debt Hurdles Facing Elon Musk

By Alfred Lee · Sep 8, 2016 11:33am PDT
It’s no secret Elon Musk may have bitten off more than he can chew by proposing a merger of Tesla and SolarCity, two debt-laden and money-losing companies he partly owns. Just how much of a bite is now clearer.Projections for both companies disclosed in a securities filing last week suggest the combined firm will have to raise around $5... It’s no secret Elon Musk may have bitten off more than he can chew by proposing a merger of...
Stephan Vermut, a Prosper director and a former executive chairman of the company. Photo by Bloomberg.
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The Falling Price of Prosper

By Alfred Lee · Aug 31, 2016 7:02am PDT · 4 comments
Few tech sectors have fallen from grace as dramatically in the last year as online lending, as an exodus of investors has weakened supply of funding for loans. Take Prosper Marketplace, which raised money at a $1.9 billion valuation in April last year. Based on lower public market valuations and Prosper’s recent sharp revenue declines, the... Few tech sectors have fallen from grace as dramatically in the last year as online lending, as an...
Hewlett Packard Enterprise CEO Meg Whitman. Photo by Bloomberg.
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Can HPE Spend Its Way to Growth?

By Kevin McLaughlin · Aug 10, 2016 10:01am PDT
Next month will mark five years since Meg Whitman joined Hewlett Packard. In that time she has streamlined the once-iconic Silicon Valley giant, including last year’s separation of the enterprise businesses from the consumer products operations. Now the question is what comes next, for both Ms. Whitman and the company she still runs,... Next month will mark five years since Meg Whitman joined Hewlett Packard. In that time she has...
Vice CEO Shane Smith. Photo by Bloomberg.
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Questions Grow on Digital Media Valuations

By Tom Dotan · Jun 6, 2016 10:01am PDT · 2 comments
In the last 12 months, a rush of investments in digital media companies has pumped up valuations. Disney invested in Vice at a $4 billion valuation, the same value it paid for Star Wars’ maker Lucasfilm in 2012. NBCUniversal invested in BuzzFeed at a $1.5 billion valuation. A handful of other online publishers got valuations in the... In the last 12 months, a rush of investments in digital media companies has pumped up valuations....
Jeff Bezos. Photo by AP.
Amazon’s AWS Conundrum
By Steve Nellis · Nov 30, 2015 7:02am PST
Jeff Bezos. Photo by AP.
True Value

Amazon’s AWS Conundrum

By Steve Nellis · Nov 30, 2015 7:02am PST
Amazon Web Services is by far the dominant cloud computing company, so far leaving rivals like Google and Microsoft in the dust. As it gets bigger, the question of whether it fits within Amazon.com is likely to loom larger.Breaking apart Amazon would be complicated, for various operational and financial reasons. It likely isn’t something... Amazon Web Services is by far the dominant cloud computing company, so far leaving rivals like...
Apple's senior vp for worldwide marketing, Phil Schiller. Photo by Bloomberg.
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How Apple’s Payment Plan Affects Revenue

By Alfred Lee · Sep 17, 2015 7:06am PDT
Since Apple unveiled its monthly payment plan for iPhones, the consensus on Wall Street is that it could help sustain strong sales of the high-priced devices. On the flip side: Apple may be required to defer into the future some of the revenue it receives from phones sold under the plan instead of recognizing it all upfront, according to several... Since Apple unveiled its monthly payment plan for iPhones, the consensus on Wall Street is that...
Apple CEO Tim Cook. Photo by Bloomberg.
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When iPhones Seem Pricier

By Martin Peers · Sep 9, 2015 9:06am PDT · 1 comment
Today’s Apple event will show off a new iPhone offering lots of glitzy new features, sure to attract the usual deluge of media attention. But anyone trying to figure out how the iPhone will sell in the future should focus less on these features and more on cellular carriers’ pricing.In the past two years, the major carriers have... Today’s Apple event will show off a new iPhone offering lots of glitzy new features, sure...
A New York Stock Exchange specialist. Photo by AP.
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Private Tech: The New Realities

By The Information Staff · Aug 25, 2015 7:06am PDT · 1 comment
Private tech investors are bracing for how a Wall Street selloff could send ripple effects throughout the private side tech, preparing for new realities around fundraising, hirings and exits. The Information spoke with about half a dozen investors Monday to determine what they’re looking out for and how they’re adapting to changing market... Private tech investors are bracing for how a Wall Street selloff could send ripple effects...
Gilt Groupe Chairman Kevin Ryan. Photo by Bloomberg.
Mutual Funds Show Markdowns On Private Stocks
By Alfred Lee · Aug 20, 2015 7:16am PDT · 2 comments
Gilt Groupe Chairman Kevin Ryan. Photo by Bloomberg.
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Mutual Funds Show Markdowns On Private Stocks

By Alfred Lee · Aug 20, 2015 7:16am PDT · 2 comments
In the public market, bad news for a company typically sends its stock plunging. In the private market, of course, there’s no opportunity for such an immediate reaction. But the growing number of institutional investors in private companies can still take their own writedowns, providing a window into how valuations in the private tech... In the public market, bad news for a company typically sends its stock plunging. In the private...
Discovery CEO David Zaslav. Photo by Bloomberg.
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The Next Issue for Media Firms: Rising Debt

By Martin Peers · Aug 13, 2015 7:01am PDT · 2 comments
Last week’s media stock implosion reflected an overdue recognition that cord-cutting is hurting media companies’ core television businesses. But there’s another risk that deserves more attention: Debt levels among major media companies have crept up to levels that could become worrisome if their business continues to deteriorate. What makes this... Last week’s media stock implosion reflected an overdue recognition that cord-cutting is hurting...
Vessel co-founder Jason Kilar. Photo by Bloomberg.
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As Pay TV Pie Crumbles, Question Is Where Spending Goes

By Martin Peers · Aug 6, 2015 7:01am PDT
The years-long debate about whether mainstream TV networks are vulnerable to pay TV cord-cutting should now be over, thanks to Walt Disney’s disclosure on Tuesday that its near-term cable channel profits would be affected by ESPN subscriber losses. Little wonder that media stocks plunged on Wednesday. The more interesting question now is how big... The years-long debate about whether mainstream TV networks are vulnerable to pay TV cord-cutting...
Fitbit CEO James Park. Photo by Bloomberg.
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The Tax Accounting Behind Fitbit’s Big Profit Swing

By Alfred Lee · Jul 30, 2015 7:00am PDT
When Fitbit filed to go public this spring, investors focused on its dramatic swing to profitability—a narrative that helped launch one of the most successful IPOs of the year. The stock has more than doubled since its June debut on Wall Street. Some of that attention is warranted: First quarter profits soared on higher sales of the... When Fitbit filed to go public this spring, investors focused on its dramatic swing to...
Google CFO Ruth Porat. Photo by Bloomberg.
Google’s Gross Margin Mystery and Takeaways from Tech Earnings
By Alfred Lee · Jul 23, 2015 7:00am PDT
Google CFO Ruth Porat. Photo by Bloomberg.
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Google’s Gross Margin Mystery and Takeaways from Tech Earnings

By Alfred Lee · Jul 23, 2015 7:00am PDT
Google’s market cap has climbed nearly $60 billion after beating earnings estimates last week. But the narrative in the tech press crediting tougher spending controls—fewer moonshots, slower headcount growth—is incomplete. As a percentage of revenue, operating expenses (excluding cost of revenues) are still up quarter-over-quarter,... Google’s market cap has climbed nearly $60 billion after beating earnings estimates last week....
Netflix CEO Reed Hastings. Photo by Bloomberg.
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The Story that Matters About Netflix Stock

By Martin Peers · Jul 16, 2015 7:01am PDT · 1 comment
Even among boom-fueled tech stocks, Netflix is having a remarkable run. While Google and Facebook have risen 10 and 15 percent respectively since the start of the year, and Amazon is up 48 percent, as of Wednesday, Netflix has doubled in price. If you are looking to understand why, look less to financials and instead towards momentum—a lesson... Even among boom-fueled tech stocks, Netflix is having a remarkable run. While Google and Facebook...
Comcast CEO Brian Roberts. Photo by Bloomberg.
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For Comcast, Online Advertising May Be Next Big Play

By Martin Peers · Jul 8, 2015 12:22pm PDT
When Comcast chief Brian Roberts runs into fellow media moguls at Sun Valley this week, he might feel a little defeated. He was forced to abandon the takeover of Time Warner Cable in the face of regulatory opposition, while rival AT&T is expected to complete its DirecTV purchase and surpass Comcast as the biggest pay TV operator. Meanwhile,... When Comcast chief Brian Roberts runs into fellow media moguls at Sun Valley this week, he might...
Netflix CEO Reed Hastings. Photo by Bloomberg.
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Netflix’s Originals Push Faces Marketing Squeeze

By Martin Peers · Jun 11, 2015 10:01am PDT · 2 comments
Netflix has mastered getting buzz for originals like “House of Cards” through public relations and word of mouth. But as its slate of Netflix-only shows grow, the company will likely have to boost marketing in the competitive U.S. market or risk wasting the estimated $450 million it is spending on originals this year. The streaming service is... Netflix has mastered getting buzz for originals like “House of Cards” through public relations...
Vox CEO Jim Bankoff. Photo by Bloomberg.
Overpriced Digital Media Firms Could Face Reckoning
By Martin Peers and Tom Dotan · Jun 4, 2015 7:00am PDT · 1 comment
Vox CEO Jim Bankoff. Photo by Bloomberg.
True Value

Overpriced Digital Media Firms Could Face Reckoning

By Martin Peers and Tom Dotan · Jun 4, 2015 7:00am PDT · 1 comment
If there’s one field that would seem ripe for consolidation, it’s the one occupied by sites likes Business Insider, Mashable and The Verge. After years of investment by venture capitalists, wealthy families and media companies, there’s an overabundance of these digital quasi-news and entertainment sites. Meaningful profits, though, still seem... If there’s one field that would seem ripe for consolidation, it’s the one occupied by sites likes...