Tech IPOs will return. Just have some patience.
Read more here: Stop sweating the tech IPO ‘drought’
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Tech IPOs will return. Just have some patience.
Read more here: Stop sweating the tech IPO ‘drought’
Tech IPOs will return. Just have some patience.
Commodities trader says it immediately ‘ceased transactions’ with Iralco after learning of its deal with Iranian programme
The commodities trader Glencore supplied thousands of tonnes of alumina to an Iranian firm that has provided aluminium to Iran’s nuclear programme, intelligence and diplomatic sources have told Reuters.
The previously undisclosed barter arrangement between Glencore, the world’s biggest commodities trader, and the Iranian Aluminum Company (Iralco) illustrates how difficult it is for western powers to curb Iran’s ability to trade with the rest of the world. Even as the west imposes stringent restrictions on banks that do business with Iran, United Nations diplomats say that Tehran keeps finding new ways to do business with willing partners.
Reuters first learned about Glencore’s barter deal with Iralco, and an aluminium supply contract that Iralco had with Iran Centrifuge Technology Co (TESA), from a western diplomatic source in early November. That was about six weeks before the EU’s December 2012 decision to levy sanctions on Iralco for supplying aluminium to TESA, which is a subsidiary of the Atomic Energy Organisation of Iran. The source showed Reuters a western intelligence report concerning Glencore’s arrangement with Iralco. It described how Glencore, based in Baar, Switzerland, provided Iralco with thousands of tonnes of alumina last year in exchange for a lesser amount of aluminium metal. The report’s authenticity was confirmed by UN diplomats.
It is not known whether any of the aluminium produced by Iralco from Glencore’s alumina raw material actually ended up with TESA. As part of AEOI, TESA has been subject to UN sanctions in place since 2006.
In a statement to Reuters, Glencore said it first learned about the TESA-Iralco relationship in December and immediately “ceased transactions” with Iralco. It said its last trade as part of the barter arrangement was in October 2012, two months before the EU move.
Glencore acknowledged that it did sign the barter deal with Iralco in August 2011, saying it was legal, and denied wrongdoing or attempts to help Iran bypass sanctions.
It declined to provide details about the barter deal, the value of which is unclear.
Iralco did not respond to an emailed request for a comment. Iran’s UN mission said it was not in a position to comment.
Iran denies allegations by western powers and their allies that it is seeking atomic weapons and has refused to stop enriching uranium. As a result, in addition to four rounds of UN sanctions, Iran has faced much tougher US and EU measures, specifically targeting its financial and energy sectors.
Separately on Friday Glencore pushed back the date to complete its £50bn takeover of Xstrata for the third time, as it waits for regulatory approval from the Chinese authorities. The company warned shareholders on Friday that it would not now be possible to complete the deal by 15 March, which it said in January was the “long stop date” for finalising the deal.
Regulatory dispute stops Chinese companies from completing U.S. IPOs.
Read the original here: The Chinese IPO wall
What’s ahead for IPOs?
Read the rest here: Smooth sailing for Norwegian Cruise Lines IPO
Microblogging website, which is expected to float for $11bn, records meagre profits in British subsidiary’s first accounts
Twitter, which is inching towards an $11bn (£6.8bn) US stock market flotation, posted profits of just £16,500 in the much-delayed maiden accounts for its UK subsidiary.
It is too early to tell, however, whether the microblogging website will adopt the kind of financial structures favoured by other internet firms such as Google, Amazon and eBay to lower their UK tax bills.
Very little is known about the finances of the San Francisco-based group, which is incorporated in the US tax and secrecy haven of Delaware. The business is estimated to have taken $288m in global advertising revenues last year, according to the research firm eMarketer – a figure that is projected to rise to $545m this year and $807m by 2014.
While the US only accounts for 10% to 20% of Twitter’s estimated 200 million active users around the world, eMarketer researchers estimate the more commercially mature US market will still generate 83% of the group’s advertising revenues for 2013.
So-called “promoted” adverts started appearing on Twitter feeds in 2010 in the US, and in Britain in September the following year. Among the first advertisers targeting the UK that autumn were Sky, BT, Eurostar, Electronic Games and Paramount Pictures UK.
By 2011, just $5.6m, or 4%, of the group’s ad revenues were estimated to have come from markets beyond the US. The UK was one of the first new territories targeted, with a small staff recruited in central London in May 2011 about the same time as the firm acquired the filtering site Tweetdeck, located near London’s so-called “Silicon Roundabout”.
Abbreviated accounts, covering the first seven months of Twitter UK’s life, were only signed off by Ali Rowghani, the US group’s chief financial officer, last month. The three-person board consists of Rowghani, Twitter chief executive Dick Costolo and the site’s group counsel Alex MacGillivray – all of whom are based in San Francisco. The UK firm’s registered office is given as that of its solicitors, Baker & McKenzie.
Small British firms can file abbreviated accounts if they meet two of three conditions: having turnover less than £6.5m, a balance sheet under £3.26m, and with fewer than 50 staff.
Twitter UK’s parent company is a holding company in Ireland called Twitter International Company. The Irish firm is not required to file accounts and is ultimately owned by the Delaware-incorporated Twitter Inc.
Last month Google’s boss, Eric Schmidt, brushed aside criticisms of the group’s elaborate corporate structure – involving an international company in Ireland and a parent company Delaware – which have seen it shift revenues of about $9.8bn into a Bermuda shell company where they are sheltered from tax. “It’s called capitalism. We are proudly capitalistic. I’m not confused about this.”
A Twitter spokesperson declined to comment on the record but privately insisted that figures in the 2011 accounts for its British subsidiary were in line with the scale of UK trading at that time.
The NYSE landed the majority, or roughly 53%, of all U.S. initial public offerings. That’s quite a reversal from 2011, when Nasdaq won 78 IPOs and NYSE claimed just 71 listings for its exchange.
Go here to read the rest: NYSE wins 2012 IPO wars
The village of Rüschlikon got £242m when Glencore floated – but many residents have reservations about the money’s origins
He’s so rich and pays so much tax that every one of his 3,600 neighbours in the picturesque village overlooking Lake Zurich got a 7% tax break, but not everyone in Rüschlikon likes Ivan Glasenberg.
The 55-year-old, who had been living quietly in the village for more than a decade, exploded into the public consciousness last year when his previously extremely secretive commodity trading company Glencore floated on the London Stock Exchange and turned Glasenberg into Switzerland’s sixth richest man overnight.
The float valued his stake in the company, which is worth four times as much as Marks & Spencer, at £5.7bn. Even with Switzerland’s famously low tax rates, Glasenberg, pictured above, paid 360m Swiss francs (£242m) in tax to Rüschlikon’s coffers because under Swiss law a large proportion of income taxes are paid to the local community rather than directly to the state.
As a result Rüschlikon, which was already known as the “richest village in Switzerland”, was left with so much spare cash that the village council proposed cutting its already low tax rate by a further 7%. The idea was overwhelmingly approved in a public vote, but some citizens argued against the windfall – suggesting it was tainted money – and are still concerned today.
The money which Rüschlikon is benefiting from comes via Glencore’s mining and trading operations in more than 40 countries around the world. “He [Glasenberg] covers a lot of territory and has access to a lot of heads of state,” said James Campbell, a former executive at mining multinational Anglo American who worked closely with Glasenberg on one of his first deals in the 1980s. “His modus operandi is active. Certainly you either like Ivan or you don’t. I’m not sure those who don’t like him can tell you why.”
Growing up, Glasenberg was a keen athlete, going on to become a champion race walker who would have competed in the 1984 Olympics if South Africa had not been banned from the competition during the apartheid period. Chris Rael, who trained with him in California in the 1980s and now works for the US athletics team, remembers Glasenberg as courteous, friendly and approachable. “He never talked about money or business, so I would never have suspected that was what he’d become.”While Glasenberg, who lives in a glass and steel chalet up a steep hill with views over the lake, is on first-name terms with presidents and prime ministers, few people in Rüschlikon had heard of him until his taxes reached the village coffers. The huge payment caused an immediate stir, with the mayor being advised to call the village’s bank to make sure it was prepared to receive such a large payment.
In Le Bistro cafe in the converted waiting room of Rüschlikon station, from where the village’s rich residents can be whisked to downtown Zurich in 15 minutes, none of the clientele whiling away the afternoon have met Glasenberg but all are happy to chat about his impact on the community.
“They are really happy with him paying a lot of taxes,” said waitress Sylvia Hauser. “But they don’t like his business, they don’t like what he is doing. It’s not very friendly and they do not agree with what he does, especially in
A year ago, it was ‘the fastest-growing company in the world’. Last week, the deals website’s founder barely survived a bid to throw him off the board
Last November, Andrew Mason, former music student turned internet wunderkind, was celebrating. Groupon, the daily deals site he founded and at that point “the fastest-growing company ever”, had just raised $700m and was being valued at $13bn. It was the biggest technology flotation since Google.
Mason had even been given the ultimate Google seal of approval, having recently turned down a $6bn offer from the search giant.
A year on, he is fighting to keep his job as the company’s share price falls to levels not even Groupon’s cost-conscious customers seem to find attractive. Even by the flash and burn standards of the internet, it’s a remarkable collapse.
Groupon’s board met last week to discuss Mason’s future. The company has lost more than $10bn in value over the last year. Sales are slowing, staff leaving. Independent directors and fellow founders are reportedly at loggerheads, pushing for Mason to go.
Even Mason admits the board is right to be pondering his future. “Here’s a news flash: our stock is down about 80%. It would be weird if the board wasn’t discussing whether I’m the right guy to do the job,” he said at a conference held by news site Business Insider last week. Clearly Mason still thinks he is the right guy: he survived last week’s board meeting, helped in part by shares that give him 10 times the votes of his peers. But the odds on his long-term survival are getting longer.
How did it all go so wrong? Groupon has suffered its fair share of self-inflicted wounds: there was an accounting scandal just after the flotation that spooked investors and its overly ambitious international expansion plans have backfired. But for Sucharita Mulpuru, an analyst at Forrester Research, the collapse was more fundamental and inevitable than that.
Mulpuru was an early critic of Groupon. “This IPO game isn’t about finding value, it’s about finding a greater fool who actually believes the valuation is true. Trust me, you will be the fool,” she wrote in a blogpost before the share sale. Needless to say, she’s not too surprised that things have gone so horribly wrong. “Anybody who looked at this objectively could see where it was heading,” she says.
Groupon’s enormous growth was fuelled by massive marketing spending and media hype, she says. “It was like a Fourth of July fireworks display: it all went off at once. It’s very difficult to sustain that.”
Academic research seems to suggest it’s not just shareholders who are getting burned. Dr V Kumar, executive director of the centre for excellence in brand and customer management at Georgia State University, and his colleague Bharath Rajan studied the impact of daily deal offers on three small local businesses: a restaurant that normally earned $2,500 in net profit per month; a car wash service that normally earned $6,000 per month; and a beauty salon/spa that normally earned $6,600 per month.
The researchers tracked the businesses for a year and the results, published in MIT Sloan Management Review, were damning. In the first month, the restaurant lost more than $7,000, the car wash service lost $6,300 and the spa lost $11,760.
Daily deal sites argue that such losses are to be expected and that they will be made up by repeat business from the new customers brought in by the coupon. But this wasn’t the case, according to Kumar’s report. Every new customer visiting the restaurant with the coupon resulted in a $14 decline in profits. For the car wash, the decline was $17 and for the beauty salon $39.
Based on their analysis, it would take the car wash service and restaurant 15
In the wake of its IPO debacle, expect Facebook to leverage its market dominance aggressively – with its billion users hostage
The tweet, posted a little over two years ago by someone with deep connections in the internet world, was illuminating. It said, simply:
“A friend working for Facebook: ‘we’re like electricity.’”
I recalled that tweet last week when Facebook made two announcements of note. First, as everyone knows by now, it has a billion users – including, I suspect, nearly everyone I know. I scarcely use the social network myself, but I am constantly invited to look at items that others post there – and which are unavailable unless I log in. It is getting more and more difficult to avoid Facebook in daily life, and if Facebook gets its wish, it will be an outright necessity.
The second announcement was relatively minor in the bigger scheme of things – Facebook’s plan to charge a fee, rumored to be $7, for users who want to place a post high in their followers’ news feeds. Wall Street saw the fee as yet another way Facebook might generate revenues – an ever-stronger mandate from shareholders and the financial community in the wake of the company’s fumbled IPO.
Both moves spoke to the growing influence of this still-young company, and to its genuine potential to become what amounts to a public utility. It’s not as essential as electricity yet, but that goal is not as far out of reach as you might think.
Facebook’s ever-expanding user base is easy to understand. It’s the ultimate (so far) positive feedback loop – the network effect run wild. The service does offer value to its users, after all: convenience and connections. Sorry to say, most people value their privacy so little these days that they shrug off just about every new abuse of their personal data because the convenience and connections are worth it. Even people and companies that are deeply suspicious of Facebook’s motives – with ample reasons for their suspicions – now feel obliged to use the service anyway, compounding Facebook’s authority by posting items there and nowhere else. For people like me, who try to avoid using it, this increasingly means either signing in or not seeing things I’d like to see.
One of Facebook’s most audacious initiatives has been in the developing world. As featured in an in-depth piece in the Atlantic magazine’s new Quartz business news site, Facebook is subsidizing mobile phone data service, making it “free” for users – but with a catch: for all practical purposes, Facebook then becomes their entry into the internet. The company has made no secret of its desire to become what amounts to an alternative internet, and this is a brilliant – if disturbing – way to make that a fait accompli in a number of places where mobile data services are much more important and ubiquitous than what happens on desktop and laptop personal computers. In such places, Facebook will be wedded to national information networks and the governments that control them.
Electricity? Not exactly. But close enough.
Facebook’s goal is not just to connect people with each other, but also to be the ubiquitous entry point for those connections. It wants to become what amounts to a public utility. The more Facebook makes itself an essential part of our lives – or, more accurately, the more we make it so – the easier it will be for the company to start charging us for using it. Users have been the product until now; advertisers buy access to us and our personal data. But the $7 fee, which is surely aimed more at businesses than average users, is a way of ensuring that messages get seen.
Only Facebook (and maybe Twitter) could even attempt to do this kind of thing, because it owns the user experience so completely. In its best walled-garden days, AOL couldn’t have pulled this off with email, because even then, it didn’t have Facebook’s kind of dominance.
Market dominance always leads to distortions. Competition is always the preferred cure. But we have other methods, too, and it’s not too soon to be contemplating them. We have antitrust laws designed to curb abuses, and we regulate public utilities because we can’t trust them not to abuse their positions.
Will policy-makers awaken anytime soon? They’d better.