Monday, September 9, 2019

Strange life forms found deep in a mine point to vast 'underground Galapagos'

Similar articles confirm the findings in the groundbreaking book by Thomas Gold The Deep Hot Biosphere: The Myth of Fossil Fuels.  Looks like we have to rethink where life came from. The past 'truths' may not be true. For those interested, an ex head chemist of Dupont personally confirmed the chemistry in Gold's book, which gives validity to Gold's observations and conclusions as to where life came from    ......Aivars Lode 

The rock-eating, sulfur-breathing microbes have scientists wondering what other strange creatures dwell deep below Earth's surface.

Something odd is stirring in the depths of Canada's Kidd Mine. The zinc and copper mine, 350 miles northwest of Toronto, is the deepest spot ever explored on land and the reservoir of the oldest known water. And yet 7,900 feet below the surface, in perpetual darkness and in waters that have remained undisturbed for up to two billion years, the mine is teeming with life.
Many scientists had doubted that anything could live under such extreme conditions. But in July, a team led by University of Toronto geologist Barbara Sherwood Lollar reported that the mine’s dark, deep water harbors a population of remarkable microbes.
The single-celled organisms don’t need oxygen because they breathe sulfur compounds. Nor do they need sunlight. Instead, they live off chemicals in the surrounding rock — in particular, the glittery mineral pyrite, commonly known as fool’s gold.
“It's a fascinating system where the organisms are literally eating fool's gold to survive,” Sherwood Lollar said. “What we are finding is so exciting — like ‘being a kid again’ level exciting.”
Sherwood Lollar is excited not only because of the peculiar the mine’s rock-eating life seems, but also because of the growing realization that strange forms of life might not be so peculiar after all. Scientists are starting to find similar microbes in other deep spots, including boreholes, volcanic vents on the bottom of the ocean and buried sediments far beneath the seafloor.

Friday, September 6, 2019

WeWork Weighs Slashing Valuation by More Than Half Amid IPO Skepticism

Now tell me, does this smell like trouble with a capital "T"?  .....Aivars Lode

WeWork’s parent company is exploring a dramatic reduction in its valuation as it aims to go public while facing widespread skepticism over its business model and corporate governance, according to people familiar with the company’s listing plans and its recent talks with major investors.
We Co. is considering putting a price tag on its initial public offering that would value the company somewhere in the $20 billion range, potentially at the low end. That is less than half of the $47 billion mark where it last raised private capital this year, making it one of the largest valuation comedowns in IPO history.
Adam Neumann, We’s co-founder and chief executive, flew to Tokyo last week to meet one of the company’s biggest investorsSoftBank Group Chief Executive Masayoshi Son, and members of his team. There, they discussed the possibility of an additional infusion of capital.

Thursday, September 5, 2019

Bad news about unicorns in both the USA and China

The following two articles illustrate the bad news across the world on unicorns....  Aivars Lode

Uber and Lyft close at record lows as investors lose faith in ride-sharing companies

Shares of Uber and Lyft fell to fresh lows on Tuesday, posting their lowest close ever, as the ride-hailing companies face growing skepticism from investors.
Uber closed down 5.7% to $30.70, falling below its previous low of $32.57 on Aug. 30. Earlier in the day, the shares hit an intraday all-time low of $30.67.

Lyft experienced a similarly steep drop, ending the day down 7.2% to $45.42, compared to its previous low of $48.15 on May 13. The stock dropped as low as $45.40 on Tuesday, touching a new intraday low.

Both companies have had a particularly rough ride on the public markets since their respective IPOs earlier this year, as investors continue to question whether Uber or Lyft can achieve profitability in the future. Uber and Lyft were trading on Tuesday more than 30% below their IPO prices of $45 and $72 a share, respectively.
Uber reported a net loss of $5.24 billion for its second quarter of 2019, blaming stock-based compensation costs. By comparison, Lyft lost $644.2 million in the second quarter, representing a significant jump from the $178.9 million it lost a year earlier.

A proposed California law could also represent a major threat to Uber and Lyft’s business models should it pass through the state Senate, as it would force the companies to reclassify their drivers as employees. The bill passed the California Assembly in May and California Gov. Gavin Newsom voiced his support for the bill on Tuesday. Meanwhile, Uber and Lyft have pledged $60 million to a ballot measure that would keep drivers’ classification as contractors.

Lyft and Uber’s leadership have tried to assuage investors’ concerns about their businesses by painting a path to profitability. Lyft CFO Brian Roberts said he believed peak losses for the company were last year, while Uber CEO Dara Khosrowshahi characterized the second-quarter loss as a “once-in-a-lifetime” hit.

Those efforts have swayed some Wall Street analysts who say the price war between the ride-hailing businesses has eased, indicating Uber and Lyft could turn a profit in the near future. In a Aug. 27 research note, Ronald Josey, an internet analyst at JMP Securities, said said data from a recent survey found many riders don’t compare prices between the two services, “highlighting the inelasticity of demand.” Josey holds a Market Outperform rating on both Uber and Lyft.
“With fewer users price comparing between services as ride sharing services compete on brand and product, we believe pricing could continue to be rational,” Josey said.

By Annie Palmer - CNBC Tech Markets

The Venture Capital Boom That Backed The World’s Most Valuable Internet Startups Has Lost Its Steam

Chinese startups from ride-sharing giant Didi Chuxing to media and entertainment juggernaut Bytedance once raised record amounts from the country’s private investors. But this investment boom is petering out rapidly as people are a lot less certain of finding gems amid a global stock market slump.
Speaking on the sidelines of Forbes Asia’s Under 30 Summit in Hong Kong in July, several young venture capitalists and list honorees said worthwhile projects were increasingly hard to come by, especially as more established companies had already built their ecosystem of services and transformed major consumer markets. What’s more, investors are also worried about diminishing returns as the escalating China-U.S. trade war drags global equities lower, clouding their exit strategies.
“The slowdown is very pronounced, and a lot of investors are quite anxious,” says Liu Yuan, managing director of Beijing-based ZhenFund. “We haven’t identified the next big platform in China yet after mobile internet, while the latter has already changed how we live, commute, order meals and shop.”
As investors hold back, equity investments in Chinese startups have plummeted. In the first half this year, equity investment in China’s private startups fell 59% to 261 billion yuan ($37 billion) from a year ago, while funds raised by private equity investors fell 20% to 573 billion yuan, according to Beijing-based investment and research firm Zero2IPO Group. The steep drop stands in sharp contrast with the booming environment in 2018, when Bytedance, parent of the popular TikTok short video app, raised $3 billion at a $75 billion valuation that made it the world’s largest internet startup.

By Yue Wang - Forbes

Wednesday, September 4, 2019

The developed world is on the brink of financial, economic, social and political crisis

I also think we will have a calamitous period in the not too distant future. However with calamity comes opportunity to buy assets cheap. Warren Buffet says when people are fearful be bold, when people are bold be fearful!  ....Aivars Lode
Developed economies are at a crisis point, the powers of unconventional monetary policy are exhausted, and markets are just beginning to wake up to this. That’s the sobering assessment on the current state of the global economy delivered by Donald Amstad from Aberdeen Standard Investments.  
His view is that when developed markets finally crack, there will be serious implications for every asset class and economy. However, those economies where monetary policy remains relatively ‘normal’ will be those best placed to respond. In his view, the emerging markets have more levers to pull when compared to developed markets, where the money printing taps have been turned on and interest rate settings are near zero. 
The irony is that during the Asian crisis it was the IMF and central bankers from developed markets that convinced the emerging market governments not to print money and ‘take their medicine.’ Amstad says that this was a cathartic process for these economies, and they are now looking on in bewilderment as the West has resorts to money printing of an unprecedented scale. 

Tuesday, September 3, 2019

Gatekeepers reign supreme: Bewildering complexity makes regulating Facebook, Google and Amazon difficult

Do you agree or disagree with the following article on the control of information?
.... Aivars Lode

Back in the 1990s – a lifetime ago in internet terms – the Spanish sociologist Manuel Castells published several books charting the rise of information networks. He predicted that in the networked age, more value would accrue in controlling flows of information than in controlling the content itself. 
In other words, those who positioned themselves as network hubs – the routers and switchers of information – would become the gatekeepers of power in the digital age. 
With the rise of internet juggernauts Google, Facebook, Amazon and others, this insight seems obvious now. But over the past two decades, a fundamentally new business model emerged which even Castells had not foreseen – one in which attracting users onto digital platforms takes precedence over everything else, including what the user might say, do, or buy on that platform.
Gathering information became the dominant imperative for tech giants – aided willingly by users charmed first by novelty, then by the convenience and self-expression afforded by being online. The result was an explosion of information, which online behemoths can collate and use for profit.

The sheer scale of this enterprise means that much of it is invisible to the everyday user. The big platforms are now so complex that their inner workings have become opaque even to their engineers and administrators. If the system is now so huge that not even those working within it can see the entire picture, then what hope do regulators or the public have?
Of course, governments are trying to fight back. The GDPR laws in Europe, the ACCC Digital Platforms report in Australia, and the DETOUR Act introduced to the US Congress in April - all are significant attempts to claw back some agency. At the same time, it is dawning on societies everywhere that these efforts, while crucial, are not enough. 

Friday, August 30, 2019

Autodesk 2Q20: First Signs of Macro Concerns Hit Guidance

This headline is reminiscent of headlines at the end of the dot com era. Once one company stared having revenue issues the rest of them jumped on the bandwagon and claimed their issues were due to (an unrelated event like) 9/11!  ...Aivars Lode

Autodesk 2Q20 results from JP Morgan Equity Research:
Results in the quarter were great with beats from top to bottom, but management is seeing signs of macro concern in the UK, the EMEA industrial complex and even with China (<3% of revenue). So to be proactive they are cutting guidance a modest amount, but not taking meaningful steps that would indicate any concerns lingering from the macro perspective. We like the initial cut, but remain concerned about the potential of further macro impacts in the back half of the year.

  • Headline results were good in the quarter. ADSK reported 2Q20 revenue/non-GAAP EPS of $796.8M/$0.65 compared to our estimate of $785.1M/$0.60 and Street’s $787.0M/$0.61.
  • Positives: Strong billings leads to cash flow performance, AEC revenue accelerated over 1Q20. Billings in the quarter grew 47.6% year-over-year to $892.8M compared to our $834.6M estimate and the street’s $798.0M estimate. The increase in billings was the primary driver of cash flow outperformance of over $75M relative to our expectations. The strength in the quarter came from the AEC segment, which saw 37.5% growth compared to 37.1% in the first quarter.
  • Issues: Macro headwinds and FX driving down top-line expectations, back-end linearity here to stay. The company took down ARR, billings and revenue guidance by $70M, $75M and $20M, respectively, at the midpoint for the year. FX headwinds of $10M accounts for a portion of this but clearly, in our opinion, the bigger issue is the macro environment causing the slowdown particularly in the manufacturing segment. Brexit, European manufacturing and the ongoing trade dispute with China were all cited as adding to top-line uncertainty in the second half where we are lowering our second half billings estimates by $103.7M after this quarter’s beat. The linearity issue highlighted in the first quarter continued in the second quarter and management anticipates quarters to be back-end loaded going forward, which puts some additional risk on even these lowered expectations.
  • Establishing our December 2020 price target of $160. Our price target is based on an EV/FCFF multiple of 19x applied to our FY22 estimate.
  • Thursday, August 29, 2019

    While everyone is watching bond yields, the S&P 500 is carving out a familiar pattern

    A worthwhile read, with some graphs of history to help you decide whether we will have a recession.... Aivars Lode
    Wall Street pundits are suddenly freaking out about recession. Their main concern stems from what happened in the bond market last week. Namely, the yield on 10-year U.S. Treasuries falling below that of 2-year U.S. Treasuries. This is called an “inverted yield curve.” Whatever, right?
    That’s just a detail. I prefer to focus your attention on what is actually happening. That is, not on TV, not from politicians, and not from your friend or family member who works for a big brokerage firm. I want to try to tip you off. Specifically, I aim to point out things that actually matter to your money at a time when it is easy to lose your marbles over this stuff.
    After all, all of this hype over the goings-on in the bond market are just the latest, little piece of evidence that things are not as they have been. That, in turn, is filtering down to the mainstream media. That trickles down to consumers, who do what they should do. They personalize it to their own situation. The toughest part for them is deciding what, if anything to do about it.