Thursday, November 7, 2019

Analysts stay Stay Selective in Software

Stay selective is what the analysts are now saying relative to tech stock valuations... Aivars Lode

Jefferies Equity Research: Stay Selective within the Space. 
High growth software valuations are now trading above terminal M&A multiples, suggesting we still have more room for multiple contraction. We expect that the short-term correction will continue given multiples remain elevated even with the recent correction. We would avoid the 15-20x multiple names until we see a broader pullback. We favor platform names with attractive growth and reasonable valuations like MSFT, CRM, INTU, SPLK, and PANW. We also favor names like SAIL and VRNS that have the potential for rev. reacceleration over the next yr. 

SoftBank Founder Calls His Judgment ‘Really Bad’ After $4.7 Billion WeWork Hit

I am sure that this is only the beginning of other massive write-offs similar to the dot-com era in the early 2000’s... Aivars Lode

TOKYO— Masayoshi Son, the billionaire founder of SoftBank Group Corp. , said Wednesday his “really bad” judgment championing U.S. office-sharing company WeWork left the Japanese conglomerate and its massive tech-investment fund with the biggest quarterly loss in its 38-year history.
Standing in front of a screen projection of stormy seas and dire Japanese-language headlines, Mr. Son told a news conference in Tokyo that he had made serious errors in judgment that led the group to post earnings “of the deepest red.”
SoftBank and the Vision Fund wrote down the value of their WeWork stakes by $4.7 billion and $3.5 billion, respectively. The $100 billion Vision Fund also wrote down the value of its holdings in U.S. ride-hailing company Uber Technologies Inc. and about 20 other investments, leading to an operating loss—the fund’s first—of nearly $9 billion for the quarter, and a group-wide net loss of $6.4 billion.
“My own investment judgment was really bad. I regret it in many ways,” Mr. Son said.
Mr. Son is fighting to preserve his reputation as one of the world’s savviest and most influential technology investors after the spectacular collapse of one of his most prized portfolio companies and the tumble in value of several others.

Monday, November 4, 2019

Large Bitcoin Player Manipulated Price Sharply Higher, Study Say

Well this is consistent with what I wrote about on manipulation of markets and commodities in my first book. Yet another manipulated market.  See my previous blog on bitcoin published April 5, 2013..... Aivars Lode

A single large player manipulated the price of bitcoin as it ran up to a peak of nearly $20,000 two years ago, a new study concludes.
The study reviewed the period between March 2017 and March 2018, when the price of bitcoin soared and its total market value rose to $326 billion. About half of that increase was due to the influence of a manipulation scheme, according to the study’s authors.
They said the unknown manipulator operated from a single account at Bitfinex, the largest cryptocurrency exchange at the time. The manipulator used another cryptocurrency, called tether, to boost demand for bitcoin, leading to the price surge.
It isn’t clear by how much or if the manipulator profited. Bitcoin traded at nearly $9,200 on Sunday.
The study—written by John M. Griffin, a finance professor at the University of Texas with a background in forensics, and Ohio State University finance professor Amin Shams —was accepted for publication by the influential Journal of Finance and will be published online Monday. An earlier version of the study argued tether was being used to manipulate bitcoin prices, but didn’t connect the scheme to one entity.
The paper doesn’t definitively conclude who the manipulator was. But it strongly suggests Bitfinex executives either knew of the scheme or were aiding it.
“If it’s not Bitfinex,” Mr. Griffin said in an interview, “it’s somebody they do business with very frequently.”

Sunday, November 3, 2019

Adam Neumann, the Boy Who Burst the Unicorn Bubble

Again I ask ....Will this be the end of Unicorns?  ....Aivars Lode

At the tail end of every bubble there is always one company whose story is so insane that people wonder in hindsight how anyone could have thought it ever made sense. Step forward We and Adam Neumann (via )
Click to Read the Bloomberg article here