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from Breakingviews:

Snapchat’s valuation soars on tech-land pixie dust

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own

Snapchat’s valuation is soaring on tech-land pixie dust. The disappearing-photo business has turned 100 million users, strong demand for chat services and the $20 million sale of a tiny equity stake into a $10 billion price tag. Trouble is, the company lacks revenue – and none is in sight. It’s a reminder that Silicon Valley dreams often trump real economics.

Facebook’s nearly $200-billion market cap confirms two things about social networks. First, there’s value in users, and second, that value accelerates beyond a certain threshold. The idea is that the sites have grown popular enough to run advertisements without turning off users, and advertisers will pay handsomely to reach so many potential customers. That’s a big reason Facebook was willing to plunk down $1 billion for Instagram and $19 billion for WhatsApp.

The gold rush continues. Fast-growing chat applications like Line Corp, the Japanese messaging service owned by South Korea’s Naver, has filed for an initial public offering that could value it at well over $10 billion. And Snapchat, which Facebook tried to buy last year for $3 billion, could now be worth $10 billion, based on venture capital firm Kleiner Perkins Caufield & Byers’ agreement to acquire less than 1 percent of the company for $20 million. That works out to $100 per user, more than double the value of a WhatsApp user when that company was sold earlier this year.

from Breakingviews:

China Mobile’s foreign foray risks meagre returns

By Ethan Bilby

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

China Mobile is using its cash pile to hunt for growth overseas. If past industry experience is any guide, however, returns could be meagre. Many other mobile operators have failed to create value through cross border tie-ups.

from Breakingviews:

A French revolution could disrupt U.S. mobile

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

U.S. mobile is at risk of a French revolution. On July 31, Xavier Niel’s Iliad emerged as a surprise bidder for 56.6 percent of T-Mobile US, the Deutsche Telekom-backed operator. The billionaire is little-known in America, and Deutsche rejected his $15 billion opening gambit. But Iliad is roughly to French telecoms what Ryanair has been to European air travel, or Aldi to retail. If it wins T-Mobile US, market share and margins at AT&T and Verizon could face the guillotine.

from Breakingviews:

SoftBank’s U.S. mobile retreat is least bad option

By Peter Thal Larsen 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Masayoshi Son has been forced to scale back his mobile phone ambitions in the United States. The chief executive of Japan’s SoftBank has belatedly bowed to hostile regulators and abandoned plans for his Sprint unit’s $32 billion takeover of T-Mobile US. He has chosen the least bad option.

from Breakingviews:

Flaky Iliad bid muddies T-Mobile US sale odyssey

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Iliad has delivered what could be a Trojan horse for Sprint’s plans to buy T-Mobile US. In a rival approach, the $16 billion French telcom has offered $33 a share, or $15 billion, for 57 percent of the No. 4 U.S. mobile operator. It’s a flaky offer on several levels. But the intervention may intensify antitrust objections to Sprint’s wish to merge.

from Breakingviews:

French T-Mo bid looks like peak TMT Entrepreneur

Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

TMT-men are the superheroes of finance today. A market boom has let telecoms, media and technology dealmakers such as John Malone of Liberty Global and Masayoshi Son of SoftBank finance ever-bigger dreams. Xavier Niel, the billionaire behind French telecoms group Iliad, is now bidding $15 billion in cash for 56.6 percent of T-Mobile US, listed but two-thirds owned by Deutsche Telekom. Maybe this idea should have stayed in the lab.

from Breakingviews:

Samsung software bet rests on future beyond phones

By Robyn Mak 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Samsung may be the world’s largest smartphone vendor, but the electronics giant is looking beyond phones. The company has launched the first smartphone that runs on its own operating system. Samsung is unlikely to challenge Google’s lead in handsets any time soon. But it may have more success with software that can control televisions, appliances and even cars.

from Breakingviews:

Korean chat app sends mixed valuation messages

By Robyn Mak 

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

What’s the value of mobile chat apps? Investors have been scratching their heads about the topic ever since Facebook slapped a $19 billion price tag on WhatsApp earlier this year. The recent backdoor listing of South Korea’s Kakao offers a new data point. But its user metrics and revenue numbers still offer a mixed message on valuation.

from Breakingviews:

AT&T puts shareholders on hold for DirecTV

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

AT&T is putting its shareholders on hold to buy DirecTV. Its $67 billion acquisition of the satellite TV operator announced on Sunday brings with it an unexpectedly robust $1.6 billion of cost savings. Even so, these don’t quite cover the cost of the premium. In any case, AT&T says it will use the money to roll out rural broadband service. Customers and regulators are getting the first call.

from Breakingviews:

FCC needs thick skin to weather its moment in sun

By Daniel Indiviglio and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The U.S. Federal Communications Commission will need thick skin to weather its moment in the sun. The usually low-profile telecom watchdog is tackling flashy issues involving mergers, internet neutrality and wireless spectrum. Resolving them won’t be easy, given the agency’s mandate to spark competition while also promoting efficiency and consumer choice. Current commissioners seem up to the challenge.

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