Feb 24, 2014 17:18 UTC

Facebook stock is not so different from bitcoin

Photo

By Rob Cox

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

With its extraordinary $19 billion swoop on WhatsApp last week, Facebook proved its stock is not so different from the crypto-currency of the moment, bitcoin. They can both be used for certain, specific purposes. Neither is backed by a government. Both depend on vast networks of individuals. And their worth reflects demand, which is based on murky fundamentals. The trick: monetize them while they still have value.

COMMENT

I was thinking a similar set of thoughts yesterday. not the devaluation but the true value of a Facebook in terms of influence and comparing it to a retailer like Walmart. You see people go to Walmart every day and are influenced in buying what is stacked near the door and presented by the vendors on the shelves. All of this presentation is a method which has ben calculated to make you buy more. Think of a model where a Facebook is the new influencer in a virtual retailer sense. They sell advertising and influence people to purchase various things through their social network circles. How is this different from a Walmart model? Yes it is virtual. FB can even enter a new country quite easily and if it does not work out it can exit. Walmart typically has to acquire a competitor in the new country as they need to get in with immediate scale and have bricks and mortar right away to get the good locations. So with this in mind….at 10 years old could Facebook be the new Walmart as they will be everywhere, the largest and the most influential very soon? Maybe the high valuations they are putting on FB shares are justified if you look at the potential. Or maybe I have just been influenced.

Posted by knifeman | Report as abusive
Feb 24, 2014 14:55 UTC

Ukraine, the bailout Europe cannot shirk

Photo

By Pierre Briançon

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

The European Union brokered the deal that triggered the end of the Yanukovich regime. With Russia angry and the United States absent, it must now lead the rescue of Ukraine’s bankrupt economy – and first decide when to act, and how.

Feb 21, 2014 20:58 UTC

Modern financial arts get special exhibition

Photo

By Jeffrey Goldfarb

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

Modern financial arts have been given a special exhibition. Washington’s estimable Corcoran Gallery, with its de Koonings and Twomblys, is being carved up like a common conglomerate. Los Angeles played host to a hostile museum takeover bid and Detroit’s restructuring features the paintings and sculptures of the city’s art institute. A blank spreadsheet is proving just as able to inspire as a canvas.

Feb 21, 2014 03:49 UTC

Thai telco bets on yield to defy political turmoil

Photo

By Una Galani

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

Thailand’s telecom operators are relying on yield to defy the country’s political turmoil. Escalating protests and low valuations make it an odd time for a financially healthy company like Jasmine International to pursue a $1.4 billion spinoff. Though the plan to give its broadband infrastructure assets a separate listing makes financial sense, investors may need to be tempted with sweeteners.

Feb 20, 2014 15:26 UTC
Edward Hadas

G20 can get past angry stares and platitudes

Photo

By Edward Hadas

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

The G20 risks becoming a particularly pompous talking shop. As finance ministers and central bankers from the world’s largest economies gather for their weekend summit in Sydney, Australia, they might plan to get out of a potentially dangerous rut.

Feb 20, 2014 03:34 UTC

No algorithm makes Facebook-WhatsApp deal compute

Photo

By Robert Cyran

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

No algorithm based on terrestrial mathematics can make Facebook’s WhatsApp deal compute. Mark Zuckerberg’s social network is committing to spend $19 billion for the 55-employee, 450 million-user, ad-free messaging service. Facebook says growth is the point, not making money. That’s the kind of magical thinking shareholders signed up for when they surrendered control to the founder.

Feb 19, 2014 05:23 UTC

Fear and loathing in China’s trust industry

Photo

By John Foley

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

China’s trust sector is the financial system’s enfant terrible. It’s a 10.9 trillion yuan ($1.8 trillion) industry built on taking short-term funding and channeling it into longer-term investments. That mismatch has already led some trust products to unravel, and more will follow. What causes concern isn’t so much trusts failing as them being foolishly rescued.

Feb 18, 2014 07:26 UTC

China copper IPO seeks gold in financial recycling

Photo

By Una Galani

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

Financial recycling is putting a gold polish on the initial public offering of a Chinese copper company. Just 15 months after it quit the New York Stock Exchange, China Metal Resources Utilization is set to go public in Hong Kong at 10 times its last market value. It’s the first of a large group of unloved stocks to perform the “Chinese flip”, exploiting the valuation gap between U.S. and Hong Kong exchanges.

Feb 17, 2014 04:40 UTC

India graft baiter’s exit raises political risk

Photo

By Andy Mukherjee

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

India’s anti-graft crusader has beaten a hasty retreat from political power. That makes the country riskier for investors.

Feb 14, 2014 04:53 UTC

From soccer pitch, lessons on Chinese tycoon risks

Photo

By Una Galani

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

Chinese investors are setting their sights on trophy assets in the West, and soccer teams look like fair game. The case of English football club Birmingham City, whose main shareholder and former president just sold a stake to an obscure Chinese company, offers a cautionary tale. Big personalities make risky shareholders, but China brings extra anxieties.