Feb 24, 2014 17:18 UTC

Facebook stock is not so different from bitcoin

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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 21, 2014 12:49 UTC

Italy needs fewer bad banks – not a big new one

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By Neil Unmack

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

Italian banks need to shed their bad debts to start lending again. The classic solution – selling poor credits to a national “bad bank” – would require Italian taxpayers to cough up at a time when state debt is 133 percent of GDP. Matteo Renzi, the likely prime minister, should try something different.

Feb 21, 2014 03:49 UTC

Thai telco bets on yield to defy political turmoil

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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 20:53 UTC

How on earth can Facebook justify WhatsApp price?

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By Peter Thal Larsen and Rob Cox
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

 

For mere mortals who haven’t partaken in whatever Kool-Aid Mark Zuckerberg is serving at Facebook’s Hacker Way headquarters, is there any way to justify the $19 billion it is paying for WhatsApp?

COMMENT

How long before the mobile operators enter the space , in software terms to duplicate whatApp would cost nothing , like wise they could block its use. Why allow an app that is eating away at your revenue stream. Facebook had to buy it because it was destroying their own user base .

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Feb 19, 2014 19:41 UTC

Candy Crush destined to be a heartbreaker

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

Candy Crush is destined to be a heartbreaker. The addictive mobile app’s Europe-based maker, King Digital Entertainment, is ready to capitalize on the hype with an initial public offering in the United States. With top hit “Candy Crush Saga” generating about 80 percent of revenue, though, investor infatuation would be a dangerous game.

Feb 19, 2014 19:26 UTC

Diamond dealers show how to make M&A sparkle

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

 

Leave it to a couple of diamond dealers to show how to make M&A sparkle. Jewelry retailer Signet’s stock shone brighter after it agreed to buy smaller rival Zale at a 41 percent premium for $1.4 billion. That’s what happens when the cost savings effectively cover the purchase price. It makes the tarnish on shareholder-unfriendly transactions involving Comcast and Jos. A. Bank all the more noticeable.

Feb 19, 2014 05:23 UTC

Fear and loathing in China’s trust industry

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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 20:07 UTC

Actavis makes pharma deals look generic

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

 

Actavis makes pharmaceutical deals look generic. Its $25 billion acquisition of Forest Laboratories follows a familiar formula in the sector. Uppity investor? Check. Low-tax jurisdiction? Check. Buyer’s stock rises? Check. And over $8 billion of value created means financiers will keep busy with their own prescriptions for M&A success.

Feb 18, 2014 07:26 UTC

China copper IPO seeks gold in financial recycling

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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 14:55 UTC

Vivendi’s SFR is top target for French cable king

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By Quentin Webb

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

France’s cable king promised investors a slew of deals when he floated Altice, his investment vehicle. The biggest and best would be Vivendi’s mobile operator SFR.