Capital drought will spark unicorn M&A orgy

December 23, 2015

Plentiful money has detached valuations on many hot private tech firms from reality. About a third of the 144 private startups worth at least $1 bln are valued at precisely that much. As capital dries up, selling to bigger rivals or mating with other unicorns becomes appealing.

Best chapter in Pearson breakup story yet to come

August 5, 2015

The media group can soon sell its 47 pct stake in publisher Penguin Random House to co-owner Bertelsmann. Including future synergies, the stake could fetch $2.7 billion, twice what Pearson got for the FT. Since the venture could get more valuable still, waiting looks better.

Nutreco’s $3 bln buyout shows value of food chain

October 20, 2014

The Dutch fish and animal-feed giant is about to be gobbled up in a $3.4 bln friendly deal. The buyer is SHV, the family outfit behind the Makro cash-and-carry chain. With no synergies, this deal is better seen as a long-term bet on growing global demand for protein.

Snapchat’s valuation soars on tech-land pixie dust

August 27, 2014

The disappearing-photo business has turned 100 mln users, chat-service demand and the $20 mln sale of a tiny equity stake into a $10 bln price tag. Trouble is, the company lacks revenue – and none is in sight. It’s another example of technology dreams trumping real economics.

What’s Facebook really worth?

March 22, 2012

A look at Google’s revenue and profit history suggests that even $75 bln is a stretch for the social network’s IPO valuation - at least on a rational discounted cash flow basis. But in Facebook’s hyped offering, anything is possible. A new Breakingviews calculator does the math.

Lazard investors getting two for the price of one

April 27, 2012

The firm’s Q1 results confirm asset management is its quiet powerhouse. Yet investors give Lazard virtually no credit for it - or else negatively assess the high-profile M&A advice business. A sum-of-the-parts analysis suggests Lazard is worth twice its $3.5 bln market value.

Apple’s valuation isn’t at risk any time soon

May 3, 2012

Its $550 bln market cap is mind-boggling, but the fast-growing iPhone maker nevertheless trades at an absurdly low 12 times earnings. A new Breakingviews calculator shows how even if growth and margins decline improbably fast, Apple should still be worth far more in 2016.

Facebook reality tops out near bottom of IPO range

May 8, 2012

The social network is aiming for an IPO at $28-$35 a share, for a value up to $96 bln. Though the final price could go higher, that’s a ratcheting down of expectations. But an update of Breakingviews’ DCF calculator shows that sanity is still at the low end of the valuation scale.

Facebook winning Keynesian beauty contest

May 15, 2012

Investors devouring the social network’s IPO shares have pushed its top valuation to over $100 bln. To justify the lofty figure, buyers are using everything from eyeballs to credit scorers. But such analytical gymnastics are merely a way to rationalize the Facebook hype.

Facebook IPO features best and worst of capitalism

May 18, 2012

Execrable hype accompanies the entrepreneurial achievement. Poor governance, Silicon Valley cronyism, breathless pundits spewing misinformation, manic investors and bankers in hoodies are all on display. Yet the genius of capitalism is precisely its ability to harness excess.