Felix Salmon

Kickstarter’s mission creep

I had a fascinating conversation last night with a chap from Kickstarter, a site designed to help creative professionals realize projects. And it’s still doing that, pretty well. But there’s clearly a degree of mission creep at Kickstarter, too — especially with regard to some of the most successful and highest-profile projects on the site.

Chart of the day, Facebook IPO edition

There are two ways of looking at the $5 billion or so that Facebook is going to raise in its IPO. One is to ask what on earth the company is going to do with all that money: it’s already making substantially more in the way of profits than it is likely to want to spend, and the chances are that the $5 billion is just going to go straight into the bank, where it will earn roughly 0.77% per year. This is not the best use of shareholder funds, and it’s hard to see why Facebook’s CFO would want the cash pile to be any bigger.

Why Apple’s cheap

I’m going to take one last bite at the Apple valuation question, since I’m happier now about why Apple’s trading where it’s trading than I was when I wrote my original post.

No dividend, no worries

Karl Smith made a funny point in response to my post about Apple’s falling p/e ratio: since Apple’s not returning any money to shareholders in the form of dividends or buybacks, he says, shareholders aren’t getting any return on their investment.

Chart of the day, Apple valuation edition


Andy Zaky at Bullish Cross has a great post on Apple’s valuation, showing the astonishing degree to which the market is discounting the value of a dollar of Apple’s earnings today, compared to just two years ago. Back then, it was worth $32; now, it’s worth just $13. In the eyes of the market, Apple earnings are worth less than those of Cisco, Comcast, IBM, or AT&T, and are worth just 13% of the earnings of Amazon.

Chart of the day, tech-stock edition


Paul Kedrosky reckons that Groupon’s the worst-performing internet IPO since Netflix, in 2002. He’s wrong: Groupon is doing even worse than Netflix did. It’s now trading at 85% of its IPO price; Netflix, by contrast, was still a tiny bit above its IPO price at this stage in its volatile history. (The chart above shows how Netflix performed in its first year as a public company, compared to its IPO price.)

Groupon’s pop


With Groupon spiking at the open to $28 per share, this post is likely to get even more coverage. Stocks with big opening-day pops, it seems, tend to fall dramatically thereafter. Which bodes ill for anybody buying Groupon at these levels.

How to justify Groupon’s valuation

Henry Blodget has a smart post on how to value Groupon today. Is he right that it’s vastly overpriced at a $10 billion valuation?

Market inefficiency of the day, Irish bank edition


You won’t be surprised to hear that shareholders in Allied Irish Banks have not done very well for themselves in the past five years. It did go bust, after all, and had to be nationalized; the share-price chart is above. But recently, as part of the recapitalization of the bank, the number of shares outstanding rose dramatically. Here’s the announcement, which doesn’t quite spell things out: