Jeffrey's Feed
Jun 20, 2011
via Breakingviews

Carlyle IPO may struggle to get “carry” revalued

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

Carlyle will soon join the crowd — but try to stand apart from it. The U.S. private equity firm is gearing up to join rivals Apollo, Blackstone and Kohlberg Kravis Roberts as a publicly listed company. Carlyle’s unique structure could be its best hope of arguing the tough case that investing profits, or carry, should be worth more than investors currently think.

Jun 15, 2011

Pandora IPO pop highlights purity of Internet hype

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

By Jeffrey Goldfarb

NEW YORK (Reuters Breakingviews) – Pandora Media’s initial public offering pop showcases the purity of the latest Internet hype. The online radio firm’s stock surged as much as 50 percent after pricing at double the original expectations. It has much in common with this year’s crop of dot-com darlings, whose shares have tumbled following robust debuts. But Pandora didn’t even need fanciful accounting gimmicks to make its case. This is full-blown froth.

Jun 3, 2011
via Breakingviews

Pandora’s huge price tag misses old-school model

Pandora Media is distinctly Web 2.0. Its Music Genome Project tailors Internet radio stations to individual tastes. Pandora is using that DNA to capitalize on investor demand for hot tech plays, with an initial public offering price range that, at the midpoint, values the company at a cool $1.3 billion. But investors should be going in with their eyes, not just their ears, open. Pandora’s business model is pretty old school.

It might look like a rival to Sirius XM — the highly-valued satellite radio monopoly. But Pandora’s primary competition is in the analogue dashboard of terrestrial radio. Pandora generated almost 90 percent of its $138 million of revenue in the year to Jan. 31 from advertising. Sirius coin comes from 20 million paying subscribers.

Jun 2, 2011
via Breakingviews

UBS proves it’s hard to keep a bad bank down

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

NEW YORK — It feels like Cary Kochman should maybe turn out the lights in the American investment banking offices of UBS. The global M&A co-head is headed for Citigroup, the latest to join a parade worthy of Macy’s on Thanksgiving. Yet even with the multi-year exodus, the Swiss group has clung to clients. Crushing a big advisory franchise isn’t easy.

May 17, 2011
via Breakingviews

Goldman Sachs in danger of looking average

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

Goldman Sachs has lost its luster. The firm earned a best-in-class reputation for its history of profitability and navigating upheaval. But it seems less assured lately. In fact, Goldman is in danger of looking downright average.

May 9, 2011
via Breakingviews

Netflix pay scheme inspires behind the scenes

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

The star attractions at Netflix keep winning over new, and sometimes unlikely, fans. But one feature of the movie rental and streaming service’s business model is less well known: the unusual way it incentivizes and pays its staff. Rivals struggling to compete with the firm led by founder Reed Hastings may want to take a peek.

May 6, 2011
via Breakingviews

Warner Music’s $3.3 bln sale cues up same old song

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

Warner Music’s $3.3 billion sale sounds awfully familiar. Under Edgar Bronfman’s leadership, the company has outperformed rivals. But Len Blavatnik is still buying it for less than half its 2005 IPO price. The billionaire is a relative insider unlikely to bring any big strategic ideas. Outsiders haven’t fared much better solving the industry’s problems. That means it will probably be the same old financial engineering song.

May 4, 2011
via Breakingviews

Goldman got a steal of a deal on Facebook

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

Goldman Sachs got its Facebook stake for a steal. That’s if Renren is anything to go by. Shares in China’s answer to the social networking giant priced at the top of their indicated range and then surged on their first day of trading. That left Renren valued at about 100 times last year’s revenue. On that basis, Facebook is worth $200 billion. Goldman bought in at just a quarter of that. With some bubbly assumptions, the higher figure can almost be supported.

Apr 21, 2011
via Breakingviews

TiVo’s forgotten legacy still offers upside

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

TiVo’s forgotten legacy may still offer upside for investors. Technology has moved on in the more than a decade since the company launched its ground-breaking digital video recorder. It changed television globally by enabling consumers to pause live programming and watch their favorite shows any time they want. Although TiVo is almost ancient history, the DVR remains a household staple and the company just scored another legal victory over an imitator, EchoStar. There may yet be more gains as courts catch up with the trends.

Apr 15, 2011
via Breakingviews

Warner Music sale would only be an opening act

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

A sale of Warner Music would only be the opening act in the record industry’s latest tragic rock opera. The company behind Bruno Mars and Metallica has attracted a surprising number of suitors. But that’s primarily because the headliner waits in the wings. The show investors really want to see is a Warner combination with EMI Group.