Jeffrey's Feed
Jun 3, 2011
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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
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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
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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
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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
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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
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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
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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
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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.

Apr 12, 2011

Arsenal deal exposes unlevel U.S. sports field

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

By Jeffrey Goldfarb

NEW YORK (Reuters Breakingviews) – The transatlantic playing field really is tilted. American billionaire Stan Kroenke is adding Arsenal to a portfolio that already includes U.S. basketball, football and hockey teams. The deal, which values the British soccer club at $1.2 billion, means half the 20-member Premier League will now be in foreign hands. By contrast, only a handful of the 122 major professional North American sports franchises have non-American owners.

Apr 7, 2011
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U.S. bank boards escape post-crisis clear-out

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

Apparently, U.S. banks don’t think their boardrooms were the problem. That’s the obvious interpretation when so little has shifted among them since before the crisis. Many directors clearly lacked the educational or work backgrounds needed to understand the derivatives and other complex products whose risks eventually overtook their institutions. Worse, they forgot or never learned the many lessons of past bubbles and manias. Yet industry knowledge on bank boards is no more extensive today than it was four years ago.