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Mar 12, 2012
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Facebook’s underwriter friends are cheap insurance

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

Facebook has friended a raft of new underwriters for its forthcoming initial public offering. According to the company’s latest filing, there are now 31 of them, up from an initial six. That may be overkill, but the social network’s clout means it can line up the extra resources and reputational buffing at little, if any, cost.

Mar 8, 2012

Apple’s latest iPad looks sufficiently incremental

By Robert Cyran

NEW YORK (Reuters Breakingviews) – Apple’s (AAPL.O: Quote, Profile, Research) latest iPad looks sufficiently incremental. The new tablet device comes with a sharper screen, more powerful chip and better camera. The update is evolutionary, not revolutionary. That may have let down gadget fiends hoping for something more. But history suggests it should be plenty for Apple investors.

When the company now led by Tim Cook introduced the iPhone 4S in October, the fifth and most recent version of its mobile handset, there was similar disappointment. Its faster chip, voice recognition software and better graphics were nice, but many had anticipated a fresh design and a 4G wireless connection. The shares tumbled 5 percent as company executives showed off the device on stage.

Mar 2, 2012
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Zynga has less to fear from mobile than Facebook

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

Zynga’s investors worry about the company’s dependence on Facebook. So it’s no wonder they warmly greeted the company’s plans to diversify away from the social network, currently the source of more than 90 percent of Zynga’s revenue. But one trend affecting its giant symbiotic partner shouldn’t worry them much – the shift to mobile devices. Ad-dependent firms like Facebook, Pandora and Yelp could lose out, if only temporarily, but Zynga’s revenue model is different.

More and more people access the Internet on smartphones and tablets. Sales of these devices have now eclipsed desktops in the United States. Yet advertisers haven’t yet followed, for reasons ranging from conservatism to a lack of tools to measure the effectiveness of mobile advertisements. Facebook and Yelp, for example, still receive almost no revenue from mobile advertising even though half Facebook’s users access it on the go and about 6 million people use Yelp’s service on their phones.

Feb 29, 2012
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Yelp IPO: four reviews, 2 stars out of 5

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

Here are four ways to think about Yelp’s initial public offering, which set a price range earlier this month of $12 to $14 a share. At the top end of the range, the company would have a market value of nearly $850 million. All told, using the online review site’s own methodology, the stock sale merits just two stars out of five.

Feb 28, 2012
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$500 bln valuation may still be only half an Apple

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By Robert Cyran
The author is a Reuters Breakingviews collumnist. The opinions expressed are his own.Apple’s market capitalization is poised to ring the $500 billion bell. But even for the most valuable company in the world, that could just be a pit stop on the way to $1 trillion. A quick tour of Apple’s other eye-watering numbers explains why.

$100 billion: The company had nearly this much cash and investments on its books at the end of December. Investors give it little credit for this hoard.

Feb 28, 2012
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Yahoo activist hasn’t yet earned four board seats

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By Robert Cyran

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

Activist investor Dan Loeb correctly diagnosed Yahoo’s problem. After the Internet company spurned a juicy bid from Microsoft in 2008 at more than twice its current value and signed away the search business for a pittance, the Third Point founder turned his attention squarely onto the board – and has played a role helping to reform it. But he hasn’t yet provided a sound prescription to cure ailing Yahoo. Until he does, Loeb doesn’t deserve the four seats he wants on the board.

Feb 15, 2012
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Congratulations Google, you’re now a conglomerate

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By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.Congratulations Google, you’re now a conglomerate. U.S. and EU antitrust authorities have cleared the search firm’s $12.5 billion purchase of Motorola. Its foray into manufacturing phones and tablets might open new markets – or simply amount to a vital means of defending its core advertising business. Whatever the case, on Wall Street, diversification like this usually merits a valuation discount.

Sure, the purchase of Motorola helps protect Google’s intellectual property. The cellphone maker’s several thousand patents shore up the walls protecting Google’s Android operating system from software and hardware rivals alike. But the company has made it clear from the start that its purchase wasn’t only about intellectual property – it was also about making gadgets.

Feb 13, 2012
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Complexity caps allure of Yahoo’s Alibaba solution

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

Yahoo sounds closer to finding a solution for its long-running Alibaba problem. A mostly cash split-off promises a tax-efficient way for the troubled U.S. Internet firm to slash its stake in its Chinese rival. But the deal is getting so elaborate, it could dilute the benefits for Yahoo shareholders.

Feb 9, 2012
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Groupon’s growth spurt nearing the end

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By Robert Cyran

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

Groupon’s growth spurt is nearing its end. The newly-public online U.S. coupon firm increased sales five-fold in 2011 and even turned slightly profitable. But its first results since the initial public offering last November, announced on Wednesday after markets closed, also show revenue growth slowed for a fifth consecutive quarter. Groupon will have to get a move-on to justify its $15 billion valuation.

Feb 7, 2012
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How does a $31 bln mega-LBO become an $18 mln IPO?

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

How does a $31 billion mega-buyout dwindle to an $18 million initial public offering? What sounds like a gambling tragedy is the perplexing, yet true, story of the leveraged buyout of Caesars Entertainment – formerly Harrah’s Entertainment – by TPG and Apollo. Co-investors are in such a hurry to get out, they’re actually paying to exit.

The 2006 LBO, combined with a boom in Las Vegas casino construction, left Caesars too heavily indebted when tourism turned down. Swapping some debt for equity helped, but the company still has $18.5 billion in net debt. It had $1.8 billion in EBITDA over the past 12 months, only roughly equal to its interest expense. That makes it hard to spruce up casinos or build new ones.

    • About Robert

      "Robert Cyran, U.S. tech columnist, joined Breakingviews in London in 2003 and moved four years later to New York, where he continues to cover global technology, pharmaceuticals and special situations. Robert began his career at Forbes magazine, where he assisted in the start-up of the international version of the magazine. Before working at Breakingviews he worked as a market researcher and reporter covering the pharmaceutical industry. Robert has a Masters degree in economics from Birmingham University and an undergraduate degree from George Washington University."
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