The $19 billion WhatsApp deal could become the Facebook founder's legacy . . . or his albatross.
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The social media company, which has no clear revenue model, is reportedly worth 15% more than The New York Times.
Is inventing games that undermine the nation's productivity really more valuable than inventing, say, the microprocessors that run the nation's laptops? So it might seem, by at least one measure: According to recent estimates, Zynga, which makes social media time-sucks Farmville and Mafia Wars, is reportedly valued at $5.5 billion, slightly more than chip-maker AMD (AMD).
Though they're all still private companies, Zynga and other social media companies -- Facebook, Twitter, Groupon, LinkedIn and others -- have been valued as if they're Google (GOOG) circa 2003.
Twitter, a company without a clear revenue model, is reportedly worth $1.5 billion, 15% more than The New York Times. Facebook is supposedly worth $30 billion, making it bigger than Macy's (M), Whole Foods (WFMI), American Eagle (AEO) and Zale (ZLC) combined.
This restaurant stock may not be as expensive as analysts say.
By Jake Lynch, TheStreet
Among the market's most beloved stocks, Chipotle commands a lofty book value multiple of 9.1 and a cash flow multiple of 25, premiums of 40% and 98% to restaurant peer averages. Few would argue that Chipotle is a value stock, but for those who believe in the company's growth prospects, it may still be a bargain.
The consensus on Chipotle is that it has surpassed fair value. Of analysts following the stock, 11 rate it "buy" and 12 rate it "hold." In fact, Chipotle is roughly 11% above analysts' median target.
Political analysts expect nuclear energy to get a boost from Republican gains in Congress, while Macy's earnings might move the retail sector. Which exchange-traded funds offer the best exposure?
By Don Dion, TheStreet
Here are five exchanged-traded funds to keep an eye on this week.
Washington faced a substantial shakeup during last week's midterm elections. There will be no downtime for these newly elected legislators, as the debate over energy reform kicks off.
With Republicans leading the House of Representatives, political analysts predict that nuclear energy will receive some welcomed attention. ETF investors looking to gain access to this industry should look to NLR.
Pancake Bites are part of an ever-expanding menu meant to cash in on more than just coffee and doughnut sales.
Jeff Reeves, editor of InvestorPlace.com
As one of America's biggest specialty beverage merchants, Dunkin' Donuts has been on the defensive in recent years as other restaurants have tried to steal some of its thunder. McDonald's (MCD) launched lower-priced premium coffees and smoothies via its McCafe menu, Starbucks (SBUX) redefined instant coffee with its Via line, and even Burger King is trying to get in on the act by upgrading its java to the Seattle's Best brand.
- Related Article: McDonald's hints at higher menu prices
But Dunkin' Donuts has been firing back, most recently by focusing on a revamped breakfast menu. The move is meant not only to keep its coffee drinkers from defecting but to actually steal some of the morning meal business that companies like McDonald's currently dominate.
Gold is a must-own position.
By Jamie Dlugosch, InvestorPlace.com
Exchange traded funds to buy this week are coming out of the gold industry.
Last week went beyond the celebration of the expected election that brought Washington closer to the right and a Federal Reserve that formally announced its intentions to buy $600 billion of treasury securities. On Friday the market move up was reinforced by a jobs number that greatly exceeded expectations.
That news alone sets the table for the must own exchange traded fund. In the wake of the Federal Reserve’s quantitative easing program, the economy is creating jobs at a better than expected clip. Can anyone say inflation and a falling dollar?
Even after rising 100% in the past year, footwear maker Deckers could double again if it taps into the Chinese market.
Maybe Deckers (DECK) is finally getting its due. Barclay's recommendation Friday finally tells the story that this high-growth stock does not deserve to sell at 13 times earnings if you back out the cash.
Deckers has always been viewed as a fad stock because of its Uggs line, which is always supposed to be one quarter away from stalling out. But Barclay's makes the point that not only is it unlikely to stall out, but it might be accelerating with international growth. It's got only 2% of its sales in China, and the Barclay's piece speculates that China could be a huge market for the company, something I agree with.
Plus, Barclay's was willing to say that Deckers isn't just a one-product brand. Teva is a huge reignited business, and it isn't even factored in to the equation.
The handbag company sees soaring sales in China, the U.S. and Japan. Europe is the next frontier.
The company ended its June 2010 fiscal year with 20% of the U.S. handbag market and a 16% market share in Japan. Sales doubled to $100 million in China (where the company has 4% of the accessories market), and the company began to increase its penetration of the U.K. and continental European markets.
In the September quarter (the first quarter of the company's 2011 fiscal year), the company reaped early returns from that strategy and continued to push its global initiatives.
Shares would look undervalued at their expected price of $26 to $29.
As part of Morningstar's IPO Research Services, Morningstar auto analyst Dave Whiston recently released a company report and preliminary fair-value estimate ahead of GM's public offering later this month.
Although the "Government Motors" stigma is likely to hang over General Motors Co. for years, we think GM's car models have their best quality and design in decades. The company is already a leader in truck models, so a fully competitive lineup, combined with a much smaller cost base, leads us to think that GM will be printing money as vehicle demand recovers.
We think GM's earnings potential is excellent because the firm finally has a healthy North American unit and can focus its U.S. marketing efforts on four brands instead of eight. The most critical cost-saving measure was setting up a voluntary employees' beneficiary association for the retiree health-care costs of the United Auto Workers.
A number of factors could push equities higher and take the wind out of emerging-market equities.
The dollar is rising Friday in reaction to stronger economic news in the United States (the October jobs report was very strong) and weakness in Europe (Irish bond yields continue to climb on budget concerns). As a result, foreign stocks are under pressure, while U.S. equities push higher.
Is this a one-day fluke or the start of a long-term trend? For most of the year, the winning trade was to sell the dollar short and buy foreign stocks. That looks to be changing now.
Over the past two months, on a relative performance basis, U.S. equities have closed the gap with foreign equities -- a possible sign that Wall Street traders are beginning to reposition their portfolios.
The company wants its workers to use its own smart phone instead.
Here's another pain point for Research In Motion (RIMM): Dell is dumping 25,000 BlackBerry devices in favor of its own line of smart phones.
It makes sense. You gotta use what you're trying to sell. Eat your own dog food, as the tech world calls it.
But the last thing RIM needs right now is large-scale ship abandonments such as this one. Shares of the company were down 3% Friday on the news.
And Dell (DELL) is pushing the stakes even higher.
Biofuels are going to be a significant part of the road transport fuel mix going forward. Here are four exchange-traded funds to gain exposure to the trend.
By Kevin Grewal, TheStreet
As governments continue to place an emphasis on renewable energy, the prospects for corn and sugar cane-based ethanol are promising, giving support to exchange-traded funds like Teucrium CORN (CORN), PowerShares Global Agriculture (PAGG), Market Vectors Agribusiness (MOO) and ELEMENTS MLCX Biofuels ETN (FUE).
In Brazil, the main source of fuel in automobiles is already ethanol as most of the nation's vehicles can either run solely on ethanol or utilize a flex-fuel system that can run on a mix of gasoline and ethanol. The success of Brazil's ethanol use has many other nations looking at it as a viable power source.
In Sweden, which has the highest number of ethanol stations in the EU, a law has been enacted which requires every gasoline station in the country to provide an alternative fuel. Furthermore, oil companies in Australia have started to provide E10 fuel -- a blend of 90% petroleum and 10% ethanol -- in gas stations, and Thailand has started actively selling E20, an 80/20 blend of petroleum and ethanol, as well as E85 fuel blends.
Shares of the coffee chain rise after earnings beat expectations and an analyst upgrades the stock.
By Miriam Marcus Reimer, TheStreet
S&P restaurant analyst Erik Kolb upgraded his rating on Starbucks to hold from sell, noting its better-than-expected earnings and growth in comparable same-store sales, driven by higher traffic and average ticket price.
Fiscal 2011 guidance "gives us greater confidence in the viability of SBUX's turnaround efforts," he noted. "We now see 500 new store openings and slightly higher operating margins leading to continued EPS growth. However, currency is likely to remain a headwind."
San Francisco targets the Happy Meal as a child obesity culprit. Voters say no to CEOs. Struggling MGM Resorts distances itself from struggling MGM Studios.
Here's our roundup of the dumbest actions in business this week.
5. Happy Meal? More like Sad Meal
San Francisco's Board of Supervisors put on its Food Police badges and set out to bring McDonald's (MCD) -- and the dastardly Happy Meal -- to justice.
In a measure sponsored by supervisor Eric Mar, the board on Tuesday voted to ban toy giveaways in meals that it said failed to meet certain nutrition requirements. Under the ban, restaurants cannot sell an "incentive item" with any food item that has excessive calories, sodium or fat. Fast-food meal packages with a toy, such as the beloved Happy Meal, must contain less than 600 calories in total and also include fruits and veggies.
Key points in General Motors' IPO documents show the US government needs to get out of the company -- and knows it.
Jeff Reeves, editor of InvestorPlace.com
It's hard enough for investors to wrap their heads around a typical IPO. Combing through a startup's numbers, purported risks and legal disclaimers is a daunting task.
And if you want to add another layer of confusion to a stock offering, consider the unique and complicated situation of automaker General Motors. GM is ready to go public again for the first time since its 2009 bailout, with the U.S. government set to sell a third of its shares in about two weeks. In preparation for this IPO, the government has filed its formal prospectus -- and made some rather shocking revelations in it.
- Related Article: Data Proves GOP Better for Stocks
Most noteworthy are three clear signs in this SEC filing that the government knows Uncle Sam's influence is bad for General Motors -- as well as any initial investors, too.
High-end goods are selling because the wealthy feel safer now that their portfolios have rebounded. Midlevel retailers like Macy's and Target may be the next to benefit.
"Let me tell you about the very rich. They are different from you and me." I always thought F. Scott Fitzgerald was speaking about how the rich handled themselves in "The Rich Boy," which begins with that observation.
Now I know he was speaking about portfolios and their impact on shopping, notably at Tiffany (TIF), Whole Foods (WFMI), Coach (COH), Nordstrom (JWN) and Williams-Sonoma (WSM) -- places where higher costs get passed on and nobody blinks. These are all stores where inflation is taken in stride because prices -- albeit higher because of the cost of silver or cotton or food -- don't inhibit profits and in fact somehow seem to improve them.
We've been in a barbell economy for certain since the great bull market of 2009 reignited itself when the polls showed Republicans would take the House. All five of the merchants mentioned put up truly amazing numbers, and the common thread among them has to be stabilization of jobs and bonuses for the wealthy.
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The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
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[BRIEFING.COM] The major averages finished the Tuesday session near their lows with the Russell 2000 (-1.0%) leading the slide. The S&P 500 lost 0.5% with nine sectors ending in the red.
Equities indices started the day with modest gains and spent the first two hours of action in the neighborhood of their flat lines. Although the early trade lacked clear sector leadership, that could have been overlooked due to the strength among heavily-weighted sectors like health care (-0.3%), ... More
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