Ed’s Daily Notes for April 14th   15 comments

While there are plenty of economic reports this week, we are knee-deep in earnings season, with the following stocks reporting earnings:

MONDAY: C
TUESDAY: JNJ, KO, INTC
WEDNESDAY: GOOG/GOOGL, IBM, BAC, AXP, ABT
THURSDAY: GE, PM, PEP, SLB, UNP, GS, DD, MS

However, I have bad news for you market junkies out there: Markets will be closed Friday, for the Good Friday holiday. Yes, it is that time of year again:

Zombiebunnies

Financial Times: Tech insiders dumped shares ahead of slide

Insiders at some of the hottest private and publicly traded internet companies unloaded substantial personal stakes ahead of the slump in tech stocks that started at the beginning of March.

The selling has stirred unease among some investors, who see the sales as opportunistic moves revealing a lack of confidence in their companies’ stock prices as shares in the fastest-growing internet companies soared in 2013.

Selling by founders and other insiders at private companies – taking advantage of a bubble in valuations in start-ups thought to be close to launching an initial public offering – raises some of the biggest concerns, according to investors.

“Individuals selling before going public is always a bad sign,” said Mr Sebastian Thomas, a portfolio manager at Allianz Global Investors. “If you believe in the business, why would you take out money at what is presumably a lower valuation in the private market?”

As the lock-ups which prevented insider sales after their 2012 IPOs expired, executives and directors at companies such as Workday, ServiceNow and Splunk have sold steadily, raising almost $750m between them over the past 12 months.

Naturally, it isn’t just the little fish either:

Among the biggest sellers, Jeff Bezos, chief executive of Amazon, raised $351m in February, taking his total sales to more than $1bn in just six months – more than three times the amount he had raised in the previous year.

Amazon shares have since fallen back 11 per cent, though Mr Bezos’ latest sale was still 14 per cent below the peak Amazon hit in January.

Sheryl Sandberg, chief operating officer of Facebook, has sold more than half her stake since the company’s IPO less than two years ago, benefiting from the steady rise in Facebook’s stock since the middle of last year. However, Ms Sandberg, whose disposals were made under a prearranged plan, began her sales when Facebook’s stock was at $21.08, well below the $58.53 it ended at last week.

Truth be told, I think the little fish sales are more significant than the big fish sales. Billionaires like Bezos are frequently looking to diversify their portfolios. However, $1 billion in stock sales in 6 months? Bezos knows Amazon is overpriced now, and he will never get a better opportunity to get his money out. I love Amazon, but I think it has to be sold at these prices.

And speaking of Facebook…

Financial Times: Facebook targets financial services

Not content with being just a platform to host cat photos and status updates, Facebook is readying itself to provide financial services in the form of remittances and electronic money.

The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.

The authorisation from Ireland’s central bank to become an “e-money” institution would allow Facebook to issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe via a process known as “passporting”.

Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer services online and via smartphones: TransferWise, Moni Technologies and Azimo, according to three people involved in the discussions.

This sounds good, until you realize Facebook is just playing catch-up:

It also comes as other internet groups – in particular, China’s Tencent and Alibaba – race to turn their sites into mobile payment platforms.

Google has reiterated its commitment to expanding its mobile payments and wallet products, which have yet to be widely adopted by consumers. It is registered in the UK to issue electronic money, in a process similar to the authorisation which Facebook is seeking in Ireland.

I still can’t decide whether Facebook is a legitimate internet company that will still be a money machine in 10 years, or if it will become the next Yahoo, a floundering company on it’s death bed in 10 years.

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Posted April 14, 2014 by edmcgon in Humor, Market Analysis, News, Stocks, Technology

15 responses to “Ed’s Daily Notes for April 14th

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  1. Ed,

    I know you are a sci fi guy but do you watch Game of Thrones?
    I think that it is the best show on tv and puts most movies that come out of Hollywood to shame.

    • Bobb,
      I have never seen it, although I’ve heard plenty of good things about it. When it gets to Netflix, I may watch it. I cut off the DirecTV service last April, and I really haven’t missed it.

    • Guys, you really need to read the books…the show is pretty good, but the books blow it away. My biggest concern is that the author will croak before he finishes the series.

      • 🙂 love the way you put it. I’ll past that info on to my wife she loves the show.

      • I started with the series (seasons 1 and 2). And now I have just finished the first two books. Trying to decide whether I should rad third book or start third season first. The series runs very true to books so far. I will say that the books are a commitment. You can not just skim through them.

      • I think I just read were HBO signed on for season 5 and 6 🙂

  2. Ed, You said you cut cable well so did I. Here is what I bought: http://www.silicondust.com/ It works great we record all our local tv shows and even the wife can operate the computer to watch tv. Fractal antenna is the best way to go. Also I notice the tv tuner in the silicondust device is much better than in a tv.

    • Bill,
      The problem with that is nobody in my family ever watched network tv when we had DirecTV, except me with football games. Frankly, I’m happier without it. I can watch Netflix at my leisure. I may get a little behind the times on some shows, but I find I prefer watching them ad-free.

      • What ads 🙂 didn’t I say I’m a computer geek 🙂 There is a way to cut them completely but for now we hit the right arrow button on our keyboard 4 times and no commercials. I’m using Amazon prime isn’t bad

      • I may try Amazon Prime someday, but for now Netflix has plenty of stuff I haven’t seen before. 😉

  3. Mark Zuckerberg lacks the experience to run a company of the size of Facebook. You don’t wake up one day and suddenly become competent to run a large company. I point to the couple deals he’s done. Way!!! overpaid for dubious synergies with Facebook.

    He needs to fail a couple times (ala Steve Jobs?) before I make any investments in the co. which is really an investment in Mark Zuckerberg>

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