July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Apple’s largest active shareholder, the $92 billion Fidelity Contrafund, cut its stake of Apple shares by 10 percent in the first two months of the year, according to Reuters. As a result, Google is now the funds’ largest holding.

Apple shares are down $7.26 so far today and down about $260 in the past six months.

In fact, the two company’s shares seem to be heading in opposite directions, with Google up about 25 percent in the past six months, and Apple down about the same percentage in the same half year:

Source: Google Finance

AAPL vs GOOG: the last six months

Apple stock has been hammered since the middle of last year, and even Tim Cook’s virtually unprecedented chat with Wall Street in February of this year had no positive effect, as the slide continued. Some investors have said that Apple’s fundamentals are sound, and that it is a bargain now — that a company with almost $140 billion in the bank will be able to continue its growth.

But Apple has yet to visibly demonstrate that is is willing to think different by producing a cheaper iPhone and react effectively to the competitive threat of Android. While Apple has been holding its own in the American market share battle, Android has been winning the global war.

Fund manager Will Danoff had held 11.56 million shares at the end of December 2012, but only held 10.43 million at the end of February. Fidelity Contrafund is up .5 percent on the day.

July 9-10, 2013
San Francisco, CA

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Apple is releasing its earnings in just a couple hours, and analysts have been tightening down their estimates. Official guidance from the company was $52 billion in sales, but very soon we’ll see how close the analysts are.

The big question, however, is this: Even if Apple has a stellar quarter, will it be enough to pull it out of its stock market doldrums?

Over the past year, Apple has seen its stock lose almost $200 billion in value, from a high of $700 to below $500, before a recent rise just north of the $500 mark. This is in spite of topping 53 percent smartphone market share in the U.S., selling 7.2 million iPhones last quarter through AT&T, over 6 million iPhones with Verizon, and being the phone of choice for 50 percent of smartphone buyers.

Oh, and by the way, on the path to meeting investors’ expectations in the last quarter of 2012, Apple sold 27 million iPhones and 14 million iPads, resulting in revenue of $36 billion and  profit of $8.2 billion — an increase of $1.6 billion from the year-ago quarter.

Not too shabby?

Apparently, shabby enough to shave tens of billions of stock market valuation. The big worry is Google’s Android: Will Apple reprise the past and fade into the sunset again, as it did (temporarily) with the PC market?

The worry is that Android will grab the lion’s share of Apple’s fast-growing and most-profitable mobile market, as it did in the third quarter of 2012, and that Apple will not make the kind of hard decisions it needs to make to retain mobile leadership.

Analysts are predicting anywhere from the low $50 billions to the mid-$60 billions, with 50 million to 55 million iPhones and 22 million to 26 million iPads. Macs and iPods are much less relevant to Apple’s bottom line. Wall Street’s consensus is $54.58 billion, 50 million iPhones, 23 million iPads, 12 million iPods, and 5 million Macs.

My guess is that to make the stock price pop, Apple will have to exceed those numbers by a considerable margin.

Yelp’s stock price dropped by as much as eight percent following the announcement of Facebook’s “Graph Search,” which could help users connect more easily with businesses your friends like.

Facebook’s Graph Search is aimed at helping you find things easier and make new connections. For example, it could help you find new restaurants, with queries such as “New York City restaurants my friends like” or “Restaurants my friends have visited.” If Graph Search works well, it could give people less incentive to use Yelp to find new places to eat. Likes are much lower-fidelity than reviews, but the new search option should still concern Yelp and other businesses.

Yelp opened the day trading at $21.97, but the company’s stock at one point sat at $20.10, a drop of 8.5 percent. Yelp gained a little a bit back at the end of trading today, but it still closed at $20.67, a drop of 5.9 percent.

Check out Yelp’s intra-day performance in the chart below.

YELP data by YCharts

Top photo via sylvar/Flickr

Updated at 7:43pm: Facebook closed the day at $30.59.

Facebook’s stock price finally surpassed the $30 a share mark, after a tumultuous ride since its May IPO when it closed at $38. The company hasn’t hit the thirties since July.

The news is exciting for investors who watched Facebook’s stock plummet in the months following its highly-anticipated initial public offering. Facebook’s IPO was botched for a number of reasons, beginning with a technology glitch in the Nasdaq’s servers that delayed trading by nearly a half hour. Scandal further erupted after Citigroup fired a top analyst and was fined $2 million for leaking information about Facebook’s risks and other confidential research during the social networks’ quiet period. The stock continued to drop after big-name investors let go of shares.

Facebook declined to comment on the stock price when VentureBeat reached out.

The high today may be attributable to an invitation Facebook sent out to media yesterday afternoon. The event invitation says, “Come and see what we’re building,” and will be held on Tuesday, January 15 at the company’s Menlo Park headquarters. The industry is now stirring about what Facebook could be up to, as there have been no recent leaks or build-up that could nod to a specific product.

The company has recently been keen on showing its users and investors that it’s still an innovator. In order to compete with SnapChat, an app that lets you send photos and videos that will self-destruct in 10 seconds after viewing, Facebook quickly hacked together “Poke,” to prove it can still innovate on the fly.

VentureBeat will be reporting live from Facebook’s event. Check back for details on what the company releases.

FB data by YCharts

Mark Zuckerberg image via deneyterrio/Flickr

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

It’s a good day for wireless service provider Clearwire, which currently has two lucrative offers that could make its shareholders very happy.

Yesterday, the satellite TV company Dish made an offer to buy a sizable chunk in Clearwire stock as well as 24 percent ownership in Clearwire’s spectrum — a deal that would value the wireless provider at about $5 billion. This comes less than a month after majority stakeholder Sprint made an offer to buy Clearwire’s remaining 50 percent stake for $2.2 billion.

Wall Street has responded today by giving Clearwire’s stock an 8 percent boost at peak. The stock price is currently holding at about 7.8 percent at the time of publication, or $3.14 a share. That’s 16 cents lower than Dish’s offer, but this is still a nice gain.

If Clearwire’s shareholders decide to go with Dish’s offer, it would boost the value of Clearwire and allow Dish to advance its plans to launch its own wireless Internet service. Sprint, however, would then be forced to continue sharing Clearwire’s spectrum with its rivals instead of strengthening its own network.

CLWR data by YCharts

July 9-10, 2013
San Francisco, CA

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Social media skills aren’t just nice to have — they correlate strongly with your company’s performance in the stock market.

According to a study of the FTSE 100 by social media consultancy Sociagility, companies’ social media savvy is correlated with market capitalization. No surprise there: The bigger a company is, the more resources it has to engage with the public via Twitter, Facebook, and the like.

But the company also found that doing social media well correlated to rises in the companies’ share prices, at least for the three weeks in November addressed by the study.

“Higher social media performance scores were associated with positive changes in share price,” Sociagility said in a statement.

“Of course, many more data points would be required to determine whether or not this represents a real or consistent lead indicator,” the report cautions. “However, the presence of any such statistically significant correlations between social media performance and share price movements should certainly embolden corporate communications directors to go to their CEOs and CFOs and say: ‘Look, this matters, and I need more resources to do it properly.’”

Interestingly, pharmaceutical and biotech companies seem to lead other industries in engagement and awareness through social media, followed closely by oil and gas companies, general retailers, and food and drug retailers.

The top-scoring company was Royal Dutch Shell, with a social performance index of 996 — far above the average score across all sectors, which was 100.

See below for the top 20 companies and industry sectors as measured by Sociagility’s study.

The FTSE 100 Social Performance Index – Top 20

The FTSE 100 Social Performance Index – Sectors

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

For the last six months an avalanche of bad news has been hitting what was once one of America’s iconic technology companies, and one of the companies that made Silicon Valley Silicon Valley. Can we all just agree now that HP is toast?

Today the news broke that HP’s revenue is down and — worse news — the company paid far too much for its acquisition of Autonomy, and therefore must take an $8.8 billion accounting charge … on top of the $8 billion goodwill write-off the company already took in August.

Bad news at HP, it seems, comes in eights followed by billions.

I was intensely skeptical in October when CEO Meg Whitman said the HP turnaround would take five years, an eternity for skittish investors. Essentially, that was a message for investors to put their money elsewhere.

Which is precisely what they have done:

Source: Google Finance

HP stock price

Here’s just a sampling of some of the bad news:

• HP takes $8.8 billion charge over Autonomy
• HP turn-around will take 5 years
• HP won’t bring a smartphone to market in 2013
• HP’s brand “not right”
• HP design has “fallen behind”
• Lenovo tops HP in marketshare
• HP loses 4000 workers
• HP reports biggest quarterly loss in its history
• HP competes for the dubious prize of worst board in America

Add it all up, and it’s hard to imagine how HP is going to make this work. Even CEO Whitman says it will take five years. But the big question is whether HP has five years to take. The PC industry used to be fast-moving, but we’re well into a post-PC era that moves even faster, and HP won’t bring a smartphone into the market until 2014.

Won’t. Bring. A. Smartphone. To. Market. Until. 2014.

That bit of insanity tells you everything you need to know about HP. A quick back-of-the-envelope comparison with Apple: $117 billion out of its $156 billion in total sales are from the iPhone, iPad, and iPod segments. That’s a staggering 75% of its revenue, almost all of which is in market segments that HP is completely whiffing on.

Which is why, no doubt, the company has had five straight quarters of falling sales.

Meanwhile an HP division head — in charge of PCs, no less — has the gall to call Surface “slow and expensive.” He then added that HP is taking it slow on consumer tablets … hardly a surprise since HP so badly bungled the TouchPad opportunity.

Glass house, meet stones. HP is slow to react, slow to move. And HP stock, even at a 10-year low that has analysts “throwing in the towel,” is expensive.

The company still has a market cap of $22 billion and saw revenues of $30 billion this past quarter. Which means that it’s too early to throw in the towel. There is still runway to fix this.

But precious little.

photo credit: with an eye via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Consumers may be ecstatic about the series of new devices Apple announced today, but investors — they weren’t so enthused.

Apple’s stock closed at $613, down over three percent on the day.

While that’s not a significant number by itself, what’s notable is that the price didn’t increase — or even stay flat — despite all of the impressive new devices Apple showed off.

Much of the stock drop seems to have come after Apple showed off the pricing for the iPad mini, which investors did not seem happy with.

Another reason for the drop, however, might be a bit larger than just Apple. The Dow Jones industrial average plunged over 200 points today on weak earnings from major companies. The Nasdaq, where Apple is traded, dropped 16 points. Clearly, investors are a bit jittery.

There are also fears among investors that Apple might add to the series of tech sector earnings misses when it reports its numbers on Thursday. Big companies like IBM, Microsoft, and Google, for example, didn’t fare so well last quarter, and investors don’t appear to be confident that Apple will reverse the trend.

Google’s shares hit a new all-time high of $747.28 in early trading today, just as both Facebook and Apple are taking a hit.

While the rise of Google’s share price isn’t tied to a single event such as a new product launch, it appears investors hope Google will continue its dominance in areas like search, advertising, and smartphones while rivals fail to meet expectations. Facebook is down nearly 9 percent to just under $21 today after Barrons published a scathing piece arguing the stock is worth only $15. Additionally, Apple is trading down 1.5 percent to $689.50, likely on news that weekend iPhone 5 sales did not meet expectations and people continue to be angry about Apple Maps.

It’s also important to note that Google’s stock has been on a tear as of late. September is the first month Google has been trading above $700 since December 2007.

Some analysts think Google has more room to grow. Citigroup raised its Google price target from $740 to $850 today. “We’re now back at the peak,” Citigroup analyst Mark Mahaney said in a note. “And we believe Google shares can rise materially higher over the next 12 months.”

Let us know in the comments why you think Google has so much momentum right now.

Google archery photo via Google

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Pandora investors aren’t thrilled with the news that technology giant Apple might be launching its own music-streaming service.

At the time of publication, Pandora’s stock is down nearly 18 percent today. Previously, the stock price remained relatively consistent despite tons of competition from the likes of Spotify, Rdio, Rhapsody, and many others. But Apple would be a far greater threat than Pandora’s other competitors if rumors of its music service plans prove true.

With Pandora, you create customized “radio” stations based on an artist, song, album, or genre by voting on what they do and don’t want to hear. The company offers a free ad-supported version of its smart radio service as well as premium subscription-based version. And while the company posted record high revenue numbers in its latest quarterly report, the expenses related to music licensing prevents it from turning a profit.

And Pandora is far from the only streaming finding it hard to make money. Spotify is also struggling to make a return on its free, ad-supported tier of service. Also, we’ve yet to see a success story from a streaming music service business, which Apple now wants a piece of.

Pandora’s investors are understandably shaken by the news, especially because Apple likely knows the uphill battle it’ll face making its own rumored music service a financial success. Some speculate that Apple’s true intentions are to keep consumers using the iPad and iPhone. A handful of hardware manufacturers are already offering a subscription-based music service, including Samsung, Sony, and (soon) Microsoft’s Xbox. So Apple (somewhat understandably) may want to join in.

P data by YCharts

Electronics retail chain Best Buy reported dismal results in its fiscal 2013 Q2 earnings report today, with profits taking a 91 percent nose dive.

The poor earnings caused Best Buy’s stock to reach a nine-year low — dropping as far as $16.23 per share during morning trading. However, the stock decline first started with yesterday’s announcement of new Chief Executive Hubert Joly, former head of hotel and restaurant company Carlson Cos. And while Joly does have a background in tech (he also previously ran Vivendi Universal as well as IT company Electronic Data Systems), his appointment as CEO caused investors to lose even more confidence after today’s earnings.

Revenue dropped 3 percent to $10.5 billion overall for the company, with the majority of losses coming from international store sales in China and Canada. The only significant point of growth for Best Buy was in online sales, which isn’t surprising considering that Amazon and other online retailers are somewhat responsible for declines in the brick and mortar stores.

The stock dropping to record lows is even more significant because of a rumored offer from Best Buy founder Richard Schulze to take the electronics chain company private.

Schulze, who stepped down as Best Buy’s chairman earlier in the year, currently owns 20 percent of Best Buy stock and is offering others $24 to $26 per share to do this. His offer is over 30 percent higher than the stock’s current price of $17-$18 per share, effectively valuing the company at $8.5 billion.

Considering the radical changes that Best Buy will need to stay competitive (not to mention profitable) over the next few years, a buyout option from Schulze seems like an even better deal for investors.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Poor Mark Zuckerberg.

Less than two weeks after the company’s freshly-minted public shares hit a low of $20.84 comes the reminder that about two billion more shares will hit the market between now and May, 2013.

Facebook dilution starts this week.

Fully 271 million shares could come on the market this Thursday, reports the Wall Street Journal. That would dilute Facebook’s already-outstanding pool of publicly-traded shares, which currently number 421 million, by 64 percent. With so many more shares on the market, Facebook’s stock price could drop even lower.

It’s an unfortunate but unavoidable side effect of the initial public offering process, but it’s one that’s especially sharp because Facebook’s IPO released an unusually small number of shares to public trading. Most IPOs sell 25 percent or more of the offering company’s stock. By contrast, Facebook sold only 20 percent. Its IPO price was $38, and the stock began trading at $42 on May 18, 2012.

The Journal notes that none of the investors whose share lockups end this week have announced any intention to sell their stock. Those investors include Peter Thiel, Accel Partners, Elevation Partners, Greylock Partners, Microsoft, Goldman Sachs, and Tiger Global.

Also, it’s not exactly a surprise that all of Facebook’s shares — like any public company’s — will eventually be publicly traded, so some experts feel that this expectation is already priced into the stock.

Employee lockups, including Zuckerberg’s, start expiring in October, with a total of 1.2 billion shares potentially coming on the market by the end of December, the Journal reports. Then another block of 529 million shares, held by Russian investment firm DST Global, Yuri Milner, and affiliated investors, comes on the market in May, 2013. At that time, the company’s total number of outstanding shares will all be trading on the public market.

Facebook stock has come up a bit from its low last week, buoyed perhaps by the news that Netflix CEO Reed Hastings was buying $1 million worth of Facebook shares.

FB data by YCharts

FB data by YCharts

Top photo credit: Andrew Feinberg via photo pin

July 9-10, 2013
San Francisco, CA

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Video rental service Neflix may soon see a dip in its stock value thanks to a downgrade by Barclays Capital analyst Anthony DiClemente.

Netflix had a particularly rocky 2011, with a 60 percent price hike on combined streaming-and-DVD rental plans and a failed plan of splitting Netflix into two companies. The company was punished with a loss of more than half of its stock price. The stock appeared to have rebounded slightly in the last quarter with a better-than-expected subscriber growth boost.

DiClemente cited rising costs and a number of emerging competitors as the main reasons for its lower stock rating.

“Amazon Prime’s [streaming video on demand] offering could eventually be carved out as a stand-alone product that would compete more directly with Netflix for subscribers. Likewise, Comcast’s recently announced Streampix service could eventually be offered … as another direct competitor to Netflix,” he wrote in a report published today.

It’s very unlikely that Amazon will ever spin off its streaming service into a standalone product, as VentureBeat has previously outlined. And DiClemente’s suggestion that Comcast’s Streampix could become a direct competitor would be more accurate if the service wasn’t tethered to an expensive monthly cable subscription. But, as he suggests, that could change over time.

In terms of rising costs, Netflix went from spending 12 percent of its total revenue on streaming content in 2010, to spending nearly 50 percent in 2012, DiClemente cites. If you factor in that the company is spending money on streaming licenses in two new markets (Latin America and the U.K./Ireland) in addition to its domestic and Canadian service, those costs aren’t really that big of a deal. I’d imagine if Netflix decided to launch its DVD-by-mail service in new markets, that percentage would be quite a bit lower.

“While rising digital content costs are not surprising given Netflix’s shift to a streaming-only company,” DiClemente said, “we believe Netflix’s mounting off-balance-sheet obligations add a greater level of risk to future earnings and liquidity in 2013 and beyond, which will have to be supported through continued subscriber growth.”

Another big risk for Netflix, DiClemente said, is in the company’s expansion into international markets. The company can’t afford to fail in either of its two new international markets without seeing serious repercussions on its business as a whole. Also, both the U.K. and Latin American markets already have Amazon-owned LoveFilm, which will make success even harder to achieve for Netflix.

Via THR

Apple has blown past Exxon Mobil, yet again, to become the world’s most valuable publicly traded company, thanks mostly to Apple’s record-shattering Q1 financial results yesterday.

Apple’s stock price surged more than 6 percent Wednesday to close at $446.66. And in early trading, Apple’s stock price hit an all-time high of $454.45. The company’s stock has a market value of nearly $419 billion, which is a bit higher than Exxon’s $414 billion value.

Yesterday, Apple absolutely smashed Q1 estimates with a reported $13 billion profit and record iPhone, iPad, and Mac sales. Of those statistics, the fact that the company sold 37 million iPhones in a single quarter was particularly jaw-dropping.

With its place as the world’s most valuable company, Apple joins a list of just 10 others that have previously held that slot. Those companies include AT&T, Exxon Mobil, Dupont, Microsoft, Wal-Mart, Cisco, GE, IBM and Altria.

Apple previously took the top slot from Exxon on Aug. 10, 2011 when its stock price closed at $363.69 and Exxon’s stock fell more than 4 percent that day. But Exxon’s fortunes soon rose and it quickly reclaimed the top slot.

July 9-10, 2013
San Francisco, CA

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Real estate listings site Zillow opened on the NASDAQ stock exchange this morning with a whopping $60 share price after its IPO was priced last night at $20 per share. But the $60 per share price fell quickly after the first trade and shares are currently trading around a more reasonable $34.

Zillow follows other tech websites to go public this year, such as LinkedIn, Pandora and HomeAway. All three of those also saw a strong first day price jump followed by quick drops, indicating short-term interest from many buyers. LinkedIn’s price has been trading over $100 per share the past few days but today it is sitting under $98.

A spokesperson from Florida-based IPO Boutique said Zillow’s strong open simply piggybacked on other Internet-based stocks. “IPOs from the likes of LinkedIn and HomeAway buoyed Zillow’s price today,” the spokesperson said.

IPO Boutique said only 50 of out of 300 potential institutions were given access to the initial $20 shares. With the price dropping dramatically from the $60 per share open, it’s easy to assume many institutions sold off those shares immediately.

Zillow originally set its IPO share price between $12 and $14 and then last week upped that to between $16 and $18. Interest must have been even stronger than anticipated with its $20 opening share price.

One major driver likely keeping Zillow’s price per share from staying high is that the company is still not profitable. It incurred a loss of $12.8 million in 2009 and a loss of $6.7 million in 2010. In the first three months of 2011, the company lost just $826,000, which suggests that Zillow is getting closer to generating profits. But since its not quite there yet, it’s no surprise investor interest is wildly fluctuating.

What do you think of Zillow? Do you have any interest in investing?

July 9-10, 2013
San Francisco, CA

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Research in Motion’s troubles just keep mounting. After a dismal earnings report last Thursday, the smartphone maker watched its stock lose a quarter of its value. Then on Monday, it lost its a digital marketing officer.

Brian Wallace, RIM’s VP of digital marketing and media, is leaving the company to take a position at rival phone manufacturer Samsung, the Wall Street Journal reported.

The news comes at a terrible time for RIM, whose Blackberry smartphone was for many years one of the most popular in the United States before losing its innovative edge and market share to Apple’s iOS and Google’s Android platforms.

It’s telling that Wallace left RIM for Samsung, which manufactures smartphones and tablets with the Android OS. Android’s market share is growing and is projected to be the world leading smartphone OS by 2015 by two major research firms. RIM’s BlackBerry OS, on the other hand, is projected by the same firms to be in fourth place, behind Microsoft’s Windows Phone 7 and Apple’s iOS.

RIM’s biggest problem right now is that the company is not pushing out any new, innovative phones. The company tried to show the market it was thinking ahead with the debut of the BlackBerry PlayBook tablet, but the company is still hobbled by sluggish sales of its flagship smartphones, delays of new products and a plummeting stock price. Time will tell if RIM can stage a legitimate comeback.