Tesla recently had its first-ever profitable quarter after 10 years in business, fully repaid its government loan ahead of schedule, and won the highest Consumer Reports test rating of any car in the industry for its luxury Model S.

The Model S, however, will suck your bank account to the tune of $80-90,000 — hardly a mass-market car. Which is why Musk promised a month ago to bring out models for the average American car buyer.

And today, he said, that car would compete with vehicles like the Leaf — the cheapest electric vehicle on the market, at just under $30,000.

Tesla stock has had an amazing three months, blasting above $100 from the low $30s just in March:

Part of the stock run-up is probably due to the fact that Tesla is in some sense the last man standing.

Competitor Fisker went belly-up in April after burning through $1.4 billion in federal and private money, spending $900,000 for each vehicle it produced, and losing its co-founder, chairman, and designer Henrik Fisker. Lesser-known Better Place burned through $850 million trying to build battery-swapping stations for electric vehicles. And the big-name car companies haven’t exactly seized the electric opportunity with both hands, with slow sales of most models.

So now, with a market cap in excess of $12 billion, Tesla is worth almost a quarter of the venerable General Motors.

That might not be sustainable, but it is a bet by Wall Street that electric — and green — is the future of transportation.

July 9-10, 2013
San Francisco, CA

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It is one thing to ‘like’ a brand’s Facebook page, but quite another throw down actual dollars. Loyal3 has raised $18 million so consumers can put their money where their mouth is.

Loyal3 makes buying stock more social and accessible for people who don’t have much experience with the stock market. In three steps, you can invest as little as $10 in well-known companies like Apple, Amazon, Facebook, Starbucks, Disney, Google, Coca Cola, Walmart etc…

Loyal3′s core philosophy is “own what you love.” Buying stocks can seem daunting for people without financial expertise. Loyal3 wants to make this process more user-friendly by providing fee-free investing and enabling the purchase of stock through a brands’ Facebook page. Loyal3 is a registered broker-dealer and offers stock in publicly traded companies, stock in Initial public Offerings (IPOs) and stock in follow-on offerings.

Consumer engagement is a major buzz word in the brand world right now as companies try to deepen their bonds with consumers and build loyalty. Loyal3 serves companies that want excited shareholders, as well as consumers who want to feel a strong connection to the brands they use everyday.

DNS-L3, LLC, an entity owned by Michael and Gigi Pritzker Pucker, led this round, along with existing investors Cris Kelly (former Chief Privacy Officer of Facebook) and Barry Schneider, Loyal3′s CEO. This is the company’s third round of financing. Loyal3 is based in San Francisco.

July 9-10, 2013
San Francisco, CA

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Google is kicking of its Google I/O developer conference today to much anticipation. The company’s shares hit $900 and continued to to climb this morning, a first for Google.

The stock price hit a high of $911.45 around 10:06 a.m. Eastern time this morning and is trading around $906 at the time of this post. That’s up over 2 percent from its opening price of $894. Google has yet to break $900 a share until today, though it has continued to rise steadily in price over the past month.

Google is holding its famed developer conference this week with a three-hour long keynote starting at noon Eastern time. While we’ve heard rumors for weeks about what Google might talk about, investors are seemingly anticipating good things. There hasn’t been much speculation about a big hardware product, release, however.

Investors may be reacting to a new music streaming service that some rumors say may show up at the show, if not the overall fanfare. Reports indicate that Google recently signed two major music partnerships — one with Sony Music Group and another with Universal Music Group — that may give Google the boost it needs to launch a product similar to Spotify. With Spotify, customers can listen to the songs and bands of their choosing on a subscription basis, as opposed to an online radio company like Pandora, where customers can only choose a theme or genre of music to listen to.

Google has also been releasing its Google Glass headwear into the market in the weeks leading up to Google I/O, causing speculation that we’ll hear more about the product in Google’s keynote.

GOOG data by YCharts

Google I/O image via Dylan Tweney/VentureBeat

July 9-10, 2013
San Francisco, CA

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Hedge fund manager Jeffrey W. Ubben disclosed yesterday that his fund, ValueAct Capital, has taken a $2 billion position in Microsoft stock, causing an almost immediate 4 percent jump in the stock.

Microsoft stock, which is down a penny today, jumped from under $30 to over $31 almost immediately overnight, and has climbed almost 11 percent over the last month. That’s part of a fairly steady rise over the last quarter which has added over $30 billion in value to the company.

According to the Wall Street Journal, Ubben said that Microsoft “is a dominant software company … and in the long term it will win out,” and that in five years, Microsoft’s investments in web and cloud could transform the company into the largest cloud company in the world. Just five days ago, Microsoft announced general availability of its Windows Azure Infrastructure Cloud — a cheaper cloud than Amazon and Rackspace. 

The company has had challenges with Windows 8 adoption which some have blamed for historically slow PC sales in the last quarter, although it is investing more in Windows 8 for tablets and smaller touch devices.

In any case, Microsoft appears to be doing something right. At least, if you can trust Wall Street.

July 9-10, 2013
San Francisco, CA

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Pioneering open-source solution vendor Red Hat (RHT) announced today that its board has authorized a $300 million stock buyback program.

The new program replaces a previous $300 million buyback program, the final $179 million of which the company completed in February, at an average price of $49.15 per share. The new program will enable management to use its discretion to purchase Red Hat stock from time to time, as it judges market conditions to be favorable, until it has gone through the entire $300 million allocation.

The previous program allowed Red Hat to repurchase about 3 percent of its outstanding stock. The $300 million allocation is just 23 percent of the company’s cash stockpile of $1.3 billion.

Repurchasing stock is one way companies use to get rid of excess cash while bolstering their stock price (by reducing the number of shares outstanding), while securing additional shares for future (as employee options or stock grants, or for a possible secondary stock offering in the future). It’s also a strong signal that the company’s board believes that its stock has a good, upward trajectory in its future.

Photo: Do you know how hard it is to find an image to illustrate Red Hat? Instead, please enjoy this photo of an adorable old lady wearing a red hat. Credit: Ross Berteig/Flickr

July 9-10, 2013
San Francisco, CA

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Motifs may have been the bane of your middle school English existence, but online investment platform Motif wants to make your life easier, or at least richer.

Today, the company that “pioneered ideas-based stock investing” announced that it has raised $25 million in its third round of financing from Goldman Sachs, as well as existing investors Foundation Capital, Ignition Partners, and Norwest Venture Partners. Motif is an online broker that organizes potential stock investments into topical portfolios, or “motifs.” Rather than investing in a series of companies spread over multiple sectors, investors invest in themes that they believe in.

“Ideas present themselves every single day,” said the founders in a blog post. “They’re around every corner, within every story, and at the heart of every phenomenon. Finally, there’s an easy, intuitive way to invest in those ideas and harvest the impact they may have.”

Each motif contains up to 30 stocks. Investors scroll through a Pinterest-esque design with categories like “biotech breakthroughs,” “pet passion” and even “rest in peace,” because “with baby boomers approaching their 70s, the death care industry could see a boost in demand.” Results are filterable by idea type, industry, percentage of daily change, returns, dividend yield, valuation, and volatility.

There is the opportunity to invest in the “junk food” motif and a “fighting fat” motif. Investing in one could potentially increase the returns in the other (insert evil cackle here).

Investors also have the option to build their own motifs with up to 30 stocks, or customize existing motifs by adding and removing stocks and changing weightings. Motif takes a flat commission of $9.95 to buy, sell, and rebalance.

As with all securities investment, this strategy involves risk. Investing in a collection of stocks around a particular idea could mean bigger wins or bigger losses, depending on market fluctuations. Let’s say for example, people stop dying. That investment in “rest in peace” may not have the greatest returns.

This investment brings Motif’s total to $51 million. The company is based in San Mateo, California.

July 9-10, 2013
San Francisco, CA

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ChannelAdvisor filed for an IPO today, proposing to raise $86.25 million, although the price per share and number of shares has not yet been revealed. The full filing is embedded below.

ChannelAdvisor provides software-as-a-service solutions to help retailers and manufacturers integrate, manage, and optimize their merchandise sales across hundreds of online channels, including Amazon, Google, eBay, Bing, Groupon, and Facebook. Customers can build customized solutions or use the “managed services” for help implementing campaigns.

“The e-commerce market has grown significantly over the last several years, as consumers have increasingly shifted their retail purchases from traditional brick and mortar stores to online stores and marketplaces,” the company said in the filing. “This trend has created many opportunities for retailers and manufacturers, but at the same time has resulted in additional complexity and challenges. Retailers and manufacturers seeking new avenues to expand their online sales must manage product data and transactions across hundreds of highly fragmented online channels where data attributes vary, requirements change frequently, and the pace of innovation is rapid and increasing.

The filing also cited a Forrester report that found online consumer spending is expected to increase to $1.1 trillion in 2016, which will grow the need for tools that help merchants navigate the “complex and fragmented” market. ChannelAdvisor’s software supports the full spectrum of e-commerce vendors, including marketplaces, paid search providers, companion shoppers, flex feeds, and social shopping companies. Services like inventory management, reporting and analytics, and content optimization help vendors get the most of their online sales.

According to the S-1, ChannelAdvisor had over 1,900 customers worldwide as of December 31, 2012, and in 2012 alone its customers processed over $3.5 billion in gross merchandise value through the platform.

ChannelAdvisor was founded in 2001 and has raised $75 million to date. Investors include eBay, Advanced Technology Ventures, Kodiak Venture Partners, Southern Capital Ventures, and New Enterprise Associates. ChannelAdvisor is based in North Carolina.

ChannelAdvisor S-1

Photo Credit: ChannelAdvisor Facebook 

July 9-10, 2013
San Francisco, CA

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Investor Warren Buffet, recently the world’s richest man, seems to think that Apple stock is going to do just fine.

Asked on CNBC’s Squawk Box about Apple, its depressed stock price, and the fantastically large $137 billion cash stash that is bulging Apple’s back pocket, Buffet seemed to suggest that its stock is a good buy, although he doesn’t own any himself.

“If you could buy dollar bills for 80 cents, it’s a very good thing to do,” Buffet said.

That’s a generically true statement, of course. But Buffet said it in the context of recounting a conversation with Steve Jobs some years ago about what Apple should do with its rainy-day fund, and when answering a question about what Apple should do with all that money.

Apple’s stock value, of course, has slid a couple hundred billion dollars since the heights of September.

Source: Google Finance

Apple’s stock since late 2012.

Years ago, Buffet had advised Steve Jobs to buy back Apple stock. It seems he would advise current Apple CEO Tim Cook to do the same, but he did add something just a little bit different: ”The best thing you can do with a business is run it well, and the shares will respond.”

One other tidbit that Buffet shared: Part of the reason that Apple has so much tax is that “two-thirds of it has not yet been taxed,” which seems to be a common refrain around the tech world these days.

You can watch the interview on CNBC or catch a summary on CNNMoney.

photo credit: Images_of_Money via photopin cc

July 9-10, 2013
San Francisco, CA

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Updated 8:11 PM PST

Apple may be bold and ambitious. Apple may have $137 billion in the bank. Apple may have generated record revenues and record profits last quarter. And Apple may be banking $50 million in revenue from each of its 400 retail stores around the globe and adding 30 more this year.

But apparently, Wall Street doesn’t really care.

Apple CEO Tim Cook talked more directly to the financial world today at the Goldman Sachs Technology and Internet conference than, perhaps, he ever has before, telling the pinstriped and necktied money managers of the world that Apple’s focus is on the long term, is still the center of innovation in the technology world, is not likely to acquire any major companies any time soon, probably won’t increase the screen size of the iPhone to match Android tablets, and won’t rush to produce a cheaper iPhone just to ship more units.

“I’m very proud that we’re out front, that we’re changing people’s lives, that we’re doing what’s right and just in moving the ball forward,” Cook said today. “I don’t mean to gush, but it’s how I feel.”

In response, Apple’s stock, which is down over $200 billion since its peak in 2012, drooped a little more, losing over $11 a share, or another 2.3 percent of its value:

Source: Google Finance

Apple stock February 12

In other words, Wall Street ain’t buying what Cook has to sell.

By the end of the day, the picture had not changed much: AAPL was down $12.03 — a 2.5 percent drop in value, equivalent to about $12 billion. That’s a little shocking for a company with dominant smartphone market share in the U.S. and a price-earnings ratio well under 10 when you take out its cash on hand. But analysts are worried that Android is going to eat Apple’s lunch in smartphones and tablets, and Apple’s desktop numbers in its last quarter were nothing to write home about either.

And given that Apple, which had established a reputation for exceeding analysts’ expectations for years, missed the Wall Street consensus numbers by about $500 million, analysts are adopting a wait-and-see attitude.

Perhaps anticipating this reaction, Cook did end his chat with a bit of a barb:

“We don’t care if people are lobbing grenades from the sidelines.”

photo credit: WanderingtheWorld (www.LostManProject.com) via photopin cc

July 9-10, 2013
San Francisco, CA

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Apple has swiftly responded to a lawsuit filed this morning by investor David Einhorn’s hedge fund Green Light Capital, in an attempt to quell further outcry from investors.

Einhorn believed Apple was planning to remove preferred shares (higher ranking shares than typical common stock) with a change to its charter, the New York Times reported this morning. But in its statement, Apple denied the preferred share change and said that it would welcome feedback from Greenlight and other investors.

“Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock,” Apple wrote. Apple shares rose by $13.55, or around 3 percent, when it released its statement this afternoon.

Many investors are worried about Apple’s slowing stock performance, after falling more than 26 percent in the last six month, as well as its increasingly large stockpile of cash (now around $137 billion). But Einhorn is the first to publicly take action. Last year, Apple announced that it would be returning $45 billion to investors over the next three years, starting with a dividend.

Apple’s full statement is below.

By early last year, Apple’s cash balance had built to a point beyond what we needed to run our business and maintain flexibility to take advantage of strategic opportunities, so we announced a plan to return $45 billion to shareholders over three years. As of next week we will have executed $10 billion of that plan.

We find ourselves in the fortunate position of continuing to generate large amounts of cash, including $23 billion in cash flow from operations in the last quarter alone.

Apple’s management team and Board of Directors have been in active discussions about returning additional cash to shareholders. As part of our review, we will thoroughly evaluate Greenlight Capital’s current proposal to issue some form of preferred stock. We welcome Greenlight’s views and the views of all of our shareholders.

As a part of our efforts to further enhance corporate governance and serve our shareholders’ best interests, Proposal #2 in our proxy includes some recommended changes to our articles of incorporation. These changes were recommended independently of Greenlight’s proposal and would not preclude Apple from adopting their concept. Contrary to Greenlight’s statements, adoption of Proposal #2 would not prevent the issuance of preferred stock. Currently, Apple’s articles of incorporation provide for the issuance of “blank check” preferred stock by the Board of Directors without shareholder approval. If Proposal #2 is adopted, our shareholders would have the right to approve the issuance of preferred stock. As such, Proposal #2 has the support of many of our shareholders.

We remain committed to having an ongoing dialogue with our shareholders to get perspectives around return of capital and driving shareholder value.

Check out Einhorn’s lawsuit filing below, via the New York Times:

Photo: Heather Kelly/VentureBeat

A portion of former vice president Al Gore’s cut of the sale from Al Jazeera’s acquisition of cable channel Current.tv is going into Apple shares, according to an SEC filing released today.

The document reveals that Gore purchased 59,000 shares of Apple stock at $7.475 apiece (or about $441,000). That’s a heck of a deal, considering that Apple stock is currently trading at around $500, making Gore’s new stake worth roughly $29.5 million.

The move suggests that not only is Apple a safer investment than trying to launch a fledgling cable news channel, but it also that the path to societal change comes through technology, rather than the news media. (Years ago I attended an event where Gore moderated a discussion between Wikipedia founder Jimmy Wales and former Wikipedia-hater, seasoned journalist John Seigenthaler Sr. The three men basically came to the conclusion that people need tools to keep the public informed.)

Current launched in 2005 as an Internet user-curated progressive news channel. Originally, the network tried to integrate functionality of community news sharing site Digg with traditional television programming. Current was suppose to be the future of how cable channels interacted with their audiences.

The first time Gore exercised his option to buy Apple shares at this price was in 2008. At the time, he only purchased 1,000 shares, leaving the remaining shares to be purchased today.

Via TNW

July 9-10, 2013
San Francisco, CA

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With good news comes bad news. Apple announced that it sold 2 million iPhone 5s in its debut in China, but the company’s stock fell below $500 for the first time since February this morning following a downgrade to neutral by Citigroup.

Apple stock fell to $499 at 6:55 a.m. Eastern this morning, reports Bloomberg. At the time of this post, the stock was back up to $503.39.

In a note last night, Citigroup analyst Glen Yeung pointed to reduced supply-chain orders that “bring into question the strength of the iPhone 5.” He proceeded to cut his price target on Apple’s stock to $575 from $675.

The Citigroup downgrade comes on top of analyst warnings from Friday that also point to component shortages (which also led to a significant Apple stock drop). Apple’s stock is down from a high of $702.19 on September 19.

Apple’s stock skyrocketed in value on top of the success of the iPhone and iPad, but analysts now fear that sales of those devices will slow due to supply chain constraints, the lack of new innovations, and stronger competition from the likes of Google and Microsoft. Some of those fears may be completely off-base, but their mere existence will lead to Apple’s stock settling well below its former high.

AAPL data by YCharts

Photo: Sean Ludwig/VentureBeat

July 9-10, 2013
San Francisco, CA

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Wall Street and Apple are not cozy bedfellows this morning. Apple’s stock is down another $19 billion this morning in early trading on reports of iPhone component order cuts and softening demand.

This morning UBS analyst Steve Milunovich trimmed his Apple stock targets by $80, saying Apple will sell five million fewer iPhones and two million fewer iPads over each of the next three quarters. Then another analyst, Peter Misek, said companies that supply components for the iPhone 5 have reported “large order cuts” over the last two days.

And this morning we reported that the cheaper iPad mini is outselling the iPad 4 – and may account for half of all iPad sales in 2013. That’s the kind of good news that’s not good news, as the lower-cost and lower-margin item is cannibalizing sales of the higher-cost, higher-margin item.

It all adds up to a tempest in a not-so-small teacup for Apple stock, which had already seen a 20 percent drop from October to November and just this morning lost another $20, hitting a low of $507.66 today, down from a high of $702.10 just three months ago on September 19.

Source: Google Finance

Apple stock (blue) versus NASDAQ (orange)

That means Apple is now down 25 percent from its all-time highs and has dropped another $20 billion in market value — almost as bad as December 5, which saw Apple lose $35 billion in market capitalization, or, as we put it then, a Yahoo, Yelp, and LinkedIn worth.

iPhone and iPad sales, plus iPod, make up 76 percent of Apple’s revenue. Any hiccups in those cash cows, and Apple stock has a serious case of the Mondays — even on a Friday. The core problem is that Android is eating iPhone’s lunch and is starting to more than nibble at iPad’s. And analysts are worried that Apple will not be able to maintain the market leadership position it has held for a couple of years now.

Given Google’s powerful market positioning, it’s hard to imagine they’re wrong.

photo credit: nobihaya via photopin cc

Trading started at $9.25 and by midday surpassed $12 and expectations. Yesterday, SolarCity lowered the price of its IPO to $8, down from the $13-$15 range set in November, raising $92 million. Initially, it hoped to surpass $200 million in its IPO. 

The stock, however, took off. This is partly attributable to SolarCity chairman Elon Musk, along with fellow board member Draper Fisher Jurveston, indicating their intent to buy a significant portion of the shares.

Tech IPOs have had mixed results this year. Consumer tech companies like Facebook and Yelp saw their stock go down after their IPOs, while enterprise companies such as Palo Alto Networks and Workday fared well in the public market. But U.S. green tech companies have had a rough year in 2012. The Bloomberg Global Large Solar Index (BISOLAR) of 17 companies declined 36 percent in 2012 as a global oversupply pushed down prices for solar panels by 28 percent.

SolarCity, on the other hand, benefits from cheaper solar panels because it is a financier and leaser, rather than manufacturer. Current clients include Stanford University, Walmart, Ebay, the U.S. Armed Forces, the U.S. Department of Homeland Security, and Intel.

Shares debuted on the NASDAQ under the ticker symbol SCTY. Underwriters for the deal include Goldman Sachs, Credit Suisse, Bank of America, Merrill Lynch, Needham & Company, and Roth Capital Partners.

Prior to the IPO, SolarCity raised a whopping $455 million in venture capital.

July 9-10, 2013
San Francisco, CA

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Apple stock fell like a rock today, dropping 6.43 percent of its value — nearly $35 billion — in heavy trading. But the big question is why.

Nothing fundamental has changed about Apple.

The iPhone 5 is selling well, with reports of up to 45 million being sold this quarter (that’s ridiculous, but still). Apple looks to sell a record number of iPads this quarter — perhaps as many as 26 million — and while its desktop sales are suffering a little due to delays in getting the new ultra-thin iMacs to market, there have been no big misses or disasters.

Analysts have had reason to scratch the walls, however.

“Apple stock is significantly more volatile than its earnings and innovation stream,” analyst Daniel Ernst told Reuters.”It makes no sense.”

Part of the problem might be the fact that Apple relies so extensively on two product lines for almost all of its sales and profits. Of $156 billion in sales in 2012, iPhone accounted for $80.5 billion and iPad accounted for $32.4 billion. Add in $5.6 billion of iPod sales, and you’ve got 76 percent of Apple’s total sales.

“Apple faces a problem in that it’s a two-product company today,” Avondale Partners analyst John Bright told Investors.com.

Any significant issues with one of those two products — and iPhone is clearly getting beaten by Android lately — and Apple’s massive revenues and huge profits will fairly instantly disappear.

Another concern might be that Apple insiders are starting to take profits. Bob Mansfield, who was going to retire this year before Scott Forstall left, sold $20 million worth of Apple stock just recently. Eddy Cue, Apple’s senior VP of Internet software and services, sold another $8.76 million worth of Apple stock today. Insiders dumping stock is always a warning sign.

But perhaps the bigger issue is a general investor feeling that the good times can’t keep going forever for Apple. Which is true, in a very general and long-term sense.

But the fact that Apple is trading at only 12 times its earnings while it has total assets of $176 billion including cash on hand and generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012 … is very, very, very odd.

I don’t own any Apple stock — and given VentureBeat’s reporting rules I cannot buy any — but I would think that, come Apple’s financial results for its next quarter, a lot of people will be thinking this would have been a very good buying opportunity.

photo credit: Thomas Hawk via photopin cc

July 9-10, 2013
San Francisco, CA

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Last year Apple missed the analyst numbers, with revenue of $28 billion and profit of $6.62 billion. A pretty good quarter, one might say, but analysts had expected $29.5 billion.

This year, analysts have a consensus estimate of $35.8 billion. Apple has only issued guidance for $34 billion.

The big question — which Apple CEO Tim Cook seemingly avoided intentionally at the company’s recent big product unveiling — is how many iPhone 5s did Apple sell. But by telling the world that Apple had sold over 100 million iPads, Cook revealed iPad sales numbers of perhaps 15 million in the last quarter — less than expectations that ranged as high as 18 million.

So the iPhone numbers will determine whether or not Apple meets or exceeds its numbers.

This earnings announcement will be an important one for Apple. It’s stock has risen about 50 percent this year, but it has slumped somewhat lately as competition in the pivotal smartphone and tablet segments continues to heat up … and as the iPad mini came out more expensive than anticipated.

Source: Google Finance

Apple stock over the last three months versus the NASDAQ

When earnings were announced for this quarter last year, Apple slumped 6 percent when the results were perceived as a miss.

Here’s what Apple analyst Gene Munster and his firm, Piper Jaffray, expect:

Earnings will be released at about 4 p.m. EST, only about an hour from now.

photo credit: herval via photopin cc

Investors jumped on Facebook stock in after-hours trading yesterday after the company’s mobile-focused earnings report, so it’s not a huge surprise to see the stock make another huge leap this morning.

Facebook’s stock is up 22 percent from yesterday, trading at $23.80, as of the time of this post. The stock reached a high of $24 this morning,  and it was up almost 28 percent in pre-market trading. Facebook’s stock is still well below the $38 it opened at, but the rise is a good sign for investors.

Facebook announced yesterday that its mobile monthly active users on has reached 604 million people. That would normally be bad news for a company that’s historically had trouble monetizing mobile, but Facebook surprised everyone yesterday when it revealed that 14 percent of its quarterly revenue (around $152.6 million) came from mobile ads.

Even though Facebook just cracked the 1 billion monthly users mark, the company’s future lies mostly in mobile. Its mobile users have increased 61 percent since last year, and Facebook also recently updated its iOS app (and will soon do the same for its Android app) to be much speedier. The faster app, along with a more concerted effort to push sponsored stories in users’ mobile news feed, likely led to the solid mobile ad growth.

FB data by YCharts

Photo via Facebook

July 9-10, 2013
San Francisco, CA

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Nutmeg will not only enhance your pumpkin pie, it will also enhance your wealth.

A British startup called Nutmeg launched its online investment manager today. It takes the place of professional investment advisors by building customized financial portfolios for anyone with a little money to invest.

Users start by answering a couple questions about their investment goals, comfort taking risks, time frame, and how much money they have to invest. From there, the team at Nutmeg determines a balance of investment they think is appropriate.

Money is generally distributed across multiple asset classes, including equities, bonds, and commodities. The goal is to create a diversified portfolio, based on the users’ assets, interests, and risk profile, that will yield the highest returns.

While clients allow Nutmeg to make investments for them, they still retain visibility and control of their funds. People have full access to their portfolio online, can realign their preferences, and add or subtract money at any time.

Investing in securities is either time-consuming, if done independently, or expensive, if done through a firm. Nutmeg strives to be a flexible online alternative. It is available to anyone with just £1,000 to invest, but can accommodate much larger budgets as well. People can establish a fund for a specific purpose, like a wedding, or in lieu of traditional portfolio management options.

“The financial services industry is in the midst of the biggest upheaval since the Great Depression,” said CEO Nick Hungerford. “Governments and regulators around the world are setting new standards, established institutions are fighting to stay alive, and meanwhile, users of the financial system are unhappy. We are determined to rebalance the power in favor of the investor.”

Hungerford formerly worked as an investment manager and private banker, but he grew frustrated with the exclusivity and lack of transparency. While studying at Stanford Business School, he caught the startup mentality and realized he could use technology to “democratize” the field.

“Financial services is one of the few industries to have withstood the internet revolution,” said investor Tim Draper. “I’m convinced that Nutmeg is the right company to bring democracy and transparency to a sector which is ripe for reform.”

While Draper is based in the United States, Nutmeg only operates in the U.K. market at the moment. Hungerford began working on the product in 2010 and after two years of research, development, and fundraising, it is open for business. The company has raised a total of $5.3 million in venture funding, led by U.K. firm Pentech and chairman of Armada Investment Group Daniel Aegarter.

It is authorized and regulated by the U.K.’s Financial Services Authority and has partnered with Pershing, a custodian bank that holds the money. Hungerford said both these connections serve to establish trust with the customers, as does the experience of the investment team.

In the U.K., the principal competitors are offline incumbents such as stockbrokers, private banks, and investment firms. For those people without significant assets to invest, Hungerford cites the largest obstacle as apathy and a lack of time.

These are also the primary deterrents in baking, and in both cases, Nutmeg is here to help.

I’m not sure what it’s like to have “extra” money. Even if I did have cash left over to invest after rent, bills, and my travel-wine-and-shopping allotment, I wouldn’t know how. Should I ever manage to save a little nest egg, SprinkleBit can show me how to turn it into a souffle (that rises and rises).

SprinkleBit is a social virtual trading platform. Its mission is to empower individuals to build a strong stock portfolio by providing resources to help them make informed financial decisions. Today, the company has announced opening the digital doors to SprinkleBit University to further educate the novice investor.

On the site, aspiring day traders have access to a stock market simulator where they can get their feet wet without actually conducting transactions. Experienced investors can use the simulator to test out new strategies. There is also the “Major League Stocktrading,” a fantasy online trading league, and a social media component that lets newbies observe and learn from other traders’ actions. They can view portfolios, follow other investors, and see the motivation behind certain actions, as well as ask for tips and engage in discussion.

In addition to assistance with the nitty-gritty aspects of trading, crowd sourcing is also used to provide insight into the ever-changing stock market. Founder Alexander Wallin created the Voting Power Index (VPI) to serve as a virtual advisor for do-it-yourself traders. The technology analyzes data to produce a buy/sell signal for stocks, advising what stocks to trade at what times.

“During an investment class, I learned that at certain point, the crowd is always smarter than the smartest person in the room,” Wallin said. “I wanted to apply that to investing. With the VPI, we found that it is possible to create a portfolio that outperforms the S&P 500.”

Wallin developed the platform while working on a graduate degree at University of California, San Diego. His research found that 2 in 5 Americans give themselves a “C” or lower when it comes to investing, while 53% of investors feel social media helps them be more knowledgable. Furthermore, people aged 22-34 are taking more responsibility for their finances at a younger age and seeking a more collaborative approach.

SprinkleBit is geared towards these novice investors, which comprise 94% of its user base. The university will offer a curriculum with modules like “Finding Your Investment Objective” and “Understanding Risk”, as well as overviews of various sectors and industries.

“Students can then take what they have learned and apply their skills by trading on SprinkleBit’s virtual trading platform,” said Wallin. “This is a safe and entertaining place for investors to build and hone their trading skills using real-time market data. Once they have built up their confidence, they can start to put real money in the market seamlessly on our site.”

SprinkleBit does not currently offer actual brokerage, but secure online trading of equities, options, bonds, municipal securities, and mutual funds are coming in the next month. The company will also offer portfolio management tools. It was founded in 2011 when Wallin completed his research, and the current platform officially launched last month.

Souffle making and investing in the stock market actually have many things common. In both cases, intuition is as important as education and skill, and practice is no guarantee of perfection. There are literal ups and downs, and split seconds can mean the difference between success and failure.

But it’s still less than half Apple’s capitalization at $627 billion.

Google’s stock dipped a bit in later trading today, and as of 9:39 a.m. Pacific time, the search and advertising giant is worth just a little less than Microsoft. But the overall trend is very clear: Google is up over 18 percent in the past six months, while Microsoft is down just over 8 percent.

Source: Google Finance

Google vs Microsoft.

Google continues to win in web search, with an almost 70 percent search market share, with Microsoft’s Bing search engine making only modest moves to increase its share. Google’s mobile story is strong as well, with 68 percent of smartphone buyers in the U.S. choosing phones running its Android operating system.

Perhaps surprisingly, social is also doing well for Google, with increased traffic to Google+, and — perhaps more importantly — the world’s biggest social network continuing to put its stock-market palm directly on its face.

One fly in the ointment is the loss of mapping and location data from iOS, as Apple has replaced Google Maps with its own program. But Apple’s woes in that area more than compensate (even if Apple’s Maps isn’t as bad as the press has made them out to be.)

The real story here is Google versus Apple, and whether tiny profits hundreds of times per day per user will eventually prove to be more lucrative than large profits several times per year per user. Google, of course, profits by organizing information at scale, making it accessible, and matching it with advertising. Apple profits by creating lust-worthy customer experiences with tightly woven hardware, software, and services.

Both want to own the user: Google with services that are too valuable to lose, and Apple with experiences that are too excellent to switch.

The best part of this story?

We’ve all got front-row seats to the clash of the titans.

photo credit: Thomas Hawk via photopin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Sterne Agee analyst Shaw Wu has upped his price target for Apple stock for the second time since the iPhone 5 release. He now believes the stock will hit a stratospheric $840 based on two things: iPhone 5 and iPad Mini.

Wu predicts iPhone 5 sales of 27 million units in the current quarter, up a million from his previous prediction, and 46.5 million units in Apple’s next quarter, which starts in December. He did note that supply-chain constraints on the new touchscreens may hamper December-February sales.

I spoke to Wu, who just arrived back from Taiwan, where he was visiting some of Apple’s suppliers. He had a chance to play with the iPhone 5 after the introduction, calling it a “very compelling upgrade” due to the larger screen, faster processor, and improved maps.

“Despite the fact that a lot of the reviews are somewhat lukewarm, we think this phone will sell extremely well,” Wu said. “This isn’t the first time that iPhone has been panned.”

Source: Apple

iPhone 5

iPhone 4 had Antenna-gate, iPhone 4S was not different enough, and iPhone 5 doesn’t have LTE, NFC, or a significantly new innovation, Wu pointed out.

“But at the end of the day, Apple is able to produce the best phone out there.”

In terms of the iPad mini, Wu talked to Asian suppliers who were being told to prepare for “something,” and he suspects an October launch may be in the cards.

“From a supply-chain perspective it is ready to go,” Wu told me. “Apple has to balance the harm that rumors do to sales against spacing out the launch after iPhone 5.”

Totaling up the numbers if he is right, Wu said Apple could have a $36.6 billion September quarter and a $157 billion 2012. The $840 stock price is based on a fairly reasonable 13 times price/earnings ratio, with Apple’s cash reserves of $124 billion tacked on.

One thing I asked Wu: How accurate are your previous projections?

“It varies,” he said, laughing. “One quarter we really take pride in was last year when people over-estimated iPhone sales. The street was at 20-22 million units while actual was 17 million. We were at 18 million, so we were off too, but we were the closest.”

He paused, then added:

“I prefer to err on the cautious side.”

With Apple, that’s sometimes hard to do.

photo credit: ~FreeBirD®~ via photo pin cc

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Like Beluga caviar, investment in Initial Public Offerings is traditionally reserved for the wealthy elite. IPOVillage is changing all that (for IPOs, not caviar) by providing a platform in which companies use crowdfunding to raise the capital they need to go public.

The process of going public is extensive, with several intermediate stages and middlemen. First, a company must work with an investment bank to underwrite the offering. The underwriters facilitate the initial sale of shares at the agreed-upon initial price; the buyers at this stage are primarily institutional investors and the biggest clients of the underwriting banks. The institutional investors then resell the shares to retail investors on the open market — but by then, the stock price has usually risen significantly from its IPO price. A further layer comes into play if an investor buys stock through a retail brokerage firm, as many do, which adds further transaction costs.

As a result of all these transactions, the stock costs more for the general public than it does for the financial institutions and elite investors who have earlier access.

IPOVillage strives to grant early access to “everyday Joe,” so he too can be in on the ground floor.

“Our crowdfunding platform allows publicly traded companies to work directly with the public,” said Howard Orloff, the managing director of IPOVillage. “It makes it open to Mom and Pop. You don’t need to have $10 million in a Goldman Sachs account to have access to an IPO; you don’t need to get favors from people. It is a completely democratic, first-come, first-serve opportunity to partake in pre-IPO pricing. This is true equity crowdfunding.”

IPOVillage acts as a portal where retail investors can sign up and have the opportunity to buy stock at pre-IPO pricing, once shares are publicly for sale. This also benefits the companies, which receive the funds directly.

What’s not clear is how it benefits the not-for-profit IPOVillage or the bank behind it, First Line Capital LLC. When I asked First Line why it was starting IPOVillage, I only got answers about democracy and equality, not First Line’s bottom line.

Right now, the companies on the platform are members of First Line Capital’s portfolio. First Line Capital LLC is a boutique investment banking firm that has worked for over 20 years with small private companies that want to go public. However, the popularity of crowd funding has caused people and companies to become more open to alternative forms of investing and fundraising. The founders at First Line saw an opportunity.

Once a company under its wing gets the go-ahead to go public, any member of IPOVillage can choose to buy shares. After signing up on the site, investors secure a place in a virtual line. When a company officially goes public, IPOVillage will guide investors to that company’s site where they can directly buy stock at the unmarked up amount. Investors will have access to recording financials and relevant information before they make their decisions.

The first investment opportunity should be available in late October, pending SEC approval. Teaser information about the company is available on the IPOVillage site, as well as the sign-up prompt.

Now, Mom, Pop, Everyday Joe, and the folks on Main Street can theoretically have the same access to the exclusive access as those people eating caviar at the top of the ivory tower.

Everyday Joe may appreciate fair pricing, but I am pretty sure he prefers steak to fish eggs.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Apple’s stock moved beyond $700 a share today in after-hours trading, proving that all you really need to have a successful business is a new iPhone. Good luck to everyone else.

The new share price is the highest Apple’s stock has ever reached, and the iPhone 5 isn’t even in consumer’s hands yet. Last week, Apple released the newcomer to its iPhone line, which sports with a new form factor with a longer screen. Apple customers are loyal, excitable folks, who snapped up two million of Apple’s iPhone inventory in the first 24 hours of preordering.

And Apple is already drawing a crowd in front of its New York store on Fifth avenue, though, some of those fans are actually just lining up to promote their startups and bands.

On the same day, Apple also updated and released both the iPod Touch and the Nano, which now comes with a 2.5 inch touchscreen. It also showed off its latest mobile operating system iOS 6, a revamped iTunes, and released new earphones called “EarPods.”

The company hit its previous all-time high of $696.98 on September 14 and hit its newest high of $700.68 a share after the markets closed today. Apple already holds the title of most valuable company in the world, overtaking Exxon Mobile.

Tim Cook image via Meghan Kelly/VentureBeat

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Apple’s stock shot up to its newest high, $696.98 a share, after the company opened up pre-ordering online for its latest device, the coveted iPhone 5.

The iPhone 5 was possibly one of the most anticipated smartphone launches yet, with rumors flowing about its features since before the launch of the iPhone 4S. This iteration has a four-inch screen, and is thinner than the iPhone 4 and 4S, which both had the same, rectangular form factor. At the same time, Apple announced the release of iOS 6, it’s latest mobile operating system; a revamped iPod Touch that will also run iOS 6; as well as a new 2.5-inch touchscreen iPod nano.

Apple even shelled out for the Foo Fighters to wrap up the event with a couple ditties.

Today marked the first day consumers could pre-order the iPhone 5. It didn’t take very long for fans to scoop up the entire inventory of iPhones available to pre-order customers.

“Pre-orders for iPhone 5 have been incredible,” said Apple spokeswoman Nat Kerris to AllThingsD. “We’ve been completely blown away by the customer response.”

Stock holders are obviously also impressed with Apple’s performance, driving the stock through the roof to it’s highest price per share ever. The company was less than $4 away from hitting $700 a share.

If you were unable to speak for one of the phones before they were all purchased, you can still stand in one of those infamous lines that form outside Apple stores the day the latest iPhone is released. This year, the iPhone will be available for purchase in stores on September 21.

Tim Cook image via VentureBeat

Apple’s stock reached an all-time high when trading began this morning at $680, following the company’s monumental legal victory over Samsung on Friday. Apple’s market capitalization also reached a new high of $637 billion.

At the time of this post, Apple’s stock has come back down to $676.56, but that’s still higher than the former record stock price for the company of $674.88. Samsung’s stock price, meanwhile, fell 7 percent when it began trading in South Korea this morning.

Update: Apple’s stock closed at $675.68 today, still above its past high before today.

The numbers aren’t too surprising, given just how thoroughly Apple trounced Samsung in their San Jose, Calif. patent trial. The jury found that Samsung willfully infringed on Apple’s patents and ordered it to pay more than $1 billion in damages. Notably, the jury also didn’t buy Samsung’s arguments that Apple infringed on its 3G patents.

Speaking to press over the weekend, Apple v. Samsung jurors said they felt Samsung wronged Apple after the first day of deliberations, and they wanted to make sure Samsung’s punishment “was not just a slap on the wrist.”

Next up in the Apple v. Samsung saga, Judge Koh has scheduled September 20 for an injunction hearing, where we’ll see if any Samsung phones will be banned from sale in the U.S. We’re also expecting a concerted appeal effort from Samsung to reduce those damages (while Apple could argue to triple them).

AAPL data by YCharts

Photo: Devindra Hardawar/VentureBeat

Peter Thiel, Facebook’s first outside investor and a member of the social network’s board, sold a majority of his holdings in the company for $395.8 million, according to a filing made with the Securities and Exchange Commission on Monday.

Thiel is the Facebook investor glamorized in the movie The Social Network for his role in helping the then college-only site transform itself into a billion dollar business that now reaches 955 million people each month. The cofounder of PayPal, Thiel has served on Facebook’s board since 2005 and is currently the managing partner at Founders Fund.

Beginning on August 16 (the expiration date Facebook’s first lockup period) and extending through August 17, Thiel completed 24 different sales of Facebook stock, spanning the funds that he manages with holdings in the social network. In total, the Facebook board member sold 20,058,068 shares for the sizable payout.

Prior to Facebook’s initial public offering, Thiel held 44.7 million shares in Facebook, or roughly 2.5 percent of the company. The billionaire serial entrepreneur sold 16.8 million through the initial offering, but he maintained 27.9 million shares split across Class A and Class B stock, per Facebook’s documentation with the SEC. In early August, Thiel converted all of his 9,297,884 Class B shares to Class A shares on a 1-to-1 basis to ready them for sale on the market.

The sell-off adds to bad news for Facebook, which saw its stock price take a big hit last week when other insiders rushed for the exits.

August 16 marked the end to the company’s first lockup period and 271 million shares were made available for sale as a result. Other investors who became eligible to sell include Accel Partners, Elevation Partners, Greylock Partners, Microsoft, Goldman Sachs, and Tiger Global. The stock will be tested further in the coming months as more than 1.5 billion additional shares will be freed for trading before the end of the year.

Facebook reported second quarter 2012 results of $1.18 billion in revenue and earnings per share of $0.12. The small win troubled Wall Street for two reasons: Facebook demonstrated to analysts and investors that it would continue to spend aggressively and failed to provide earnings guidance for the rest of 2012. The stock has struggled ever since. CEO Mark Zuckerberg recently characterized the price drop as “painful” for employees.

Photo credit: (cc) Kenneth Yeung http://www.snapfoc.us

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

It wasn’t the sweetest deal ever had, but Silicon Valley investment firm Andreessen Horowitz made nearly $14 million in profit by disposing of its holdings in Groupon earlier this summer.

Andreessen Horowitz (a16z) plunked down $40 million in a late-stage bet on Groupon in early 2011. The firm held roughly 5.1 million shares in the company but sold its entire stake after the June 1 expiration of the stock’s lock-up period, according to the Wall Street Journal.

An a16z representative declined to comment on this story.

The sale appears to have been a smart move in the short-term; a16z’s original investment in the deals company would currently be under water by $15 million had it maintained its stake.

Groupon’s shares have been sliding downhill for months, popping at the time of its initial public offering to $28 a share but deflating in value ever since. Shares are now trading at less than $5 a piece following a second quarter earnings report that made investors question the company’s continued growth potential.

Andreessen Horowitz wasn’t the only firm to make a quick exit. Others who have cashed out include investment firm Kinnevik, which dumped all of its 8.38 million shares in June for an $81.5 million exit. The Swedish firm originally invested $2.9 million in MyCityDeal, and its holdings were converted to Groupon shares when Groupon acquired MyCityDeal in 2010.

Maverick Capital and Fidelity also significantly reduced their stakes in the daily deals company earlier this year, according to filings with the Securities and Exchange Commission.

Photo credit: Brian Auer/Flickr

Those executives include CEO Marc Pincus, who sold $200 million in stock, chief operating officer John Schappert, who sold $3.9 million worth, and chief financial officer David Wehner, who, arguably, would have the best data on how the company would perform and sold stock worth $4.6 million.

As Kotaku reports, the law firms investigating now number at least five: Schubert Jonckheer & Kolbe, Newman Ferrara, Johnson & Weaver, Wohl & Fruchter, and Levi & Korsinsky.

Source: Zynga

How do you like them apples, Zynga?

In a statement released late yesterday, Schubert Jonckheer & Kolbe says its investigation will focus on “whether these insiders were privy to material adverse facts about Zynga’s business and financial condition at the time they sold their shares.”

Wold & Fruchter, which has a history of class action lawsuits, said that it was also “investigating possible violations of federal securities laws and breaches of fiduciary duty by officers and directors of Zynga.”

Some of the investors who sold, such as Reid Hoffman, are also on the Zynga board of directors, and therefore would be part of the investigation. Hoffman sold shares worth $8.2 million.

It’s worth noting a couple of things.

First, all of the executives and investors still hold substantial amounts of Zynga stock. So it’s not as if they dumped everything and ran.

And second, given the litigious nature of American society and the dare-we-say-it ambulance-chasing nature of some law firms, it’s not hard to believe that these investigations are proceeding. But it’s far too early to make any conclusions, one way or the other.

One thing is for sure: The optics of the timing are certainly not helping Zynga in the court of public opinion. As one of the commenters on our previous post said (and this is verbatim):

I LOST 250K ON THIS PIECE OF S*** !!! iM IN A VERY VERY ANGRY MOOD RIGHT NOW.

Johnson and Weaver may provide similar investors with some hope. The firm said that “investors who purchased shares of Zynga common stock at any time before July 26, 2012 … and who currently still own any shares may have legal rights to compensation.”

Given this kind of investor fury and the dollar amounts involved, I would not be shocked to see more smoke and noise before all this is settled.

Stay tuned!

Image credit: Gunnar Pippel/ShutterStock

As Henry Blodget points out, Zynga insiders, including chief executive Marc Pincus, cashed out in April, selling 43 million shares for over $516 million in a secondary stock offering. Pincus himself raked in about $200 million of that total, according to Blodget’s report. All of the proceeds went to the stock holders, not the company.

[ update July 27: five law firms are now investigating Zynga for possible insider trading ]

Yesterday, results for the past three months were announced: earnings of precisely one skinny American penny for each of Zynga’s 736 million shares, driving Zynga’s stock price sharply downward.

Besides Pincus, other Zynga employees who cashed out include Zynga’s chief operating officer John Schappert and chief financial officer David Wehner. Investors who took the opportunity to sell include LinkedIn’s Reid Hoffman, Google, and four venture capital firms including Fred Wilson’s Union Square Ventures. Each of them sold over 300,000 shares at an average price of $12 per share.

Source: Dean Takahashi

Zynga CEO Marc Pincus

That netted all of these insiders a nice chunk more than anyone who sold at today’s price: just over $3.

There’s no indication of insider trading or improper behavior. Zynga blamed the blown quarter on a number of things that happened quickly: delay of The Ville game, Facebook changes that hurt engagement with older games, and Draw Something’s spectacular implosion.

But the optics look bad. And they look double plus ungood if you happen to be a Zynga investor with stock that has shed 80 percent of its value in a single year, coming down from a high of over $16 per share.

Good thing that all of the sellers, including Marc Pincus, only sold “a fraction of their holdings,” according to Blodget, so all of them remain well-vested in the company’s future.

Otherwise what just looks bad right now might actually be bad.

Image credit: Pakhnyushcha/ShutterStock

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Facebook’s stock fell 11 percent in after hours trading this afternoon, reaching a new low of $24, after the social network reported earnings for the first time as a public company.

Facebook barely exceeded Wall Street’s expectations with $1.18 billion in revenue and earnings per share of $0.12 for the second quarter. The company reported a net loss of $157 million, attributed to its share-based compensation plan. At the time of this post, Facebook’s stock was down 10 percent at $24.15.

The dip isn’t too shocking for Facebook’s stock, given how tumultuous it’s been so far. After going public at $42, Facebook’s stock closed at $38.37 on its first day of trading. The stock eventually fell to $33 on its second day. It certainly didn’t help that Nasdaq couldn’t keep its systems afloat during Facebook’s debut. Eventually, it became apparent that Facebook panicked and botched its IPO, as we’ve reported in-depth.

It’s not all doom and gloom for Facebook though: The company reported today that it has reached 955 million monthly active users — tantalizingly close to the coveted 1 billion figure. 543 million of those users access the site from mobile devices, a statistic which has no chance of slowing down anytime soon.

Photo via Shutterstock