Tom Taulli
California - http://taulli.com
Tom Taulli is the author of various books on finance, including The Complete M&A Handbook (Random House) and Investing in IPO's (Bloomberg Press). In addition to his writing, Mr. Taulli has appeared on high-profile television venues such as CNN, CNBC and Bloomberg TV, and has been quoted in the various print media sources such as the Wall Street Journal, USA Today and LA Times.
Posted Aug 7th 2008 3:35PM by Tom Taulli
Filed under: Google (GOOG), Small business
Former
Google, Inc. (Nasdaq:
GOOG) engineers recently launched a new-fangled search engine, called
Cuil. The goal was pretty ambitious; that is, to be the next Google.
Well, the debut was shaky, as the online reviews were mostly negative. Basically, the quality of the search results were lackluster -- and the overall performance was erratic.
No doubt, in the social media world, things can get brutal. Yet, it's something that many businesses need to think about.
So, how do you deal with negative reviews?
Continue reading Entrepreneur's Journal: What if your company gets bad online reviews?
Posted Aug 7th 2008 12:43PM by Tom Taulli
Filed under: Private equity, Blackstone Group L.P (BX)
According to the
Blackstone Group LP (NYSE:
BX) conference call, it appears that the buyout market is getting somewhat better. For example, in Q2 the firm struck deals like the purchase of the The Weather Channel.
Despite all this, things are still far from good. In fact, Blackstone predicts that the slowdown will continue into 2009 and perhaps 2010. Actually, it looks like the problems are slipping over into Europe and even Asia.
So it should be no surprise that Blackstone's recent
financial results are fairly lackluster. The firm posted a net loss of $156.5 million, or $0.60 per share, which compares to a profit of $774.4 million or $0.20 per share in the same period a year ago. Revenues plunged 63% to $353.7 million. Of course, the main reason is that Blackstone hasn't had opportunities to exit investments from its portfolio.
However, Blackstone believes there are juicy investment opportunities. For example, the firm's credit-focused hedge fund, GSO Capital, is investing in distressed debt and even providing financing for Blackstone buyouts. Interestingly enough, the alternative asset management segment saw a 34% spike in revenues to $225.2 for Q2.
Some other good news: Blackstone is still collecting large amounts of assets. So far, the amount is about $113 billion, providing the firm with lots of power to capitalize on things.
Tom Taulli is the author of various books, including The Complete M&A Handbook
and The Edgar Online Guide to Decoding Financial Statements
. He also operates MergerBook.com.
Posted Aug 6th 2008 12:35PM by Tom Taulli
Filed under: Earnings reports
According to its earnings conference call, it looks like
NetSuite Inc. (NYSE:
N) isn't being harmed by the slow economic environment. Then again, the company provides a cost-effective enterprise resource planning (ERP) solution. Plus, the competition -- including
SAP (NYSE:
SAP) and
Microsoft Corp. (Nasdaq:
MSFT) -- has been lackluster.
In Q2, NetSuite's revenues surged 43% to $36.6 million, a 7% sequential increase. In fact, NetSuite added more than 400 customers in the quarter. Although there was a net loss of $3.1 million, or $0.05 per share, SAP has made recent moves to increase its pricing.
Essentially, NetSuite focuses on the mid-market customer. Keep in mind that there are more than five million of them in the U.S. And, for the most part, the market is fragmented and unpenetrated.
Continue reading NetSuite cuts loss, still growing
Posted Aug 5th 2008 11:06PM by Tom Taulli
Filed under: Comcast Cl'A' (CMCSA), Small business
Dany Levy, who got her start as a journalist, is the mastermind behind the highly successful email newsletter platform, the
Daily Candy (established in 2000). She even got investment capital from top players, such as Bob Pittman (the founder of MTV).
Well, this week
Comcast (Nasdaq:
CMCSA)
agreed to shell out $125 million for the Daily Candy.
Basically, the Daily Candy is a purveyor of hip/fashionable content – geared to women. True, there are only 2.5 million email subscribers. However, they are highly desirable for advertisers. The Daily Candy's user base has a median age of 31; has $75,000 in income; and 96% read the email every day. Oh, and 66% of them have purchased something they read about from the Daily Candy.
Currently, there are local editions in 12 cities. Although, with the heft from Comcast, I'm sure this number will expand. There should also be some nice synergy with the advertiser base as well as cable assets like the E! Entertainment channel.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 5th 2008 12:15PM by Tom Taulli
Filed under: Deals, Google (GOOG), Next big thing, Small business
Founded in 2002 – during the dark times of the Internet –
Friendster became one of the pioneers of the social networking space. The company quickly got traction and even attracted the interest of
Google (NASDAQ:
GOOG). But, of course, MySpace and Facebook had ultimately beat out Friendster.
Yet, the plucky website hasn't given up. In fact, the company has
announced a $20 million round of venture capital. The investors include heavyweights like IDG Ventures, Kleiner Perkins Caufield & Byers, Benchmark Capital, DAG Ventures and Founders Fund. In all, Friendster has raised $50 million.
Actually, Friendster is ranked as the 9th most trafficked site in the world, with a heavy penetration in Asia where it is the #1 social networking platform. There are about 75 million registered users.
Interestingly enough, Friendster has a broad portfolio of patents, which perhaps can be used as leverage when combating its rivals. What's more, the company has done quite well in terms of adding features and providing a good user experience.
To help keep things on the right track, Friendster has hired Richard Kimber as its CEO. He was formerly a regional managing director of South Asia for Google. Apparently, he'll be spending much of his time in Asia, trying to put together partnerships.
While social networking seems to be maturing in the U.S., there still are great opportunities in foreign markets. Furthermore, with $20 million more in the bank, Friendster can broaden its footprint and perhaps be a hot property for an acquisition.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 5th 2008 11:00AM by Tom Taulli
Filed under: Deals, Private equity
With its plans to become a public company in Q4, the folks at
KKR have a lot on their plate. However, the company realizes it needs to keep bolstering the firm.
In light of the credit crunch and slowing economy, this is a tough thing. After all, much of KKR's business comes from its buyout business, which has been mostly frozen for the past year.
But, KKR understands that private equity is a long-term proposition, and there are certainly some great investment opportunities. One attractive area is infrastructure. In fact, in May KKR announced plans to
raise a $10 billion infrastructure fund and retained a top
Lazard (NYSE:
LAZ) executive, George Bilicic, to manage things.
Well, this week there was more activity on this initiative. KKR
retained John Bryson as a Senior Advisor. No doubt, he's a maestro about infrastructure. He was formerly the CEO of Edison International (he joined the firm in 1984) where he had to deal with complex regulations as well as find ways to grow operations. Before this, he was a partner at the law firm, Morrison & Foerster and even served as the president of the California Public Utilities Commission.
Of course, KKR is facing lots of competition in the infrastructure category, such as from other tier-1 private equity operators and even sovereign wealth funds. Take a look at
TPG, which has recently made a
preliminary $6.5 billion bid for Australia's Asciano (a port and rails firm).
Yet, infrastructure is a massive space with room for many players. More importantly, private equity firms are bulging with cash and need to find places to put it.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 4th 2008 1:10PM by Tom Taulli
Filed under: Deals, China, Private equity, Blackstone Group L.P (BX)
When the
Blackstone Group LP (NYSE:
BX) went public a year ago, the Chinese government invested $3 billion in the firm. No doubt, this was a sign that Blackstone was ready for lots of dealmaking.
But so far, things have been underwhelming. One of the deals was for a mere $600 million for a 20% stake in China National Bluestar Corporation (a chemicals company). There was also the $160.7 million purchase of a commercial building in Shanghai.
However, Blackstone isn't giving up. In fact, today the company
announced the opening of its Chinese office in Beijing. The chief of the operation will be Fu Shan who was formerly the VP of Beijing Mainstreets Investment Group Corporation (which focuses on real estate deals). He also has extensive background with governmental divisions, such as the National Development and Reform Commission (NDRC).
Blackstone realizes that China requires more than just money and deal structuring. There needs to be staff that has deep experience in dealing with the intricacies of the country. Even with this, the dealmaking is still likely to be a slog.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 4th 2008 11:00AM by Tom Taulli
Filed under: Deals, General Electric (GE), Private equity
Infrastructure assets can be stable, long-term investments, and as a result, private equity firms are certainly interested.
In fact, TPG has joined Global Infrastructure Partners – a joint venture of Credit Suisse and
GE Infrastructure (NYSE:
GE) – to make a
preliminary $6.5 billion bid (when you include the debt load) for
Asciano, a port and rails infrastructure firm based in Australia.
Actually, TPG has had a mixed performance with Australian deals. For example, the firm was unable to pull off its $11.1 billion buyout of Qantas.
Yet, now the markets are much different, and infrastructure operations definitely need cash – which is tough to get in the current credit crunch.
Asciano has about 8,000 employees and generates $2.5 billion in revenues. Some of its key assets include bulk export facilities, four leading container terminals, Stevedoring equipment and rail operations for freight and commodities. There are also joint ventures, such as Patrick Autocare (processing, storage and distribution of motor vehicles).
Of course, Ascaino has already rejected the buyout offer, but it's going to be tough to get a much higher bid, especially in light of the company's heavy debt load and weak operational performance over the past year.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 3rd 2008 2:00PM by Tom Taulli
Filed under: Small business
Like many others, a friend of mine is having troubles with her business. And, to keep going, she needs an infusion of capital. However, because of the credit crunch, she can't get a loan.
So what are the alternatives? Well, she is thinking of raising money from friends and family (F&F). In fact, she thinks she can get about $100,000 or so -- which is enough for her current needs.
But, of course, she's concerned about the process. What if she is late paying back the loan? What if the economy suffers for a long period of time?
Well, here are some things to consider:
Act as if you're preparing a pitch to a venture capitalist: No doubt, you can get into a lot of trouble if you get F&F funds on an informal basis. Simply put, you are vulnerable to misunderstandings.
Take Tony Seba, who started PrintNation.com. To launch the business, he raised $500,000 from his mother and brothers.
However, he pitched his deal in a professional way. For example, he put together a business plan and investor presentation (which took several months). He also assembled the necessary legal documents.
Continue reading Entrepreneur's Journal: Raise money from friends, family and fools?
Posted Aug 3rd 2008 10:10AM by Tom Taulli
Filed under: Insiders, Microsoft (MSFT), Yahoo! (YHOO)
It was about 18 years ago that I attended my first shareholders' meeting (for a local utility). The company had recently eliminated the dividend and many several angry people were in the crowd. It was exciting stuff.
But it was also an exception -- at least based on many other shareholder meetings I've attended (which are mostly formalities).
Despite this, I thought things would be different with the Yahoo! (NASDAQ: YHOO) meeting, which happened last week.
Well, I was wrong. Apparently, the meeting was a snooze-fest. In fact, Yahoo!'s shareholders voted overwhelming to keep their board members. This was despite the fact that the company seemed to fumble a juicy $47.5 billion buyout offer from Microsoft (NASDAQ: MSFT).
Interestingly enough, at the board meeting, the directors made it clear that they were thoughtful about the offer but also wanted to get the best deal for shareholders. Moreover, Yahoo! said that it was surprised that Microsoft withdrew its offer.
Of course, Yahoo! has also been the target of activist shareholder, Carl Icahn. Then again, he'll be on the board anyway (where I'm sure he'll make his views widely known).
Continue reading Yahoo!'s board meeting is ... boring
Posted Aug 1st 2008 2:02PM by Tom Taulli
Filed under: Earnings reports
For David DeWalt, the CEO of
McAfee (NYSE:
MFE), it's been an extremely busy quarter. He traveled to 15 countries and met with over 500 customers. He even gave 11 executive keynote addresses (actually, I'm not sure if DeWalt sleeps).
Well, the hard work is paying off, as seen with McAfee's
latest quarter results. Revenues came to $396.8 million, up 26% over the past year. Earnings were $47.8 million, or $0.30 per share (see more of today's
earnings news).
McAfee continues to build on its product offerings (the company is the #2 player in the security space). In fact, the company snagged 21 deals over $1 million.
What's more, McAfee announced the purchase of Reconnex Inc. for $46 million. Essentially, the company develops sophisticated technology to monitor data on networks (which is done through appliance computers). Reconnex has about 1.5 million managed users.
Interestingly enough, DeWalt wrote a
blog post about the deal (yes, I'm not sure how he finds the time to blog too). According to him:
"Reconnex, coupled with our current data protection solutions, gives us the network and endpoint presence that will allow us to leapfrog all other data protection vendors and reinforces our position as the largest dedicated security provider."
So far in today's trading, McAfee's stock is up 8.43% to $35.51.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Aug 1st 2008 11:50AM by Tom Taulli
Filed under: Private equity
Like other tier-1 private equity firms, the
Carlyle Group has been expanding into a variety of investment categories. After all, with the evaporation of the buyout business, it's really a necessity.
However, it's far from an easy process. For example, in March the Carlyle Group
suffered tremendous losses -- $16.6 billion of debt went into default -- from its publicly traded mortgage vehicle (Carlyle Capital Corp.). In fact, the company had to be shutdown.
Well, unfortunately, this hasn't been an end to the bad news. This week Carlyle had to
unwind another fund: Blue Wave, which is a $600 million hedge fund (focused on mortgage-backed securities). Last year, the fund posted a horrible 17% negative return. The poor numbers were the result of bad timing and leverage.
True, Blue Wave was able to stabilize things, with a 2% return for this year. But, for Carlyle to generate substantive fees, the returns would need to be much larger – and that would likely require taking on lots of risk.
So, in the end, it looks like Carlyle made the right decision on Blue Wave.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Jul 31st 2008 2:45PM by Tom Taulli
Filed under: Earnings reports, Deals, American Express (AXP)
Back in 2001,
Concur Technologies, Inc., (NASDAQ:
CNQR) hit a low of 31 cents per share. At that time, investors had lost all confidence in the Internet. What's more, Concur was in an un-sexy space; that is, a provider of software to help companies with travel expenses.
But the company's CEO, Steve Singh, was still a believer and thought the market opportunity was huge.
Well, as of now, things are starting to pay off. In fact, this week, Concur
announced that it received a $251 million strategic investment from
American Express (NYSE:
AXP) at $39.25 per share. There is also a warrant to purchase an additional 1.28 million share (see more of today's
earnings news).
Continue reading American Express: Don't leave home without ... Concur
Posted Jul 31st 2008 10:50AM by Tom Taulli
Filed under: Deals, Private equity, Blackstone Group L.P (BX)
With bulging coffers, U.S. private equity firms have been aggressively expanding into foreign markets. One of the big players is
The Blackstone Group LP (NYSE:
BX).
According to a piece in the
Financial Times, it looks like Blackstone is taking a look at
Informa Plc, a UK publisher.
Actually, it looks like other major private equity firms, such as Providence Equity Partners Ltd. and Carlyle Group, are swarming over the company.
Informa was formed, in 1998, as the result of a merger of the IBC Group plc and LLP Group plc, but if you take a look at the various businesses, the roots go back to 1734 with the first maritime publication.
As of now, Informa has operations in 40 countries and about 10,000 employees. Moreover, the firm organizes more than 10,000 events and conferences a year. There are also 2,500 subscription based information services.
In other words, Informa has a fairly steady business, with strong recurring revenues.
Interestingly enough, last month Providence Equity made a preliminary overture for Informa for about $4.29 billion. But getting debt financing won't be easy.
Then again, in the case of Blackstone, it might not have to worry about such things since it looks like the firm is teaming up with the cash-flush Dubai World Trade Center sovereign wealth fund.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
Posted Jul 30th 2008 5:55PM by Tom Taulli
Filed under: Earnings reports, Deals, Anheuser-Busch Cos (BUD)
The credit crunch should be bad news for investment banks, right? Not necessarily. After all, strategic buyers have been aggressive lately, perhaps because there's not much competition from private equity operators.
One of the beneficiaries is
Lazard (NYSE:
LAZ), which
reported its Q2 numbers. Eearnings came to $64.6 million, or 54 cents per share, which compares to $61.5 million, or 53 cents per share in the same period a year ago.
Simply put, Lazard has been snagging some choice client engagements. For example, Q2's revenues on merger assignments spiked 37% to $225.1 million.
In fact, the firm is an advisor on InBev's $52 billion deal to purchase
Anheuser-Busch Cos. (NYSE:
BUD). Another high-profile assignment is Gaz de France's 44.6 billion euro deal with Suez.
Keep in mind that Lazard has worked on about
$100 billion in announced deals in July alone. This is certainly a nice momentum boost.
Besides, Lazard has a strong restructuring division. While the business is still fairly small – at $32.7 million – there should be lots of potential for growth. Just look at some of the major bankruptcies lately, such as Mervyn's, Steve & Barry's, Linen 'n Things and so on.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.
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