Google puts more money in SolarCity

Solar City was founded in July 2006 by brothers Peter and CEO Lyndon Rive, based on a suggestion for a solar company concept from their cousin, Elon Musk, who is the chairman and helped start the company.

The company designs, finance and installs solar energy systems, performs energy efficiency audits and retrofits and builds charging stations for electric vehicles. SolarCity had more than 6312 employees as of December 2014.

SolrCity logo

SolarCity has grown in recent years to meet the rapidly growing installation of solar photovoltaic systems in the United States. The overall U.S market has grown from 440 MW of solar panels installed in 2009 to 3,300 megawatts in 2012, and it is expected to grow rapidly.

In October last year, SolarCity announced it would be offering up to $200 million in solar bonds to launch a new online website to buy the debt, the first registered public offering of such bonds in the United States.

«Corporations are starting to realize the importance of using clean energy», CEO Lyndon Rive said. Historically the companies that have financed solar deployment have been the big financial institutions, but now it seems to be a shift in the market were tech companies are getting into the market and helping to transform a dirty infrastructure to a clean infrastructure.

SolarCity partners with banks, large corporations and the asset-backed market to create project finance funds to finance its lease and PPA (Power Purchanse Agreement) options. SolarCity`s financing partners have included Bank of America, Merrill Lynch, Citi, Morgan Stanley, National Bank of Arizona and U.S Bancorp, among others.

Among SolarCity`s more well known financing partnership was a $280 million fund created with Google to finance residential solar installations in June 2011. The Google Fund was the largest fund of its kind in the U.S, and Google`s largest investment in clean energy.

I wrote about Apple in my recent article that it is spending $848 million on a massive solar farm to power its corporate offices and California stores. Google continues to invest in renewable energy and they announced today that they have invested $300 million in a $750 million SolarCity fund to finance residential solar projects.

This is Google`s second investment in SolarCity.

Renewable energy principal at Google, Siddharth Mundra said today; «We’re happy to support SolarCity’s mission to help families reduce their carbon footprint and energy costs. It`s good for the environment, good for families and also makes good business sense.»

Rive said their biggest competitor is the customer not doing anything with the clean energy and just sticking with the monopoly.

SolarCity installs the systems at no charge to customers and then charges the residents slightly less per month for the energy than they pay their traditional utility, and their new fund will be used to cover the cost of installing solar systems on homes in 15 states in the U.S.

Solar panels are still a niche product, but the cost of solar rooftop systems has been plummeting in recent years. Take a look at the chart below:

solar_price

In their newly report they said that they have reduced installation costs from $2,19 per watt to $2,09. Its net loss of $1,47 per share was a little bit wider that the estimates of $1,27. Q1 EPS loss forecast for a net loss of $1,75 to $1,65 was worse than current expectations. They added a grand total of $3 billion in future contract payments throughout the entirety of 2014.

The stock is down -38,7% last 12 month, but only 1,5% so far in 2015. The 5 billion valuation company traded down -0,34% today. The short interest have been massive since March 2013. From two to twenty million, but seems like it peaked at the end of last year.

Solar power is growing fast and the older energy companies are trying to stop it, and many utilities are now pushing for reforms that would slow the breakneck growth of rooftop solar. American Legislative Exchenge Council are pushing to get rid of solar subsidies.

A study from Lawrence Berkeley National Laboratory argues that this solar business could soon put utilities in dire straits. If rooftop solar were to grab 10 percent of the market over the next decade, utility earnings could decline as much as 41 percent.

You can quick and easy replace a taxi driver with a robot, but I assume it will be difficult to set in a robot instead of a human to install a solar panel.

This sector can push the unemployment rate further down if the demand for the solar panels goes up.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Herbalife – a pyramid scheme?

International multi-Level marketing nutrition company Herbalife (HLF) will report 4th quarter earnings Thursday afternoon. The stock is down more than 50% and many investors are doing just like Bill Ackman, betting against the company.

The hedgefund manager Bill Ackman has been leading a crusade against Herbalife and has accused Herbalife of running an international pyramid scheme. A long string of large earnings beats and an investment from Carl Icahn fueled Herbalife`s fire in 2013.

Herbalife failed to live up to expectations in its 2nd quarter of 2014. They missed on the top and bottom line again last quarter and the stock got punished even further. What`s going on in Herbalife? Is it a house of cards that is on the brink to collapse?

pyramid-scheme money

(Picture: Money pyramid. When money stops to come in at the top, the pyramid will collapse. This is why Ponzi and Madoff failed.)

Thursday`s reports will show us how the company is doing it right now. The consensus expectations is that 4th quarter earnings will fall from $1,28 last year to $1,22. Revenue growth has decelerated rapidly in the past six months from 20% to 4% and is forecast to decrease by 9% this quarter.

Herbalife is trading at $33,66, up 2,43% today.

The SEC (Securities and Exchange Commission) recently sent a tweet from @SEC_News reinforcing an investor alert, where the company defined the updated characteristics of a pyramid scheme (The note was titled «Bevare of Pyramid Schemes Posing as Multi-Level Marketing Programs»).

The lines of legality for MLM business models are very thin, and SEC outlines 7 different hallmarks to beware of when considering joining an MLM company. The hallmarks make it easier to make a decision about these types of business models.

Compare the hallmarks to Herbalife, amid open investigation by the SEC, FTC and FBI. Bill Ackman is not in doubt and say that the stock will plunge – down to zero.

A pyramid scheme is an unsustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products of services to the public.

The chart in the picture below shows how pyramid schemes can become impossible to sustain:

Pyramid_scheme

(Picture: The unsustainable exponential progression of a classic pyramid scheme)

In a pyramid scheme, an organization compels individuals to make a payment and join. In exchange, the organization promises its new members a share of the money taken for every additional member that they recruit.

The directors of the organization also receive a share of these payments. For the directors, the scheme is potentially lucrative, whether or not they do any work. The organization`s membership has a strong incentive to continue recruiting and funneling money to the top of the pyramid.

Such organisations seldom involve sales of products or services with real value. Without creating any goods or services, the only ways for a pyramid scheme to generate revenue are to recruit more members or solicit more money from current members. Eventually, recruiting is no longer possible and the plurality of members are unable to profit from the scheme.

But Herbalife are selling products, so what is the problem?

The network marketing or multi-Level marketing (MLM) business has become associated with pyramid schemes. According to the U.S Federal Trade Commission (FTC), many MLM schemes «simply use the product to hide their pyramid structure». While some people call MLM`s in general «pyramid selling,» others use the term to denote an illegal pyramid scheme masquerading as an MLM.

The Federal Trade Commission warns, «It`s best not to get involved in plans where the money you make is based primarily on the number of distributors you recruit and your sales to them, rather than on your sales to people outside the plan who intend to use the products”.

The FBI warns you and their website states:

Pyramid schemes—also referred to as franchise fraud or chain referral schemes, are marketing and investment frauds in which an individual is offered a distributorship or franchise to market a particular product. The real profit is earned, not by the sale of the product, but by the sale of new distributorships. Emphasis on selling franchises rather than the product eventually leads to a point where the supply of potential investors is exhausted and the pyramid collapses.

This is all about human psychology.

Herbalife`s products are overpriced and critics say they are exploiting poor people who are tricked into paying thousands of dollars for products they will not be able to sell or want to consume. Critics say Herbalife is targeting groups of people who are easily victimized by false promises of riches.

Pyramid Scheme Statistics:

  • 88 percent of the members will be on the bottom level of most pyramid schemes will lose their investment.
  • In a naked (productless) pyramid scheme, 90.4 percent of people lose their investment.
  • In product-based pyramid schemes, 99.88 percent lose their investment.

Herbalife is a pyramid if people earn their money only from other members. Their market cap is $3,08 billion, and how much of that is earned from their products to nonmembers? Herbalife won`t reveal that number and do not belive it is relevant.

Bill Ackman, the head of the hedge fund Pershing Square, say a tiny fraction of members make money. «There is no profitable retail opportunity here», he said. In order to get people in, they have to mislead them. Not all investors shares Ackman`s views.

Investor George Soros added shares in fourth quarter.

Regulators struggle with these grayer areas, where fraud can be camouflaged. The legal tests are confusing and inconsistent. For example how are regulators to determine how many of the shakes in various members basements are for resale versus personal use?

Herbalife have a network of approximately 3,2 million independent distributors, and sell its products in 88 countries, as of December 31, 2012. Herbalife has been on the market for 37 years and every year they lose half of the people who have qualified for bonuses, but they have so far been able to replace them. How long can that continue?

As long as new members and money comes in, it will never stop.

This is why Ponzi and Madoff failed. New money didn`t come in at the top of the pyramid and boom (!), the pyramid collapsed. Pyramid schemes are a scam, plain and simple. Multi-Level Marketing schemes are barely legal, but offer very little return for their required investment of cash and time. Stay away!

Bill Ackman will profit if Herbalife collapse.

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

 

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Business connections is more than you think

Making good music is vital, but it`s not enough. You need more than that. How is the rapper Pharrell Williams doing it?

Pharrell Williams is an American singer-songwriter, rapper, record producer and fashion designer. Williams and Chad Hugo make up the record production duo the Neptunes, producing soul, hip hop and R&B music. He is also the lead vocalist and drummer of rock, funk and hip hop band N.E.R.D.

Pharrell Williams in Adidas

(Picture: Pharrell Williams)

Pharrell has produced numerous hit singles for various recording artists, and he earned eleven Grammy Awards including two for the Neptunes.

He currently owns a media venture that encompasses entertainment, music, fashion, and art called i am OTHER, a multi-media creative collective and record label that serves as an umbrella for all of Pharrell Williams` endeavors, including Billionaire Boys Club and Ice Cream apparel, Billionaire Girls Club, textile company Bionic Yarn and a dedicated YouTube channel launched in 2012.

By August 2003, Pharrell and the Neptunes had produced a stunning 20% of all the music being played on British pop radio and 43% of the music being played on American pop stations. Pharrell went on to write a verse and help produce for Wreckx-N-Effect`s 1992 hit «Rump Shaker».

The same year he also performed a small rap solo on SWV`s second hit «Right here». The Neptunes have produced Britney Spears`s single «I`m a slave 4 U». They also reached number one in the U.S with Nelly`s single «Hot in herre».

Pharrell featured on Daft Punk`s mega hit «Get Lucky» and in march 2013, he wrote and produced the monster hit «Blurred Lines» for Robin Thicke.

The Neptunes were named «producers of the year» in 2002.

Pharrell has that rare gift for creating music, tracks, hooks and lyrics. Always one step ahead of the curve.

He is not only good at making great music, and last month at the World Economic Forum at Davos, Pharrell made a big announcements to prime ministers, billionaires, and CEO`s. He announced a concert over seven continents to mobilize support for a UN climate pact in Paris at the end of the year with his collaborator, Al Gore.

That`s what`s makes this man so unique, because tackling climate change is not what we might expect from a rapper and hip hop producer.

He released his first solo single in 2006, and the album failed. It took a long time for him to find the reason behind it: he wasn`t being true to himself. He tried to be like other rappers and producers. He changed the strategy and got back to his own roots.

He was tired to mimic Jay Z and P. Diddy, so he created i am OTHER. An organization dedicated to reaching young people who feel different and helping them use their unique talents to launch creative ventures.

As Pharrell states in the organization`s mission statement;

«We are proud to be different and belive that individuality is the new wealth. This shared philosophy flows through each pillar within our organization: music, film, television, apparel, tech and multi-media.»

Mark this words folks: Individuality – Individuality – Individuality! That`s the future. Individuality is the new wealth. It makes things grow!

There`s another interesting thing behind this success. The friendship behind Pharrell`s success that harkens back to many connectionally intelligent friendships and partnerships throughout history, like Albert Einstein, who refers to his closest friend, Michele Besso, as «the best sounding board in Europe».

So how was Einstein able to create his theory of relativity? By his daily walks with Besso, discussing a shared love of the violin and scientific exchange.

As Einstein recalled at a lecture in Kyoto in 1922: That was a very beautiful day when I visited Besso and began to talk with him as follows: “I have recently had a question which was difficult for me to understand. So I came here today to bring with me a battle on the question.” After a lot of discussions with him, I could suddenly comprehend the matter.

The next day I visited him again and said without greeting “Thank you. I’ve completely solved the problem.”

The romantic myth of the lone genius fails because it obscures the social, connected qualities of innovation. The pair is a «primary creative unit,» because it is a fundamental, fractal and recurring shape in the patterns of innovation.

The creative pair is a natural and powerful expression of connectional intelligence that is often central to getting BIG things done.

Pharrell created i am OTHER to give a voice to kids who were like himself. At i am OTHER, Pharrell funded and mentored kids who wanted to break into all of the fields to which he had access: fashion and entertainment, but also tech and manufacturing.

He also created the Collaborative Fund, a venture capitalist fund that he described as «an investment fund focused on supporting and investing in the shared future. The fund centers around two macro themes, which we belive to be at the core of business innovation in the coming years:

the growth of the creative class and the collaborative economy».

Investors for the Collaborative Fund includes Chad Hurley, co-founder of YouTube; Chuck Temple and Tony Hsieh, CEO of Zappos to name a few. But he did more. He co-founded a manufacturing company, Brooklyn Machine Works that crafts handmade bikes.

Pharrell was so busy and so satisfied and felt so fully himself that what he really needed to do was to get back into the studio and make music again, and the result was the monster hit:

HAPPY!

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Taxidrivers could become extinct

If you work as a taxi driver you must have a plan B, because someone out there will change the game. Thousands of taxi drivers will be replaced by robots. The driverless cars is one of the biggest and fast growing technology trends at the moment.

Goolge have been working on a driverless car for some years now, and many others are working with the same case. Google said they will be ready for the mainstream market in about five to ten years, but driverless cars is in use already today!

Google-Driverless-Car-picture

The UK government is pouring about $30 million into those driverless cars, and Britain have real driverless cars on real roads in four different places in the country today, right now. “An essential part will be an effective and fast communication between cars, and between cars and existing and future roadside infrastructure,” said Dr Evtim Peytchev, of Nottingham Trent University.

Business Secretary Vince Cable, backing driverless car trials in four cities, believes driverless transport could become a £900 billion industry worldwide by 2025.

Google is not alone on the market for this new technology trend.

Audi`s next generation A7 is on the road today, and Mercedes, BMW, Volvo and Toyota are working to make a big advantage in the new auto market. But what`s funny is that some of the innovative companies in this new market isn`t real car company`s.

One of them is Google, but Apple is also on this trend now.

Google`s driverless cars have traveled thousands of miles and most importantly; without an accident! Awesome.

One of the biggest privately held technology company`s is Uber, which I have talked much about in my recent articles. Google venture is not only investing in real hi-tech company`s, and it is no secret that Google have invested huge amount of money in Uber. A company that is taking the world by storm right now.

Uber have so far made many taxi drivers angry, and Uber have disrupted the old traditional taxicab market already. This is just the beginning. Uber and Google will shock the market again, but this time it will be critical for the taxi drivers. Reason: driverless cars + Uber. What a mix. But there is a drawback; Uber and Google may have a conflict of interests, because Google is so far along on the ride-sharing portion of this combination.

Taxidrivers will be history.

Your cab in the future will be a smart phone on four wheels.

Taxidrivers have been angry about Ubers innovative business model, but what are they gonna do when the driverless cabs comes to the market? They will be fired. You think that a human/taxi driver is better and safer than a computer but it isn`t. A «driver» is safer on the road than a human/taxi driver.

The driverless cars will make peoples`s life easier and cheaper. CEO`s and other workers can use the new car/cab as an office instead of driving the car. Some companies will organize driverless carpools for their employees if they work overtime.

Parents can send their kids to the school and other activities without a driver/busy parent.

They say it is safe, but is it 100% safe? What if the driverless car crash. Who are responsible? Who can you blame on?

According to The New York Times, policy makers and regulators have argued that new laws will be required if driverless vehicles are to become a reality because “the technology is now advancing so quickly that it is in danger of outstripping existing law, some of which dates back to the era of horse-drawn carriages”.

 


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Holiday



Shinybull will be back on 23 February, 2015. Click the link below and check out the Fan Fund

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shinybull countdown

 

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