by | May 15, 2014 · 1:57 pm

Who is Jan Koum?

 

Jan Koum is born in Kiev, Ukraine on February 24, 1976. He is an American internet entrepreneur and computer engineer. He founded WhatsApp together with Brian Acton and are the 6th richest billionaires in the world under the age of 40.

whatsapp logo

He earned most of the money while they sold WhatsApp to Mark Zuckerberg`s Facbook in February this year for $19 billion. Koum is Jewish and grew up in Fastiv, outside Kiev in Ukraine. He moved to Mountain View, California in 1992.

 

Koum moved with his mother and grandmother to California where a social support program helped them to get a small two bedroom apartment at the age of 16. His father intended to join the family later, but finally remained in Ukraine.

 

He started to work as a cleaner at a grocery, while his mother worked as a babysitter, but at the age of 18 he became interested in programming. He enrolled at San Jose State University and simultaneously worked at Ernst & Young as a security tester

 

Jan Koum was part of a group of hackers called w00w00, where he met the future founders of Napster Shawn Fanning and Jordan Ritter. Jan Koum and Brian Acton worked at Yahoo in nine years. In September 2007 the both left Yahoo and took a year off.

 

Both applied and failed, to work at Facebook. In January 2009, Koum bought an iPhone and saw opportunities in the new app industry. He visited his friend Alex Fishman and they talked for hours about Koum`s idea for an app.

 

A week later Koum started WhatsApp on his birthday, February 24, 2009. Now, you all know that the WhatsApp baby is worth $19 billion. On February 19, 2014, Facebook Inc announced it is acquiring WhatsApp.

 

Facebook paid $4 billion in cash, $12 billion in Facebook shares and $3 billion in restricted stock units to be granted to WhatsApp founders and employees that will vest over four years. Jan Koum is the CEO in WhatsApp.

 

As of April 22, 2014, WhatsApp had over 500 million monthly active users (MAU), 700 million photos and 100 million videos are shared each day, and the messaging system handles more than 10 billion messages each day.

 

As of May 2014, WhatsApp has crossed 50 million MAU`s in India, which is also its largest country by the numbers of MAU`s. WhatsApp Messenger is a proprietary, cross-platform instant messaging subscription service for smartphones that uses the internet for communication.

 

Facebook paid $19 billion, which is $42 per user. A week before the WhatsApp deal, Japan`s Rakuten bought Viber for $900 million. They claims to have 280 million users, which is $3,21 per user.

 

Some investors say Facebook paid too much for WhatsApp, while others say WhatsApp could be worth $100 billion. WhatsApp`s users are worth $42, while Viber`s users are worth $9, and Line`s are worth $73. WeChat`s users are worth $231 per MAU.

 

If you only sell ads, I think that an international user is worth less than a Western user. I really look forward to see what the right valuation for these apps are in the future. Anyway; A great story!

 

Reports today:

 

08:30 a.m EST Core CPI m/m

08:30 a.m EST Unemployment Claims

08:30 a.m EST CPI m/m

08:30 a.m EST Empire State Manufacturing Index

09:00 a.m EST TIC Long-Term Purchases

09:15 a.m EST Capacity Utilization Rate

09:15 a.m EST Industrial Production m/m

10:00 a.m EST Philly Fed Manufacturing Index

10:00 a.m EST Mortgage Delinquencies

10:00 a.m EST NAHB Housing Market Index

10:30 a.m EST Natural Gas Storage

 

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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by | May 14, 2014 · 1:46 pm

Cash flow or Price earnings (P/E)?

 

I have written about Price Earnings ratio earlier, but Cash flow ratios are a better measurement of a stock`s value than P/E. When you read about stocks in the media, you only read about a company`s P/E, and never about a company`s cash flow.

money2

Cash flow is the money that is moving (flowing) in and out of your business in a month.

 

If more money is coming in than is going out, you are in a Positive cash flow situation. Voila, you can pay your bills. If more money is going out than coming in, you are in a danger of being overdrawn.

 

Company`s in trouble typically need working capital in form of a loan or line of credit to cover shortages in cash flow. Sometimes customers are not paying at the right time of purchase. It may take some time in B2B business, and that can be a problem for some companies.

 

Knowing the number about a company`s P/E is good, but knowing a company`s cash flow is better. You have probably heard about how much cash Apple Inc have, and how much cash a company can generate tells you about its health.

 

P/E ratio represents the ratio of the stock`s price to its earnings per share (EPS). It is important to know about a company`s P/E. You can hear about it in the media daily, even if the P/E is high or if the P/E is low.

 

Many investors seem to overlook the importance of cash flow, and rather only look at the P/E. It is much better and more important to look at a company`s price relative to its cash position. Therefore; look at the cash flow.

 

It`s simple: without cash, you won`t last long. As a private person, you probably know how that is? We live in a world of capitalism, and what are you gonna do without capital? There is a long list of companies that failed because cash was in too short supply.

 

But how can you see if a company is over or undervalued, which is the same purpose of P/E? Two measurements shed light on a company`s valuation.

 

Price to Cash flow

You determine the price to cash flow by dividing the stock`s price by cash flow per share. The use of cash flow instead of net income is the reason why many investors use this measurement. You can find net income in computing EPS.

 

You will see that the company have more cash than the net income figure indicates, because the expenses don`t involve actual cash.

 

Free Cash flow

Divide the current price by the free cash flow per share. The result gives you the value the investors places on the campany`s ability to generate cash. It describes how much cash the company generated in the trailing 12 months.

 

Just like P/E, you can see where the market values the company. Lower numbers relative to its industry and sector suggest the market has undervalued. Higher numbers than the industry and sector suggests the market has overvalued the stock.

 

It`s easy to find the numbers and don`t worry, because you don`t have to do the math by yourself. You can simply go to a web site with these valuation numbers and look for your company`s cash flow numbers.

 

You should never use only one measurement, because it`s not as simple as that and it doesn`t tell you the whole story. You must see the bigger picture. Look at other metrics to verify relative value, but cash flow can give you the clues to how other investors values a stock.

 

Reports today:

 

08:30 a.m EST PPI m/m

08:30 a.m EST Core PPI m/m

10:30 a.m EST Crude Oil Inventories

 

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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by | May 13, 2014 · 2:06 pm

Micron Technology Inc +158,1% (1 YR)

Micron Technology Inc (MU) is a global manufacturer and marketer of semiconductor devices, principally NAND Flash, DRAM and NOR Flash memory. Micron is the largest U.S memory company and the company provides memory solutions for computing, communications, consumer and industrial applications, and serves both wireless and embedded applications.

micron logo

I feel a big enthusiasm toward chip makers that offer DRAM (dynamic random-access memory) products. Other producers are Samsung (OTC:SSNLF) and SK Hynix (OTC:HXSCF). Micron shows merit as an investment and will probably buy back its stocks in the future.

Maintaining its relationship with Apple (AAPL) will help the stock. DSG (DRAM Solutions Group) sales are up 198%, in part due to the acquisition of Japan`s Elpida Memory. One of the compelling things about Micron is its $615 million takeunder of Elpida Memory.

Elpida is a producer of DRAM for mobile devices. Net sales for the Q1 of 2014 increased 120% Y/Y. The devalued yen also helps pricing and cost of the overall transaction. DRAM is responsible for 69% of net sales and that is up 39% in 2013.

Micron was founded in 1978 and is headquartered in Boise, Idaho. The stock is up +26,5% so far in 2014. Up +158,1% (1 YR). So, what now? Is Micron still a buy? Micron has an extremely low PEG ratio of 0,86.

This is one of the best performers of all S&P 500 companies last 12 months. The stock is up +158,1% (1 YR), while S&P 500 is up only 17%. Micron stock still have room to rise up and seems to have strong earnings growth prospects.

One thing to consider is the high amount of insider activity. Some big stakeholders have diluted their stake in Micron, and heavy insider selling is a point of worry, but despite the selling activity, the stock is not volatile. It seems like the investors don`t care about that.

Reports today:

08:30 a.m EST Core Retail Sales m/m
08:30 a.m EST Retail Sales m/m
08:30 a.m EST Import Prices m/m
10:00 a.m EST Business Inventories m/m

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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by | May 12, 2014 · 12:44 pm

Human Capital

 

I watched Eurovision Song Contest on Saturday. Denmark was the winner last year, so the show was sent from Copenhagen live on Saturday. They had a great song last year and followd up with a great song on Saturday too. Once the Danish song started I thought to my self that I have heard the song before.

220px-YouToMeAreEverything

Basim represented Denmark on Saturday and Basim and the rest of his crew did a great gig, but the song called Cliche love song is a plagiat. I mine opinion, this song should be banned, but NOBODY IS TALKING ABOUT IT! Have a listen to the song and make up you mind. Click the link below.

Basim – Cliche love song

This song is similar to a great hit from a group called The Real Thing. They had their first hit on the UK charts in July 1976, with the song called You to me are everything. This was on top for three week in the U.K but peaked at nr 64 on Billboard top 100. It didn`t reach the top in the US because the flood of the coversongs. Have a listen to the link below:

 

The Real Thing = You to me are everything

 

Have a listen to both songs and make up you mind. It is very similar. You can listen to them on the headphones made by Dr Dre`s company called Beat Electronics which is in talk with Apple Inc. Nobody understand why Apple is trying to buy Beat Electronics but it is probably something there which is not released yet.

 

In addition to the brand I think Apple is buying knowledge like Dr Dre and the music mogule Jimmy Lovine. Apple is not buying the physical products, but the brand and a human capital. This is the future of the business. How much is a brain wort? How much is an idea worth?

 

Facebook did the same when they bought WhatsApp. What did they really buy? Not the physically app, but the brand and the human capital. The question is how much is it worth? I really look forward to the value of the app WhatsApp. What about Beat Electronics? Apple want to compete with Spotify and start a streaming business, because iTunes sales are declining.

 

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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by | May 9, 2014 · 2:20 pm

Telefonica are expanding – profit falls – shares tumble

 

Telefonica`s Q1 earnings missed analysts expectations. Net profit slumped 23%, down to $957,5M. Revenue fell 14% to €12,2B. Sales in Spain are dropping down -8,2%. In Germany the sales are dropping down 8,8%, and in the U.K -0,3%.

telefonica

Telefonica has two-third of its customers in Latin America and their revenue plunged -18% in Brazil and -13% in the rest of the region. Operating income (OIBDA) dropped -14% to €3,93B. Shares are down -3% in Madrid.

 

They try to expand and has reached a deal to buy Spanich media giant Prisa`s 56% stake in pay-TV provider Canal+ for €725M ($1 B). Their stake will increase to 78%. The mobile service demand is declining.

 

Canal+ owns lucrative soccer broadcasting rights which is good for Telefonica. The deal could pave the way for them to include Canal+ offerings in phone/TV/broadband bundles. Telefonica is also waiting for regulators to sign off on its $11,9B deal to acquire German carrier E-Plus.

 

Regulators are worried about diminished competition because the deal will lower the number of German mobile network owners to three, and that is Telefonica, Deutsche Telecom and Vodafone. As the French government say, there is a growing willingness among continental regulators to support a measure of consolidation.

 

They hope that merging weaker players will create entities more willing to make big network investments. The EU plans to rule on Telefonica/E-Plus next month (June 23). Telefonica hopes to sign the deal in Q2.

 

This business need to thing different. Getting paid for phone calls and messages are out. Its only internet access left and its all about price. This industry has a huge potential for growing business, but the fact is that they don`t know it themself.

 

 

Reports today:

10:00 a.m EST JOLTS Job Openings

06:00 a.m EST FOMC Member Kocherlakota Speaks

 

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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