Month: December 2017

2017: The Year The Unicorn Died

Remember back in days of yore (pre-2015) when a new year celebration, or any celebration or extravaganza for that matter, would pale in comparison to a “it’s different this time” funding round after-party?

You remember don’t you? This was where being on the “guest list” or “invite” was the equivalent throughout Silicon Valley as a red carpet event was in Hollywood. Of course, all the free-flowing bubbly and more would be paid for via those “funding rounds.” But hey, who needs to watch the bottom line when there isn’t one to begin with, right?  Remember the mantra: “It’s different this time.” So party on and party hard, business can wait and is so – old school.

So how will this years new year celebration be rung in for the Unicorn set? Hint: Bring out the crying towels, because, it is indeed – different this time.

This year is culminating with an event which for all intents and purposes proves that the faithful have lost their faith. That event is none other than the most over-valued, over-rated, over-hyped, over-_______(fill in the blank) unicorn known as Uber™  penning its deal with SoftBank™, which purportedly cuts it valuation by some 30%. Or said differently – by about 1/3rd. And that’s if you believe the metrics and math used to begin with.

Supposedly there is some form of accounting alchemy that will allow a portion of the “investment” to be applied in such a way that the original near $70 BILLION valuation metric can stay intact. i.e., It’s probably not lying in a legal sense. But everyone knows its pure bull. From my purview this same reasoning would allow me to openly cite that land in Kentucky I’ll sell you is truly oceanfront – you’ll just need to wait for the full effects of climate change to evolve as to see it. But it’s not like I’m lying, right?

Now some will argue (especially any next-in-rotation fund manager, or Silicon Valley aficionado paraded across the main stream financial media) that this latest investment proves that there is a worthy, worthwhile business in Uber. Maybe there is, maybe there isn’t, but here’s what we do know, which is far more telling and far more prophetic in my view:

Softbank was looking to purchase somewhere around a 14% stake. So to entice current shareholders that were supposedly “holding out for the big IPO pay-day of riches” they offered a price of $33 per share, in the hopes that this would be enough to possibly bring on board some of those holdouts. It would appear they could have offered less. Why?

As being reported by the Wall Street Journal™ “people familiar with the mater” said the tendered shares offered (you know, at almost a 1/3 discount) totaled around 20%. That implies not only was there no need to possibly further incentivized, or pry any shares from true believers cold clinched hands, but rather, there were more willing sellers (e.g., more offered) than what was required for the deal. i.e., SoftBank only needed 14%, but had 20% available (at nearly 1/3rd off!) or offered for sale. SoftBank implied it’s going to leave that remaining 5% on the table.

If you’re still a “it’s different this time” true believer: Can you say, “Uh, oh?” Because if we use math as it is intended, that means, or one can infer, that SoftBank is leaving 25% of the available shares that it could have purchased – on the table.

Remember, it (SoftBank) thought it was going to have a hard time getting that 14%, this was why (all conjecture) the $33 per share was offered to begin with, as to hopefully tempt any possible on-the-fencers.

But temp it did! So much so that it was oversubscribed to the sell-side by some 25%. Talk about it’s different this time. So much for any remaining faith remaining in the faithful of an IPO to riches for this once most valuable private startup, is it not? After-all, this latest “investment” slashes Uber’s valuation to less than it was said to be worth in 2015. (i.e., $51B, 2015 – $48B today.)

I made the statement back in May of 2016, “If everything is so great. where are the Unicorn IPOs?” This was met via “The Valley” and nearly every so-called “tech aficionado” or next-in-rotation fund manager with derision and more across the mainstream business/finance media channels. I was of the “doesn’t get tech” crowd and was to be laughed off, or maligned for ever daring to question the unicorn or “it’s different this time” religion which had pervaded any remaining business sense or ethics.

But everyone seemed to forget then at the end of 2014, Quantitative Easing ended. And when 2015 began it was being touted as the year for both the rebirth of Unicorn’s and their IPO’s. And then it was 2016. And then 2017. And now we begin 2018.

The difference this time for unicorns is this: Not with hope. But rather, to face what I said was inevitable in 2015: “Crying Towels”

The reasoning is simple, and for those in “the Valley” who like it said best in pictures, here you go. To wit:

In 2015 depictions of Venture Capitalists went cartoonish – literally.

Photo credit CB Insights™

In 2016 the IPO to save the IPO world, Twilio™ debuted – then subsequently died – literally.

(Chart Source)

Then for 2017 it was the ultimate mascot for any-and-all remaining “it’s different this time” devotees to prove to the world that in fact, it still was, with Snapchat’s™ IPO – then – it all snapped – literally.

(Cover source, Chart Source)

Yet, what is far more troubling which should be carefully, thoughtfully contemplated by all continuing to belive in the charade that is “The Valley.” I offer you the following to ruminate…

Over the course of the last 12 months the “markets” have never – in all its history – seen levels of such low volatility, for so long. In fact, the markets have also: Never had one full year of 12 consistent, back-to-back winning months. Again: 2017 did not have one, repeat, not one losing month. And, closed the year at heights never before seen in the history of markets.

And the most lauded, valuable, watched unicorn – in the history of unicorns – not only didn’t IPO – insiders sold their shares at a 30% discount  – and the offering was oversubscribed to what was need. Or said differently…

It’s over, just like 2017.

© 2017 Mark St.Cyr

Apple’s Glass: Half Empty – Half Full – Or ?

As always let me preface with the following: I am both an Apple™ fan, as well as near exclusive product user. However, with that said, I’m also a businessman. And it is to these points which I base my commentary.

For the last few years I’ve noticed a troubling undercurrent when it comes to all things Apple. That undercurrent revolves around a distinct feature which can be summed up using one word, for all intents and purposes seems to be used far more frequently than at any time I can remember. That word? “Delayed,” or its paternal twin which shares the same DNA, i.e., “Backordered.”

It now seems you can’t talk about a new or improved product when it comes from Apple without also including the near inevitable “delayed” or “backorder” issue which seems to follow every new product or feature. Although the actual word “backorder” seems never used. What else does something along the lines of “expected delivery time in 6 weeks” or more indicate other than that?

The actual term “delay” we all have come to know means the entire product launch is currently unavailable. No further backorder phraseology required.

New products and features for Apple were, at one time, highly anticipated rollouts with large-scale events and demonstrations that were supposed leave one near breathless in anticipation. Today, a lot of that breathlessness is attributable to one holding their breath in anticipation of what will arrive first: A complete launch delay announcement, or some revolving backorder status.

So common have these now become I wouldn’t be surprised at any subsequent event one might hear something along the lines of…

“Oh, just one more thing. It will be so popular, so wickedly awesome, so supercalifragilisticexpialidocious – we don’t know if we’ll have enough, or even when we’ll be ready to ship at all. So try to order early and often. We’ll let you know as soon as we see fit, as we delay any rollout status back ever further, because we only use nebulous terms for availability allowing us the cover to roll back your anticipated expectations again and again. Even if that means years. Ain’t that great?!”

Yes all tongue-in-cheek. But am I that far off? (Hint: Mac Pro®)

I used the aforementioned “glass” analogy for a very specific reason, but not in the way of most.

Far too many look at the proverbial glass and only see two variables. i.e., The optimistic/pessimistic viewpoint. Yet, there is another, which is by far more important, for it answers the original age-old question in absolute terms, forcing one to now plan or assess accordingly.

That other question is this: Why is the glass half empty, or full, to begin with?

In other words it’s the “why” which should be asked, as in: Is it filling up from empty and is now at half? Or, was it full and has since leaked or evaporated down to half?

I’ll contend that’s the correct set of questions when viewing the glass. Not the other two. Answer the latter, and the prior two become situational for the requisite action if required.

“So how does this pertain to Apple?” one might be asking. Good question, and it’s for this reason:

Is Apple’s once product admiration, wonderment and astonishment continuing to rise? Or, has it reached its heights and is slowly leaking or evaporating?

If it’s the latter – that’s a very big problem. And there are far more troubling indications that it is may be just that. And this latest holiday “delay” shows that in spades via my perceptions.

Once again Apple delayed the rollout of what can only be described as a revolutionary new product till after the holiday season. However, this time – not only was this product an important next step in the evolution for Apple’s ecosystem. But more importantly – it could also be argued as possibly the most important consumer product to be developed since the smart phone.

That gadget? The Home Smart Speaker.

Apple’s HomePod® was supposed to be the quintessential “800-pound gorilla” to Amazon’s Echo® and Google’s Home® and was slated to enter the holiday shopping window in December. But then, right before Thanksgiving, Apple announced that HomePod won’t be home or even ready for the holidays, because “sometime in December” is now “early 2018.”

It’s not that Apple did not have enough for any anticipated sales volume. No, what I consider absolutely, inexplicably unacceptable is that they didn’t even have the product itself available. As in, if you wanted one? You got zip, zero, nada, for the rollout and the entirety of any availability completely missed the entire holiday shopping season.

Was this some sort of afterthought gift idea or product that people just happened to pick up as a stocking stuffer that was nestled between the candy bars at the checkout lines? The answer to that is an emphatic, no!

It has been purported via many shopping reports to be one of (if not the) best-selling consumer gadget this shopping season.

And Apple missed it entirely.

The issue here is two-fold. First: Not only did they seemingly anticipate or know of its importance to be for the holiday rush, but also, they announced early as to make sure customers knew there would be an Apple product “sometime in December” for this category.

So the underlying sales pitch is: Don’t buy theirs just yet. We’re coming out with ours, “sometime in December” and you’ll be amazed with what it does.

Maybe it’s just me, but “early 2018” is light-years away from “sometime in December” and the consequential, all important  holiday shopping frenzy.

Adding insult to this self-inflicted injury is the following: Not only did an ever important launch window get missed. Rather, what many contend is far worse – a complete launch whiff of a product now clearly demonstrating just how important it is as a segment of a company’s ecosystem. The proof?

The apps required to use these products subsequently moved in unison of their holiday sales to vault theirs to the top-notch for both IOS® and Android®, proving its holiday sales appeal.

And Apple didn’t even have the product ready. This point can not be made too lightly from a business perspective via my acumen.

To make the point in another way: It would appear there are going to be a lot of requests made to purchase and play music, movies and more during the interlude to the new year. Just not via a HomePod. Can you say, “Alexa®” or “Hello Google®?”

If I were Siri®, I’d be pissed.

As I iterated earlier this is far from the first time Apple has had holiday availability issues. Remember, AirPods®? You can now finally get some, but you’re still going to have to wait, for they are still having supply side issues. But if you wanted this “breakthrough technology” last year under your tree? Much like the recent hyped, in much the similar fashion HomePod – sometime next year was about as good, as it got.

Are you seeing a pattern here?

Then we had what can only be described as the disastrous rollout for the iPhone 8®. The only thing that gave that rollout any cover was the, once again, disastrous live rollout demonstration for facial recognition on the iPhone X®.

The only thing comparable to this obviously embarrassing mistake? (It was said, because someone used it prior in set up.) Was when, seemingly oblivious to the obvious, about 2 years ago Apple asked Microsoft™ employees to appear onstage to demonstrate a few new features and products for the iPad Pro®.

Again, maybe it’s me, but this seemed just a little bit “tone-deaf” for a company that is supposed to be so “in-tune” with its customers.

The only thing more ridiculous for comparison would be something along the lines of creating a stylus (something Jobs originally denounced) then calling it a Pencil®. Wait, scratch that. I forgot.

Speaking of “forgot.” What about wearables like the iWatch®, or other such item? You know, like taking the top spot for number one on the holiday check list of must-haves sale items. After all I would imagine with all the hype manufacturers (and next-in-rotation fund managers) were giving them, that these must have been the go-to gadget of the holiday season, right?

Nope, need I remind you, see home speaker category once again, for that. You know – where Apple didn’t even have a product available.

But if you want a watch? I’ll bet dollars-to-doughnuts there’s no waiting and you can have as many as your little beating heart-to-monitor desires. (Hermès® option extra, but I’m sure, quite available) After all, wasn’t that Mr. Cook’s baby?

How about a MacPro®? Did you get a new Mac Pro? That’s OK, neither has anyone else, that too is still a product in waiting. Apple said in 2017 it was “completely rethinking the Mac Pro.” Well, there hasn’t been anything new since it relaunched in 2013 so that’s quite a long time for “thinking” in my humble opinion. But there’s still so much to think about, I guess, a date for 2018 is still abject speculation on the sooner side, with some rationalizing maybe 2019 is the year.

The message?

No rush, what’s a few years when it comes to computer product cycles anyway. After all it’s not like we didn’t give you a “touch bar” for your laptop. Be happy with that for now will ya – we’ve got some political fundraising we’re working on here, between that and the new building with all its furniture decisions for the new corporate offices – we’re barely keeping it together! You may think product priorities come first, but have you tried to find office furniture that’s made for a circular building?

Then of course there was the latest software snafu that landed Apple in serious, “WTF is going on there?”, conversations across the spectrum of both computers, as well as general product awareness. For those who don’t remember…

Apple, the company, which sells itself on making sure all of its products, as well as any third-party suppliers don’t have any holes for security, or any other issues as to make sure (paraphrasing Jobs) “The shit just works as expected.” And will boot any and all out of their collaboration efforts or stores for even the slightest infractions. Had a embarrassing, amazingly giant security flaw that remained undetected, for far too long, in its latest operating system just last month, causing Apple to issue an apology, for the first time in years as to push, or force-load an update.

I’ll ask again – are you beginning to see a pattern here?

I’ve said it before, and I’ll say it again. Since Mr. Cook has taken over the reins he now seems to be worried about everything, and anything other than what truly matters. i.e., Selling product hype to Wall Street, rather than focusing first on selling great products that ship.

It would seem that once explicable Jobs mantra is not only no longer present, but may have been jettisoned entirely since the “operations guy extraordinaire” left to be the “Corner office guy of Wall Street.”

The problem right now for Apple, again, is two-fold. The First…

Developing great products that work and ship needs to be the true focus once again. For it’s becoming blatantly obvious – it is not.

And second: Before one decides to reap in all that rarefied air and vistas in the new “corner office?” Maybe one should be worried – very worried. Why? Because with every blessing usually there also comes a hidden curse. And there is one that’s almost as reliable as an Egyptian mummy’s. To wit:

 

(Source)

© 2017 Mark St.Cyr

What May Matter Most About The Tax Bill Is Attitude Reform Over Substance Reform

With the completion, signed into law “Tax Cuts and Jobs Act” officially entered into the books, removing the question of whether or not the republican congress could/would pass any of their original campaign promised legislation before year-end. (i.e., Obamacare reform, regulation reform, tax reform.) The next question, possibly with as much impending importance as that first, is two-fold.

First: “What does it all truly mean?” And second: “Where do we go from here?”

Let me be right up front and make my opinion known when it comes to this current legislation: I am not a big-fan primarily for these points:

One: I’m sick-to-death of any legislation that requires “re-authorization” or some other mechanism as to avoid taxpayers from incurring a sudden massive increase if they don’t vote a certain way or for a certain party in the future. i.e. Tax rules that expire (think: AMT as just one) which just so happen to fall during major election cycles. That’s not tax cutting under the umbrella of reform, or what was once known as such – that’s just can-kicking and re-holstering a loaded weapon. Knock that crap out of politics and now you’re talking true reform, or at least a start of it.

Two: This whole “pay for” argument. It’s bogus, disingenuous, as well as insidious. Paying for this tax bill, as argued, means the government does not go without one cent less. That’s not true tax cutting – that’s only tax shifting. Although I agree with many of the provisions of that so-called “shift.” What it does not do is reduce the overall burden of taxation for the entire populous.

To “pay” for this tax bill, what I believe would have been far more effective: is a 1% reduction across the board from the previous budget going forward for the next 7 years. This concurrent with an inability as to increase for any static growth imbedded as is done every year (i.e., inflation styled adjustments which can be endlessly gamed) would be true reformation, as well as truly “bigly.”

With that said, I’ll take it as a first start. Yet, not for what is actually contained within, but rather, for what it possibly signals in a psychological sense. For as flawed as I perceive this bill to be, what I believe to have also perceived is an underlying shift in the tenor, tone, and quite possible attitudinal resolve to actually work together on future legislative endeavors. i.e., There’s a chance, as ever so slight as it may be (for we are talking politicians here) that a return to the prior debacles of healthcare and regulatory reforms, with an intent of actually pushing through meaningful reform/legislation, might actually be plausible over the next few years. (I’ll pause here for a moment so we can both stop laughing. OK, let’s continue…)

There were two seminal moments in the final stages that truly caught my eye. The first was the combination of events involving Sen. Bob. Corker, then senator Mitch McConnell and House Speaker Ryan at the celebration rally. These alone were quite informative to those trying to pay attention, for there was a clear shift in direct proportion to the president.

Sen. Corker had made no bones about his opposition to not only the President, but nearly any and all of his ideas on legislation, as well as the process since the election. Then – this latest CNN™ interview happened. And all that seemed to change with it.

The now outgoing (important point) senator publicly revealed (another important point) he had spoken with the president and issued a subtle form of mea culpa stating he now understood what the president was going through in regards to the media. To wit:

During the call, Corker said he told Trump, “‘I have some empathy, if you will, with what you’re dealing with,'” concerning the media.

Then there was this…

Corker, who decided not to seek re-election next year, said he was surprised and troubled that a “social media phenomenon can turn real live people that you respect in reporting to start writing things that have been totally debunked, but writing things as if the opposite is true.”

The issue that’s revealing, from my perspective, is the senator did not need to publicly state anything. Usually, something like this is all well and dandy behind closed doors, or with a nod of tacit acknowledgment should it ever be revealed or known in public. But to publicly state it on one’s own, for no other reason then just making one’s opinion known? In political terms: that’s an epiphany type moment that affects not just one – but quite possibly – an entire party. Which brings me to the celebration rally with the two majority leaders McConnell and Ryan.

In what seemed was going to be just another form of “We did it!” big celebratory hoopla, when in actuality the raising of a beer-glass at the local pub would have more than sufficed as to represent what was passed. This one was quite revealing, in a way I believe needs to be pointed out for those whom may have not seen, or noticed.

Both Sen. McConnell and House Speaker Ryan seemed to actually be heaping genuine, as well as meaningful praise on the president for the passage of this bill. Yes, politicians of all stripes know how and when as to make sure there’s inclusion for all within the party. However, if you actually listen to their wording, along with delivery and postures? It’s hard not to see that something has changed. And that change could be profound in its meaning for actually governing and putting forth meaningful legislation going forward.

For suddenly – there seems to be cohesion.

Personally, I think the “Corker moment” was an epiphany understood by many. And if there’s even the remotest chance that there might be a willingness (because they’re no longer scared of their own shadows in the media, because they know it no longer matters) to put forth meaningful reforms and a president that will sign them? I’ll take it. Whether it’s true or not remains to be seen. Nonetheless, again, I’ll take it.

Here’s something else I’ll take when it comes to this legislation: The pass through provisions regarding businesses.

There are a lot of people far smarter and informed on what the mechanics of this legislation will actually do in the forms of what one will owe, or not owe in taxes than I do. But here again is where I feel the numbers for whom it can affect may be more important than the actual formulation of numbers contained within.

There’s a lot of hand-wringing about high wage earners possibly leaving the employ of some company as to take advantage of these new provisions and become self-employed and hire themselves back to their once current employers. My take?

Fantastic! Do it! Anyone and everyone that has the means and wherewithal to become an independent business owner should do it. I believe this regardless of the tax law. But if this current legislation is only a small move in the fulcrum that persuades one to do it, then as Nike™ famously said: “Just Do It!”

This nation was built by small, independent businesses. From the sole-practitioner (think from your local Dr. to your local plumber as a sample) to the small business that used to fill every downtown center or local industrial park. These were (and in some places still are) the businesses that used to employ the majority of jobs that were local, well-paying, and had a sense of purpose and connection to their surrounding communities. And they have gotten the shaft year, after year, after year for decades. If this helps them in the slightest? I’m all for it, and will look at it as a good first start. Again – first start.

In my opinion: The more it puts or enables people to move into the “independent contractor” side of the ledger – the better. Why? Easy: The more people who truly understand business (i.e., why there’s a need to make a net profit) along with the dealing with first hand the onerous taxes, regulations and more that are thrust upon it with every election cycle, by actually having to pay and follow those terms via being a business owner, rather than just an employee who doesn’t fully understand, comprehend, or worse even pay attention to any part of their deductions (think, FICA as one) on their pay stubs –  the better we all are.

We are facing a multitude of issues still staring us down in a way as if looking down the barrel of a fully loaded Howitzer. And the stakes, one could reasonably argue, (of which I am in that camp) have never been greater.

There is the possibility, again, as slight as it may be, that the aforementioned “tax bill” may prove to be more important in its substantive attitudinal adjusting, rather than its proclaimed tax substance. Or said differently using a sports analogy…

You could feel the momentum change – and with it – so the game.

It’s quite possible we may have just seen it as a nation. But then again, we are only in the first quarter. And if the mixing of football and politics has shown us anything over the last year. Maybe the players (e.g., the pols) should celebrate these little victories quietly, while continuing to push ever-the-more until the final tick has run off, before any larger celebratory actions take place.

Continuing with the football analogy – there are still 3 more “quarters” to go, as in political election years. And after all, for any clues as to what could go wrong?

Ask a Atlanta Falcon® fan.

© 2017 Mark St.Cyr

Addendum To “About That Whole Bitcoin Thing”

Early this morning I posted my thoughts on what was transpiring in the crypto-mania space. I started the article with the following. To wit:

“Over the last few months it’s been hard to have a conversation without someone asking me for my take on the entire BitCoin™ phenomena. My standard response has been, “I believe it all to be a mania, currently. But the underlying technology known as blockchain…blah, blah, blah.”

Well, it seems it wasn’t just me experiencing this same frustration, for one of my colleagues sent me the following (near laughing hysterically) from none other than Nouriel Roubini, commenting on the same about an hour ago. Again, to wit:

 

(Source)

Like the old saying goes, “Misery loves company.” At least for Mr. Roubini and myself…

At least that misery isn’t coming from owning any.

© 2017 Mark St.Cyr

About That Whole Bitcoin Thing

Over the last few months it’s been hard to have a conversation without someone asking me for my take on the entire BitCoin™ phenomena. My standard response has been, “I believe it all to be a mania, currently. But the underlying technology known as blockchain may have something to offer further down the road, because it works on the distributed ledger principle. After-all, the IMF itself has been issuing working or white papers on the subject for years. We’ll just have to wait and see how this all shakes out. But as far as the current ‘crypto-mania’ thing? Let’s just say – color me skeptical.”

This was usually met with either disbelief that I could say such a thing, or the usual, something along the lines of, “You just don’t get it!” type of dismissal.

I was also reminded near infinitum, precisely and usually verbatim what James Altucher the now self promoting, wildly proclaimed Bitcoin guru retirement strategist had used as a response to any naysayers. So much so I usually would abruptly end the “conversation” midstream and ask, “Then why are you asking me anything if he’s the expert?”

Again, it’s one thing to ask me for my opinion and dismiss it. That’s perfectly acceptable. It’s quite another to engage me in so-called conversation, then try to use any of my arguments as some type of foil to jujitsu into providing one responses, which are obvious to the other, they don’t truly understand what they’re retorting, other than regurgitating someone else’s words. The only thing worse is their believing it’s making one seem as if they’re the “informed” one.

Parrots can do similar – but last I heard, they’re not earning money for those insights. They’re put in cages and stared at for amusement, not practical or pragmatic advice. And personally I’m not taking on any more pets. Whether I can afford them or not.

So why do I even bring any of this up? Good question – and it is this…

In case you’re just waking up and you went to bed thinking of all the wonderful cars, yachts, McMansions and so forth you were going to purchase with your newly minted Bitcoins or other crypto. Well, lets just use as they say in Silicon Valley a “picture” to say what needs to be understood. Ready?

(Chart Source)

The above chart is Bitcoin priced in $Dollars as in what one bitcoin was worth. Remeber when one “coin” was worth as much as $20.000.00? Oh that was oh soooo long ago. Like last week.

As of today? Well the above chart represents the current price as of about 9:00AM ET. The bars represent daily increments. And if you click on the above chart, what you read is correct. As of this writing Bitcoin is down nearly $5000.00 overnight. So if you bought in yesterday at around $16000.00 and thought you were a BTFD genius? You’re not only not up, but worse, you’re not just down – you’re way, way, way (did I say way?) down.

The only thing more scary than the chart above is this:

The day is still quite young.

And for those who believe I’m unfairly pointing fingers at Mr. Altucher. As I’ve stated many times, I have nothing against Mr. Altucher, I’ve just called for caution about what he’s been professing of late. Nothing more. And for those who doubt my “self promoting” argument. Here’s just two screenshots of ads that have been near impossible to ignore and have been to my eye – everywhere. To wit:

(Screenshots of web ads Non-working)

 

 

 

 

 

 

 

 

 

 

 

 

These are those moments when “Where can I get me a Bentley®?” now begin to morph into something like “Can I list a Bentley on Craig’s List™?

 

© 2017 Mark St.Cyr

An Update To MSC Content No Longer Available

Hello all, Merry Christmas and Happy Holidays from everyone here at MSC/StreetCry Media.

This is just a blanket announcement as to answer some recent inquiries about no longer finding any of Mark’s content on other platforms where they may have resided for quite some time prior. An example would be Mark’s podcast offering on iTunes for one.

Mark announced earlier in the year that he was removing all content from any and all other sources as he prepares to launch his next endeavor MYTR.

Please Note: This does not include Mark’s postings on this blog or the reprints of those posts found on other venues. There is no change in that content channel.

As of today we were notified that the remaining venues have since removed any remaining content from their sites. Other examples such as Amazon or other book outlets such as Barnes and Nobles etc. have also since complied. Mark’s offerings are no longer listed per our request.

This is a dramatic shift in approach to business as it pertains to anything conducted on the web today. Mark is the one of the only higher profiled public figures we know of with a global reach, consolidating his offerings forcefully and intentionally making content for sale or exclusive to subscribers to be made available only on his own proprietary sites. No sharing or social media, No Youtube or equivalents such as Vimeo and others, No podcast vendors of any kind such as iTunes, Libsyn, Podcast One and more. Calling the above anything less than dramatic would be fitting of the term understatement.

There will be more announcements coming for when MYTR will be available. But it’s close, as in very close.

We just wanted to post this on Mark’s blog to alert any subscribers old or new as well as readers.

Once again, best wishes to all!

V.V. -StreetCry Media Partners

 

A Juxtaposition Moment Example In Real-Time

It seems that the digital ink was barely dry on my prior article when overnight (morning in Asia) a real-time example involving not only a few of the players, but the example industry itself seemed to have held a meeting and went through the process I explained earlier and moved on it. The player? SoftBank™.

So what was the move, and what does it imply, you ask? Fair questions, but I’ll let you decide. To wit:

Via the Financial Times™: “Didi Chuxing raises $4bn as it plots overseas push”

Who is “Didi” you ask? Didi Chuxing™ is the Uber™ of Asia. It is also the company out Uber-ing Uber in both competition for customers, as well as (wait for it…) actively being chased with “big fat wallets” wanting to invest it in it. The rewards for investing in Didi (as in Series funding) now has one particular advantage (and I’ll argue most) that the other has lost. What is that advantage?

A funding round still raises the valuation, considerably. The next funding round for Uber everyone both assumes, as well as has been reported, will be the equivalent of a down round, or more importantly – lowers its valuation, regardless of how they want to report the numbers. i.e., What ever it is said, or stated to be worth, everyone knows it’s just a ruse, for the bloom has long fell off this once idolized Silicon Valley rose.

In April of this year SoftBank had already invested $5 Billion in Didi. This latest round adds to that already sizable position. I’m going to go out on a limb here and surmise, that adding to that investment today, in light of the ever escalating legal issues that seem to be appearing daily in regards to Uber, that a juxtaposition moment was reached. i.e., Why exactly are we (SoftBank) waiting to invest there (Uber) when we could just easily invest here (Didi) and the valuation goes up, not down?

Or said differently – there’s your juxtaposition moment example (all conjecture of course) in real-time with real-world consequences.

You don’t add to an already sizable position into the demonstrated “Uber killer” in the largest growing markets if you’re still interested in buying heavily into that competitor with its ever-increasing legal issues galore and valuation issues. Let alone, have to sit and wait to see if they can come to some type of agreement as to take your money, while playing numeric alchemy with its valuation metrics and stock holders. All while they burn through cash in a way that would make Elon Musk nervous.

If the above isn’t enough writing on the wall, writ large enough, for most to understand its possible implications. Let me add a few other points for consideration:

SoftBank was joined in this latest funding round with the state fund of Abu Dhabi. Why is that relevant you ask? Fair question, and it is this. If one remembers, the last state fund with deep enough pockets to make a funding round worth it, was when Saudi Arabia did the same, only in Uber. The issue here? Abu Dhabi’s investment is taken for granted as increasing in value. Adding to Uber would be seen as diluting Saudi Arabia’s prior.

Distinction with a difference? A difference with a problem is probably a better question. But I would bet dollars to doughnuts – that question is currently being asked and aggressively assessed. Wouldn’t you?

Oh, I almost forgot: And I would imagine that would now leave one (e.g., SoftBank) with the added benefit of freeing up those pre-allocated $Billions for more immediately, report-able “profitable” investments elsewhere if needed. You know, like in anything with crypto-something-or-other in its name. I mean – did you know there’s an all out mania in that area going on? (snark intended)

The only thing to watch for now, and is truly the moment to watch for, is if, or when, there’s an official statement made by SoftBank in regards to that they’re no longer looking to invest in Uber. For if that happens?

Break out the remaining crying towels.

© 2017 Mark St.Cyr

That Juxtaposition Moment

There comes that moment when you need to decide precisely how, where, and why you’re going to deploy business capital, of any type. That “moment” is usually a three-part process.

First: The decision of “why” is made.

Second: The decision of “how.”

Then finally: When any vehicle that fits the “how” criteria is found – either acquire it immediately in as much cover-of-darkness as possible, as to not allow any competitive bidders to enter the fray.  Or, openly shop any-and-all potential acquisitions as to allow for others you may not have even contemplated prior, to allow themselves to be bid on, by you. i.e., Remember the adage, “Nothing attracts a crowd like a crowd?” Apply that same rationale only using a “big fat wallet.” You’d be surprised how many “deals” suddenly appear on what was once considered a “blank radar.”

Now, with the above for some context. Let’s apply this today, to any hypothetical company looking to invest as to expand its reach or presence, for what ever the reasoning.

So with the above now in mind, here are few headlines as of Wednesday morning of this week. Ready?

Unicorn? To wit:

“In Latest Blow For Uber, EU High Court Rules Company Must Be Regulated As Taxi Service”

“In another major blow to Uber’s ability to operate profitably within the European Union, the EU’s highest court ruled on Wednesday that the ride-hailing app company is, in fact, a transportation company, and its drivers should be subjected to all pertinent regulations for taxi and livery-cab drivers. The decision opens the US ride-hailing app up to tougher national regulation in Europe’s 28 member states. The judgment effectively shifts Uber’s legal status from a digital company to a transportation company, giving it less freedom from regulation in the EU’s single market, according to the Financial Times.”

ICO? (aka the “Bitcoin” crytomania) Again, to wit:

“Litecoin Founder Cashes Out, Sells Entire Stake After 9,300% Rally”

“Charlie Lee, the creator of the world’s fifth-biggest cryptocurrency, Litecoin, announced shortly after midnight that he was cashing in his profits after a torrid, 9,300% rally in the past 12 months.”

Or, because there is so much “mania” that people are willing to throw money – ask questions later. What appears at first glance to be a warning sign to investors, what can not be understated is the reason why.

Why, you ask? Fair question, yet better if you derive the answer for yourself, rather than me trying to convince you. Ready?

“SEC Suspends Trading In Crypto Company Which Soared To $11 Billion Amid Bitcoin Mania”

“The Securities and Exchange Commission cites concerns regarding the accuracy and adequacy of information about compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock.

As Bloomberg reports, through Monday, Crypto’s market value had surged to more $11.9 billion. The company invests in digital assets, and is developing source code for managing them, according to its regulatory filings.”

For those not seeing the answer? Let me spell it out for you: Eleven… Billion… $Dollars… near overnight.

Now to be fair, since that surge that “valuation” has been purged, because the CEO himself went on-air and openly admitted (paraphrasing) “They didn’t deserve that kind of market cap.”

Obviously this was a once-in-a-lifetime type aberration, right? Au contraire, once again, to wit:

“Microcap Net Element Explodes 280% Higher After Announcing Blockchain Expansion”

“…all that is necessary – and sufficient – is a press release mentioning the company’s name and throwing in the word “blockchain” in the same sentence (see Riot Blockchain and LongFin Corp), other public microcaps have decided that if that’s all it takes, then by all means they will gladly take investors’ money.”

Now that “juxtaposition” moment comes. i.e., You’re a company with a “big fat wallet” and you’re simultaneously, openly looking for “deals.” Do You…

Unicorn, and wait for a possible IPO that may never pay off, with more and more regulatory issues possibly forthcoming?

Or, do you…

Blockchain, and its current regulatory issues only because people are throwing money at these entities so fast, and in such vast amounts, they’re just having a hard time trying to keep up. For the sole reasoning that many of these new entries are creating $10’s of BILLIONS of wealth overnight, literally ex nihilo, to the point central banks themselves are blushing.

So, as I stated in my article over the weekend

On Monday morning, I would have had the conference room booked with the CEO and the Board as to make this case. And If I’m thinking it, you know there must be others as well – and that should scare the daylights out of anything toting a “unicorn” moniker.

Again, how this all ends is anyones guess. But as I once heard Seth Godin remark in describing a different topic, “There will be crying.”

I believe any remaining Unicorn tears will be the first to again moisten the gutters as good-of-a-first-bet, as any.

We shall see.

© 2017 Mark St.Cyr

Bitcoin: The Unicorn Slayer

And there they stood armed, shielded, clad from head-to-toe in gleaming Non-GAAP armor. The once gilded heroes of the “The Valley” known as Unicorns, determined to stand their ground, steadfast in their resolve, to prove to any remaining, willing devotees still wanting to believe in their magical powers known as IPO’s. That with their “it’s different this time” shielding and double-counting weaponry, that they could, indeed, not only stand up to these dark forces and times. But rather, rise above and vanquish any doubters or evil forces gathering against the “New Religion.”

Then, the blockchain army, led by the general known as Bitcoin, drew his gleaming blade, forged of bits, derived from the secret mines of the ether, ordered a charge. Then, backed by their more powerful ICO siege engines, pummeled any remaining faith of the once mighty “eye balls for ads” high priests into oblivion. Confirming to any-and-all that dared doubt whose offerings was superior. The cleaved heads, severed valuations and self-declared fortunes laid strewn across the ledgers as testament to the might of this now superior empire. Yet the lagging question always remains…

For how long, this time?

Magical thinking deserves fairytale inspired descriptions, which is why I penned the above tongue-in-cheek. However, that shouldn’t deter you from the seriousness of the underlying point. i.e., Magical thinking times are precisely where we are.

Years ago I first heard about the idea of “magical thinking” when I was introduced to the writings and work of James Howard Kunstler. Although he’s well-known (I’m generalizing here) for his caution on “big oil” related topics and the dismal affects regarding suburbia and modern architecture. His book “Too Much Magic” is a title and theme that just keeps popping front-of-mind every time I both read any financial/business news, or watch the “markets.” It truly is the best descriptor of our times.

There’s now so much magical thinking, along with actual practice, I believe Merlin views his crystal-ball in envy.

Trying to argue any form of common sense, or rational thinking is now viewed as if one is trying to work a spell on the other. All while speaking in some long-lost arcane dialect. And if you try using math which consist of 2+2=4 voodoo? The conversation is all but rejected in total, with the subsequent need-to-look-at-my-phone-now styled conversation stopper. After all, maybe the Kardashians’ are about to launch an ICO. Don’t want to miss that opportunity, right?

Not that long ago I asked the following about IPO’s. To wit:

“Have you noticed the near financial/business media blackout when it comes to anything like IPO’s and their spawning stable-mates known as “Unicorns?”

Remember when debuting an IPO was met with such media fanfare it allowed for the viewing public to fawn, or feel really insignificant (more like loser) for not being one of the “beautiful people” paraded across magazine covers, screens, or conference stages?

So alluring was the “next IPO celebrity” made out to be it probably made Hollywood’s PR machine envious.”

I’ll ask again: When was the last time you heard about an IPO, Unicorn, Series A,B,C -LMNOP funding round for adding 10’s of $Billions to an already deemed decacorn, or any “unicorn” for that matter?  ___________ (Insert crickets here)  And yes, “decacorn” is an actual term used in “The Valley,” because “uni” is so passé. e.g., Think Uber™ or AirBnB™. Don’t want to mix the single digit $Billions with the double digits’ now, do we?

How about Bitcoin™?

I know, it was a trick question. However, can the parents of the seven-year-old, still chanting “blockchain” in the back, please bring their child to order, for the sake of the group, so we can proceed? (TIA!)

Do you know what “blockchain” technology truly is and what it means? Maybe a better question: Do you care?

Is there an even better question? Maybe. How about: Does anyone really care?

Hint: call me crazy, but I’ll go with, nope, nope, and nope. But maybe the best question of all would go something like this…

“I’ll go with ‘Cryptocollectables’ for $300 Alex.” Question: “Name this equivalent of Beanie Baby® mania in blockchain form?” Answer: “What are Cryptokitties®” “Correct!”

And you thought unicorns were the ultimate mythical, magical mascots of delirium to ever enter the world of finance and business. My, how old and dumb you must now feel. What are you, like over 35? I bet you still have a landline in your house, don’t you? Geezer.

First it was the Federal Reserve and its casting of spells for economic prosperity via quantitative easing. Then, it was Silicon Valley borne Unicorns that were changing the way business (they claimed) should be done. Then it was the “markets” with their proprietary central bank affixed bullseye which allowed for IPO’s and cash-to-burn so large and bright, it made a Burning Man® festival pale in comparison.

But that was then – and this is now.

IPO? Fuggetaboutit! ICO’s (initial coin offerings) are where it’s all happening now. Oh yeah, and don’t “Bogart” the hopium, please. There’s plenty to go-round for everyone. After all, just mint your own if the current batch doesn’t suit your investing taste buds.

Again: Why deal with the endless chasing of ones tail, needing to replenish the ever-quickening, self-draining coffers with endless funding rounds, only to wait then add the possibility of being publicly humiliated (see Snapchat™ for for clues) when it all goes awry? That’s now soooo last year.

Now – you can just fire-up your own bank of computers (or anyone else’s you can hijack) and mint not only your own “coins.” But you can skip the whole going public thing, because the “markets” have already announced and cemented your “winning” ways via setting up virtual vehicles for active trading to go long/short these entities. All before they even go “public” as was once thought, or even vaguely understood!

Business plan? Real product? Real customers? Real anything? F-that! That’s the only thing that needs to be real.

And if you think I’m being hyperbolic? Here are just two points (you can read more here) that should state all one needs to know about what is currently transpiring. Actually, these two points alone should scare the pants off anyone blindly mortgaging their house, credit cards, 401K, kids tuition payments and more, to get-in-while-the-gettin-is-good type of investing prowess. To wit:

Lack Of Restrictions: ICOs are unregulated and able to avoid the routine scrutiny of venture capitalists or lending institutions. As of this writing (September 2017), there is no official regulatory body for the industry to comply with.

Flexibility Of Compensation: In return for the capital investment, ICO purveyors are not required to give specific compensation or ownership rights to the investor. Percentages of the new cryptocurrency, cloud storage or other services may be used in place of traditional IPO stock models.

As I type this Bitcoin and its subsequent aspiring offspring (e.g., Etherum™ et al.) are currently worth hundreds, upon hundreds of $BILLIONS of dollars in cold-hard cash equivalent. By the time this article goes to post? They could be worth $Trillions! By year-end I wouldn’t be surprised if James Altucher starts taking bids for how to by Mars, paid with Bitcoin riches. Yes, as crazy as that sounds, remember – we’re talking magic here. So anything is possible. (To be clear, I have nothing against Mr. Altucher. It’s only because he’s now seen, by many, as the face of an ever-growing “bitcoin” retirement guru cadre. Nothing more.)

You have to feel bad for the once mighty unicorn of days gone by. After the Federal Reserve stopped their own money printing ex nihilo operations, the reporting of strength, stamina, and business models of these once unassailable, magical, mythical business creations appeared beyond reproach. Then, overnight, the only press that seem to be able to garner is bad. And I mean just that, all bad.

Uber™ and its stable mate AirBnB are once again “Back in the news.” The issue? Uber’s stems from (yes, another!) possible coffer bleeding legal quagmire with accusations of illegal corporate espionage. And AirBnB? Europe seems to be taking a liking much as they did with Uber. i.e, As in enforcing laws, codes, and more. And when it comes to some of that “more?” Well, let’s just say, no matter where you may be staying: Remember to smile, because you could be on hidden camera.

Here’s another set of questions I believe no one is asking so, as usual, I’ll ask them.

First: What does one think the reaction at a SoftBank™ roundtable meeting would be if someone brings up the suggestion when it comes to making their next “investment? Here’s just one hypothetical, but I know if I were at that “table,” here’s what I would argue, tomorrow. To wit:

“What if instead of investing $Billions into an entity (e.g., Uber or other) where we have to use more computing power and PR just to spin calculate how we can state a few $Billion to now be worth $10’s of Billions, with the added possibility, we may never get to an IPO to begin with, where that stated valuation and more will be redeemed.

Flanked with the ever-increasing actuality of more and more potential legal liability, or lawsuit quagmires. Reducing the odds of ever making that possibility increasingly more unlikely. And instead: All we may need to do is just state: ‘We’re getting into the Crypto-business with both feet tomorrow. And, are prepared to allocate significant resources to this endeavor immediately?

An ICO could mint us $10’s of Billions near immediately. Just look at some of the latest entrants – most, if not all, currently lack or even have our size of potential seed capital. So why are we needing to look further into anything with an IPO in the future – when ICO’s are here, now, and in such a frenzy buyers are willing to pay just about anything – just to get in?”

That’s what I’d be waiting to say, as soon as the meeting started. And if there wasn’t one already slated? I’d make sure I booked the conference room myself with the CEO, Board, and whomever else I could get to attend. Asking it first thing when the office opened.

I’ll bet anyone dollars-to-doughnuts if I’m already thinking it – someone else already is, also. And any remaining unicorns, decacorns, or cash-burn junkies should assume the same. Because once one can create everything in-house, ex nihilo, unregulated, and in an all-out mania of which has now eclipsed the Tulip mania of the 1600’s, making it the largest ever?

It won’t be unicorn tears running down the gutters of the magical kingdom known as “The Valley.” It’ll be worse, much worse. The only thing worse might be this, if something like the following happens in conjunction.

When would/will Amazon™ declare (or Wall Street demand) it’s separating itself into two separate entities? i.e., Amazon the on-line retailer – and AWS™ – the crypto-computing powerhouse? After all, Overstock™ CEO is already exploring pretty much the same idea.

Could or would AWS do to Bitcoin what Amazon did to retailing? Think about that as one tries to recalculate their latest “coin” balance.

Just remember when playing in the “markets” – any and all losses are to be made payable via cold-hard cash if your “investment” prowess suddenly runs out of “bits.” That’s not mythical folklore, but rather, that’s a possible, if not probable reality. Yet, just like all good fairy-tales…

We still have to wait for the final ending, as the story continues to unfold around us. Or said differently:

“To be continued…”

© 2017 Mark St.Cyr