Day: January 7, 2019

F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it…get this)

From my article to end the year “2018: The Year That Laid The Experts Bare”:

IPO’s such as those being discussed by the likes of Uber™, Airbnb™ and others will be lucky to survive in 2019 let alone ever get to IPO nirvana should this rout continue. (as I’ve said since they started)

The last of the IPO venture capital saviors (i.e., SoftBank™, Tencent™, Sovereign Wealth Funds et al.) themselves are watching their own share prices getting pummeled. It may not be long when they themselves will need to raise capital by selling any and all “future bets” just to survive.

And here is the latest via the Financial Times™. To wit:

SoftBank to slash planned WeWork investment

Japanese tech investor will inject $2bn into shared-office provider, down from planned $16bn

Also, this “deal” will now not include the participation of SoftBank’s Vision Fund which already invested over $8 Billion. So now that anticipated $16Billion has not just been cut in half, but that half has been halved, then, halved again. And the original fund is not the source.

Can you say “Uh – oh?”

And for those who think this was just a lucky one-off where the timing of my above article just happened to coincide, here’s something 2017. And it’s just one of many. From my article back in July of 2017 in regards to WeWork™. Again, to wit:

Remember: Only in “The Valley” is it reported on, and accepted as an article of faith, along with a straight face; that a VC can turn a few $Million into a $Billion all based upon a standard of accounting equivalent to: “Because that’s what they say it is.”

Try saying that at your local bank if you’re trying to re-fi or buy a house. See how far you get. Yet, in “the Valley?” You may get “that loan” based on that “$Billion” stated on your balance sheet. Which is precisely why I bring this up.

Again, it isn’t the “accepted” math that was/is in question, (e.g., The alchemic miracle of accounting allowing $millions to now be claimed as $Billions) but rather, it was the size of this jump (e.g., $4 Billion) that the math allowed for, leapfrogging this company into the #3 position of all unicorns with a valuation of now $21BILLION.

But what do I know.

© 2019 Mark St.Cyr

Footnote: These “FTWSIJDGIGT” articles came into being when many of the topics I had opined on over the years were being openly criticized for “having no clue”. Yet, over the years these insights came back around showing maybe I knew a little bit more than some were giving me credit for. It was my way of tongue-in-cheek as to not use the old “I told you so” analogy. I’m saying this purely for the benefit of those who may be new or reading here for the first time (and there are a great many of you and thank you too all). I never wanted or want to seem like I’m doing the “Nah, nah, nah, nah, nah” type of response to my detractors. I’d rather let the chips fall – good or bad – and let readers decide the credibility of either side. Occasionally however, there are, and have been times they do need to be pointed out which is why these now have taken on a life of their own. (i.e., something of significance per se that may have a direct impact on one’s business etc., etc.) And readers, colleagues, and others have requested their continuance.

Update to: The Fed’s words…

I was just made aware that the Federal Reserve has changed its press conference schedule from the every other meeting ( or 4) to now there will be one after every meeting for 2019. (e.g., now there’ll be 8) And if that changes my thoughts in any way. Here’s my response:

No. As a matter of fact I believe it will bring even more volatility for these two reasons:

First: That means every meeting has to now be considered “live,” where an additional interest rate increase may be possible. Everyone will think this means that there’s now opportunity for the Fed to pause. That may be true, but that also means if the data (data the Fed focuses on) continues to be good, then the Fed can also accelerate. Doesn’t mean they will, but that does mean it’s a possability and will have to be factored in, regardless.

Second: This now means the Fed has twice as many opportunities to say, or not say the wrong thing, at the wrong time, which now doubles the possibility for increased volatility at every meeting.

As I stated earlier – it may not matter what the Fed says as to halting the already accumulating carnage. However, what they can say is the wrong thing (as well as not say if the “markets” are looking for it) at the wrong time something that can exacerbate any further market mayhem.

After-all, if everything was going along as swimmingly as they have been stating it has, i.e., “We got this!” Then why the need to increase the pressers at all? Think about it.

As always, we shall see.

© 2019 Mark St.Cyr