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Why Twitter Could Be Doomed

Mar 20, 2012, 7:00 am EDT
Why Twitter Could Be Doomed

Last week on Bloomberg TV, Elevation Partners’ Roger McNamee said Twitter was “being destroyed by a lack of focus.” This may seem over the top, but keep in mind that McNamee has a pretty good track record for spotting strong businesses. Some of his investments include Facebook and Yelp (NYSE:YELP).

And McNamee isn’t alone in his assessment. Gawker recently had a grueling post on Twitter, with a title of “Twitter’s Secret History As the World’s Worst Tech or Media Business.” Consider that according to eMarketer, the company generated only $140 million in revenues last year — and was deep in the red. This compares to Facebook’s $3.15 billion in revenues and $1 billion in profits. Twitter also pales in comparison to other social media/networking companies like LinkedIn (NYSE:LNKD) and Groupon (NASDAQ:GRPN).

It seems that the big money-makers on Twitter are celebrities. After all, they often earn anywhere from $20,000 to $100,000 per tweet. Unfortunately, none of this goes to Twitter. Read 

6 IPOs on Tap for This Week

Mar 19, 2012, 11:56 am EDT
6 IPOs on Tap for This Week

The IPO market will be busy this week, with six offerings planned. Here’s a look at the more interesting ones: ExactTarget

ExactTarget (NYSE:ET) operates a cloud platform that helps customers with marketing, such as with email and social media. The goal is to leverage corporate data to develop targeted campaigns. Last year, revenues increased by 55% to $207.5 million. ExactTarget has more than 4,700 customers, including Groupon (NASDAQ:GRPN), Microsoft (NASDAQ:MSFT) and Priceline (NASDAQ:PCLN).

The company plans to issue 8.5 million shares at a range of $15 to $17. The underwriters include JPMorgan Chase (NYSE:JPM), Deutsche Bank (NYSE:DB) and Stifel Nicolaus Weisel. Read 

The SEC Charges 3 in the Secondary Markets

Mar 15, 2012, 11:42 am EDT
The SEC Charges 3 in the Secondary Markets

Yesterday the Securities & Exchange Commission filed charges against the operators of two investment funds that focus on pre-IPO shares such as Facebook and Twitter. There was also a settlement with SharesPost, a company that enables the purchase of shares of privately held companies through an online exchange.

Over the past few years, trading activity in these gray markets has surged, which has alerted the SEC to potential fraud and misrepresentation to investors.

Now the SEC has charged the founder of EB Financial Group, Laurence Albukerk, with not adequately disclosing fees. Albukerk has agreed to give back $210,499 in profits and pay a penalty of $100,000. Read 

Demandware IPO Surges Over 50%

Mar 15, 2012, 11:24 am EDT
Demandware IPO Surges Over 50%

Last night, cloud operator Demandware (NYSE:DWRE) issued 5.5 million shares at $16 in its IPO. So far in today’s trading, the stock is at $24.50.

There seems to be no end to investors’ appetite for cloud deals. Other recent IPOs — Jive (NASDAQ:JIVE), Bazaarvoice (NASDAQ:BV) and Brightcove (NYSE:BCOV) — have also  performed strongly.

Demandware’s platform enables enterprises to easily launch e-commerce sites. But it offers more than website creation — the system also allows for mobile apps and even in-store kiosks. Demandware is also exploring interactive television, which could be a boon for e-commerce. Read 

Behind Zynga’s $400 Million Secondary Offering

Mar 14, 2012, 12:05 pm EDT
Behind Zynga’s $400 Million Secondary Offering

Zynga (NASDAQ:ZNGA), which is the leading social gaming site, has filed for a secondary offering for $400 million. The underwriters include Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS).

It was only back in mid-December that Zynga pulled off its high-profile IPO, which raised $1 billion. While the offering got off to a shaky start, the stock is actually now up 36% from its IPO price of $10 per share.

The secondary offering isn’t meant to raise capital for the company. Instead, it will be a way for Zynga’s existing shareholders — such as venture capitalists — to cash out some of their holdings. Read 

Carlyle Principals Get a Huge Pre-IPO Payday

Mar 13, 2012, 2:12 pm EDT
Carlyle Principals Get a Huge Pre-IPO Payday

The principals of private equity firm Carlyle Group — William Conway, Daniel D’Aniello and David Rubenstein — took $398.5 million in tax-deferred dividend distributions in 2010, which came from a $500 million investment from Abu Dhabi’s Mubadala Development, according to Bloomberg.

Carlyle plans to come public within the next month or so.

In the private equity game, personal compensation seems to be the main priority.  Consider that in 2011 the Carlyle principals got roughly $138 million each. And this was not unusual. KKR’s (NYSE:KKR) Henry Kravis and George Roberts bagged $94 million each, Blackstone’s (NYSE:BX) Stephen Schwarzman received $148.5 million and Apollo Global Management (NYSE:APO) Leon Black got $104 million. Read 

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