Here’s the S-1.
Is this company really worth the $100 billion or so implied by the IPO pricing? A few points of comparison: the market capitalization of Duke Energy is $29 billion. Target stores is $36B. Yahoo is $19B while Amazon is $101B and Cisco Systems is $89B. CSX railroad is $22B, Ford is $38B, and General Electric is $194B.
Do you think a $100B valuation for Facebook is realistic? What strategies and future environments could lead to this number being sustainable or even understated?
(I don’t have any direct financial interest in Facebook currently, but may do something with the stock at some point, more likely in the short than in the long direction. This post is for sharing of general information and discussion and does not represent financial advice.)
Month: May 2012
Why Obamacare is worse than understood by most and must be stopped.
The Supreme Court will rule on the constitutionality of Obamacare this year. The arguments and the issue which got the most publicity was the individual mandate. I don’t actually care much about this although it may well violate the Constitution. There are far worse things in the legislation and they should be emphatically rejected by the Supreme Court. The worst of the issues is discussed in detail here. This is a really frightening piece of legislation and I cannot imagine that the Court will let it stand. Of course, given the absence of argument, the Court will have to find this hidden provision itself.
Perhaps nothing in the Obamacare legislation embodies the top-down, command-and-control nature of Progressive healthcare more than the Independent Payment Advisory Board (IPAB), a 15-member panel of “experts” to be appointed by the President. There are three particular features of the IPAB that illustrate this fact: The IPAB will control all healthcare spending, public and private. The IPAB has been awarded near-dictatorial power. And the IPAB is designed to be a nearly immutable entity.
How is this accomplished ?
Specifically, Section 10320 (in the Managers’ Amendments portion of the legislation) grants the IPAB, beginning in 2015, the authority to limit all healthcare expenditures, that is, all healthcare expenditures, and not just expenditures by Medicare or government-run programs.
To emphasize this expanded authority, Section 10320 changes the name of the “Independent Medicare Advisory Board” to the “Independent Payment Advisory Board.” It directs the IPAB, at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private healthcare programs. Furthermore, it designates that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies “administratively” (that is, without any action by Congress).
Thus the federal government can control, under penalty of criminal prosecution of doctors, private health care spending ! This goes well beyond Medicare and Medicaid. It will prevent, unless stopped, people from spending their own money on health care.
That is not the worst of it. The IPAB cannot be changed or repealed by Congress. This is unprecedented in US law. Even the ill-advised Prohibition Amendment, promoted as another moral obligation by progressives after World War I, could be repealed by another constitutional amendment.
A quick reading of Section 3403 might leave one with the impression that the IPAB is a sort of Mr. Rogers of healthcare a mild-mannered, friendly, always-helpful, but ultimately undemanding agent for good. This is the impression imparted by the first few paragraphs of the Section, which paint the new entity as an “advisory” board, whose main task is to develop “proposals” and “advisory reports,” which “proposals” and “advisory reports” would solely consist of various “recommendations,” that ought to be “considered” for the purpose of cost reduction.
Nothing could be further from the truth. This language is simply another example of supplying a new law, which is far more radical than the authors would like people to know, with a soothingly misleading introductory paragraph. The IPAB is actually designed to be as all-powerful as it’s possible to be.
Natural Gas: Past, Present, and Future
The hot energy story of the last few years has been the vast expansion in the available supplies of natural gas, and the very significant economic implications thereof. I though it might be interesting to take a look at the past, present, and future of this commodity.
The first known use of natural gas was by the Chinese, circa 500 BC…they captured gas from places where it was seeping to the surface, transported it in bamboo pipelines, and burned it for a heat source to distill seawater and capture the resulting salt and fresh water. The modern gas era began circa 1800 with the use of gas for lighting–initially of streets and later of homes and other buildings. Since there was no network of gas wells and long-distance pipelines, the gas used for these applications was usually not true natural gas, but rather “town gas,” made by heating coal. (Gas stoves seem to have become popular circa 1880, and apparently had quite an impact….I’ve read that the term “gas-stove wife” was enviously applied to women who were so fortunate as to have one of these appliances and were thereby spared the labor of tending a wood or coal stove, and hence had some leisure time available.)
The transition from coal gas to true natural gas had to wait on the build-out of a long-haul pipeline network, which took place mainly from 1920 to 1960. Although electricity became the glamor “fuel” and displaced gas in many cases for cooking and heating, the generation of electricity itself has in recent years become a major source of gas demand. Natural gas is also important as a feedstock for the production of fertilizer and of various plastics. By the early 2000s, there were serious concerns that the US was running out of natural gas–see for example this 2003 TIME Magazine story. The article cites Alan Greenspan’s concerns that high nat gas prices would make us uncompetitive in many industries, as well as citing direct economic pain inflicted on consumers. The only solution seemed to be large-scale imports of natural gas via LNG (liquified natural gas) ships. (Gas is far more difficult to transport than oil, because it needs to be liquified in order to make the volumes manageable, which in turn requires refrigerating it to very low temperatures.) In late 2005, US natural gas prices hit an inflation-adjusted level of almost $16 per million BTUs.
The price is now about $2.50 per million BTUs. What happened?
Amazing Digital Technology
There are many blogging tools to use; over at LITGM we use “Blogger” which is owned by Google (and free) and over at Chicago Boyz and at other sites we use Word Press. Many of the up and coming sites are now on Tumblr, which looks pretty much like another blogging platform to me.
There was a Louis CK sketch where he talks about how amazing it is to fly on an airplane and connect to the Internet and all the things we take for granted while everyone whines about it. I felt the same way as I started to look at some of the new technologies available under Blogger.
Blogger just rolled out “dynamic views”. I am not a blogging technical expert but in laymans’ terms, you get a lot of real estate back that is taken up with static page elements like the blogroll on the side and post categories and comments. When you hover your cursor over these items, they “pop up” (dynamically) and then you can click on them if you wish else they don’t take up space otherwise.
Another advantage is that they load up your blog when you turn it on (you see the Blogger “gears” running) and then you can view it a bunch of different ways, from a “classic” view to a “magazine” view or “flip card” which is cool if you have a lot of photos because you can see them at a glance and click to get at the post underneath.
Like everything else, they are trying to get the bugs out at Blogger. When they initially rolled it out, you couldn’t see items like your blogroll / links because those “widgets” didn’t work with dynamic views. Some super-technical web nerds could make it work but the average person wouldn’t unless they wanted to hack html code. There are sites and message boards out there with many comments bemoaning the new technology and what is lacking but of course Google has added many of these widgets back so that they now work with dynamic views and at least you can see comments and labels (basically their version of tags or categories).
I turned “the most important site on the internet” Drunk Bear Fans into a dynamic views site and it is pretty cool. Since there is more page real estate (the tabs on the side only pop out when you hover over them) I was able to make the pictures bigger and I also did some other housecleaning. This is more of a test bed than LITGM so I will keep working over there until it is ready for “prime time” and then maybe we will kick over LITGM, too. For now we are looking at the header because you still have to work on that in html to get the great pictures up there that Gerry inserts but I am sure one of the tech guys at Google is working on that in a frenzy and that will be in some upcoming version.
It is simply amazing how far the technology has come on blogging and web development FOR FREE. Dan was chuckling at how much just the hard drive would have cost back when we were in college 20+ years ago to store the pictures, movies and other elements associated with a site like LITGM, which also is free along with all the development time Google has put into this platform (plus the fact that they bought the company that made the original technology in the first place).
I was in the dot.com “boom” era in the early 2000’s in the middle of all the companies that imploded. I can tell you first-hand that building a site that a 10 year old could do with dynamic views would have cost millions and millions of dollars, and it would have crawled. The cloud based infrastructure that these sites use and the power of the tools that they give developers and non-developers alike FOR FREE is amazing. For a couple of minutes it is worth stepping back and reflecting on that. Then back to complaining about everything, just like Louis CK says.
Cross posted at LITGM
