“Shareholders are rethinking their position in Facebook”

On some level we all believe that certain companies and brands are a sure thing.  We think this way without doing any in depth financial analysis.  What influences our thinking is our perception of  these companies and brands.  If companies have been around long enough, and they master the art of brand awareness through advertising, we naturally assume these companies and brands are money makers.  We can all name three companies, without damaging any brain cells, that we believe are a sure thing, Apple, Coke-Cola and McDonald’s.  No deep contemplation required, it’s right there at the tip of the tongue.  The reality is these companies have a storied history, and in Apple’s case, a history of ineptitude or at the very least questionable business decision making.  Hard to imagine today by there was a time when you could point to Apple as an example of what not to do as a business.  Clearly that’s not the case today, and Apple today is one of the most successful and recognizable brands in the world.

 In today’s world brand recognition and awareness does not guarantee a sure thing.  There’s been two recent examples of companies who bought into their own brand appeal, and concluded that investors would over-pay for the right to have a piece of the action.  I enter into evidence Facebook as exhibit “ A”, and Manchester United as exhibit “B’.

One of the most anticipated IPO’s in recent memory was Facebook.  Investors were salivating at the opportunity but not nearly as much as the principles of Facebook.  Investment bankers representing Facebook believed that the  Facebook brand would lead investors to set aside sound investment principals.  It was assumed that investors would pay a premium because it was the Facebook brand.  Hubris?  Hype? Greed?  They all played a part in Facebook initial IPO and present day values.  Facebook stock took a major hit last week, and shareholders are rethinking their position in Facebook.  Goldman Sachs has a stake worth $900m in Facebook, and they along with Microsoft can sell their stake as of August 16th.  What to do?  Well, they’ll have to think about Facebook loosing $38.8 billion in market value since the IPO.  It’s also estimated that over the next 9 months about 1.9 billion shares will become available as compared to the the fewer than 500 million shares available today.  Does the strength of the brand trump supply and demand principals?  You don’t have to be Warren Buffet to come up with the right answer.

Is there a sporting franchise with greater brand recognition than Manchester Untied?  Soccer may not have the appeal in North America that it does on every other continent but there’s a good chance that even the uninitiated to the wonders of the beautiful game would recognize the name Manchester United.  It’s been estimated that United is the most valuable franchise on the planet, get ready for this, worth an estimated $2.3 billion.  As sure a thing as it gets. Almost.  Manchester United debuted on the New York stock exchange on Friday, anticipating share value to range between $16 to $20.  The market spoke and settled in at $14.  A partly $100m less than what the owners anticipated, and they’ll have to settle on the $230m which was raised in the IPO.  No one is going to shed any tears for the owners of  Manchester United and the Tampa Bay Buccaneers of the NFL, the Glazer family.  Other than the Glazer family maybe, a debt load of $661m for the soccer team alone is a big number to crack every month. 

 So what will we make of Facebook and Manchester United’s foray into the world of IPO’s? Well, the principals are worth a lot of money and so are their respective companies. However, it’s clear that investors  are not willing to pay an inflated priced for chic alone. 

 Until next time,

 Cheers.

Oh sure, we’re winning a few medals in London but the Olympics are fleeting. Before you know it the Olympics will be over and we can all go back to watching our favorite programs on T.V.   Don’t get me wrong, we’re proud of our athletes but there something bigger happening which has brought our great nation together.  Drinking beer!

Try as I might but I had difficulty finding a good news story about a company doing really well with a connection to Canada,  until I came across this gem in the National Post.  No one, and I do mean no one can convince me that we as Canadians didn’t play a part in the success of this company. It’s summer time in Canada, and it’s what we do.  Just remember the next time you twist off the  cap on a bottle of beer you might want to think of buying some stock.  Like Pavlov’s dog.

 Until next time

 Cheers.

Molson Coors profit beats, but new unit disappoints

 Molson Coors Brewing Co reported quarterly profit that blew past Wall Street estimates on Tuesday, helped by an improved performance in its U.S. business and the addition of operations in Europe.

The maker of Molson Canadian, Coors Light and Blue Moon beers reported net income of US$105.1 million, or 57 cents per share, in the second quarter, down from US$222.8 million, or US$1.18 per share, a year earlier.  Excluding one-time items, including financing and acquisition-related charges, earnings were US$1.38 per share. On that basis, analysts, on average, were expecting US$1.19 a share, according to Thomson Reuters I/B/E/S.  The company acquired East European brewer StarBev in June in a US$3.4 billion deal that expands its presence outside of its three core markets of Britain, Canada and the United States.  Net sales were US$999.4 million, higher than US$933.6 million a year earlier and analysts’ estimate of US$934.8 million.  The company sold 13.9 million hectoliters of beer, a 6.4% increase from the prior year.

 Earlier Tuesday, MillerCoors – the combined U.S. operations of Molson Coors and SABMiller – posted a 9.1% rise in net income, driven by price increases, a move toward more expensive beers and continued cost savings.

Full Article here.

 © Thomson Reuters 2012

“What makes this award a little sweeter is that the CAAMP Mortgage Forum 2011 beat out two large American conferences.”

I had a new blog all crafted and ready to be posted today but I had to set it aside.  Why?  Because I received some fantastic news on Monday morning that I had to share.  CAAMP Mortgage Forum 2011 was the recipient of  another award over the weekend.  This is now the second award that the CAAMP Mortgage Forum 2011 has received.  The most recent award was from the International Events Society.  The ISES awarded CAAMP the “Best Meeting Conference over $250K”.  What makes this award a little sweeter is that the CAAMP Mortgage Forum 2011 beat out two large American conferences.  The sense of pride and accomplishment has nothing to do with an inferiority complex.  We can do anything as well as they do South of the boarder and given the state of our respective economies we’ve demonstrated that we can do a lot of things better north of the 49^th parallel.  What makes this a little sweeter for me is based solely on the fact that Canada’s Woman soccer team lost to the US woman’s team over the weekend at the London Olympics.  The loss was a direct result of shameful officiating and the referee in charge of the match should never be allowed to officiate a match of such significance again.  It was gut wrenching to watch our gal’s come out on the short end because of an officials ineptitude.  Our Woman’s soccer team have dedicated years of training for this moment, and as far as I’m concerned, they’re true champions.

Okay, I’ll get off on one soap-box to jump on another.  We won, hands down fair and square!  I’m so proud of the staff at CAAMP.  Putting a conference together like ours takes extraordinary effort.  It’s easy to take for granted the work that is required to pull off an event of this magnitude.  The truth is the CAAMP staff has spoiled us a little.  It’s easy to assume that every conference is like ours and that every conference is as cost effective as ours.  As someone who’s attended many conferences outside of Canada, I can honestly say that we’re very fortunate.  From sheer size to quality and cost, we are the best.  And now we have some hardware to prove it.  Take a bow Michael Ellenzweig, Cara Shulman, Alison Cousland, the organizing committee and all the staff at CAAMP for making it happen.  Most importantly, thank you to all the Mortgage Forum sponsors, and those who attended.  Without your collective support the conference doesn’t happen.

Thanks to our sponsors, Mortgage Forum 2012 in Vancouver promises to be bigger and better.  Hopefully I’ll see you in Vancouver from November 25 -27, 2012.

Link to Mortgage Forum 2012 Conference site

 Until next time,

 Cheers.

I hate it, the end.

Just kindling, well, not about hating it but the end part.  One thing I’ve learned is you get what you pay for.  A friend of mine, John Novak, is the proprietor of the moving company Tippet-Richardson.  The company has been around for many years, and their reputation for quality service is well deserved.  A little pricey but as John has reminded me, on more than one occasion, “you time is worth money and Is the best use of your time packing boxes?”  Up until now I haven’t told him he’s right.  If you’re moving soon and you need a mover, give them a call.  A good moving company can eliminate a lot of stress.

I also learned that when you move you get nickeled and dimmed to death.  From the gas, water, electric and cable companies, all charge a disconnect fee as well as fee to start services again when you move into your new home.  Why?  Because they can.  God forbid getting someone to agree to pay a renewal fee for their mortgage, that’s simply preposterous.  But it’s perfectly acceptable to pay a reconnect fee for the privilege of watching TV. 

I’ve learned that the land transfer fee in the city of Toronto boarders on criminal.  Mayor Rob Ford promised to do away with the fee when he was campaigning, and yet here I am cutting him, and the province of Ontario, a cheque for an obscene sum of money.  Mr. Mayor, I’ll give you a pass on the land transfer tax if you provide me with added services.  Like picking me up every morning and giving me a ride to work, by piggy-back.

I also learned that the sound of boxes being tapped is really annoying.  It’s right up there with nails scratching a blackboard, a dentist’s drill and Joan Rivers voice.

Until next time,

Cheers.

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