This is the week that Facebook is actually expected to file its S-1 for an IPO. I was interviewed by Market Watch for this story. The key to the Facebook valuation is whether it can convince investors that it is creating a new media environment that can sustain its business. Stay tuned.
Facebook IPO is the talk of Silicon Valley – Therese Polettis Tech Tales – MarketWatch.
Finally, the HP board is getting serious as this story in the Mercury News today suggests. I was interviewed for the story but not all my comments made it in (which is normal).
Holdovers from the “Spygate” days are now disappearing. The real challenge now is to find a serious CEO who understands how to manage what remains a serious engineering and science workforce. Meg Whitman is a placeholder who cannot hold that kind of culture together.
HP lost a big step when it missed the importance of social and mobile. The “user” revolution that companies like Facebook and Apple recognize makes HP look like a Cold War behemoth.
HP trims board in wake of controversies – San Jose Mercury News.
A serious empirical study suggests that Wall Street insiders do indeed engage in inside trading.
A grim and powerful reminder that the long awaited democratization of China – which so many liberals claim would follow with WTO membership and globalization – remains far away.
3 Monks’ Deaths Show Rise of Self-Immolation Among Tibetans – NYTimes.com.
As long term followers of my blog may recall I am a big fan of the work of economics writer Eamonn Fingleton, whom I count as well as a personal friend. Eamonn has been a keen follower of economic development in Asia. He has written several very important books that deserve even a larger readership than they have already achieved. The opinion essay he has in tomorrow’s New York Times, link below, may help.
Eamonn succinctly makes the case that the Asian economies get something right – that there is an alternative to the Washington consensus and as of yet American liberals have yet to really grasp this. Japan and now China are engaged in capital intensive investment that also pays attention to the risks of unemployment. Both countries, particularly China, achieve this in part by authoritarian forms of politics. But they do not shy away from the link between manufacturing and global economic competitiveness.
In the wake of a devastating economic crisis and the response of movements like Occupy Wall Street it is high time that the American left articulate a new approach. These days it seems that only Sarah Palin and Rick Santorum know that there is a working class in this country.
If one wanted further confirmation that we now live in the era of “fictitious capital” this end of the year headline in today’s FT was a stunning reminder.
I am working on an article that applies the theory of fictitious capital to our understanding of corporate law. One way to begin to understand the issue is to ask: what was the real value of your investments or assets a year ago and what are they worth now. It is hard to think that they are really worth some ten percent less in any fundamental way.
But in retrospect they were clearly over valued. There was more fiction than fact than we had understood.
I was interviewed by the New York Times today regarding illegal trading in a firm’s securities by employees of that firm. A senior Facebook employee has been fired for allegations of “insider trading.”
There is no way, of course, to know whether the firing is justified or if the former employee will face a lawsuit or civil or criminal investigation. But all of those are possibilities when insiders buy securities from or sell securities to others while in possession of material non public information.
The analysis in any situation is complex but a useful rule of thumb is “Disclose or Abstain” – namely, if you are a corporate insider in possession of material information that outsiders are not aware of you should either disclose that information to them before engaging in a securities transaction or else do not trade.
Of course, most material information should not be disclosed willy nilly by employees – it is in essence an asset that belongs to the corporation (and its shareholders and the corporation may not want the information disclosed (even to its shareholders)). In fact, our securities laws allow corporations to keep significant amounts of information confidential for periods of time. We have a periodic disclosure regime in the US not a continuous disclosure regime.
That makes it very difficult for insiders to engage in securities transactions which is something that some people forget all too easily.
First Netflix, now Google/YouTube. Silicon Valley’s technology companies continue their assault on the aging business model in Hollywood. Netflix announced recently that it had purchased exclusive rights to distribute a new TV show produced by Media Rights, a group linked to talent agency William Morris Endeavor. Now YouTube is talking about doing deals through talent agents with star actors to produce content for distribution on its popular platform.
Google has been trying for several years now to appropriate centuries of intellectual effort by writers by scanning books and yet not paying royalties. Since it is very difficult for authors, especially those who are no longer alive, to organize to defend their interests, the company has been able to strike deals with intermediary groups (who appointed them?) such as the so-called “Authors Guild” to pay nominal royalties where authors could be located.
But the patent inequities of the arrangement convinced a US district court judge to scuttle the deal. A US Justice Department investigation of the Google maneuver is also underway.
One tactic used by Google that caught the judge’s eye: the private company requires authors to “opt out” of their attempt to take author’s works and make them available on their computer system rather than “opt in” – this greatly disadvantages groups like widely dispersed and poorly organized authors. Berkeley Law’s IP law professor Pam Samuelson wrote about the issue in greater detail here.
The Wall Street Journal reports that Egypt had begun arms shipments to Libyan rebels. Had this effort been expanded into full blown support by Egypt for their Libyan brethren it might have been enough to turn the tide in Libya and prevent Big Power states led by France and the US from intervening. That would have been a far better outcome for the wider future of the democratic wave sweeping the Middle East and North African region.
Now, however, the Big Powers – which to date have only brought the IMF’s and World Bank’s neo-liberal reforms to the region – will have gained a significant role in influencing the MENA revolution. They will try to shape it in their interests.
In fact, the willingness of Egypt to help Libya may have frightened the US into acting preemptively lest they lose all influence in the region. Of course a key role was also played by “State Department Socialists” like Human Rights Watch and other groups that have developed the theory of “humanitarian intervention” as a new form of fig leaf for Big Power intervention in the region and elsewhere. I have written on this development here.