Unintended Consequences
Excerpt from Fiduciary Magazine
by Andre Peschong
Looking at the fallout on Wall Street, there has been great change in the financial industry and, in turn, some unintended consequences. The hedge funds that once numbered over 7,000 (my unofficial estimate as I couldn’t find a substantiated number) are now pared down to around 3,000. Venture Capital has retreated to higher ground by doing larger deals and more 2nd, 3rd and 4th rounds into existing portfolio companies. Private equity houses have largely been untouched, but they are suffering from the lack of exits. Three of the largest investment banking firms have gone under or been absorbed by larger traditional banks.
Southern California: The New Detroit?
Excerpt from SoCalTech
by Tom Taulli
Recently, the CEO of GM (NYSE: GM), Rick Wagoner, extolled the importance of electric cars. It does seem like a no-brainer, especially in light of environmental concerns and the soaring price of crude. In fact, the mega car company is exploring many alternatives, such as fuel cells, ethanol, hybrids and so on.
Of course, it’s all good news for a variety of companies in southern California, which are developing next generation car technologies. “Southern California is the home to a myriad of design studios for all the major car companies,” said Andre Peschong, who is a principal at Bridgewater Capital. “There is a talent pool of engineers, CAD design specialists and let’s face it, a car culture.”
Improve Your Business Game
Excerpt from Southland Golf Magazine
by Andre Peschong
I see parallels between the market and the deal-making environment that often accompanies golf. Is it any wonder that so many business deals get done during a round?
Golf is a game of confidence and concentration. There’s good concentration, such as setting up to a shot, and bad concentration, such as wondering when the beverage cart will pass by.
No Slack with SPACs
Excerpt from Blogging Stocks
by Tom Taulli
Equities are ailing. And yes, the IPO market is basically dead.
But there is a bright spot: Special Purpose Acquisition Corporations (known as SPACs). Essentially, this is a new-fangled public offering.
So, what’s going on here?
Well, I had a chance to interview Andre Peschong, who is a veteran investment banker and has his own blog, Deal Flow Diaries.
The Allure of Angel Investing
Excerpt from Forbes.com
by Andre Peschong
Angels are the new venture capitalists. Sound like a bold statement? Not so if you look at recent statistics.
Angel investing has been on a consistent upswing since 2003, and it is attracting high-net-worth individuals who want to take a more proactive approach to early-stage investing. According to Ernst & Young, since 2000, the number of venture capitalists has declined by 50% while the number of angel groups has more than doubled.
LOHAS: The Next Secular Shift
Taken from Seeking Alpha
by Andre Peschong
We all see the market grasping for some piece of news that will hopefully signal a market direction or at least a short term move. The bad news seems to be mounting not only in the US but also in the world economies. Mounting debt is still plaguing a recovery, while at the same time putting the inflation watchers on alert.
Grounded
By David Shabelman, The Deal, March 26, 2004
Amid a budding revival for initial public offerings this year, there have been no drkoop.com sightings, nor are there any IPOs in the pipeline akin to those of Internet toy retailer eToys Inc. or online grocer WebVan Group Inc., the two other famous Internet “growth stocks” of the late 1990s that ultimately went bust. Such speculative offerings simply aren’t possible these days. In fact, without profits and a high profile in a major technology sector, venture capitalists and entrepreneurs won’t find any takers among public investors. Says Venky Ganesan, a principal at Globespan Capital Partners: “Your average cookie-cutter software company with $40 million to $50 million in revenue isn’t going to go public unless they have a unique story. The underwriters will take you, but you will become a public market orphan, which doesn’t create value for anybody.” Ganesan should know. Earlier this month he dropped plans to seek a public listing in 2005 for one of his firm’s portfolio companies, Trigo Technologies Inc. Instead, he chose to hook up with IBM Corp., which bought the maker of product management software for undisclosed terms March 9. Read more »
New Stocks Use The ‘.com’ Ending Again
By Raymond Hennessey, Wall Street Journal, April 12, 2004
Being a dot-com is suddenly back in fashion.
After two years that saw many companies change their names to drop the tarnished suffix from their corporate names, potential IPOs seem to no longer feel there’s such a stigma. In the last several weeks, several companies with “.com” at the end of their names have filed for initial public offerings of stock, including salesforce.com Inc., Shopping.com Ltd. and Advertising.com Inc. Read more »
Accounting Unknowns Make Investors Wary of Chinese IPOs
By Elizabeth Wine, Financial Times, April 12, 2004
Investors are having a touch of accounting deja vu, but the less-than-forthcoming financial statements are not coming from American companies this time but from Chinese ones.
Reports have been trickling out that some of the hottest Chinese initial public offerings misled investors with false or incomplete financial statements, leaving some experts murmuring about the bursting of another market bubble. Read more »
IPOs Are Back – For Now
By Susan Kitchens, Forbes, March 29, 2004
Here come the IPOs again.
After a three-year drought, initial public offerings are creeping back into the market. Through the middle of March, 33 companies listed their shares on major U.S. exchanges, up from only five companies over the same period in 2003.
Last year, the market saw only 83 new listings raising $16 billion–the slowest full year for IPOs since the 1970s, according to Thomson Financial. Read more »