Tag: investment

Data based law investment is with us

stupid-lawyer1Two Harvard undergraduates have come up with an evil service which uses data to work out if a civil litigation is worthwhile fighting.

The process allows investors to cover the cost of a lawsuit in exchange for a share of the financial settlement which was what billionaire Peter Thiel did when he secretly funded a lawsuit from Hulk Hogan against Gawker Media.

The new start-up is called Legalist and uses an algorithm  to look at civil lawsuits to predict case outcomes and determine which civil lawsuits are worth investing in.

Legalist cofounder Eva Shang has received a $100,000 investment from Thiel’s foundation to build the startup. She told Business Insider that the Gawker lawsuit is something that the company would be staying away from. Instead, the company will be focusing on commercial and small-business lawsuits.

Legalist says it uses an algorithm of 58 different variables including, the presiding judge is and the number of cases the judge is currently working on. The algorithm has been fed cases dating back to 1989 and helps people figure out how long a case will last and the risks associated with it.

In a presentation at Y Combinator’s Demo Day on Tuesday, the founders claimed that the startup funded one lawsuit for $75,000 and expects a return of more than $1 million. Shang says the $1.40 is earned for every $1 spent in litigation financing, which can prove to be a profitable enterprise when you’re spending hundreds of thousands of dollars.

So it looks like there will be a world where investors can invest in lawsuits and clean up.  Has the world gone stark raving mad? [Yes.ed]

Google flings Schmidt at Myanmar

Google exec Eric Schmidt is continuing his Axis of Evil world tour and collected his badge to become the first high-profile tech company executive to visit Myanmar.

Schmidt, who recently visited North Korea, apparently sees money to be made in Myanmar after reforms in that country which prompted Western nations to ease sanctions following decades of military dictatorship.

Schmidt has also visited Seoul, Taipei and Beijing and is to speak at a technology and communications park and meet with government officials.

Myanmar’s military stepped aside and a quasi-civilian government was installed in 2011. There have been waves of political and economic reforms which Schmidt hopes to surf for extra business.

According to Reuters, the country formerly known as Burma is an untapped market for most technology companies with mobile penetration in the country of 60 million of just five to ten percent.

While Schmidt’s visit to Pyongyang, which Google described as a “personal” trip, was controversial, this trip apparently falls within his mandate as executive chairman.

Myanmar’s planned modernisation of telecoms infrastructure and expected boom in mobile phone usage will pave the way for the entry of companies such as Google.

In February the US Treasury Department issued a general licence for four of Myanmar’s biggest banks, two of which are owned by tycoons associated with the former junta.

Many leading firms in Myanmar are still controlled by businessmen subject to sanctions, but Western companies are starting to move in after the implementation of a new foreign investment law.

By the way, Schmidt has a new book coming out. Dubbed The New Digital Age, it’s due to hit bookshelves in April, was co-authored with Google Ideas chief Jared Cohen.

The Wall Street Journal, which got its paws on a copy, said that the authors criticise China for being an enthusiastic “filterer of information” and a “prolific” hacker of foreign companies. 

Samsung throws more cash into Kunshan plant

Samsung is planning splashing cash on expanding its presence in Kunshan, China.

According to a report by Xinhua news, the company will spend around $1.7 billion at the plant in east China’s Jiangsu Province over the next five years.

Samsung can afford it. Last week the company announced that in the final quarter of 2012, it hit £4.1 billion in net profit.

The cash injection is in addition to the estimated $81 million, which the company threw at the plant during 2008, when it was initially set up, through to the end of 2012.

The new investment is said to focus on gaining new business in the competitive smartphone area as well as help Samsung build on its chip business.  The company will use the money to build workshops, purchase equipment and set up research institutes within the plant. 

Samsung is already busy building a $7 billion chip factory in Xi’an, northwestern China.

Intel moves into Burma

Now that Burma’s generals have stopped killing its citizens, Intel thinks that the time is right to move into the country.

Apparently the company has plans to begin providing its technologies via local Ingram Micro distributor KMD next year.

It will mean that Intel CPUs, motherboards and solid-state drives will be the first to get a foot in the door to the developing economy.

Uday Marty, managing director of Intel’s business in Southeast Asia, said that Chipzilla had been encouraged by developments in Myanmar and believes that now is the right time for Intel to be supporting the nation’s growth.

He said that the chip maker would help provide technologies and education programmes. It would help to improve the social and economic welfare and prospects of the people of Myanmar, the company claims. It is also looking at exploring partnerships with the Myanmar government on education and digital literacy in 2013.

Intel’s Thailand office will reportedly play a significant leadership role in sales and marketing, Marty said.

Of course the fact that the country is restructuring after years of isolation and needs technology to bring it up to par, and that Intel is the first on the scene with a lot of chips it can’t shift in other countries, is nothing to do with it.

How Google, Qualcomm, SAP decide to invest

How do money men in some of the world’s biggest technology companies decide where to invest their considerable treasure piles? Mike Magee found out at the White Bull conference, 2012, Barcelona.

There are different methods to the money. Speaking to the audience (ChannelBiz UK) Google’s Yves Cornaz pointed out that when it buys, the bought become Googlers overnight.

But the investment comes in mostly through product teams. According to Cornaz, the product teams get a clearer picture day-to-day of companies that are cropping up, which new companies are coming to light, and how. “We do some of our own analysis but it’s a bit harder for something to come out to stick,” Cornaz said. “In terms of process we spend quite a bit of time with the founders and our team inside”, to make sure they are excited about Doing No Evil at Google.

Though, he pointed out, the founders are “very much involved” with all M&A decisions.

Jason Ball, of Qualcomm Ventures, said that late stage companies, which are pulling in hefty revenues, tend to walk in through the front door, though this process can take six months to a year. “If we write a multimillion cheque, the top ranks of the company will be involved,” Ball said.

But, for the early stages, he admits he is on the hunt: making it known that Qualcomm is prepared to write a large cheque. “For normal seed programmes, two or three of us will decide and write a €200,000 cheque”.

At the moment, Qualcomm wants to sell more chipsets and is keeping both eyes open for businesses it can invest in to further that aim. Big on the agenda, as we wrote last year, is the internet of things, which the company believes will help it sell yet more chips. 

For SAP Ventures’, the company’s Jorg Seivert said there is a range of elements to pick from, including within the company at SAP Labs. “For the most part, we look for opportunities like this event [White Bull] or connecting to other VPs that we’re friends with,” Seivert said. As for the investment committee, there are six partners on it, and the vote goes to four out of six.

Why Mark Zuckerberg needs a makeover

Every CEO has their own “unique” sense of style.

The late Steve Jobs never went anywhere without his always buttoned, never belted trusted jeans and turtleneck, while ol’ Steve Ballmer prides himself on his polo necks, which he lovingly alternates in colour and style.

However, there’s a new kid on the fashion block, looking to take the tech style crown from right under these CEO’s feet – and that’s the young Mr Zuckerberg.

It wouldn’t be hard for the Facebook CEO to rise to the top of the Facebook fashion brat pack.

He hasn’t got the paunch of Mr Ballmer, or Paul S Otellini’s eyewear. He could carry off that sleek tailored Prada suit and show off those eyes – perhaps with a tinge of eyeliner – since it’s the fashion now.

But Zuckerberg has his own line of style in mind. And that’s – wait for it – pyjamas.

The CEO turned up at a meeting with prospective investor Sequoia Capital wearing the nightwear. Not only is this the most unprofessional you can get but also a terrible faux pas.

In fact it’s a cardinal fashion sin with this attire even being banned in Tescos – Mark, that really says something.

Now, experts are claiming that the Facebook chief needs to fix up, and look sharp if he wants to impress the fat cats.

Michael Pachter, an analyst for Wedbush Securities, told Bloomberg TV that the hoodie and casual attire did not show investors that Zuckerberg was serious about business.

Perhaps dressing like a college kid makes Zuckerberg feel young, or perhaps he’s going for the more down and out look, not looking out of place in Zooland’s Derelicte – perhaps if he looks the part people may bung him a pound or two.

It seems to have worked as the CEO is worth billions. Now, where did we put those old sweatshirts and trackies?

Samsung goes on buying spree

While the rest of the world is sitting hoping that the world economy will not collapse, Samsung has said that it will increase its investment this year to a record $41.4 billion.

The cash will be spent will be in everything from building factories to research and development activities to doing mergers and acquisitions and hiring.

As Reuters points out, it shows how much difference there is between the Samsung and uts faltering rivals.

Samsung tends to chuck money into new technologies ahead of rivals, and it seems that Samsung is now banking on logic chips and OLED displays to be its next big thing.

Historically the outfit spent a fortune on flash chips, computer memory chips and LCD flatscreens, even as a gloomy global economic and IT spending outlook forces its peers to cut back.

Lee Sun-tae, an analyst at NH Investment & Securities pointed out that Samsung has piles of money to play with and make bets in new technology.

The group also said it will hire over 26,000 more staff this year, up from last year’s 25,000. Samsung now employs around 350,000 in total. 

Report tears open Olympus' enormous loss hiding scandal

A 200-page report on the biggest corporate scandal Japan has ever faced, Olympus’ billion dollar loss-hiding, has been published, and it really is quite messy.

The report, writes the Wall Street Journal, says Olympus’ management was “rotten” and that “contaminated other parts around it”. The scandal, unearthed by ex-CEO Michael Woodford who was thanked with a sacking, has seen Olympus’ shares plummet and risked having the company delisted from the Tokyo Stock Exchange.

Rather than face up to the dire situation the company was in, it allegedly created bogus funds around the world to buy off billions and billions of yen in bad assets. Later it tried to write everything off by buying start-ups at a hugely inflated price which subsequently vanished.

In the report, execs like Hisashi Mori, who was an executive vice president and his boss Hideo Yamada led the plans, along with a few others, to hide losses and make them disappear through made-up acquisition prices.  

The WSJ says, as Olympus faced a financial downturn in the mid-80s when the US dollar was devalued following the Plaza Accord, then-president Toshiro Shimoyama decided the best thing to do would be to plough money into other companies as part of its core business strategy. Many of the deals went sour and, coupled with other factors like the rise of the yen, it wasn’t looking good for Olympus. Mori and Yamada tried to fix it by gambling with derivatives and structured bonds.

Ex prez Toshiro Shimoyama denies any wrongdoing and used the useful line: he can’t really remember, said the WSJ.

Shimoyama left the company with the losses and was followed by Masatoshi Kishimoto as president, who, the report claims, didn’t do enough to fix the mess and left it up to Mori and Yamada to keep doing what they were doing. Kishimoto’s replacement, Tsuyoshi Kikukawa, was from Finance and well aware of Olympus’ situation.

Things really took a turn for the worse when changes to Japan’s accounting rules meant Olympus would have to go public with the securities losses – and the company had over $1 billion of that. It was then, the report says, that Mori and Yamada approached two brokers, Akio Nakagawa and Hajime Sagawa, to hatch a cunning plan.

It was as easy as moving Olympus’ dodgy assets away from the company and over to others that weren’t at all connected – avoiding having to disclose any at all on the official books. Nakagawa and Sagawa started a set up fund in the Cayman Islands called Central Forest Corp. This bogus company was to buy off Olympus’ assets. To fund the transactions, Mori and Yamada allegedly got Olympus to put ¥21 billion in Japanese government bonds into an LGT Bank account. The bank was then asked to give Central Forest an ¥18 billion loan.

To finance the whole operation, Mori allegedly lied to LGT bank and explained the whole bizarre situation away – claming Olympus was on a shopping trip to make a string of secret buys in Europe. Altogether, Olympus managed to shift ¥65 billion from Olympus in Europe.  

This scheme was, by and large, repeated in Singapore using accounts through Commerzbank AG and Societe Generale SA to move ¥60 billion away from its books, though the report doesn’t accuse the banks of being at fault.

Later, Olympus started another investment fund in Japan with an ex Nomura broker. That, too, was used to buy bad assets. Presidents Kishimoto and Kikukawa were told about the schemes, the report says. 

Olympus did get found out once. Auditor KPMG AZSA spotted some mysterious figures in the books and Olympus owned up to the loss-hiding – but it only admitted to one fund. 

Eventually the execs realised the decades-long plot was doomed and tried to write the whole lot off. They used three start-ups, a waste recycler called Altis, a cosmetics company called Humalabo and a microwave container company called News Chef. Olympus bought them all for  ¥73.2 billion before getting rid of them for good.

The report says Olympus then used that money to repay loans from LGT and shut down its dodgy European operations. Later, it offset the funds in Singapore, according to the report, by using $687 million it got from buying UK medi-tech company Gyrus Group PLC, which went through as recently as March 2010.

According to the report, there was a bizarre pervasive atmosphere at Olympus which discouraged anything other than yes-men: “The head of the company ran an autocratic regime over a long period, generating an internal atmosphere in which people hesitated to disagree. Among executives there was a rampant tendency to treat the company like their private possession. There was little awareness of loyalty to shareholders.”

Certainly that still rang true when current president Shuichi Takayama said of ex-CEO Woodford’s findings: “If this secret information hadn’t been leaked there would have been no change in our corporate value”.  

The accused orchestrators Mori and Yamada held onto their positions at the troubled cameramaker until the scandal was blown wide open. Olympus is now under a great deal of pressure to replace the entire board. Ex-CEO Woodford claims a takeover is out of the question because it isn’t normal business practice in Japan, but he does say Olympus needs a shareholders meeting ASAP and a different set of directors, as picked by the managers, urgently. 

Olympus is still on deadline for 14 December to post its most recent earnings or it risks being delisted.

Marvell invests $200 million in Israel

Marvell, the fabless semiconductor company, has said that it will be splashing out $200 million on its current research and development centres in Israel, in a bid to help introduce its mobile chips and system-on-chips to the market at a quicker rate.

Israel is big business for chip companies, with Intel making it a key country for semiconductor production as well as being a top employer.  

Now Marvell’s co-founder, chairman and CEO Dr. Sehat Sutardja tells President Shimon Peres that the company will invest 200 million in the coming year.

Like Intel, the company already has a recognised presence in the country, which it entered 10 years ago.

Since then it has made a number of acquisitions which sum up to a tidy $3.5 billion, while its  Israeli development centre has 1,200 employees, and comes second to its US plant.

Marvell Israel general manager Yossi Meyouhas told Reuters that the new investment comes as a result of Israel facing “new, expanded international competition.”

He added it is “critical” that organisations invest in the country, to ensure it remains “a recognised leader in R&D and technology innovation.”

Google goes to war with Wall Street

Google CEO Larry Page might have started his rulership of the outfit by miffing Wall Street.

There is a dark muttering amongst the cocaine nose-jobs that Page snubbed them when he came to announce Google’s results this month.

Wall Street had hoped to hear Page sketch out his vision during a post-earnings conference call last week. However Page appeared on the blower for a few minutes, said he was jolly optimistic and then buggered off.

Wall Street is used to feeling important. Its analysts are used to be being wined and dined and getting pampered so that they will write nice things about a company. Page’s handling of them was the equivalent of passing the bottle around the wrong way during an officer’s mess under the old Empire. It was the sort of snub, while accidental, could only be dealt with by a revolver in the library.

Wall Street dealt with the snub by flogging the stock down more than eight percent and wiped out $US 15 billion in value. It was the biggest single-day decline since December 2008.

Steve Jobs is famous for telling Wall Street to go forth and multiply, but he does make an effort to deal with shareholders. He also markets his company a bit more and explains why his products are superior. It might be bullshit, but investors like that sort of thing.

Page, however, does not seem to want to talk about his outfit’s plans and unfortunately is going to see his share prices fall like a ton of bricks until he gives people something to like.

Part of the problem is that Page does not like appearing before the media.

That is ok if you are an enigmatic founder, but it is not so good if you are a CEO. Jobs and Ballmer have both twigged that the roll of a modern CEO is to be a media whore, Page has got to work that out.

Fortunately snubbing Wall Street will not damage Page much. He has piles of cash and he does not need to raise any more dosh from Wall Street.

In the long term though, there might be further problems. Investors have always moaned about the way the outfit treats them. It does not tell them its plans and does not even show results for of its various business units.

Recently Google even stopped briefing analysts at its Mountain View, California, headquarters, which means that some of the more significant analysts have been forced to buy their own drinks in seedy bars.