new dog old trick

Carnival of the Capitalists 12/19/2005

Only one Carnival of the Capitalists remaining before Christmas...and it's up at Coyote Blog. 

Link: Coyote Blog: Carnival of the Capitalists 12/19/2005.

Happy Birthday Carnival of the Capitalists!

Link: BusinessPundit: Carnival of the Capitalists Turns Two!.

The Carnival of the Capitalists is celebrating its second birthday this week (and next).  BusinessPundit, one of the two proud parents of the carnival, is hosting this week.  As always, it is an interesting collection of the best of business, economics, and management blogging. 

Big Tech Deals: Oracle/Siebel and eBay/Skype

Two big tech acquisitions got announced today.  One I understand; the other not so much.

Oracle took out Siebel in a deal that has been rumoured several times over the past months.  This may well be the last big acquisition in the wave of consolidation that has been underway in the enterprise application software market for a couple of years now.  There will be more deals before this wave of consolidation ends, but they will likely be smaller, more vertically-focused extensions and add-ons to the product lines of the remaining major players.  All two or three of them.  This must be bittersweet for Tom Siebel.  Larry Ellison has just added to an already massive multi-dimensional integration project: integrating organizations and integrating product lines and technology from Peoplesoft, Retek, ProfitLogix, and I-Flex with Oracle.  Still, this transaction takes out the largest single player in the high-end enterprise CRM application market and continues Oracle's drive to best SAP as the leader in applications.  They are not there yet but they are clearly on a mission. 

The other transaction, and the one I must admit I don't grok the logic of, is eBay's acquisition of Skype.  People who have thought about it include Om Malik, James Enck, and Ross Mayfield.  Ross says the logic is simple - I still don't quite see it.  One thing does seem clear to me though.  I've read some things indicating that the Skype management team and investors had a choice of a totally up-front buyout or a deal structure with up-front cash plus a performance-based earn-out.  They took the earn-out, with $2.6B up-front and the potential to earn another $1.5B over the next 3 years.  If it's true that they had a choice and settled for the earn-out, then it's clear that at least those folks see the logic and potential in the combination of companies.  It will be interesting to track the performance of this combination over the next couple of years. 

Carnival of the Capitalists: 12 Sept 2005

After two weeks watching the Hurricane Katrina train wreck unfold it is past time to get back to work.  What better way to kick off the work week than with the umpetty-eleventh installment of the Carnival of the Capitalists...good job this week by Evelyn Rodriguez, who has her own personal experience with natural disasters.

Link: Crossroads Dispatches: Carnival of the Capitalists - Hosted by Evelyn Rodriguez.

Economic Impacts from Katrina

Hurricane Katrina has left a wide swath of devastation in its path across New Orleans and the Gulf Coast.  The recontruction efforts will be going on in those areas for at least a couple of years; however, I've been wondering about other economic impacts across the rest of the U.S. as a result of this storm.

We've been hearing plenty about possible disruptions of energy supplies and energy prices from Katrina.  I'd be willing to bet that those impacts will turn out to be somewhat limited and transient unless some much greater damage to well heads and pipelines in the Gulf is found over the next couple of days.  Not to say that we won't see a spike in gasoline prices, but releases from the U.S. strategic reserve can help to smooth out oil supply disruptions over the next couple of months. 

I am wondering about longer term disruptions to the construction industry as a result of the demand for materials to recover and rebuild from Katrina.  I'm not an expert in this area but in talking to builders in the Nashville area over the past couple of months I've learned that material costs have already increased significantly this year.  This includes materials like concrete, lumber, etc.  In addition to price increases, apparently concrete supplies are such that in some areas of the southeast it has been on a rationing/allocation system.  I'm not clear if this is due to supply problems or just sky-rocketing demand based on the continuing robust construction market combined with good overall economic growth in many cities in the southeastern U.S. 

My recollection is that the construction materials market was somewhat disrupted after Hurricane Andrew as a result of the demand for supplies like plywood, concrete, etc.  Given that for some of these materials we are already in a sitution where global demand (yes, global - the Chinese among others are consuming huge quantities of building materials like concrete, steel, and lumber) is very strong, I wonder if we are looking at the possibility of a ripple effect across the housing industry that has been helping to support the U.S. economy.  I wonder what will happen in this corner of the economy, and others, as a consequence of Katrina.

UPDATE:  Well, the bits were barely dry on this post when I found a headline on the Nashville Business Journal online addressing the cement/concrete shotage.  High spots:

Cement's in short supply and that's causing big problems for a construction industry already dealing with shortages of structural steel and soaring fuel costs.

   

"I would say that this period of time, I've seen the greatest increase in our costs since I've been in this business ... some 30 years," said Jim Winchester, president of the family-owned QUIKRETE in the Atlanta area.

Limited supply has driven up the price of cement, in some cases more than 25 percent in the past year, the Atlanta Business Chronicle reports.

And industry experts say they don't expect relief any time soon.

"Cement is going to be a worry for a long time to come,'' said Ken Simonson, chief economist of the Associated General Contractors of America. About 32 states have experienced shortages of cement, he said.

The shortages are caused by record construction figures.

And that's before Katrina.

Also, when I said the energy impact was likely to be transient - I was thinking on the scale of a few months, not days or weeks, but also not years.  We'll know more in another couple of days once the infrastructure in, under, and around the Gulf is surveyed. 

   

 

Carnival of the Capitalists for 6/27/05

Carnival of the Capitalists is up for this week at Business Blogcasting.  It's prime midsummer carnival season and there is a strong roster of posts this week.  Grab a roasting ear or a funnel cake while you stroll down the midway sampling this week's wisdom and insights.

Link: BusinessBlogCast - Text: 6/27/05 Carnival of the Capitalists.

COTC for 6 June is up at GalaTime

GalaTime has this week's interesting melange of business, economics, management, investing, entrepreneurship, and public policy posts.  Nicely organized for easy browsing; there is something here for everyone.  Enjoy!

Link: GalaTime - Where Time is Money!: Carnival of the Capitalists - June 6th Edition - Hosted by GalaTime.

Carnival of the Capitalists

The Raw Prawn has this week's edition of Carnival of the Capitalists.  It's a veritable prawn cocktail with 46 varied entries on business, econ, taxes, management, entrepreneurship, etc.   Grab your cocktail sauce and dig in!

Link: The Raw Prawn: Carnival of the Capitalists.

Carnival of the Capitalists for 8 November

Carnival of the Capitalists for this week is up at Incite.  As usual, a good collection of business, management, and economics reading.  Enjoy! 

Financing lingo - pro rata explained

Brad Feld's excellent weblog continues its intermittent tutorial on venture finance lingo with a good post by Seth Levine of Mobius Capital that tackles the term "pro-rata". As Seth says, pro-rata is a concept that on the surface seems straightforward but which gets complex in the real world.

I have personally seen the type of confusion that he talks about in his piece. We were raising a D round of financing. My three existing investors all insisted that they shared a common definition of pro-rata as we went into raising the round. I made the mistake of believing them - file that as number 283 in my list of First-time CEO Mistakes, sub-category of Dealing with Venture Investors. It turned out that their ideas were actually somewhat different and we had a scramble at the last minute before we got everyone aligned and could close the round. Not a big deal other than the fact that between the new investor being a bit slow turning around contracts and the existing guys needing to be corralled into accepting a common calculation of their pro-rata shares we had turned a two month cushion between when we accepted the new investor's proposal for valuation and financing terms and when we'd be out of cash into about a three day window before we would have missed part of a payroll.

Another in a series of good clear explanations of sometimes complex financing topics on Feld's weblog.