When Demand Media holds its initial public offering tomorrow, it'll be the first venture-backed IPO of 2011 and, though relatively small by Wall Street's standards, the most talked-about technology IPO in quite some time. That'll happen in this peculiar era of tech-industry financials, when the the big trend has been to prolong an IPO in favor of less restrictive private-market trading activity.
But that's not what everyone's talking about with Demand--nor is the $179.4 million in revenue it reported in the first nine months of 2010 (an operating loss of $6.4 million), nor the $1.2 billion valuation it's expected to reach when 7.5 million shares are issued on Tuesday. The IPO of the Santa Monica., Calif.-based company, founded in 2006 and run by former MySpace executive Richard Rosenblatt, is making headlines because Demand itself is so controversial. And many people will regard its short-term financial performance as evidence not just of the company's future, but as indicative of the fate of the media and even search industries as well.
Purely by the numbers, there are financial questions about its viability. Demand, for those who are unfamiliar, is a company that uses algorithms, top-notch search engine optimization, and an army of freelancers to produce an immense amount of written and video content in a remarkably short amount of time. Before it opened up its books in advance of its IPO, the company used to tout its financial stability. But it's not yet proven profitable, since the way that it amortizes some costs--distributing them over five years rather than reporting them upfront--means that it's not making as much money as it appears to be.
But perhaps more crucial to its future as a public company, Demand's revenues are extremely dependent on referrals from search engines, meaning that it's at the mercy of Google's own product decisions. That's because its content, many allege, is designed to rank high on Google rather than to provide a quality experience for readers, viewers, and other users. When Google hinted last Friday that it's going to find some algorithmic way to de-prioritize content that falls under that umbrella, the elephant in the room was unequivocally Demand.
And what this leads to is the real fuss over Demand's IPO, which is philosophical rather than financial. Critics of the company say it's polluting the Web with cheap content that outranks higher-quality content in search queries, driving down the salaries of freelance writers and video producers in the process, and search engine aficionados say that it's making search queries less useful because so many Demand-related results are pushing others off the top Google search rankings. The derogatory term for Demand and similar companies is a "content farm" or "content mill," bestowing a mood of automation upon creative processes that, by all accounts, should be far from automated.
Demand Media is actually a little bit more complicated than that. If the Internet is a series of tubes, as one politician so famously claimed, Demand is arguably the company that's best figured out how those tubes work, and how to get its own material (of which it can generate a lot) pushed through them. Detractors are complaining that it's trying to crowd out the rest of the Web and that its content is clogging those tubes like icy slush in a storm drain.
Here's an appropriately snowy example: A couple of weekends ago, I was in northern Vermont and looking to find a good snowshoeing trail. After someone recommended a peak called Mount Hunger, I googled "hiking mount hunger vermont" for more information. Two of the top three results came from Trails.com, a site that became part of Demand Media when it acquired a company called Hillclimb Media early on. The eighth result came from MountainZone, another Demand Media site geared toward skiers and snowboarders.
On the Trails.com page for the main trail up Mount Hunger, I was met with a three-sentence description of the trail, a Google topographic map, a WeatherBug widget for the region, links to related Trails.com pages, and suggested hotels through Trails.com's own booking service. For actual trail maps, I'd have to subscribe to a "pro" account. Oh, and there were ads: display units for the trendy W hotel chain, affiliate links, and Google text ads that took up almost as much space as the site's content itself.
Was Trails.com's high presence "polluting" my query for snowshoeing tips? Well, it wasn't inaccurate, nor was it thoroughly unhelpful. But ranking lower than the Demand-owned site on my query was a whole lot of rather inarguably better content: full Google Book about hiking trails in the region, a photo- and detail-heavy entry on mountaineering wiki SummitPost, and resources from the local Green Mountain Club, which maintains many Vermont hiking trails. Other search queries, likewise, see hastily written eHow cooking tips ranking above complex food magazines' recipes or responses to Answerbag popping up in information-seeking searches, and information-scant Demand slideshows that have been syndicated to media partners.
And so there's the heart of the controversy. Like a fast-food chain encroaching upon a small town or a big-box retailer in a land of independent businesses, Demand is stirring up harsh feelings among those who value high quality (Demand itself, of course, says that its content is high-quality) and long-form content. A successful IPO and steadily growing stock price over the next few months would seem to validate this, and would be taken by many pundits as yet another sign of the much-publicized death of journalism.
Last I checked, McDonald's and Wal-Mart weren't going away any time soon. In any market where there are "premium" products, there are bound to be cheap ones too. But when you're in an unfamiliar town, walking around looking for somewhere to get a salad, the greasy burger joint doesn't instantly pop up on every corner regardless of which way you turn the way a content farm's pages tend to top ever more Google searches. And that's where the real concern about Demand's financial viability is: that as it grows, and its properties fill more and more Google search results with quickly published or easily replicable content, that search engines will devise a way to lower its rankings and suck it out of "the tubes."
And Google may be doing just that, indicating that it will find a way to deal with content that isn't spam per se, but which was designed with search engine ranking in mind rather than the quality of information. It's particularly pressing for Google at a time when the rise of Facebook has dealt a blow to its Web-wide hegemony, and when critics have said that less relevant Google search results may open up new possibilities for search start-ups to finally one-up Mountain View. If it's a pressing issue for Google it would, indeed, raise real questions about Demand's viability. Look at Facebook's ability to clamp down on third-party applications' ability to post on members' "walls" when the complaints started rolling in about too much "app spam."
Prospective investors should know that, given the fast-changing nature of the Web, Google could have a far bigger impact on Demand Media than lawmakers looking to curb obesity would have on McDonald's. But Demand proved its capability to innovate and game the system when it built its SEO-munching content engine in the first place, so it very well may have a few tricks up its sleeve in dealing with the content-quality police.
Sketchy? Maybe. On shaky ground? Definitely. But Demand's proven smart so far. At the least, with its financials open to scrutiny and its business model potentially in need of a Google-proof revision, this will be an interesting one to watch.
Sunday, February 13, 2011
Shaw Capital Management February Newsletter: Government bond Markets 3 of 3
PRLog (Press Release) – Jun 17, 2010 – Shaw Capital Management Korea February Newsletter: Article three of three - The markets are assuming that the more powerful members of the eurozone will support the weaker members in order to prevent defaults that might threaten the single currency structure; but the yield spreads have widened considerably to reflect the increased risks. Our tentative view is that the markets will “muddle through”, and that defaults will be avoided; but higher overall yield levels seem unavoidable. Prospects in these markets are therefore very unattractive. The gilt edged market has also come under pressure over the past month; short-term yields have remained basically unchanged, but there have been increases in medium and longer-term yields that has produced a much steeper yield curve.
Shaw Capital Management Korea February Newsletter: Article three of three - There has been evidence of a modest improvement in the economic background; and the Bank of England is proving to be a stabilising influence at a difficult time; but a very disappointing Pre-Budget Report has indicated that there will be no attempt to address the problems of the huge fiscal deficit until after the election. Our tentative view is that the markets will “muddle through”, and that defaults will be avoided; but higher overall yield levels seem unavoidable. Prospects in these markets are therefore very unattractive. Funding pressures will therefore continued to increase; and so, although there does not appear to be any real danger that the UK might join the list of countries that could default on their sovereign debts, annual debt issues in excess of £200 billion cannot continue for long if this is to be avoided. It is no surprise therefore that investors have reacted by reducing their exposure to the market.
Shaw Capital Management Korea February Newsletter: Article three of three - There is still some doubt whether the UK economy has moved out of recession. The pace of contraction in the third quarter of the year has been slightly reduced, and since then the pace of job losses has declined, and consumer spending has held up fairly well. But business investment and manufacturing activity remains weak, and so there may have been no overall improvement in the final quarter of last year. The Bank of England has therefore kept short-term interest rates at 0.5%, and maintained its quantitative easing programme, and this has provided support for the market, since the bank has been a major buyer of gilts in recent months.
Shaw Capital Management Korea February Newsletter: Article three of three - However it has not been enough to prevent a very adverse reaction to the Pre-Budget Report from the UK Chancellor. The market did not really expect any significant action on the deficit ahead of the forth-coming general election; but was still surprised by the apparent lack of realism. The government is prepared to allow the deficit to continue to accumulate, and is relying on the gilt edged market to provide the funds to finance that deficit in the hope that this will enable it to win the election, and has produced no real indications of how the deficit might be reduced even after the election is over. It is not surprising therefore that investors have reacted by reducing exposure, that 10-year yields have risen to 4% and longer-term yields to 4.5%, and that there are even suggestions that the country could face a capital flight and a full-blown debt crisis in the coming months. We do not share these extreme views; but clearly the prospects for the market are very unattractive, and higher yields appear unavoidable. Investors have reacted by reducing exposure... and there are even suggestions that the country could face a capital flight and a fullblown debt crisis in the coming months.
Shaw Capital Management Korea February Newsletter: Article three of three - The Japanese bond market is basically unchanged over the past month; but there are fears that present yield levels are unsustainable. A sharp reduction in the growth estimate for the third quarter of last year, and weaknesses since then have raised the possibility of a move back into recession and a further period of deflation. The government has reacted by launching its fourth fiscal rescue package since the economic crisis began last year. It amounts to the equivalent of a further $81 billion to be spent in the regions and on subsidies for consumer durables, and is expected to lift the debt issuance this year to a record $835 billion, despite the indications that bond investors may be becoming increasingly unwilling to finance such a high level of new bonds, and the warning from the IMF that the government is risking a significant increase in debt funding costs. Since overseas involvement in the bond market is at a very low level, such a development is unlikely to affect bond markets elsewhere directly; but it could be a warning to other countries of the dangers of placing too much pressure on their own markets.
Shaw Capital Management Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management based in Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.
# # #
Shaw Capital Management Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management based in Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
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Shaw Capital Management Korea February Newsletter: Article three of three - There has been evidence of a modest improvement in the economic background; and the Bank of England is proving to be a stabilising influence at a difficult time; but a very disappointing Pre-Budget Report has indicated that there will be no attempt to address the problems of the huge fiscal deficit until after the election. Our tentative view is that the markets will “muddle through”, and that defaults will be avoided; but higher overall yield levels seem unavoidable. Prospects in these markets are therefore very unattractive. Funding pressures will therefore continued to increase; and so, although there does not appear to be any real danger that the UK might join the list of countries that could default on their sovereign debts, annual debt issues in excess of £200 billion cannot continue for long if this is to be avoided. It is no surprise therefore that investors have reacted by reducing their exposure to the market.
Shaw Capital Management Korea February Newsletter: Article three of three - There is still some doubt whether the UK economy has moved out of recession. The pace of contraction in the third quarter of the year has been slightly reduced, and since then the pace of job losses has declined, and consumer spending has held up fairly well. But business investment and manufacturing activity remains weak, and so there may have been no overall improvement in the final quarter of last year. The Bank of England has therefore kept short-term interest rates at 0.5%, and maintained its quantitative easing programme, and this has provided support for the market, since the bank has been a major buyer of gilts in recent months.
Shaw Capital Management Korea February Newsletter: Article three of three - However it has not been enough to prevent a very adverse reaction to the Pre-Budget Report from the UK Chancellor. The market did not really expect any significant action on the deficit ahead of the forth-coming general election; but was still surprised by the apparent lack of realism. The government is prepared to allow the deficit to continue to accumulate, and is relying on the gilt edged market to provide the funds to finance that deficit in the hope that this will enable it to win the election, and has produced no real indications of how the deficit might be reduced even after the election is over. It is not surprising therefore that investors have reacted by reducing exposure, that 10-year yields have risen to 4% and longer-term yields to 4.5%, and that there are even suggestions that the country could face a capital flight and a full-blown debt crisis in the coming months. We do not share these extreme views; but clearly the prospects for the market are very unattractive, and higher yields appear unavoidable. Investors have reacted by reducing exposure... and there are even suggestions that the country could face a capital flight and a fullblown debt crisis in the coming months.
Shaw Capital Management Korea February Newsletter: Article three of three - The Japanese bond market is basically unchanged over the past month; but there are fears that present yield levels are unsustainable. A sharp reduction in the growth estimate for the third quarter of last year, and weaknesses since then have raised the possibility of a move back into recession and a further period of deflation. The government has reacted by launching its fourth fiscal rescue package since the economic crisis began last year. It amounts to the equivalent of a further $81 billion to be spent in the regions and on subsidies for consumer durables, and is expected to lift the debt issuance this year to a record $835 billion, despite the indications that bond investors may be becoming increasingly unwilling to finance such a high level of new bonds, and the warning from the IMF that the government is risking a significant increase in debt funding costs. Since overseas involvement in the bond market is at a very low level, such a development is unlikely to affect bond markets elsewhere directly; but it could be a warning to other countries of the dangers of placing too much pressure on their own markets.
Shaw Capital Management Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management based in Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.
# # #
Shaw Capital Management Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management based in Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
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Shaw Capital Management: South Koreas Economy from wanihetty - Netvibes
South Koreas output is continuing to accelerate, and the government needs to exit from its accommodative economic policies earlier than anticipated. The HSBC Koreas purchasing managers index (PMI) rose from 55.6 in January to 58.2 in February the highest since December 2007. New orders are coming in, and there are rising backlogs of unfulfilled orders. Shaw Capital Management: South Koreas Economy - Employment too is rising suggesting that the current pace of growth will be sustained for the next several months. Inflation paced a little with consumer prices up 3.1% in January from a year earlier. But inflation in Korea is likely to remain stable for some months. The central bank is expected to tighten its monetary policy by starting to raise interest rates from the current record low of 2% in the later part of the second quarter as the government retains its focus on job creation and growth. Shaw Capital Management: South Koreas Economy - Exports expanded 31% year on year, better than Reuters forecast of 22.7%. South Korea posted a much larger-than-expected trade surplus of $2.33 billion in February as ship deliveries boosted exports, while imports fell as holidays reduced crude oil and natural gas demand. The government expects a monthly trade surplus of more than $1 billion from March as demand improves. The current-account surplus is most likely to dwindle to around $17 billion this year from $42.7 billion in 2009 as imports rise. A new Bank of Korea governor, widely expected to be a more pro-government figure, will not rush to raise rates after taking office in April. Exports grew 31% from a year earlier to $33.27 billion, faster than the expected rise of 21%, while imports climbed 36.9% to $30.94 billion, exceeding a forecast of an expansion of 34.0%. South Korea, which is heading the G20 group of leading economies wants to leave an imprint of its presidency. Shaw Capital Management: South Koreas Economy - It is trying to introduce a system of international currency swaps which it hopes will reduce global imbalances by lessening the need for countries to accumulate reserves, seen as one of the causes of last years financial and economic crisis. Shaw Capital Management - Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor. Our philosophy is simple: almost every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor. Before Shaw Capital launched the open architecture revolution, investors had to make the unhappy choice between selecting an advisor who was independent, but unsophisticated (the traditional pension and endowment consulting firms), or selecting an advisor who was sophisticated but had conflicting interests (global banks, trust companies, money management firms). Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice. A true open architecture firm is completely independent of the rest of the financial services industry and accepts compensation only from its clients. In addition, open architecture firms must make the financial commitment to hire only the most experienced advisors, and those advisors must apply their experience to the issues that will most affect their clients' wealth. Matters like asset allocation and manager search are simply too important to be left in the hands of young analysts. We are proud of our role in leading the open architecture revolution, and look forward to introducing you to its benefits.
Shaw Capital Management: South Koreas Economy
South Koreas output is continuing to accelerate, and the government needs to exit from its accommodative economic policies earlier than anticipated. The HSBC Koreas purchasing managers index (PMI) rose from 55.6 in January to 58.2 in February the highest since December 2007. New orders are coming in, and there are rising backlogs of unfulfilled orders.
Shaw Capital Management: South Koreas Economy - Employment too is rising suggesting that the current pace of growth will be sustained for the next several months. Inflation paced a little with consumer prices up 3.1% in January from a year earlier. But inflation in Korea is likely to remain stable for some months.
The central bank is expected to tighten its monetary policy by starting to raise interest rates from the current record low of 2% in the later part of the second quarter as the government retains its focus on job creation and growth.
Shaw Capital Management: South Koreas Economy - Exports expanded 31% year on year, better than Reuters forecast of 22.7%. South Korea posted a much larger-than-expected
trade surplus of $2.33 billion in February as ship deliveries boosted exports, while imports fell as holidays reduced crude oil and natural gas demand.
The government expects a monthly trade surplus of more than $1 billion from March as demand improves. The current-account surplus is most likely to dwindle to around $17 billion this year from $42.7 billion in 2009 as imports rise. A new Bank of Korea governor, widely expected to be a more pro-government figure, will not rush to raise rates after taking office
in April.
Exports grew 31% from a year earlier to $33.27 billion, faster than the expected rise of 21%, while imports climbed 36.9% to $30.94 billion, exceeding a forecast of an expansion of 34.0%.
South Korea, which is heading the G20 group of leading economies wants to leave an imprint of its presidency.
Shaw Capital Management: South Koreas Economy - It is trying to introduce a system of international currency swaps which it hopes will reduce global imbalances by lessening the need for countries to accumulate reserves, seen as one of the causes of last years financial and
economic crisis.
Shaw Capital Management - Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor. Our philosophy is simple: almost every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.
Before Shaw Capital launched the open architecture revolution, investors had to make the unhappy choice between selecting an advisor who was independent, but unsophisticated (the traditional pension and endowment consulting firms), or selecting an advisor who was sophisticated but had conflicting interests (global banks, trust companies, money management firms).
Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice.
A true open architecture firm is completely independent of the rest of the financial services industry and accepts compensation only from its clients.
In addition, open architecture firms must make the financial commitment to hire only the most experienced advisors, and those advisors must apply their experience to the issues that will most affect their clients' wealth.
Matters like asset allocation and manager search are simply too important to be left in the hands of young analysts.
We are proud of our role in leading the open architecture revolution, and look forward to introducing you to its benefits.
Shaw Capital Management: South Koreas Economy - Employment too is rising suggesting that the current pace of growth will be sustained for the next several months. Inflation paced a little with consumer prices up 3.1% in January from a year earlier. But inflation in Korea is likely to remain stable for some months.
The central bank is expected to tighten its monetary policy by starting to raise interest rates from the current record low of 2% in the later part of the second quarter as the government retains its focus on job creation and growth.
Shaw Capital Management: South Koreas Economy - Exports expanded 31% year on year, better than Reuters forecast of 22.7%. South Korea posted a much larger-than-expected
trade surplus of $2.33 billion in February as ship deliveries boosted exports, while imports fell as holidays reduced crude oil and natural gas demand.
The government expects a monthly trade surplus of more than $1 billion from March as demand improves. The current-account surplus is most likely to dwindle to around $17 billion this year from $42.7 billion in 2009 as imports rise. A new Bank of Korea governor, widely expected to be a more pro-government figure, will not rush to raise rates after taking office
in April.
Exports grew 31% from a year earlier to $33.27 billion, faster than the expected rise of 21%, while imports climbed 36.9% to $30.94 billion, exceeding a forecast of an expansion of 34.0%.
South Korea, which is heading the G20 group of leading economies wants to leave an imprint of its presidency.
Shaw Capital Management: South Koreas Economy - It is trying to introduce a system of international currency swaps which it hopes will reduce global imbalances by lessening the need for countries to accumulate reserves, seen as one of the causes of last years financial and
economic crisis.
Shaw Capital Management - Every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor. Our philosophy is simple: almost every investor will achieve better long-term risk-adjusted results by working with a true open architecture advisor.
Before Shaw Capital launched the open architecture revolution, investors had to make the unhappy choice between selecting an advisor who was independent, but unsophisticated (the traditional pension and endowment consulting firms), or selecting an advisor who was sophisticated but had conflicting interests (global banks, trust companies, money management firms).
Today, virtually all investors faced with the challenge of managing a significant pool of capital can access open architecture advice.
A true open architecture firm is completely independent of the rest of the financial services industry and accepts compensation only from its clients.
In addition, open architecture firms must make the financial commitment to hire only the most experienced advisors, and those advisors must apply their experience to the issues that will most affect their clients' wealth.
Matters like asset allocation and manager search are simply too important to be left in the hands of young analysts.
We are proud of our role in leading the open architecture revolution, and look forward to introducing you to its benefits.
Shaw Capital Management News Washington Waxes Brazilian
Brazil provides us with an example of a rapidly developing, energy-hungry economy in the Western Hemisphere, where biofuel is a fact of life. Biofuel is also an investment imperative for energy investors and companies that want to make money
in Brazil. As an important part of the #3 economy in the Americas, ethanol can't be ignored by the United States.
(Sugar) Ethanol as a Global Commodity; Focus on Cosan Ltd. (NYSE: CZZ) Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and its happy beginning to 2010 signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels. Cosan, a Brazilian company that processes more sugar than anyone else in the world, is now joining with Royal Dutch Shell (NYSE: RDS), the #2 oil producer in Europe.
Shell is paying Cosan $1.625 billion for half of its core assets. As part of the joint venture that will emerge, Shell is also taking on Cosan's debt and opening up 2,740 Shell service stations to Cosan's sweet, green fuel. Shell will also give Cosan two small Brazilian companies ... Codexis and Iogen ... where Shell has been investing in ethanol. Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and...signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels.
Shaw Capital Management Korea News: Cosan stands to gain big from an efficient system of turning agricultural leftovers into fuel in its own right. Of all the money and knowledge changing hands, one part is most important: By gaining access to Shell's distribution system, Cosan will have the luxury of ramping up production without
worrying if there will be buyers.
Shell wants to fertilize Cosan's cane-based business. Cosan output now has to grow from 2 billion liters per year up to the 3 billion that will be needed to satisfy a total 4,500 fuel stations in Brazil. From there, it's up to 4 and 5 billion liters annually and on to making ethanol a global commodity. You'd be hard pressed to tell the difference between Shell and Cosan's statements on this joint venture if you removed a couple of words. Very simply, each company wants access to the other's expertise. "Cosan represents the best entry to sustainable biofuels in the market... the best entry of scale," Shell's Mark Williams said in London. In Sao Paulo, Cosan Chairman Rubens Ometto said the tie-up is intended to be "the step forward that was lacking, in spite of all our efforts, to make ethanol a global commodity." Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two.
Shaw Capital Management Korea News: Low prices also help, as evidenced in Brazil where flex-fuel vehicles now account for 90% of new cars and truck sales. Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two (Brazil mandates that all gasoline have at least a 20% ethanol component). As it stands, Brazilians are the end users of the vast majority of the ethanol that their country produces (about 25 billion liters annually). And you wouldn't know it from most of the media, but ethanol is more than just an automotive matter...
Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
About Author
 Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.  Â
This article is free for republishing
in Brazil. As an important part of the #3 economy in the Americas, ethanol can't be ignored by the United States.
(Sugar) Ethanol as a Global Commodity; Focus on Cosan Ltd. (NYSE: CZZ) Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and its happy beginning to 2010 signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels. Cosan, a Brazilian company that processes more sugar than anyone else in the world, is now joining with Royal Dutch Shell (NYSE: RDS), the #2 oil producer in Europe.
Shell is paying Cosan $1.625 billion for half of its core assets. As part of the joint venture that will emerge, Shell is also taking on Cosan's debt and opening up 2,740 Shell service stations to Cosan's sweet, green fuel. Shell will also give Cosan two small Brazilian companies ... Codexis and Iogen ... where Shell has been investing in ethanol. Cosan is entering into a joint venture with an oil giant that could be worth $12 billion, and...signals a renewal of interest in ethanol and entrance of some unlikely participants into biofuels.
Shaw Capital Management Korea News: Cosan stands to gain big from an efficient system of turning agricultural leftovers into fuel in its own right. Of all the money and knowledge changing hands, one part is most important: By gaining access to Shell's distribution system, Cosan will have the luxury of ramping up production without
worrying if there will be buyers.
Shell wants to fertilize Cosan's cane-based business. Cosan output now has to grow from 2 billion liters per year up to the 3 billion that will be needed to satisfy a total 4,500 fuel stations in Brazil. From there, it's up to 4 and 5 billion liters annually and on to making ethanol a global commodity. You'd be hard pressed to tell the difference between Shell and Cosan's statements on this joint venture if you removed a couple of words. Very simply, each company wants access to the other's expertise. "Cosan represents the best entry to sustainable biofuels in the market... the best entry of scale," Shell's Mark Williams said in London. In Sao Paulo, Cosan Chairman Rubens Ometto said the tie-up is intended to be "the step forward that was lacking, in spite of all our efforts, to make ethanol a global commodity." Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two.
Shaw Capital Management Korea News: Low prices also help, as evidenced in Brazil where flex-fuel vehicles now account for 90% of new cars and truck sales. Shell's 45,000 stations around the world will pump biofuel to vehicles that can run on gasoline, ethanol, or a mixture of the two (Brazil mandates that all gasoline have at least a 20% ethanol component). As it stands, Brazilians are the end users of the vast majority of the ethanol that their country produces (about 25 billion liters annually). And you wouldn't know it from most of the media, but ethanol is more than just an automotive matter...
Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
About Author
 Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.  Â
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Financial Markets Focusing Greece and Spain - Shaw Capital Management Newsletter by Shaw Capital Management
(1888PressRelease) February 06, 2011 - The situation in Greece and in Spain has obviously caused great concern in London. But the Bank is also aware of the risks as a time when the economy is still in a very fragile state, and of the need to compensate for the fiscal retrenchment by maintaining a supportive monetary policy, and low short-term interest rates. There are therefore reasons for concern about the prospects for sterling. If the latest measures do succeed in reducing the fiscal deficit to manageable levels without aborting the economic recovery, and if the problems affecting the euro continue, or become even more serious, then sterling may well maintain current levels or even appreciate further.
Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
But the situation is very uncertain, and the odds do seem to favour a further period of weakness until the effects of the latest government measures can be more accurately assessed.
The yen has weakened slightly over the past month as the improvement in market sentiment has increased
the "risk appetite" of investors for the equity markets, and for commodity-related currencies.
The economic background in Japan has continued to improve, helped by the export performance; but there are still doubts about whether this improvement can be sustained, and these doubts have been increased by the latest announcement by the new prime minister that the main priority of his government will be a reduction in the huge fiscal deficit, rather than the promotion of fresh measures to accelerate the growth rate.
There is also a further uncertainty created by the decision by the Chinese authorities to adopt a "more flexible" policy on the renminbi that presumably means that it will be allowed to appreciate slightly faster. It is not clear what the consequences of this move will be; but overall it seems likely that conditions elsewhere, especially those affecting the euro, and some disappointment with "risky" investments in global markets, will continue to provide some stability to the Japanese currency.
Shaw Capital Management, Korea - Investment Innovation & Excellence. We provide the information, insight and expertise that you need to make the right investment choices. Shaw Capital Management Korea typically offers its clients such services as asset allocation and portfolio design; traditional and non-traditional manager review and selection; portfolio implementation; portfolio monitoring and consolidated performance reporting; and other wealth management services, including estate, tax, trust and insurance planning, asset custody, closely held business issues associated with the establishment or expansion of a family office, the formation of family investment partnerships or LLCs, philanthropy, family dynamics and inter-generation issues, etc.
But the situation is very uncertain, and the odds do seem to favour a further period of weakness until the effects of the latest government measures can be more accurately assessed.
The yen has weakened slightly over the past month as the improvement in market sentiment has increased
the "risk appetite" of investors for the equity markets, and for commodity-related currencies.
The economic background in Japan has continued to improve, helped by the export performance; but there are still doubts about whether this improvement can be sustained, and these doubts have been increased by the latest announcement by the new prime minister that the main priority of his government will be a reduction in the huge fiscal deficit, rather than the promotion of fresh measures to accelerate the growth rate.
There is also a further uncertainty created by the decision by the Chinese authorities to adopt a "more flexible" policy on the renminbi that presumably means that it will be allowed to appreciate slightly faster. It is not clear what the consequences of this move will be; but overall it seems likely that conditions elsewhere, especially those affecting the euro, and some disappointment with "risky" investments in global markets, will continue to provide some stability to the Japanese currency.
Factoring and Accounts Receivable Financing Expert Tips
Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.
There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.
What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?
Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.
When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.
First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of your A/R under 90 days can be financed.
So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.
As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.
Let’s talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.
Other issues, again, we can call them pitfalls, to look for include: being locked into a contract; having the total factoring cost, or pricing, not reflected properly in your term sheet; advance rates which don't make sense relative to the price you are paying for discounting invoices and; excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms).
So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense Stan Prokop is founder of 7 Park Avenue Financial. Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing, the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size.
There probably isn't a day when Canadian business owners and financial managers don't hear about factoring and accounts receivable financing as a method of financing their business in Canada. Despite its growing popularity and, we can say, relative importance in the Canadian business financing marketplace this financing mechanism is still somewhat understood.
What information do business owners need to know in order to assess if factoring, also known as invoice discounting, is a viable transaction? Also, are there mistakes and pitfalls to be avoided when considering this financing strategy?
Let's examine the answers to some of those questions. You can be forgiven for trying to figure out why factoring has increased in prominence from a time when no one had almost ever heard of it! The answer to that popularity is more simply and obvious than you might think, and its simply that Canadian chartered banks are finding it increasingly more difficult to fund accounts receivable (and inventory of course) to the extent that their customers need this financing.
When you have a situation where the actual need for financing is acute, and the benefits and flexibility seems significant it is not hard to see the rise in popularity of such a financing mechanism.
First of all, 99% of the time, factoring provides your firm with a greater level of borrowing based on your accounts receivable levels. Quite of 90-100% of your A/R under 90 days can be financed.
So is it all good news? Not necessarily, as we are always meeting with clients that have chosen the wrong type of funding or factoring, and, even worse, find them locked into contracts they cannot get out of. That is uncomfortable for any size firm as you can imagine.
As with any newer type of financing the playing field is complex. You can be forgiven for not knowing how many factor firms are out there, how they run, what their own limitations are, and, even to a certain extent, do they in fact themselves have the funding to survive, let along finance your firm. For that reason we cannot over emphasize the need to work with a credible, experienced and trusted professional in this area.
Let’s talk about some of the nuances, we can call them potential 'pitfalls 'also, of picking the wrong factoring partner. For a starter if you choose a firm who itself is not well capitalized, as we said, you might find that the financing commitments made to you cannot be honored. Canadian business has never had to think that the Canadian chartered banks could be 'out of money 'but the Canadian landscape is somewhat littered with small and medium sized factor firms that do not have the financial wherewithal to support their funding commitments in all places. That just re - enforces our idea that a trusted industry expert will guide you to the best partner for your firm.
Other issues, again, we can call them pitfalls, to look for include: being locked into a contract; having the total factoring cost, or pricing, not reflected properly in your term sheet; advance rates which don't make sense relative to the price you are paying for discounting invoices and; excessive notification and intrusion with your customers, which is very prevalent in the U.S. model of factoring (Many Canadian factor firms are branches of U.S. firms).
So let's recap. It's simply that factoring is growing in popularity. It works because it is providing funding where banks often cannot. If you don't understand who you are dealing with and the various nuances of this type of financing it becomes a burden, not a solution. Investigate this great financing mechanism, but ensure you know what you are getting into. Talking to an expert always helps - that's just common sense Stan Prokop is founder of 7 Park Avenue Financial. Originating financing for Canadian companies, specializing in working capital, cash flow, and asset based financing, the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size.
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