RBC Capital analyst Mahesh Sanganeria this morning cut his rating on National Semiconductor (NSM) to Underperfom from Sector Perform; he has a $13 target on the stock, which closed Friday at $13.97.
“We expect the company to face challenges in achieving its stated goal of revenue growth in line with industry,” [...]
Article courtesy of BARRONS.com: Tech Trader Daily
Three months ago, things were looking up for startups seeking venture capital. Now it seems that optimism was misplaced, according to the latest Moneytree Report from Pricewaterhouse Coopers and the National Venture Capital Association.
Venture funding has followed an unsteady path to recovery since the economy collapsed at the end of 2008. Venture rounds plummeted at the beginning of 2009, and though they’ve been climbing since then, the climb hasn’t been consistent. Investments fell in the first quarter of 2010, rose dramatically in Q2, and now they’ve fallen again.
So here’s the big number: During Q3 (July to September), venture firms invested a total of $4.8 billion in 780 deals, according to the report. That’s a 31 percent drop from the $6.9 million invested in Q2, and it didn’t even match the $5.8 billion invested during Q3 of 2009.
In a conference call discussing the numbers, Flybridge Capital Partners’ Michael Greeley suggested that Q2 may have been an “anomaly” and that the lower investment levels seen in Q1 and Q3 may be the new normal.
“Firms that are active are seeing quite healthy deal flow,” Greeley said, but the industry is consolidating and the number of active firms is falling.
Much of the unpredictability in venture capital can probably be attributed to cleantech. Since venture investment in the cleantech sector tends to be dominated by a few big deals, the amount invested varies widely from quarter to quarter. In Q3, cleantech investment declined 59 percent, to $625 million, from $1.5 billion in the previous quarter.
Still, other industries were down too. Biotech investments fell 32 percent. Internet investments fell 25 percent. The average deal size fell from $7.5 million to $6.2 million. And the number of early-stage deals fell from 454 to 358 (though as a percentage of overall deals, the number of early-stage financings remained the same).
The report was compiled using data from Thomson Reuters.
Tags: MoneyTree Report
Companies: Flybridge Capital Partners, national venture capital association, PricewaterhouseCoopers, Thomson Reuters
People: Michael Greeley
Article courtesy of VentureBeat » deals
Everybody wants to know just where the oil spill in the Gulf of Mexico will spread. Intel’s Encanto supercomputer in New Mexico has calculated just where the oil will go, using a complex ocean current simulation.
As the company described in a blog post, the computer model predicts that the oil on the surface will by carried by the gulf’s Loop Current over hundreds of miles to Florida. Then it will curl around the state and head into the Gulf Stream in the Atlantic Ocean. The spill could thus cause damages thousands of miles up the East Coast of the U.S.
The model was created by scientists at the National Center for Atmospheric Research in Boulder, Colo. The Parallel Ocean Program had already been created as part of a theoretical experiment to model the weather in the ocean, and scientists adapted it for the spill. The simulation ran on Intel’s Encanto supercomputer in Rio Rancho, New Mexico. The supercomputer, No. 32 on the list of fastest supercomputers, is a water-cooled machine with 28 tall cabinets and more than 3,500 Intel quad-core Xeon processors.
The first runs at the simulation took more than 250,000 hours of computer time, with 1,000 cores working in parallel. The simulation showed that the big mass of oil that was deep underwater was moving slow. But the oil at 65 feet and higher was moving quickly to Louisiana and Florida. In the Gulf Stream, the oil can move 100 miles per day. The simulation isn’t perfect, as it doesn’t take into account things such as oil density and bouyancy. Here’s a video that shows the predicted path of the oil.
Companies: Intel
Article courtesy of VentureBeat » Deals & More
A total of 79 mergers and acquisitions raised $4.3 billion in the second quarter of 2010, according to a report by Dow Jones VentureSource. That’s a slight 4 percent drop from last year’s report. Overall, this year is slightly up, 12%.
The largest deal by far this past quarter was Google’s $750 million acquisition of AdMob, the large mobile advertising network.
Separately, the National Venture Capital Association counted 92 deals with a total disclosed value of $2.9 billion in a report of its own. The table below shows how far off today’s M&A market is from the booming days of 2006, when it seemed like Google bought everyone.
Both NVCA and VentureSource also reported that IPOs were numerically up, but financially shaky, in the second quarter.
Article courtesy of VentureBeat » Deals & More
A big chunk of the new wireless broadband spectrum that President Obama wants to make available in the next five years would come from television broadcasters, who will be asked to give up radio spectrum slots for which they have fought and paid so that wireless data carriers can use them mostly for mobile Internet access instead.
The proposal would nearly double the available amount of bandwidth for wireless broadband, from today’s 547 megahertz to about 1,000 megahertz. (Don’t confuse these megahertz of bandwidth, which counts the amount of the radio dial allocated to Internet access, with the megabits used to measure throughput speed of a connection. “Bandwidth” is a popular misnomer for connection speed rather than actual wireless radio band width.)
Obama’s Presidential memorandum issued today, “Unleashing the Wireless Broadband Revolution,” could just as well be called, “Taking Back Lots of Wireless Spectrum Assignments.” Obama’s proposal is based on the FCC’s National Broadband Plan, a wonky but pragmatic proposal to reassign 300 megahertz’ worth of bandwidth between now and 2015.
The Obama administration wants to make a full 500 megahertz of bandwidth available for auction to companies that would use it for wireless broadband data connections for consumers and possibly first-responder networks. About 120 megahertz would come from broadcast TV. Administration officials told The New York Times that around 45 percent, or 225 megahertz, would come from various government spectrum blocks that are used lightly or not at all.
The FCC’s plan comes with a footnote: “Timing and quantity depends on Congressional action to grant incentive auction authority as well as voluntary participation of broadcasters in an auction.” Broadcasters, represented by the National Association of Broadcasters, may not be too voluntary about participating. They’ve complained that the government’s most recent spectrum auctions took parts of the airwaves that had been reclaimed by disabling traditional analog TV broadcasts, and sold these radio frequencies to buyers who are now “warehousing” it, i.e. letting it lie idle rather than developing new consumer services. An NAB spokesman told The New York Times that broadcasters hope “further reclamation of broadcast television spectrum will be completely voluntary.”
Tags: broadband
Companies: FCC
People: Barack Obama
Article courtesy of VentureBeat » MediaBeat
Leveraged buyout and venture capital firms are steaming over a new carve-out provision for family farms inserted at the last minute into the carried interest tax hike that passed the House at the end of last month.
The provision appears to exempt farmers who have organized their business as investment partnerships from paying ordinary income tax on the money they take from the partnership. The new bill, of course, will treat most carried interest as income for tax purposes instead of capital gains. Private equity and VC firms say the exemption is unfair and Congress is merely cherry picking certain industries to raise taxes on.
“It’s a carve-out in the bill, there’s no question about it,” said Mark Heesen, president of the National Venture Capital Association, an Arlington, Virginia-based trade group that is lobbying the Senate for its own exemption. “It shows that they are not being upfront.”
“This would indicate that the issue is not so much about tax policy but to indicate which industries are currently in favor and which are seen to be in disfavor,” Peter Rose, a spokesman for New York-based Blackstone, said of the exemption for farmers.
As the Senate takes up debate on the legislation this week, lobbyists for the private equity industry plan to make an issue of the family farm exemption and VC firms may move to get an exemption of their own.
Blackstone, Venture Firms Protest Tax Break for Family Farmers [Bloomberg]
Earlier: Private Equity Fuming Over Carried Interest Tax Hike
Article courtesy of Dealbreaker
Veering off into not profit land, the D: All Things Digital conference in Rancho Palos Verdes, California, this morning turns over the stage to National Public Radio CEO Vivian Schiller, who is being interviewed by Kara Swisher.
Here are some highlights.
Schiller notes that they now just call themselves NPR now, not [...]
Article courtesy of BARRONS.com: Tech Trader Daily
The U.S. House of Representatives has passed HR 4213, a bill that will double the tax on carried interest — that’s “carry” if you’re a venture capitalist — which many investors factor in as part of their long-term investments in startups.
What’s carried interest? Let’s sharpen Wikipedia’s entry: Carry is a share of the profits of a successful partnership that is paid to the manager of, say, a private-equity fund. It’s a form of compensation designed to reward the manager when they make money for investors.
In private equity, in order to receive carried interest, the manager must first return all capital contributed by the investors, and, in certain cases, the fund must also return a previously agreed upon rate of return — the hurdle rate — to investors.
The details vary from firm to firm and fund to fund, but here’s what matters: Carry is taxed as capital gains, just like the profits from a successful IPO.
HR 4213, if passed into law, will change the tax status of carried interest to a blend. One fourth of the income remains capital gains, but 75% will be taxed as regular income. To investors, the change not only cuts into their take, it also implies the value they’ve built is the same kind of money as a regular paycheck. That’s why they’re extra-angry.
Carried interest is one of several easy targets for Congress, which is looking for ways to bring in fresh revenue for the U.S. government while also granting temporary extensions to corporations that might otherwise need to cut jobs, or to get creative with the accounting books in ways that won’t end up as taxes paid at some point.
But the bill, according to the National Venture Capital Association which represents more than 425 VC firms, “effectively removes any meaningful tax incentive for long term investment in new companies” by averaging out to a 35 percent tax rate on fund managers’ carry.
A group of conservative Democrats known as the Blue Dogs failed to keep the House from passing the bill, or from reducing the increased carry tax.
NVCA issued a statement on the bill’s passage that said, “If this bill is signed into law, Congress should expect a further decline of venture investment over time, a move away from seed and early stage investment, and less innovation and job creation for our country.”
Tags: taxes
Article courtesy of VentureBeat » Deals & More
The National Cable and Telecommunications Association, the chief trade arm of the cable industry, is none-too-pleased with the FCC’s proposal to reclassify broadband service under the rules for common carriers. The NCTA issues a statement today which assets that the FCC has not made a compelling case of a need [...]
Article courtesy of BARRONS.com: Tech Trader Daily
Not only did the F.B.I. fail to read Danielle Chiesi her Miranda rights before arresting her last year, they didn’t let the young lady take a shower and told her what clothes to wear before being perp walked in front of the national media.
That’s the latest charge made by Chiesi in a court filing, which includes a statement by her of what actually happened the morning she was arrested on October 16, 2009. Among other things we learn that the Feds, wearing bulletproof vests, knocked on her apartment door and shouted for her to open up. Aside from a cat and some fish, Chiesi said she was alone. The feds tried to get her to make a monitored phone call to “a particular individual” and persuade her to cooperated with the investigation.
View Chiesi Statement on Arrest
Article courtesy of Dealbreaker