Snapchat—-The Most Expensive Big Tech IPO Ever At 62X Sales
If investors do buy into the $25 billion valuation reportedly being sought by Snapchat’s founders, they’ll likely be paying for the priciest tech IPO to hit the market, perhaps ever. At least by one measure, it’s more than double as expensive as Facebook’s IPO, and nearly four times as expensive as Google’s.Since Snapchat lost roughly $515 million in 2016 and has yet to turn a profit, the more conventional stock valuation metric, the price-to-earnings ratio, won’t hold up……When Twitter went public in 2013, the social media company sought a $14.2 billion valuation. At the time, its sales in the year preceding the offering came in at $316.9 million, meaning that its owners were looking for a valuation of nearly 45 times sales. But even that is about 40% lower than where Snap looks to be pricing its shares. At the rumored $25 billion valuation, Snap’s owners and its bankers are looking to sell shares at a sky high 62 times sales.
China’s $9 Trillion Moral Hazard Is Now Too Big to Ignore
China may be about to embark on its most ambitious — and perilous — campaign to convince investors that they shouldn’t depend on a bailout when markets go south. In a rare show of cooperation, the nation’s main financial regulators are drafting new rules for asset-management products that aim to make clear the investments don’t have government guarantees, people familiar with the matter told Bloomberg News on Tuesday. The products, which promise higher returns than bank deposits but are viewed by many investors as a form of risk-free savings, have become an integral part of the Chinese financial system after swelling in recent years to almost $9 trillion as of June 30.
Repeal, Replace, Repair, Rename—The Chaos On Obamacare
During his campaign, Trump vowed to America’s middle class that he would get rid of (since then the phrase has been amended to “repeal and replace” for various reasons) Obamacare as soon as he got into office. Well, Trump is out of his 30 day honeymoon, and the confusion and chaos over the future of Obamacare has never been greater, to a large extent due to growing pushback he has been getting in Congress……However, this process is likely to take longer than expected, which is likely to delay the upcoming debate over tax reform; this in turn will have adverse consequences for the market, which has already largely priced in substantial passage of Trump’s tax reforms even if no details are known yet. More importantly, as Goldman writes in an overnight note, the difficulty the Republican majority is having addressing a key political priority suggests that lawmakers might ultimately need to scale back their ambitions in other areas as well, such as tax reform.
The Binge Down Under: Household Debt In Australia At All-Time High, Wage Growth At Historic Low
For 20 years Australians doubled down on debt, confident rising wages would inflate away the burden and grow their wealth. Their lucky streak may be coming to an end. Reserve Bank of Australia Governor Philip Lowe’s acknowledgement of the rising risks can be seen in his determination to draw a line under a five-year easing cycle and avoid further escalating debt. But the horse may already have bolted: household debt has surged to a record 187 percent of income and data Wednesday showed private wage growth at 1.8 percent, an all-time low.
Is the US Restaurant Recession Becoming Structural?
Restaurant prices have been rising. The price index for “food away from home,” a subcategory in the Consumer Price Index, increased between 2% and 3% every year since 2012….. It’s not just that eating out is getting more expensive; it’s that stretched households are pushed by price increases elsewhere to divert some of their limited means from eating out to other expenditures….. the National Restaurant Association lamented “soft same-store sales and customer traffic readings” in December, which kept the Current Situation Index (tracking same-store sales, traffic, labor and capital expenditures) in contraction mode for the third month in a row:
Donald Trump Versus The Imperial City—He’s Still Looking For Rapprochement With Russia
Trump: “But I want to just tell you, the false reporting by the media, by you people, the false, horrible, fake reporting makes it much harder to make a deal with Russia. And probably Putin said ‘you know.’ He’s sitting behind his desk and he’s saying ‘you know, I see what’s going on in the United States, I follow it closely. It’s going to be impossible for President Trump to ever get along with Russia because of all the pressure he’s got with this fake story.’ OK? And that’s a shame because if we could get along with Russia — and by the way, China and Japan and everyone. If we could get along, it would be a positive thing, not a negative thing. And later, Trump: “But you know what? I want to do the right thing for the American people. And to be honest, secondarily, I want to do the right thing for the world. “If Russia and the United States actually got together and got along — and don’t forget, we’re a very powerful nuclear country and so are they. There’s no upside. We’re a very powerful nuclear country and so are they. I have been briefed. And I can tell you one thing about a briefing that we’re allowed to say because anybody that ever read the most basic book can say it, a nuclear holocaust would be like no other.
About the Donald $600 million F-35 Cost Cut—He’s Being Sold “Used” Savings By The Military-Industrial Complex
President Trump’s latest claim is that he’s managed to shave US$600 million off the price of the next batch of F-35s (LRIP-10).But on December 20, the day before then President-elect Trump met with Lockheed Martin’s CEO, the head of the F-35 Joint Program Office, Lt. General Chris Bogdan said that LRIP-10 aircraft would likely be ‘somewhere on the order of 6-7% [cheaper] per aeroplane, per variant’. That hasn’t been lost on Defence commentators, who’ve already established that the LRIP-10 cost reductions announced by General Bogdan on December 20 would amount to roughly $600m in savings. It appears that President Trump is claiming credit (paywalled) for something that was going to happen anyway owing to the ramp-up of volume from 45 planes in LIRP-9 to 90 planes in LRIP-10…..
So Much For Rapprochement With Russia—-General McMaster Is A Major Hawk
Those breathing a sigh of relief that the rumored favorite John Bolton didn’t get the nod may want to hold that thought — and their breath. McMaster is not the man to guide President Trump toward better relations with Russia and less US interference in the internal affairs of others. In fact, he believes the opposite. And what we’re seeing now is we’ve awakened to obviously this threat from Russia who is waging limited war for limited objectives. Annexing Crimea. Invading Ukraine. … What is required is forward deterrence. The General also made the completely fallacious assertion that Russia invaded Georgia in 2008. Even the highly critical if not overtly anti-Russia European Union concluded that Georgia was to blame for launching an ill-advised attack on Russian peacekeeping forces that were part of an international mission in South Ossetia.
OMG! Nicki Haley is More Clueless Than Samantha Power!
Just when we thought the great national embarrassment of a UN Ambassador Samantha Power was over, we are suddenly faced with a new US Ambassador to the United Nations, Nikki Haley, who almost makes Ms. Power look like a giant in world affairs and diplomacy. Addressing the UN Security Council Open Debate on Conflicts in Europe today, Ambassador Haley managed to get nearly every single point spectacularly wrong while mixing in the most banal of platitudes to further deaden the delivery. Said Haley:It can be tempting to take Europe’s peace and security for granted. Europe is a continent of strong, stable democracies. And Europe is a continent of flourishing economies that benefit from close cooperation. But Europe faces serious challenges – most acutely, Russia’s attempts to destabilize Ukraine and infringe upon Ukraine’s sovereignty and territorial integrity.
Heads Up, Donald—-NSA’s Tapping Your Calls Says William Binney
Binney was an architect of the NSA’s surveillance program. He became a famed whistleblower when he resigned on October 31, 2001 after spending more than 30 years with the agency. Asked whether he believes the NSA is tapping Trump, Binney replied: “Absolutely. How did they get the phone call between the president and the president of Australia? Or the one that he made with Mexico? Those are not targeted foreigners.”
