id
stringlengths 32
32
| url
stringlengths 31
1.58k
| title
stringlengths 0
1.02k
| contents
stringlengths 92
1.17M
|
|---|---|---|---|
ae39f26f60dbea3c6401d851cfd0189c
|
https://www.forbes.com/sites/rosecelestin/2021/02/24/tax-functions-unprepared-for-covid-19-economic-landscape-ey-survey/
|
Corporations Face Challenges With Global Tax Policies Amid Covid-19
|
Corporations Face Challenges With Global Tax Policies Amid Covid-19
WASHINGTON, DC - FEBRUARY 05: Treasury Secretary Janet Yellen listens to President Joe Biden as he ... [+] delivers remarks on the national economy and the need for his administration's proposed $1.9 trillion coronavirus relief legislation in the State Dining Room at the White House on February 05, 2021 in Washington, DC. Biden hosted lawmakers from both parties at the White House this week in an effort to push his pandemic relief plan forward. (Photo by Stefani Reynolds-Pool/Getty Images) Getty Images
According to Bloomberg, the U.S. is the 7th fastest recovering economy among the ten most advanced countries in 2021. Other sources report that the U.S. economy will make a slow recovery by the fourth quarter of 2021, while the global economy will see a forecasted growth of 4.7%.
Nevertheless, many finance organizations are still unprepared to tackle the Covid-19 economic landscape and associated global tax policy changes, according to EY’s Tax and Finance Operate (TFO) survey.
Survey results show that 73% of respondents are likely to co-source critical activities with the next 24 months. This survey was conducted before the pandemic and includes more than 1,000 tax and finance executives from 42 jurisdictions, representing 17 industries and 835 large publicly listed companies.
In another survey that polled 150 senior tax executives at companies with revenues ranging from $100 million to $3 billion from November through December 2020, 43% of respondents plan to outsource specialized tax work in 2021.
Market insight analysts reported moderate changes in regulations in the three years leading up to 2019. Additionally, more recent regulations have emerged from changing trade policies, new NOL carryback rules under the CARES Act, and other factors due to Covid-19. EY outlines a myriad of issues in their Global Tax Policy Tracker and Tax Controversy Covid-19 Response Tracker, both updated regularly to provide a snapshot of the tax-specific policy changes announced in countries and jurisdictions around the world.
MORE FOR YOUBonds. Corporate Bonds.Leading With DE&I In The Finance FunctionLeading With DE&I In The Finance Function
Another change will be a potential increase in the U.S. corporate tax rate. Most recently, Treasury Secretary Janet Yellen stated that a 7% increase is plausible, pending OECD negotiations with other global economies to ensure U.S. corporations’ competitiveness. On the contrary, Neil Bradley, Chief Policy Officer at the U.S. Chamber of Commerce, believes that a higher corporate tax rate will instead make U.S. corporations less competitive, in a statement to Financial Times.
In either case, corporate tax and finance functions, especially within multinationals, need to become savvier in dealing with Covid-19 crisis management while on the road to economic recovery. Specifically, finance executives will need to transform the tax function to become more operationally efficient to accommodate global trade policy changes. In tandem, leaders still need to take a more in-depth look into value streams to identify bottlenecks and mitigate supply chain risks to meet domestic obligations.
Another finding from the EY TFO survey is that 39% of respondents have trouble attracting and retaining people with the necessary skills. Because the industry for accounting services is labor-intensive, it is necessary to consider the workforce composition to ascertain the adaptability of new policy changes to support remediation strategies. Specifically, co-sourcing the tax function provides a safer alternative than pure in-house accounting services. Though midsize to large companies have the capacity and resources, financial fraud and misappropriation can still occur. More comprehensive analytical capabilities coupled with expert talent are evident to account for global policy changes to prevent unethical behavior and promote industry best practices while improving more accurate and efficient reporting and regulatory compliance.
Almost all respondents, 99% of the EY TFO survey, indicated that they are revamping their tax and finance operating models in some way to ensure they have the right talent and technological capabilities to monitor, evaluate, and respond to policy changes around the world.
Market insight analysts also reported that the “Big Four” management consultants, including PricewaterhouseCoopers, Deloitte, EY, and KPMG, have undergone several M&A activities over the past five years. As a result, they capture nearly 50% of total market revenue, making them poised to employ new emerging technology products and services to keep pace with emerging trends.
Moreover, EY’s TFO survey also shows that 65% of respondents cited the lack of a sustainable plan for data and technology as the most significant barrier. Management consultants can facilitate a more robust IT framework to bolster data and compliance efficiency and effectiveness. Companies can then drive better business decisions, standardize and automate workflow processes, and free up tactical finance and tax operations for more strategic analysis of consumer preferences.
As the EY survey findings suggest, co-sourcing talent and technology can better equip companies to deal with global policy changes and regulations beyond Covid-19 and provide corporations with a more astute tax and accounting function.
|
417134326c0bd6a6018ddc8619c189d8
|
https://www.forbes.com/sites/rosecelestin/2021/03/02/beyond-meat-continues-to-disrupt-the-global-meat-industry-even-during-covid-19/?sh=58eafb4240f3
|
Beyond Meat CFO Mark Nelson To Retire: How The Company Disrupted The Global Meat Industry Under His Leadership
|
Beyond Meat CFO Mark Nelson To Retire: How The Company Disrupted The Global Meat Industry Under His Leadership
Beyond Meat hamburger is seen in a pub in Milan, Italy, on January 04 2020. Beyond Meat is a Los ... [+] Angeles-based producer of plant-based meat substitutes founded in 2009 by Ethan Brown. The company's initial products became available across the United States in 2012.The company has products designed to simulate chicken, beef, and pork sausage.According to a life cycle assessment (LCA) of the Beyond Burger from the University of Michigan, the Beyond Burger generates 90% less greenhouse gas emissions, requires 46% less energy, has >99% less impact on water scarcity and 93% less impact on land use than a ¼ pound of U.S. beef. (Photo by Mairo Cinquetti/NurPhoto via Getty Images) NurPhoto via Getty Images
Named "Innovator of the Year" in 2019, Beyond Meat CFO Mark Nelson will retire from the plant-based company on May 5, 2021, after joining the company in December 2015. He will then enter into a consulting agreement with Beyond Meat beginning May 6, 2021, until May 5, 2023.
Mark Nelson spearheaded the best U.S. first-day IPO in nearly two decades, with Beyond Meat surging 163% from its original offering price of $25 during its trading debut on May 2, 2019. During a Q2 2019 earnings call, Mark Nelson attributed staggering revenue growth to existing customers' growing demand and new restaurant deals, despite the threat of supply shortages.
Fast forward to Q4 2020, and the plant-based company is still making waves under Nelson’s financial leadership, with strong retail channel net revenues up 85% year-over-year.
However, the company experienced a $25.1 million net loss in profits and a 54% year-over-year decline in its foodservice channel due to "weakened foodservice demand resulting from the global pandemic," according to CEO Ethan Brown in a recent press release. Additionally, the company has undertaken R&D efforts, international expansion, and a few non-negotiable investment activities, including a new state-of-the-art global headquarters, magnifying its near-term losses in profitability.
According to the National Restaurant Association, the restaurant and foodservice industry lost an estimated $240 billion in sales from mid-March to the end of 2020. On average, restaurant and foodservice supply chain revenues were down 30% in 2020. At least 85% of supply chain businesses in the restaurant and foodservice industry reported lower revenues in 2020 than in 2019. Additionally, profit margins were lower in 2020 than in 2019 for 71% of supply chain businesses surveyed by the trade association.
MORE FOR YOUAlibaba’s $2.8 Billion Mistake—What CFOs Should Know About Antitrust RegulationsLeading With DE&I In The Finance FunctionThe SEC’s Technology Modernization Is Accelerating—Are You Ready?
"I've outlined a deep and disruptive decline in foodservice activity due to Covid-19. Nevertheless, we remain the #1 brand in terms of dollar sales across NPD tracked foodservice activity", said Ethan Brown in last month's earnings call. "This is worth repeating. Beyond Meat is now available in approximately 62,000 global retail outlets and 60,000 global foodservice outlets, representing increases of 68% and 48%, respectively, versus the end of 2019."
With the alternative meat industry predicted to top $140 billion by 2029, Beyond Meat is set to capture a sizeable share of the $1.4 trillion global meat industry. According to CEO Ethan Brown, Beyond Meat has scaled and matured its manufacturing processes and supply chain, with affordability driven by its production model's efficiency.
Beyond Meat most recently announced strategic partnerships with McDonald's, PepsiCo, and Yum! Brands, the parent company of Kentucky Fried Chicken, Pizza Hut, and Taco Bell, which will further scale the company and also help mitigate the company's 54% year-over-year decline in the foodservice channel.
As part of the three-year global strategic agreement with McDonald's, Beyond Meat will become the preferred supplier for the patty in the McPlant. "We're excited to work with Beyond Meat to drive innovation in this space, and entering into this strategic agreement is an important step on our journey to bring delicious, high quality, plant-based menu items to our customers," said Francesca DeBiase, McDonald's Executive Vice President and Chief Supply Chain Officer.
Meanwhile, Beyond Meat's strategic partnership with Yum! Brands will expand the companies' growing track record of collaborations to offer delicious and sustainable plant-based products.
"With these two deals, the world's largest restaurant chains are placing plant-based meat directly on the plates of millions of customers around the world. McDonald's and Yum Brands have doubled down on plant-based meat and have demonstrated the long-term potential they see in the category. This is the clearest sign yet that the future of meat will be plant-based," said The Good Food Institute Executive Director Bruce Friedrich.
|
92d8225b65b744db8dd9beb68365669d
|
https://www.forbes.com/sites/rosecelestin/2021/03/05/climate-change-will-cost-companies-13-trillion-by-2026/
|
Climate Change Will Cost Companies $1.3 Trillion By 2026
|
Climate Change Will Cost Companies $1.3 Trillion By 2026
LONDON, ENGLAND - FEBRUARY 23: Prime Minister Boris Johnson chairs a session of the UN Security ... [+] Council on climate and security at the Foreign, Commonwealth and Development Office on February 23, 2021 in London, England. The United Kingdom holds the security council's rotating presidency and is the host nation of this year's COP26 UN climate summit in Glasgow. (Photo by Stefan Rousseau-WPA Pool/Getty Images) Getty Images
While the impacts of Covid-19 became the forefront of disruptive forces experienced within the past year, this period of unprecedented havoc also bred growing concerns around environmental anomalies, among other geopolitical issues.
For the first time since 1992, a British Prime Minister chaired a United Nations Security Council meeting with a focus on climate and security in a virtual session held late last month. Prime Minister Boris Johnson called on UNSC members to help vulnerable countries adapt to the impact of climate change and warned council members that unless urgent action is taken, the world risks worsening conflict, displacement, and insecurity. He also went on record, stating that climate change is a "geopolitical issue every bit as much as it is an environmental one."
Indeed, disruption cycles have materialized more concurrently with economic uncertainty due to the onset of recent black swan events.
Supply chains remain particularly exposed to unforeseen vulnerabilities, causing leaders to consider more resilient approaches to adapt to this new converged reality. A greater emphasis on business continuity and long-term, sustainable strategies are new priorities for leaders to stabilize financial and operational performance while tackling the ever-changing socioeconomic and geopolitical landscapes during these times.
According to the CDP Global Supply Chain Report released last month, a total of $1.26 trillion in revenue losses is anticipated for suppliers within the next five years due to climate change, deforestation, and water insecurity. Additionally, corporate buyers stand to inherit $120 billion in increased environmental costs by 2026.
Climate change alone accounts for 93% of the total environmental costs, according to CDP. Changes to consumer preferences, loss of access to capital, and increased operational expenses will soon emerge as key risks due to the cascading environmental effects on supply chains caused by ecological impacts and market changes.
MORE FOR YOUAlibaba’s $2.8 Billion Mistake—What CFOs Should Know About Antitrust RegulationsLeading With DE&I In The Finance FunctionThe SEC’s Technology Modernization Is Accelerating—Are You Ready?
President Biden recently took executive action to tackle the climate change crisis domestically and abroad. Additionally, the U.S. Senate recently confirmed Linda Thomas-Greenfield as U.S. Ambassador to the United Nations, reinforcing President Biden's commitment to restore relations with the UN in a multilateral approach to foreign policy. With the U.S. being the second-largest emitter of greenhouse gases, rejoining the Paris Agreement is also a positive step towards net zero emissions by 2050.
"The Paris Agreement is an unprecedented framework for global action. We know because we helped design it and make it a reality," Secretary of State Antony Blinken said in a press statement. "Its purpose is both simple and expansive: to help us all avoid catastrophic planetary warming and to build resilience around the world to the impacts from climate change we already see."
Companies should also implement proactive measures to reduce Scope 3 emissions, known as upstream and downstream supply chain emissions. According to the World Economic Forum, these emissions are from procured products, business travel, suppliers' transport, usage of sold products, transportation of products, and product disposal in their latest report.
Currently, eight supply chains account for more than 50% of global emissions: food, construction, fashion, fast-moving consumer goods, electronics, automotive, professional services, and freight. As a result, supply chain emissions are 11.4 times higher than operational (Scope 1) emissions. However, if supply chains can cut emissions by 619 million tC02e, then they can save $33.7 billion in return, according to WEF.
Ruth Porat, CFO of Alphabet and Google, said, "Climate change is a constant threat to the global economy and humanity more broadly. Business must do our part to address the problem in our own operations and in the way we work with our supply chains. That is the focus we need to create a better future."
Over the years, decarbonizing supply chains has been an increasing priority across various companies to reduce greenhouse gas emissions. In a focus group conducted by the Boston Consulting Group in Q3 and Q4 2020, 40 climate-leading CEOs and experts said that the three most significant barriers to abating upstream supply chain emissions include:
Lack of transparency, The challenge to execute, and Limited support from industry ecosystems and regulators
However, in addressing these barriers, BCG offers nine supply chain initiatives corporate leaders can take to decarbonize supply chains. Of those nine initiatives, engaging suppliers to manage their emissions and setting ambitious corporate reduction targets on Scopes 1-3 are the easiest to tackle.
For example, Walmart has urged its suppliers to remove a billion metric tons of greenhouse gas emissions from their supply chains by 2030. Laura Phillips, Walmart's Senior Vice President for Sustainability, said, "the bulk of the reduction will come from suppliers including General Mills, Campbell Soup, and Unilever." Walmart has also committed to reducing 18% of emissions from its operations by 2025.
Similarly, AstraZeneca has set three key targets to address Scope 3 emissions by 2025. In their recent Sustainability Report 2020, the pharmaceutical company achieved a 29% reduction in freight and logistics emissions, a 6% increase in waste incineration emissions, and an 11% reduction in first-tier API formulation and packaging energy emissions since 2015.
On the other hand, RE100 is a global initiative that unites over 280 prominent brands to address Scope 2 emissions and achieve net-zero carbon emission targets within the next few decades.
With over $1 trillion at risk, "leading companies that manage and reduce environmental risks in their supply chains will benefit from lower costs and better reputations, giving them a more competitive edge today and being more resilient for the economy of tomorrow," says Sonya Bhonsle, Global Head of Value Chains at CDP.
|
cf9f1d1f5487f4b05074848dfa73bc52
|
https://www.forbes.com/sites/roslynlayton/2019/08/07/8-million-low-income-households-connected-in-8-yearspolicy-takeaways-from-comcasts-internet-essentials/
|
8 Million Low Income Households Connected In 8 Years—Policy Takeaways From Comcast’s Internet Essentials
|
8 Million Low Income Households Connected In 8 Years—Policy Takeaways From Comcast’s Internet Essentials
An article of faith among some policy advocates is that fiber networks should be built to every residence in the US and that all people are entitled to high-speed, low-cost access. This “supply side” view is fundamentally flawed because it fails to incorporate the diverse needs of individual users. The point is simply illustrated by the fact that people adopt services, not networks. That broadband speeds grow faster than people’s desires to subscribe to them indicates that internet adoption is more complex than advocates realize. The experience of Comcast’s Internet Essentials (IE), now a leading broadband adoption program for low-income Americans, highlights that effective broadband policy must incorporate a multitude of demand-side factors.
Comcast on Tuesday, Aug. 6, 2019 announced it is significantly expanding eligibility for Internet ... [+] Essentials, which is the nation's largest, most comprehensive, and most successful broadband adoption program in America, to include all qualified low-income households in its service area. Since 2011, Comcast has invested more than $650 million to support digital literacy training and awareness, reaching more than 9.5 million low-income Americans. (Joy Asico via AP Images) ASSOCIATED PRESS
The key scholar on the Diffusion of Innovations, Everett Rogers, described how technological adoption is primarily a social, not economic, process. His research focused on how farmers adopted agricultural innovation and the role of trusted peers to introduce new tools and methods. This seminal work is crucial to understanding and address the major barriers to broadband adoption—digital literacy training and relevance, equipment, and cost. Notably the IE program addresses these pieces, along with the essential social element of a network of tens of thousands of partners to help families cross the digital divide.
When Comcast launched the program, it focused on families with children eligible for a free lunch under the National School Lunch Program but has since expanded to seniors, veterans, residents of public housing, and community college students. IE customers receive Internet service for less than $10 per month; the option to purchase a subsidized computer for less than $150, and free in-person, online, and printed digital literacy training. This reflects an investment of some $650 million dollars to support digital literacy training and awareness, which some 9.5 million people have accessed. Based upon the success of IE, the program is now expanded to all qualified low-income households in Comcast’s service area, a move likely to double the total number of eligible households for the program to more than three million additional low-income households. These are households with people of different needs including those with disabilities, parents of young children, and seniors. John Horrigan, earlier at Pew and now the Tech Policy Institute, has assiduously documented the importance of digital skills training within broadband adoption. His most recent work describes the benefits for kids and schoolwork drive broadband subscriptions, but digital skills training opens doors to household internet use for jobs and learning.
Some advocates suggest that the ability to have multiple streams of Frasier on Netflix should be the proxy for a standard internet connection. While entertainment is highly individualized and privately valuable, there is far greater social value in the ability to check health information, send email, read news, and maintain connections with friends and family. These services do not necessarily require high speeds, and indeed many companies would like to offer these services for free or low cost with a private subsidy. Moreover, these services are easily accessible on mobile wireless networks for which the subscription rate exceeds population.
That Comcast has invested so heavily in getting first time users on the network reflects the reality that the market for broadband grows more competitive by the day. Multiple mobile operators are offering gigabit speeds via 5G networks, and satellite providers have launched 100 Mbps service. Fortunately the Federal Communications Commission recognizes this, and has streamlined cable regulation per Congress’ intent, leveling the playing field for competing networks. Notably Comcast is redoubling its commitment to IE without any regulatory mandate to do so. When operators can differentiate their service to meet the differentiated needs of users, we will get far greater Internet adoption than from one-size-fits-all policies.
MORE FOR YOUThis AI Is A Leading Indicator Of The Future Of WorkOurCrowd Is Most Active VC In Record-Breaking Israeli Tech Fundraising
|
fced3ca8bd82c7a7d743cd27cc79851d
|
https://www.forbes.com/sites/roslynlayton/2020/06/03/court-rebukes-eu-4-to-3-mobile-mergers-could-help-5g/
|
Court Rebukes EU. 4 To 3 Mobile Mergers Could Help 5G.
|
Court Rebukes EU. 4 To 3 Mobile Mergers Could Help 5G.
Pictured, European Commission Vice President for Competition, Margrethe Vestager in 2016. The ... [+] European General Court anulled the EC's decision to block Hutchison 3UK's proposed acquisition of O2 Telefonica UK./ AFP / THIERRY CHARLIER (Photo credit should read THIERRY CHARLIER/AFP via Getty Images) AFP via Getty Images
A recent EU court decision annulled the EU competition authority’s blocking of a four-to-three mobile operator merger in UK. While four years too late to save the £9.25 billion ($11.6B) deal, the decision rebukes the European Commission for errors in law and analysis. This article briefly reviews the decision and provides takeaways for past, pending, and deterred 4 to 3 mergers. If European authorities implemented the court’s wisdom, they could begin to reverse the moribund trend of investment and accelerate 5G rollout, presently some years behind the US and Asian countries.
The Telecoms UK Investments v Commission Decision
Last month the General Court of the European in Luxembourg annulled the European Commission (EC) decision to block Hutchison 3G UK3’s (“3”) acquisition of Telefónica UK (“O2”) in May 2016, the third and fourth players in the market. The EC argued that the merger would remove an important competitor, reduce competition among British Telecom’s Everything Everywhere (EE) and Vodafone (players 1 and 2), increase prices, restrict consumer choice, reduce competition on the wholesale market, and hinder development of mobile network infrastructure. While the court recognized the EC’s authority to block mergers in certain circumstances, the mere positing that a merger reduces competition and increases prices is not enough to demonstrate harm. The court said that the EC erred in law and assessment; did not overcome the required legal hurdle of proof, and failed in quantitative analysis to show that the merger would increase prices.
Why the European Commission erred
The Court said that the EC competition authority erred. It could be that the competition experts in the EC’s Directorate-General for Competition (DG Comp) don’t understand law or economics. But the more likely reason is that they put politics above their mandate and thus contorted the analysis to arrive at their predetermined outcome. To release the decision in May 2016, EU Vice President for Competition Margrete Vestager tweeted “Commission has decided to block Hutchison's plan to take over O2 in the UK To serve UK consumers - affordable prices and innovation.” The court ruling shows this was a preposterous, unevidenced claim. As Strand Consult observed, blocking the merger was a gift for the shareholders of British Telecom (BT), which acquired Everything Everywhere (EE), making it the only UK provider with a quatro play solution (broadband, video, wireless, and telephony).
The EC case essentially says that if allowed to merge, 3 and O2 will leave the UK mobile market to enter a parallel universe in which they will offer the same products at increased prices and lower quality. The unwitting consumer will be forced to buy this inferior product, and competitors BT, EE, Vodafone, and others will fail to capitalize on the merged entity’s unworldly strategy. Had the EC supported this assertion with empirical evidence or sound financial modeling, the court might have allowed this interpretation.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItSAP Retreats From Finance, Spins Off IP And Staff To A PartnerArtificial Intelligence And Whisky Making: The Perfect Blend?
The court rightly pointed out that the assumptions the EC made could also be interpreted in the opposite way. For example, if the merger creates a new entity with a large market share, it can invest and innovate like the largest providers. Notably mergers are done to reduce cost and improve efficiency. 3 and O2 must spend significantly to market their services (as much as 25 percent of revenue) and maintain administrative overhead. Reducing these expenses, provides valuable savings to invest in next generation technologies.
A key issue in the case is network sharing agreements. The four operators shared two agreements, with EE and 3 using one contract, and Vodafone and O2 using another. 3 and 02 proposed to exit those agreements and make a new one. The EC claimed that the parties would take their knowledge of the individual agreements to make a new agreement and then degrade the quality of their network service. However, it is possible that the parties could take their knowledge and maker a better network sharing agreement. It’s hard to fathom a merger conducted for the purpose to offer old technology and reduced quality. In any event, the court rejected the EC argumentation that that potential misalignment or disruption of earlier network agreements would impede competition.
What happens next
In the meanwhile, O2 has moved on. It is has agreed to a £31B ($39B) deal with Liberty Global’s Virgin Media to create “leading fixed-mobile provider in the country” and invest £10 billion for next generation networks and 5G in UK and challenge BT and Sky. This deal may have less regulatory scrutiny as it is vertical merger between a mobile operator and cable/content company. In any event, DG Comp has no jurisdiction in this deal. As the proposed tie up demonstrates, it is technological development, not the number of providers, that drives competition in the market.
Strand Consult observes that other mergers have been blocked and deterred for the same arguments the court now claims that DG Comp did not justify adequately. Denmark’s Telenor and Telia, the 3rd and 4th players, should feel vindicated as DG Comp erroneously claimed that their proposed merger would increase prices in Denmark. Shortly following the deterred deal, prices increased anyway. The EC policy of preferring cross-border consolidation is at odds with the reality of doing business in the individual member states, as each country has its own legal framework for mobile operators and spectrum rights. Mobile operators can only harvest synergies within the country, but the EC has been reluctant to allow them improve the economics. So the result is that a country like Denmark with a market cap equal to greater Hamburg is required to maintain 4 network operators.
More generally, mobile operators are not competing on discrete mobile services, but rather the total package of connectivity. Regulators prefer the former because it’s easier to measure by comparing the listed price of mobile offers, but this approach does little to capture how consumers buy mobile subscriptions—which are bundled with other services, existing contracts, cross sells, devices, and so on. Bronwyn Howell and Petrus Potgieter demonstrate this logically and mathematically in Bundles of trouble: Can competition law adapt to digital pricing innovation?
The court ruling is a sweet ex post validation for the T-Mobile/Sprint merger in the US, though some suggest that the eleventh hour acquisition of Sprint’s Boost and 800 MHz spectrum made the deal more palatable politically and allowed US regulators to maintain a “4 operator” market. However it remains to be seen whether Dish will evolve into a 5G player even though it is flush with spectrum. This shows that remedies themselves can be misguided.
The decision also apply to acquisition by Silicon Valley digital platforms which are motivated by same goals as mobile operators: compete in the marketplace, improve value for customers, and to lift the level of innovation. However DG Comp appears to be dug in on inventing new tactics to challenge the platforms, the latest being a theory of tipping markets.
For better or worse, competition authorities are rather insulated from the impacts of their decisions. Fortunately, the courts provide an important check on executive power and remind competition authorites that decisions to block mergers need to be based on facts and evidence, not theory alone. If policymakers took the court decision seriously and allowed much needed in-country consolidation, the EU could begin to close the mobile network investment gap, as it has lagged the US and Asian countries for years.
|
0cee629255d6a32caaa63fcf4e70ec9e
|
https://www.forbes.com/sites/roslynlayton/2021/01/29/the-most-important-lesson-for-buttegieg-and-the-biden-administrations-on-transportation/
|
The Most Important Lesson For Buttigieg And The Biden Administrations On Transportation
|
The Most Important Lesson For Buttigieg And The Biden Administrations On Transportation
A long train loaded with double-stack white cargo containers winds its way around tight s-curves in ... [+] mountain countryside. getty
Every President in recent memory has promised to “fix” America’s aging infrastructure with little to no success. If President’s Biden’s promise to Build Back Better is just more taxpayer and deficit funded handouts to obsolete, inefficient networks, then don’t expect things to improve. A forthcoming report from the American Society of Civil Engineers in March will once again grade America’s infrastructure, and there is little reason to believe it will have improved across 16 different areas that received a collective D+ in 2017. After all, its most recent report, Failure to Act: Economic Impacts of Status Quo Investment Across Infrastructure Systems, outlines a significant financial need to update various systems. One of the few bright spots in the report is freight rail. This is not a coincidence; freight rail one of the few transport infrastructures which is privately funded in the US.
Market incentives align risk, reward and responsibility.
As I described in Network Behavior Under Crisis: Telecommunications, Transportation and Energy Regulation During COVID19, private network providers—by investing for the future—were prepared for the unexpected. They didn’t ask for or accept COVID bailouts. No regulator told network providers in advance to be ready for the pandemic, but following their investment incentives, network providers continued service through the crisis and to maintain quality even with increased constraints. There is no need to use taxpayer money and deficit spending when private companies are willing to invest.
Freight railroads invest some $25 billion annually to ensure networks are safe and state of the art. They put one-fifth of their revenue back into the locomotives, freight cars, tracks, bridges, tunnels and other infrastructure across 140,000-miles of rail. Need to make that investment to ensured continued growth, expected 30% in the next two decades. Similar market dynamics play out in privately owned broadband networks which account for roughly one quarter of the world’s total outlay in private broadband networks. This investment also makes efficient use of scarce resources like spectrum; the recent C-band auction garnered a whopping $81 billion, a record for US auctions.
Problems with publicly funded networks
Accountability is blurred when ownership, funding, and regulatory control are shared between federal, state, and local governments, as is the case with many highways and public transit. Different government actors blame the other for cost overruns and delays. Consider reports about Federal Highway System, California’s rail system, and the New Jersey Turnpike Authority.
On top of that, government doesn’t feel the pain of inefficiency. It subsidizes highways for gas-guzzling tractor-trailers which get 5 miles per gallon when a privately operated freight trainer can deliver the equivalent of 470 miles per gallon. Rep. Earl Blumenauer (D-Ore.) of the House Transportation & Infrastructure Committee said it’s time to abolish gas tax and for the Biden administration to kick-start the use of a vehicle-miles-traveled (VMT) fee. The principle of user pays is a good one. Thankfully the Department of Transportation secretary-designate Pete Buttigieg said he wouldn’t support a gas tax increase, and he endorsed a VMT fee in his presidential campaign.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItExtended Reality In Education: The 5 Ways VR And AR Will Change The Way We Learn At School, At Work And In Our Personal LivesSAP Retreats From Finance, Spins Off IP And Staff To A Partner
For the results of the parallel policy experiment on freight rail, look no further than Europe which is decades behind the US on technology, efficiency, safety, and sophistication. A three-axel freight car in Europe carries only 2/3 the weight of the same size car in the US. European railroads have wanted to modernize but outdated regulation keeps them in the dark ages, like unscientific limits on train length and height. US rail double-stacks containers whenever possible, but this is illegal in EU. European freight railroads would be in a better financial position to make needed investments and safety upgrades if they could consolidate, but pseudo-progressive anti-merger policy from Brussels prohibits this. The industry has yet to return to its output levels from before the 2008 Financial Crisis levels, and has even been falling since 2018. The effect of EU policy has been unwittingly to keep Europe small and weak, only strengthening China’s advantage.
Solution: Deregulate poorly performing public networks
The single most important gain in transportation policy was made when Democrats held the White and Congress in 1980: deregulating aviation, trucking and rail. President Biden broadly supported these measures as a Delaware senator, including voting for the Staggers Rail Act. Freight rail prices fell by 40%, inefficient companies were rationalized, investment increased, and safety and output improved.
To win broader political support from their current razor thin margins, Democrats should demonstrate that they don’t hate the market succeeding over government. They should also resist the urge to use their positions of regulatory power to reward political favorites with unsustainable price controls and subsidies. The upside is that Democrats could take credit for ushering in a new golden age of green transportation through market incentive for all Americans, rather than just delivering the goods for their friends. If that’s too ambitious, then they should avoid further harm. This simple notion will test the newly elevated Chair of the Surface Transportation Board, Martin Oberman. The freight rail market is working well and doesn’t need fixing.
|
ee270d1d0256a2adba0eae6331921ef9
|
https://www.forbes.com/sites/roslynlayton/2021/02/10/super-bowl-55-showcased-5g-enabled-stadium-sports/
|
Super Bowl 55 Showcased 5G-Enabled Stadium Sports
|
Super Bowl 55 Showcased 5G-Enabled Stadium Sports
TAMPA, FLORIDA - FEBRUARY 06: An onlooker take video from a cell phone during a fireworks display in ... [+] preparation for Super Bowl LV on February 06, 2021 in Tampa, Florida. (Photo by Douglas P. DeFelice/Getty Images) Getty Images
NFL regular season attendance reached a 10 year-low in 2020, and COVID-19 has dealt the double blow of capacity limits and lost revenue, some $2.7 billion. But 5G is giving fans a reason to watch the game in person. Many of 22,000 who attended Superbowl 55 witnessed more than just a home team winning in their home stadium for the first time and Buccaneers’ quarterback Tom Brady notching his record seventh win. Those with Verizon’s Ultra Wideband 5G network, the right app and phone enjoyed an unprecedented, interactive experience.
While sports fans have been using second screens for some years, 5G takes a quantum leap from 4G and WiFi. Super Bowl attendees enjoyed 7 high-definition data streams from stadium cameras to their devices, allowing them simultaneous closeups of the players and the field, the “SkyCam” panorama, and augmented reality (AR) features like game stats. The program was part of Verizon’s $80 million upgrade of Raymond James Stadium with 281 low power small cell antennas, free charging stations, and network boosters for first responders. Downtown Tampa, Ybor City, and the Tampa Riverwalk were fortified with 70 additional miles of backhaul fiber, investments that will power 5G in Tampa for years to come. Verizon FiOS at home customers accessed 5 of the 7 streams, and 5G gamers played in a Superbowl simulation in Fortnite Creative by Epic Games. (Check out the cool pics from Forbes Contributor Rob Pegoraro.)
5G is poised to revolutionize the experience of sports, entertainment, concerts, conventions, rallies, even weddings. It is also changing media, as competitors to broadcast and cable use 5G network slicing to deliver high quality video streams to households through the air, one objective for the 50 bidders in the recent record-breaking C-band spectrum auction, adding a whopping $94 billion to the Treasury. In addition to Verizon, AT&T and T-Mobile also are investing vigorously and experimenting with 5G in sporting venues, each with different frequencies and strategies, a rivalry which makes America’s mobile wireless industry one of the most competitive. Moreover, network operators have kept America resilient during the pandemic, as people turned to broadband to work, learn, shop, and receive healthcare from home. America’s broadband providers have kept America connected by waiving late fees, making networks available for free, and investing in education.
However, looming threats to the availability of connected devices and 5G network equipment come from potential exclusion orders from the International Trade Commission (ITC) in two separate cases filed by Ericsson that could dramatically impact the future of 5G. Intellectual property expert Michael Rosen explains that the premise of the ITC is to “protect US industry from unfair practices by foreign competitors.” But in practice, the ITC has become a favorite venue of patent trolls and of companies attempting to block their competitors’ imports by engaging in litigation as a licensing strategy. Lawmakers have moved to rein in patent abuse at the ITC as it threatens critical supplies during the pandemic.
As a rule, companies like Qualcomm, Apple, Nokia, Ericsson, and Samsung license each other’s patents to make complex devices, but these negotiations can be abused. For example, if Ericsson’s recent suit against Samsung over smartphone patents at the ITC succeeds, it could block Samsung devices from the US market, handing Apple a near monopoly in high-end smartphones and leaving consumers with few safe device choices for 5G.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItSAP Retreats From Finance, Spins Off IP And Staff To A PartnerCryptocurrencies, NFTs & Another Rise Of Blockchain. Ignore At Your Own Risk.
Network equipment is another key part of the 5G picture. Nations want alternatives to fill the gap as Huawei has been sidelined for security concerns. Samsung is quickly becoming a viable competitor in the infrastructure market. It offers a suite of products to help build safe, end-to-end 5G networks. It is valuable to have a non-Chinese government owned firm which makes a wide-range of electronics to challenge the flood of vulnerable Chinese-government made devices in the market today. The second ITC case filed by Ericsson at the ITC appears to be an opportunistic effort to block an emerging competitor or up the licensing price for network equipment at a critical time for the roll out of 5G networks.
Naturally, protecting patents is important, but the ITC is a redundant body to existing courts and offers sanctuary to firms which should otherwise compete on their merits in the marketplace. Congress should reform and modernize the ITC, and in the meantime, the ITC must reject attempts to leverage its authority to game 5G deployment.
|
98d1c94c81c31840d2380ad4a3c16a64
|
https://www.forbes.com/sites/roslynlayton/2021/02/24/us-china-tech-competition-hinges-on-this-formerly-obscure-commerce-department-post/?sh=2dafe7117446
|
US-China Tech Competition Hinges On This Formerly Obscure Commerce Department Post
|
US-China Tech Competition Hinges On This Formerly Obscure Commerce Department Post
Great power competition between US and China will impact the future of national security, trade, ... [+] prosperity, and jobs. getty
When President Biden convenes lawmakers today to address our nation’s semiconductor manufacturing weaknesses, it will shine a bright and needed light on America’s cyber security vulnerabilies. It is this growing threat that has recently elevated in prominence a relatively unknown Commerce Department post in the obscure world of export control. When computer code and mobile phones can be used as weapons of war, President Biden’s nominee to lead the Department’s Bureau of Industry and Security (BIS) will be a key player on the front lines of strategic trade control and signify a key element of strategy in the new era of great power competition with China.
As the agency charged with enforcing the export controls on strategic technologies, BIS is as important today as a senior role at the Departments of Defense or State. News outlets recognized the elevated importance of the agency and recently profiled two potential contenders to head the 450-person agency. Dr. James Mulvenon is a recognized military intelligence and Chinese cyber expert with SOSi International who wrote the definitive analyses on China’s semiconductor foundries and their alignment with the military. In a hard-hitting op-ed, Mulvenon decried the business-as-usual Democrats, the techno-globalist “Davos set”, who systematically exported American jobs. He calls for the United States to protect its innovation from being acquired by the PRC’s state-owned enterprises and national tech champions by way of export controls, economic sanctions, merger reviews by the Committee on Foreign Investment in the United States (CFIUS), and offensive investment in American research and development.
Kevin Wolf, another rumored front-runner, served as Assistant Secretary for Export Administration at the Commerce Department from 2010-2017 and can cite chapter and verse of export control law. He developed the sanctions for Chinese military’s ZTE, subsequently removed because it was perceived as too harsh. He claims that hard sanctions should have been imposed on Huawei, not the Entity List designation, an instrument designed to highlight and resolve wrongdoing. Sanctions block assets and prevent exchange with the sanctioned party. Wolf’s goal is to advocate for greater budget and headcount for the bureau, reflecting its increased importance.
Today’s BIS is reinvented. For the first time, it can impose restrictions for human rights reasons. This has been used to punish more than 50 entities involved in human rights abuses in Hong Kong, Taiwan, and Western China. BIS’ military end user rules streamline due diligence for the exporting community and fit into a broader strategy to limiting exploitation of US resources, technology, and capital markets. Its foreign direct product rule that stops actors like Huawei, which try to circumvent controls. BIS also countered Russia’s chemical weapons program, which produced nerve agents with Novichok, used to poison dissident Alexei Navalny.
While Mulvenon and Wolf may have advocated for BIS to have these kinds of capabilities, it took the Trump Administration to make them happen, and a Republican Congress to enact the long overdue reforms at Treasury and Commerce. Moreover, the prior BIS head Cordell Hull got career employees to up their game, averaging one regulatory action per week. By the numbers, he accomplished more in 18 months at the bureau than was achieved at BIS in the last 18 years. Under the prior administration, the number of actors on the Entity List almost doubled to more than 1,600 today, with 330 in the PRC alone. Now that the Export Control and Reform Act has been implemented, BIS has at last permanent statutory authority and expanded responsibilities, oversight for 38 emerging technology controls and additional foundational technologies, ability to enforce laws on US firms operating overseas, and a synchronization to tie export controls to mandatory CFIUS filings.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItFinary Raises $3.2M To Build The Gen-Z Group Chat Investing PlatformYC-Backed Popl Raises $2.2 Million To Create The Digital Business Card
The rebooting of BIS does not come a moment too soon. Its surge in activity reflects the shift under General Secretary Xi Jinping to fast-track the goal of PRC global supremacy. Coupled with its Made in China 2025 plan, which targets 10 strategic industries, China will build, buy, siphon, or steal the latest technology. The PRC seeks self-sufficiency in semiconductor manufacturing equipment (SME) and elimination of foreign competition so that it can control the means of production, supply its growing demand for semiconductors both in military and civilian use, and reduce US economic power and leverage.
Without the due diligence of BIS, the latest and greatest SME from the US will end up in military uses and to military actors in China. While the chips made in those machines could go to smartphones, they are also likely to enable higher precision missiles to be aimed at Americans. High-end semiconductors play a crucial role in advanced technology like 5G, quantum computing, and artificial intelligence, the weapons of the next generation of warfare. While some high-end manufacturing capability remains in the US, the global market share for US manufacturing has been halved in the last decade, from 25% to just 12%, reflecting China’s undercutting the market and cost that the US lacks modern industrial policy to support the necessary land, labor, and capital for advanced semiconductor manufacturing. The BIS nominee should pledge to maintain if not strengthen the controls on SME and other emerging and foundational technologies.
|
8310ba00fcfe37f08708f1d06aa5aead
|
https://www.forbes.com/sites/roslynlayton/2021/02/25/the-economics-of-californias-net-neutrality-law/
|
The Economics Of California’s Net Neutrality Law
|
The Economics Of California’s Net Neutrality Law
The California State Legislature doesn't care about the economics of net neutrality, but you should. ... [+] getty
Many policy proposals sound great on the surface, but when viewed from economic and empirical perspectives suggest sup-optimal results. One example is net neutrality or open internet, which I have studied using network traffic analysis for more than a decade across 50 countries. The data show mixed results for the policy; countries with soft measures like transparency and disclosure get better results than those with hard core price controls as proposed by California. A recent court decision greenlights the imposition of the California Internet Consumer Protection and Net Neutrality Act of 2018 (CA SB-822). Here’s a brief review of its economics.
The bill asserts that California is dependent on an open and neutral internet for the following nine “vital functions” to work:
(A) Police and emergency services.
(B) Health and safety services and infrastructure.
(C) Utility services and infrastructure.
(D) Transportation infrastructure and services, and the expansion of zero- and low-emission transportation options.
(E) Government services, voting, and democratic decisionmaking processes.
(F) Education.
(G) Business and economic activity.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItSAP Retreats From Finance, Spins Off IP And Staff To A PartnerCryptocurrencies, NFTs & Another Rise Of Blockchain. Ignore At Your Own Risk.
(H) Environmental monitoring and protection, and achievement of state environmental goals.
(I) Land use regulation.
The bill makes an interesting assertion that is contradicted by the fact that these functions have been working without SB-822 in effect. These functions also work in every other state without such rules. My forthcoming study of four fiber to the home networks shows that 8 of the 9 vital functions use only 25 percent of the bandwidth on a network. One subset of the business function, streaming video entertainment from Netflix, YouTube, Disney+/Hulu, Microsoft/Xbox and Amazon Prime, uses 75 percent of the network bandwidth, and this amount is increasing.
Policy norms have dictated that fixed line broadband access is offered on commoditized or flat-rate access, and net neutrality rules enshrine this. However, this model falls hardest on people with low-income, particularly immigrants, and those in rural areas. About two-thirds of American households subscribe to one or more streaming video entertainment services, paying as much as $25 or more on top of the price of flat rate broadband. Enabling the provision of video streaming entertainment requires a continuous investment in equipment and energy in the middle mile of networks. In my study, the investment amounts to $17.48 per subscriber per month. However, broadband providers have difficulty to recover this cost equitably. Following the net neutrality logic, the upgrade cost is imposed on all network subscribers, even if they don’t subscribe to Netflix. This means that everyone is paying an additional $11.65 per month in video streaming cost. But those who watch a lot of movies get 33% off the delivery cost.
It’s no surprise that net neutrality has been litigated for some decades as it amounts to taking of property without just compensation. The recent court ruling will probably be appealed, as it likely violates a Constitutional tenet that California can’t regulate services from other states. Moreover, the California net neutrality law violates the speech rights of end users.
The premise of the legislation to prohibit blocking of content and services seems defensible. But this also obliges end users to pay for content they don’t necessarily want, like advertising. For example users watch ad-supported YouTube with embedded video ads. While these ad formats have improved in efficiency, video ads can consume significant bandwidth for which the consumer must pay. In a fair market, the advertiser would pay for the bandwidth to deliver the ad. But net neutrality makes this practice illegal. Essentially California says that end users must pay 100% of the broadband cost while the internet advertiser pay zero.
SB-822 also prohibits “zero rating” and “paid prioritization.” These are common pricing practices for many goods and services, for example an overnight shipment via FedEx, the free trial at the gym, a free dessert with the purchase of an entree and so on. Tesla’s cars come with a sim card that zero-rates Spotify. Bundling makes sense to stimulate the use of connected devices and smart services, but the practice will be killed by SB-822. If California’s politicians really cared about “vital functions”, they’d support the “zero rate” on socially valuable services (let them be free or low-cost) but flexibly price the privately valuable ones like entertainment which varies with personal preference.
Historically the notion of using one’s internet connection to access legal content with a legal device has not been controversial. In fact, broadband providers have already agreed to uphold this and have been required to do this as part of consent decrees. However it’s not clear how California’s policy will work if House Democrats demand that cable companies block legal content from FoxNews, OneAmerica News Network, Newsmax and others. This hypocrisy leads many to be skeptical of net neutrality, seeing it instead as government censorship.
Advocates claim that heavy-handed regulation is needed to stop broadband providers from blocking content and services, but over 20 years, this has happened in only a handful of cases, all of them resolved without net neutrality rules. Meanwhile, the big tech platforms block, ban, throttle, and demonetize the content and users they don’t like every day. Demanding neutrality for just one part of the internet is illogical. Consumers deserve the same rights and protections across the internet. Congress has to power to set this right, and it should.
|
e7b0c9375e3112d3a0e194dcf48efe35
|
https://www.forbes.com/sites/roslynlayton/2021/03/09/almost-failing-us-improved-to-con-infrastructure-report-card-but-too-many-ds-remain/?sh=177e7eb44a9e
|
Almost Failing: U.S. Improved To C- On Infrastructure Report Card, But Too Many D’s Remain
|
Almost Failing: U.S. Improved To C- On Infrastructure Report Card, But Too Many D’s Remain
Why is public transit like the New York City Subway getting a D- in the latest Report Card for ... [+] America's Infrastructure? A lack of private ownership and innovation. getty
The American Society of Civil Engineers (ASCE) just published its quadrennial Report Card for America’s Infrastructure. D grades were earned in 11 of 17 areas: aviation, dams, hazardous waste, inland waterways, levees, public parks, roads, schools, stormwater, transit, and wastewater. Better grades were earned for drinking water, energy, inland waterways, and ports. Rail (which includes 140,000 miles of freight railroads) and Public Transit (public buses, subways, and light rail) offer starkest difference. What can we learn from Freight Rail which got the highest score of all (B) to Public Transit which got the lowest (D-)? Private investment and entrepreneurial innovation improve grades.
The almost failing grade: public transit
The report observes that most of America’s public transit is aging and underfunded, with many vehicles and guideway elements in poor condition. Ridership is declining, exacerbated by the pandemic and other socio-economic trends. Moreover, as people work, learn, shop, and receive health care from home—enabled by ever-improving broadband networks—many have moved away from cities where public transit is concentrated. This undermines the business model for the traditional infrastructure and requires new thinking.
Entrepreneurs partnering with public sector and innovation: Mobility on Demand
The report highlights how public transit agencies are partnering with private mobility providers to complement public transit by providing service during irregular hours, making first/last-mile connections, or providing transportation service in underserved areas. Called Emerging Mobility on Demand (MOD) and micromobility services, transportation network companies and bike/scooter share, have played a critical role in expanding the definition of public transit. These incremental innovations were made possible by the ridesharing revolution, led by Uber, which is described as doing more to improve public transit in seven years than the government did in seven decades. MOD has emerged to address a key problem in public transit—while the transit system may enable the longest leg of the trip, the passenger still must get to and from the transit system.
An estimated 100 million micromobility trips occur annually. Transit is evolving further with connected and autonomous cars and buses. This Mobility-as-a-Service (MAAS) is a shared digital channel for passengers to plan, book, and pay for multiple types of mobility services, demonstrating the shift away from personally-owned vehicles and towards leveraging multiple modes of transportation.
Urban SDK has emerged as leading platform for mobility analytics to help cities and transit authorities improve ridership, on-time performance, safety, and network upgrades. It integrates complex technologies, data sets, real-time information, historical analysis, and geospatial tools for smart decision-making, more efficient routing, reduced crashes and incidents, and better identification and planning of micromobility hubs. Using the Department of Transportation’s National Performance Management Measures and the National Transit Database reporting requirements, this Jacksonville, FL startup works with the Florida Department of Transportation, North Florida Transportation Planning Organization, and Miami-Dade Transportation Planning Organization. “With Congress likely to pass a major infrastructure package in 2021, state and local government agencies will be in stiff competition for federal funds. Those cities and states who can tell a story of their infrastructure needs through reliable data sources will be the successful participants for federal funds,” notes Urban SDK CEO Drew Messer.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItFinary Raises $3.2M To Build The Gen-Z Group Chat Investing PlatformIBM Cloud For Financial Services Helps Firms Meet Regulatory Requirements
Top of the class: rail
ASCE’s Rail category includes privately-owned freight rail (on its own is the best performing, best-funded, and most sustainable infrastructure in the study) and Amtrak. Prior the pandemic, Amtrak was on track to breakeven for the first time in recent memory with no need for federal funding for FY2020. Covid-19 unfortunately upended that positive trend.
Private owners invest in and steward their networks
Freight rail is essentially private owned and operated, and owners invest a whopping $260,000 per mile annually. From 2019, Class I capital expenditures — including track, structures, and equipment — totaled $38.3 billion over 198,554 operating track miles. In 2018 there were 1.7 million ton-miles per day transported across America’s freight rail network, an increase of over 100,000 ton-miles from the previous year and an increase of nearly 400,000 over the past 20 years. Goods moved on the nation’s freight network are projected to grow from 1.40 billion tons in 2018 to 1.58 billion tons in 2045. Freight rail providers continued to deliver essential inputs during the pandemic and eschewed Covid-19 subsidies and bailouts.
One notable difference between private and public infrastructure is that private ones do a better job to upgrade aging equipment and facilities, with freight rail investing almost 20 percent of operating revenue to renew infrastructure. Whereas public infrastructure must wait for government support to fund upgrades, a private infrastructure must upgrade or it will lose customers. This is the essence of a multi-modal competitive market. Shippers have many options to deliver their goods, and they shop around for the best deal.
Don’t fix what isn’t broken
The report provides valuable recommendations for the infrastructures to improve their performance. This also means recognizing what’s working and strengthening it. ASCE urges policymakers to “Continue a financial and regulatory environment that supports private rail investment and innovative financing options for future investment.” Commonly with a new administration, stakeholders may attempt rent extraction from regulatory agencies to reward political constituents. The Biden Administration has inherited one good infrastructure performer in freight rail; it shouldn’t wreck it with misguided policies like forced switching, price controls and revoked exemptions which undermine the incentives for investment. By law, the freight rail industry regulatory Surface Transportation Board must pursue a deregulatory approach and only intervene when there is clear evidence of market failure. Fortunately, by leaving freight rail alone, the Biden Administration can realize a policy success, and it should allow innovative entrepreneurs help the public sector.
|
ccfc38d995d1f92e698a49f1428d7bce
|
https://www.forbes.com/sites/roslynlayton/2021/03/17/hackers-are-targeting-us-banks-and-hardware-may-give-them-an-open-door/
|
Hackers Are Targeting U.S. Banks, And Hardware May Give Them An Open Door
|
Hackers Are Targeting U.S. Banks, And Hardware May Give Them An Open Door
China's hacking world is an ever-changing mix of official, military, and civilian actors who may ... [+] engage in state-sponsored, freelance, or independent attacks. getty
When people run their credit card, pay a bill online, or withdraw money from an ATM, few consider the software and hardware that makes those transactions happen. They expect that their personal and financial information is secure. Yet, there is a silent but immense assault against consumers via their financial transactions. The financial service organizations on which we all rely are increasingly the chief target of cyber attacks.
A new report for China Tech Threat identifies that financial organizations have become the prime target of cyber attack, which a morass of government agencies and policies tasked with cyber-defenses have done little to abate. U.S. banks must take proactive measures—including cyber resilience audits, secure-sourcing strategies and removing elements with vulnerabilities—to protect their systems, data, and customers.
Cyber-attacks against major financial institutions have grown significantly in recent years. An analysis in 2015 found that financial organizations were targeted four times more than other industries. Only four years later, financial firms experienced as many as 300 times more cyber-attacks than other companies.
Those located in the United States were the most targeted, accounting for over a quarter (55 of 207) of major global cyber-attacks against financial services, according to the FinCyber Project by the Carnegie Endowment for International Peace and BAE Systems Applied Intelligence.
Increasingly attacks are perpetrated by Advanced Persistent Threat (APTs) actors. These sophisticated, sustained attacks are meant to infiltrate networks and conduct long-term operations, such as spying or data exfiltration. Unlike an opportunistic cyber-attack, in which the perpetrator seeks to “get in and get out” for some immediate payoff, an effective APT will skirt a system’s security and remain undetected for a prolonged period. A cyberattack on a bank can devastate its customers and systems; and a cyberattack on the US Treasury, which SolarWinds can dangerously close, could bring down the country.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItFinary Raises $3.2M To Build The Gen-Z Group Chat Investing PlatformIBM Cloud For Financial Services Helps Firms Meet Regulatory Requirements
Much cybersecurity discourse and practice are focused on software and applications, and while important, these can compel organizations to de-emphasize hardware and physical facilities security. As the Supermicro case illustrates, the motherboard hardware of a U.S. firm was compromised by third-party supplier linked to the PRC military to enable a sophisticated attack across the network of an organization. This revelation reportedly led to Apple removing thousands of servers and Amazon terminating a supplier in China.
APT attacks require greater resources, planning, and knowhow than most rogue hackers possess. As such, they are more likely to be perpetrated by nation states—namely, the People’s Republic of China, North Korea, Russia, or Iran. Of these, only the People’s Republic of China (PRC) has a key position in the production of information technology, enabling it to install physical and virtual backdoors.
It is well documented that the PRC uses technology to surveille and exfiltrate information. In fact, recent Chinese laws require its citizens and businesses to support the government’s intelligence operations, which include spying, IP theft and technology acquisition. As the China Tech Threat report notes, perhaps most alarming, the only barrier preventing PRC-sponsored hackers from launching a potentially catastrophic cyber-attack against U.S. banks may be a precarious dynamic of mutual economic interdependence between US banks which want to do business in China and the discretion of the Chinese government to allow them to do, albeit with draconian conditions.
U.S. banks and financial service providers cannot rely solely on the government to combat these state-sponsored threats. Federal measures leave something to be desired, as evidenced by the growing number of attacks and even government agencies’ own technology purchases from companies with known ties to the PRC. Additionally, the absence of a clearly defined authority on cyber-defense has produced policy that is at time inconsistent, incoherent, or incomplete.
Rather than wait for policymakers to fix the problem, U.S. banks should preemptively mitigate exposure. That requires regular resilience audits and, increasingly, sourcing technology products from trusted democratic countries and removing hardware that could be compromised.
“Hardware represents a gaping and exploitable hole the current approach to cyber security… Hardware vulnerabilities can be exploited to completely sidestep software-based security measures,” wrote John Villesenor, a former nonresident fellow at the Brookings Institution’s Center for Technology Innovation, in 2013. As China’s production capacity has grown since Villesenor’s report, so too has the potential for these built-in backdoors.
Last month, President Biden signed an executive order to initiate a review of U.S. supply chain security. That should offer a wake-up call to policymakers of how important it is to know where their IT products are originate.
|
781313de1fcd35b8da72c340af1bf796
|
https://www.forbes.com/sites/roslynlayton/2021/03/23/mit-researchers-estimate-the-value-of-domain-name-system-dns-at-8-billion/
|
MIT Researchers Estimate The Value Of Domain Name System (DNS) At $8 Billion
|
MIT Researchers Estimate The Value Of Domain Name System (DNS) At $8 Billion
New support is needed for vital multi-disciplinary internet research projects following the drought ... [+] cased by Covid-19. getty
Since 1985, the Domain Name System (DNS) has played a critical but underappreciated role to map names to internet addresses. Domain names have important value as intellectual property and marketing assets in addition to their ability to “route the money of the Internet.” The market value of global DNS ecosystem is roughly $8 billion annually, with additional value for domain names. This finding comes from an important new paper Changing Markets for Domain Names: Technical, Economic, and Policy Challenges presented at the 48th Telecom Policy Research Conference (TPRC48) by William Lehr, David Clark and Steve Bauer. The paper represents another research milestone from MIT Computer Science & Artificial Intelligence Lab whose scholars explore fundamental scientific questions of the internet. Clark is one of the early internet pioneers who later served as its Chief Protocol Architect 1981-1989.
In the last 10 years, the number of generic Top Level Domains (TLDs) has expanded significantly from a handful of suffixes (.com for commercial, .org for organization, .edu for education, .gov for US government, and .mil for US military) to nearly 1200. Including country code TLDs (.EU etc), this makes about 1500 TLDs. This evolution has given firms more flexibility beyond .com to register their online business addresses and may even offer additional marketing value with suffixes like .baby, .cafe, and so on.
The DNS is managed under multi-stakeholder global internet governance coordinated by Internet Corporation for Assigned Names and Numbers (ICANN). It sets the rules for the generic TLD registries like Verisign (.com, .net) and the Public Interest Registry (.org) which supply wholesale second level domain names to registrars like GoDaddy and Alibaba which are then registered for a fee by registrants like Forbes (i.e., Forbes.com). The primary registration of domain names, 350 million and growing, drives roughly $8 billon in annual revenue. The secondary or resale market is $2 billion with the purchase and renewal of .com domain names. Calculating the market value of DNS is admittedly difficult because DNS activities are calculated within other business activities of major online firms, the decentralized ecosystem of the internet itself, and lack of transparency of domain actors in China and other countries.
The importance and relevance of DNS
The authors observe that the intellectual property associated with domain names and the value of DNS itself as embedded, reliable infrastructure. However, changing behavior is reducing the value and function of DNS by separating names from addresses. Search engines, content delivery networks, and digital object identifiers obviate the user’s need to access DNS. As users spend more time on mobile apps, the DNS might not be used at all.
Another issue is the protocol of encrypted DNS called DNS Over HTTPS or DOH which relocates that DNS resolution to a new part of the internet. This could bring undue navigational control to large entities like Google and Mozilla. Normally DNS is a separate service from the platform, but encrypted DNS demonstrates how platforms can exert control on points outside their network. This unintended consequence bedevils law enforcement which is unable to locate registrants when traffic is encrypted.
MORE FOR YOUIn The Ripple Case, The SEC Is Now On Trial – And Knows ItFinary Raises $3.2M To Build The Gen-Z Group Chat Investing PlatformIBM Cloud For Financial Services Helps Firms Meet Regulatory Requirements
Policy questions in DNS governance
The paper explores complex questions of market power, governance, regulatory oversight, and ecosystem fragmentation. Few consumers realize it, but price controls have been in place to enable easy and low-cost switching from registry to another (from .com to .org for example), similar to number portability. However companies like GoDaddy and Network Solutions are not price regulated and can easily raise prices for domain names without losing customers. If a business must have a certain domain name, they will likely purchase it and/or renew it whether the price is $10 or $100.
There is a secondary market of existing domain names in which speculators or “domainers” who purchase desirable domain names with the hope of “flipping” them for a higher price. The paper cites a first-of-its kind study of the secondary market by the Boston Consulting Group (BCG) which estimates that 18% of .com domain names are currently registered exclusively for resale by domainers with the average price of $1660 in 2020. These domain names are withheld from availability to the general public prices and therefore from productive use. Moreover, domain name buyers in this market experience not just price shocks (BCG estimates that the prices are 150 to 200 times the customary registrar prices), but potential abuse of brand, copyright, trademark, and keywords.
The MIT authors suggest that this is not necessarily added value in the economy. The lack of transparency in the secondary market is additionally problematic in that governance actors can’t necessarily anticipate or monitor abuse.
Technically-informed policy and policy-informed technology
The paper is part of a larger $1 million Convergence Accelerator project by the National Science Foundation to improve internet security by studying its structural dependencies, ownership, and economic interrelationships. Funding for these vital multi-disciplinary research projects has all but dried up in the wake of Covid-19. Federal agencies and corporations have tightened research budgets. Funding is necessary to support quality academic research into the public domain and to raise the quality of policy debate. Understanding DNS and other internet phenomena has never been more important. People increasingly rely on the internet for to work, learn, shop, communicate, and get healthcare. An important interdisciplinary internet policy conference now in its 49th year, TPRC49, is one forum for this and related academic papers. Abstracts for papers, posters, and panels for the September conference are due March 31.
|
6103cdffe00e75103d23bdeecbae6303
|
https://www.forbes.com/sites/rosspomeroy/2014/04/04/time-to-bring-pseudoscience-into-science-class/
|
Time To Bring Pseudoscience Into Science Class
|
Time To Bring Pseudoscience Into Science Class
Pseudoscience is a "claim, belief, or practice which is presented as scientific... but lacks supporting evidence or cannot be reliably tested." America is awash in it. "Roughly one in three American adults believes in telepathy, ghosts, and extrasensory perception," a trio of scientists wrote in a 2012 issue of the Astronomy Education Review. "Roughly one in five believes in witches, astrology, clairvoyance, and communication with the dead. Three quarters hold at least one of these beliefs, and a third has four distinct pseudoscientific beliefs." Who can we blame for becoming adrift in such hogwash? Thank popular TV hosts like Mehmet Oz, who's touted more than 16 weight-loss miracles on his show, none of which has yet resolved America's obesity epidemic. Thank celebrities like Mayim Bialik and Jenny McCarthy, both anti-vaccine advocates. Thank TLC for giving "Long Island Medium" Theresa Caputo a medium with which to popularize her charlatanism. Thank New Age guru Deepak Chopra, who pushes all sorts of ineffectual alternative medicine through books and media appearances, while collecting a tidy fortune. By stressing the importance of critical thinking and reasoned skepticism, groups like the New England Skeptical Society, the James Randi Educational Foundation, and the Committee for Skeptical Inquiry constantly battle these forces of nonsense, but their labor all too often falls on deaf ears. It's time to take the problem of pseudoscience into the heart of American learning: public schools and universities. English: Latest JREF fellows. Tim Farley, Karen Stollznow, Steven Novella & Ray Hall. Portrait taken... [+] at The Amaz!ng Meeting TAM9 from Outer Space July 16, 2011 (Photo credit: Wikipedia) Right now, our education system doesn't appear to be abating pseudoscientific belief. A survey published in 2011 of over 11,000 undergraduates conducted over a 22-year period revealed that nonscientific ways of thinking are surprisingly resistant to formal instruction. "There was only a modest decline in pseudoscientific beliefs following an undergraduate degree, even for students who had taken two or three science courses," psychologists Rodney Schmaltz and Scott Lilienfeld said of the results. In a new perspective published Monday in the journal Frontiers in Psychology, Schmaltz and Lilienfeld detail a plan to better instruct students on how to differentiate scientific fact from scientific fiction. And somewhat ironically, it involves introducing pseudoscience into the classroom. The inception is not for the purpose of teaching pseudoscience, of course; it's for refuting it. "By incorporating examples of pseudoscience into lectures, instructors can provide students with the tools needed to understand the difference between scientific and pseudoscientific or paranormal claims," the authors say. According to Schmaltz and Lilienfeld, there are 7 clear signs that show something to be pseudoscientific: 1. The use of psychobabble - words that sound scientific and professional but are used incorrectly, or in a misleading manner. 2. A substantial reliance on anecdotal evidence. 3. Extraordinary claims in the absence of extraordinary evidence. 4. Claims which cannot be proven false. 5. Claims that counter established scientific fact. 6. Absence of adequate peer review. 7. Claims that are repeated despite being refuted. They recommend incorporating examples of pseudoscience into lectures and contrasting them with legitimate, groundbreaking scientific findings. These examples can be tailored to different classes. For example, in physics classes, instructors can discuss QuantumMAN, a website where people can pay to download digital "medicine" that can supposedly be transferred from a remote quantum computer directly to the buyer's brain. (Yes, that's a real website.) Or in psychology classes, professors can expound upon psychics and the tricks they use to fool people. But teachers need to be careful, the authors warn. "Research suggests that the use of pseudoscientific examples enhances scientific thinking, but only if framed correctly." Teachers must stress the refutation of pseudoscientific claims more than the claims, themselves. Otherwise, their worthy efforts to instill critical thinking could backfire. Prior research has shown that repeating myths on public fliers, even with the intention of dispelling them, can actually perpetuate misinformation. "The goal of using pseudoscientific examples is to create skeptical, not cynical, thinkers. As skeptical thinkers, students should be urged to remain open-minded," Schmaltz and Lilienfeld say. But when claims are revealed to be specious, students should also be prepared to discard them. This article was originally published at RealClearScience. Source: Schmaltz RM and Lilienfeld SO (2014). Hauntings, homeopathy, and the Hopkinsville Goblins: Using pseudoscience to teach scientific thinking. Front. Psychol. 5:336. doi: 10.3389/fpsyg.2014.00336 Correction 4/7: An earlier version of the post mistakenly referred to the Committee for Skeptical Inquiry as the Center for Skeptical Inquiry.
|
49923157123b5fe99685aacd2cbfb68c
|
https://www.forbes.com/sites/rosycordero/2019/04/17/queen-of-the-south-alice-braga-treads-lightly-in-new-orleans-series-returns-june-6/?via=indexdotco
|
'Queen of the South': Alice Braga Treads Lightly In New Orleans, Series Returns June 6
|
'Queen of the South': Alice Braga Treads Lightly In New Orleans, Series Returns June 6
Alice Braga in "Queen of the South" season four. Photo: YouTube/Screenshot
Exclusive: For three seasons, fans of USA Network's Queen of the South wondered when Alice Braga's Teresa Mendoza would ascend to the throne. When season four premieres on June 6, the wait is over as audiences will see the queen pin begin her reign in New Orleans, after gaining control of a smuggling operation from Sinaloa to Phoenix last season.
Starting over in the popular Louisiana city won't be easy for Mendoza, but nothing ever has been in her life. But with the support of her loyal sidekick Pote (Hemky Madera), arms boss King George (Ryan O'Nan) and new family member Javier Jimenez (Alfonso Herrera), there's nothing she can't do.
This season, we are headed to New Orleans and taking Teresa’s journey to a whole new level – as she expands her businesses on the East Coast, both legal and illicit," said co-showrunner and executive producer Dailyn Rodriguez. While at the helm of taking on a corrupt system, she remains focused on building her sense of family. With her Phoenix operation as a foothold and an exiled Camila Vargas [Veronica Falcon], Teresa is finally enjoying the fruits of her labor. After her involvement with James [Peter Gadiot] and Guero [Jon Ecker], Teresa recognizes the pitfalls of being entangled with someone in the business. As the season progresses… we may see her fall into a new romance with a local musician.”
Key art for Queen of the South season four Photo: USA Network
Even though audiences had to say goodbye to many evil favorites, there's a new batch of baddies coming into the fold. In the trailer, both Pepe Rapazote and David Andrews make their debut as Cuban drug dealer Raul "El Gordo" Rodriguez and Judge Cecil Lafayette, respectively.
New Orleans is the perfect place to tell this chapter of Teresa’s story," said co-showrunner and executive producer Ben Lobato. "The city is vibrant and romantic, filled with characters and a sense of endless possibility. The unique scenery provides dynamic imagery and reflects a culture that serves as a perfect mirror to our storylines this season. Her expansion in New Orleans will inevitably come at a heavy price. We introduce a new antagonist, Judge Cecile Lafayette, who holds an iron-clad grip on New Orleans and serves as Teresa’s toughest obstacle.”
Queen of the South returns for an action-packed fourth season on June 6 at 10/9 central, only on USA Network. Check out the exclusive first promo for season four below:
|
36e7cf776180b966eb886473e08e4bd1
|
https://www.forbes.com/sites/roughdraftventures/2017/05/01/why-hackathons-are-the-best-founder-bootcamps/
|
Why Hackathons Are The Best Founder Bootcamps
|
Why Hackathons Are The Best Founder Bootcamps
As interest in computer science explodes across the country, hackathons have emerged a national phenomenon among coders on college and high school campuses alike. Last year, more than 65,000 students participated in more than 200 weekend-long hackathons hosted by Major League Hacking (MLH), the official collegiate hacking league. The hackathon community is appropriately active online, too: Facebook group Hackathon Hackers has a cult following of over 50,000 members and Hacker News has emerged as the "The Reddit for Hackers."
Most hackathons are recreational (PennApps, the world’s largest collegiate hackathon, flaunts the motto “hacking for the hack of it.”) but for some hackers, hackathons are the catalyst for full-time projects. GroupMe, the popular social messaging app that sold to Skype for $85M just 370 days after launch, for instance, was originally hacked at TechCrunch’s Hackday. Workflow, a program that connects mobile apps to automate things you do every day, was conceived at an MIT hackathon, went on to raise capital from Rough Draft Ventures, and was just recently acquired by Apple.
Participants prepare to take part in the IBM Hackathon, a marathon 24-hour free-coding event.... [+] (MANJUNATH KIRAN/AFP/Getty Images)
As a serial-hacker-turned-founder myself, I’ve recently been reflecting on how hackathons have prepared me to become a founder. Here are some of the ways hackathons can prepare aspiring founders -- and a word of caution on taking hacks full time:
You turn abstract ideas into real products
Hackathons are an exercise in turning abstract ideas into tangible products. This is the same for startups, too: While tons of people have great ideas, founders are distinguished by their ability to execute.
Sometimes the hardest thing for a writer is taking his or her views or positions and putting them down on paper in a coherent way. For hackers, the challenge is taking product ideas and transforming them into designs, lines of code, or hardware prototypes. Hackathons help participants hone this fundamental skill.
You learn to hack on a (time) budget
The typical hackathon is only 24 - 48 hours. There’s a lot to get done in this time: come up with an idea, form a team to work on it, and, of course, build the product. The best hackers manage their time effectively by prioritizing the tasks that need to get done and iterating quickly. Plus, most hackathons culminate with a demo where you present to an audience of peer hackers, engineers, and mentors, so you want to build a product you’re proud to show off.
This is good practice for aspiring founders. When you’re working on a startup, you are low on cash and as a result, time. The only way to get more of these resources is to deliver a product that impresses your customers and investors.
You innovate by experimenting with new tech
Remember when you were 8-years-old and you had that one friend who had all the coolest toys and Pokémon cards? Remember how playing at their house was the best day ever?
That’s what hackathons are like for engineers. As part of their hackathon sponsorship packages, companies like Uber and Amazon deploy APIs and SDKs (read: nerd toys), which become the building blocks of projects. Instead of starting from scratch, hackers can leverage these existing frameworks to catalyze their projects. This youthful energy is the heart and soul of startups.
That’s why even larger companies like Dropbox have made internal Hackathons a part of their culture and why Google pioneered the 20% time policy where employees can dedicate separate time to work on a project that inspires them.
You meet future teammates
In the same way some friends don’t travel well together, some don’t hack well together. Hackathons can be great trial run to benchmark how you and your teammates get along.
In the early days of a company, your most valuable asset in the early days is not the product, it’s the team and their ability to ruthlessly execute. The product will inevitably pivot, but the team is there to stay. Learning to manage team dynamics will prepare you for the rigors of entrepreneurship.
You learn from mentors and pick up new skills
One of the coolest parts about hackathons is that many corporate sponsors send engineers as mentors to be on the ground during the hackathon. So if you’re tinkering with Alexa, there’s an Amazon expert there to help you work through any bugs. Asking for help is a skill on its own. Since entrepreneurs pride themselves on being self-starting, it’s hard to admit that you are confused and totally lost. On the flip side, not asking for help wastes productive time. Learning to leverage the resources and support around you is an essential skill for any early stage founders.
A Word of Caution on Hackathon Projects:
Most hackathon projects are just that-- projects. Building something “cool” isn’t the same as building a business. A product is only one component.
Sometimes, the rushed nature of hackathons can work against you. So while a product may be impressive within the context of being built so quickly, it might not necessarily be the best solution to a problem.
Before pursuing a hack full-time, ask yourself: Does this product make people’s lives 10x better? Is there a large enough target market where you can differentiate yourself? Does this deserve to be its own product, or would it work better as a feature of an existing product? If the answers to these questions are clear and compelling, you may have the foundation for a real business. If not, keep hacking!
|
5c983bed7a00bf368613b081eb6daf7d
|
https://www.forbes.com/sites/roxannerobinson/2021/02/11/why-rihannas-fenty-clothing-line-has-been-put-to-an-end/
|
Why Rihanna’s Fenty Clothing Line Has Been Put To An End
|
Why Rihanna’s Fenty Clothing Line Has Been Put To An End
Rihanna arrives at The Fashion Awards 2019 wearing Fenty (Photo by Samir Hussein/WireImage) Samir HusseinWireImage
The pandemic proved to be good for panties and not so good for pants. At least that is the case for Rihanna's Fenty clothing line, the LVMH-owned brand and only the second start-up brand the French luxury conglomerate has backed. In a mutual agreement, the parties have decided to cease the line launched less than two years ago. The pressure to make it or break it has never been higher in luxury.
Meanwhile, Savage X Fenty, the disruptive lingerie line launched in 2018, secured $115 million in Series B funding led by L Catterton's Growth Fund. Clearly expressing opposite paths begs the question of what led to Savage X Fenty succeeding over Fenty?
Fenty Maison’s Unique Beginnings
It's important to look at the stakes involved launching a ground-up brand by LVMH. The luxury behemoth is known mainly for acquiring and reviving existing luxury brands. The last time they launched a new brand was Christian Lacroix in 1987. It also marked the first female of color to lead a brand for the French group. Beyond adding to her beauty and lingerie enterprises, the concept was to build upon Rihanna's creative director and guest designing gigs at Puma and Manolo Blahnik, both commercial successes. In these cases, the singer harnessed an existing aesthetic with production support built in.
The debut collection for Fenty, in May of 2019, represented the "greatest hits" of the singer's wardrobe and was executed with Fenty's number 2 creative Jahleel Weaver, her longtime stylist. In a video press conference at the time, Rihanna, aka Robyn Fenty, the CEO and Creative Director of Fenty, noted the experience by saying, "It's a meticulous process. You don't get bored when deciding what a new collection can be. LVMH is a monster of a machine; you can only expect the best."
The aim was to eschew typical four times yearly collections by adding drops when the inspiration and mojo to churn the machine for merch beckoned. Fenty rolled out in tandem with events with several retail partners versus costly fashion shows. The collection priced in the entry designer category: Jogger pants cost $280, T-shirts started at $180, hoodies at $300, an oversized padded denim jacket for $940 and dresses between $600-700. Initially, the drops were averaging every six to eight weeks, with seven deliveries in 2019 and six in 2020. The philosophy was to build on essential wardrobe items to be evergreen in the line.
MORE FOR YOUWalmart And McDonald’s Break Up A 30-Year MarriageWhen China Rings The Bell In Xinjiang, Retail CrumblesDressbarn’s Rebirth Is A Tale Of Digital Smarts And Perfect Pandemic Timing
Unforeseeable Challenges
Aside from the fact that a global pandemic put many fashion brands in peril, Fenty didn't gain the traction its initial hype promised. Signs of its trouble were evident in the fall of 2020, when a new managing director Bastien Renard was appointed to replace ready-to-wear executive Veronique Gebel. Next, LVMH chief financial officer Jean-Jacques Guiony said the line was a “work in progress,” to WWD. As Fenty Beauty and Fenty Skin, also LVMH owned, are performing exceptionally, it's clear the singer is bankable.
PARIS, FRANCE - MAY 22: Bernard Arnault and Rihanna attend Fenty Launch on May 22, 2019 in Paris, ... [+] France. (Photo by Julien Hekimian/Getty Images for Fenty) Getty Images for Fenty
But designing clothing collections is entirely different. Especially when Covid-19 made traveling to Europe for design meetings and production visits difficult. The singer and her stylist and (company brass) may have been overly ambitious about just how much unique merch could be pumped out in a year. Accessories such as sunglasses and fashion jewelry performed better overall, often selling out or having waitlists. But most styles remained the same since the May 2019 launch. Aside from signature hip-cut out on skirts, dresses and even hoodies, the merch wasn't that distinctive. The shoe offering didn't appear to evolve.
An effort to remedy that, perhaps, was the collaborators joining forces with buzzy cobbler Amina Muaddi. The collaboration added a covered toe elastic vamp style slingback stiletto and garnered them a footwear award. But the shoes offered in drop 11-20 were the last. Some industry voices on Twitter, such as Pierre M' Pele of Perfect Magazine, proclaimed the line was simply not good.
The Industry View
Luxury brand consultant Robert Burke, of Robert Burke and Associates, surmises that the clothing line positioned at collection prices wasn't the best place to reach her customer. He noted luxury buyers stuck with tried-and-true names like Dior, Chanel, Louis Vuitton and Hermes.
Burke also felt that for the launch's fanfare, the drop method was not the right approach. "They left out the fashion show hype which would have reached millions more online, but her power is in her notoriety," said Burke.
The lingerie and beauty lines, on the other hand, appeal to her demographic with their body positivity outlook and accessible price points. Plus, they have garnered a bigger social media following. While Fenty has just 1 million followers, Savage X Fenty has 3.9 million and Fenty Beauty has a whopping 10.5 million followers.
There is also a lower threshold in luxury today to weather loss and unprofitability. "I don't know if there are five and ten-year plans anymore; there is so much at stake. And investors look to brands that grow organically," said Burke.
Sucharita Kodali, VP, Principal Analyst with Forrester, agreed. “I think like any smart business decision, this is about investing in what is working–i.e., beauty and undergarments–and failing fast at anything that isn't," she said. "In this case, Fenty fashion clothing wasn't working, so it's not a priority now.”
A Lust for Lingerie
Like Rihanna’s beauty brands, Savage X Fenty lingerie is experiencing great success, thanks largely to its ability to attract Gen Z and Millennial customers. Relative to the clothing line, Fenty lingerie is quite affordable, with skimpy thongs selling for less than $10, bras selling for $17 to $22, and full-body teddies under $30.
It has also promoted the inclusivity factor. Sizes range from XS to 3X and Savage X Fenty promoted all shapes, colors and sizes in their branding campaigns, website and social media. It checks all boxes for authenticity, which is vital to the demographic. The line was extra buzzy for its ever-present influencer stable with names such as Aeysha Perry-Iqbal (489K followers), Corie Rayvon (974K followers), Denise Bidot (794K followers), Jazzmyne Jay (586K followers) and Symphani Soto (434K followers) among others.
LOS ANGELES, CALIFORNIA - Rihanna onstage during Rihanna's Savage X Fenty Show. (Photo by Kevin ... [+] Mazur/Getty Images for Savage X Fenty Show Vol. 2 Presented by Amazon Prime Video) Getty Images for Savage X Fenty Show Vol. 2 Presented by Amazon Prime Video
Marie Driscoll, CFA and Managing Director, Luxury & Fashion at Coresight Research Inc. notes the surge of demand for intimates, casual and comfort apparel benefitted from the same trend that stymied fashion apparel during Covid-19, the lack of anywhere to wear tailored and dressy RTW. “To pivot to intimates is a wise move and does leverage Rihanna’s brand DNA of inclusivity, which is a value consumers seek when choosing brands, along with demand for comfort clothing in a Covid-19 environment, “ said Driscoll noting the longer-term secular trend of casualization to benefit a focus on intimates and sports apparel.
Market Standing
In a press release about the new injection of funding into Savage X Fenty, co-Presidents Natalie Guzman and Christiane Pendarvis said: "As we continue to grow the brand at a remarkable pace, it is imperative we move forward with partners who not only have a deep understanding of our business and customer base but share our ambitious vision for Savage X Fenty and have the operational know-how to work with us to achieve it."
That ambitious vision includes retail. Branded brick and mortar stores are important to this brand that destigmatized racy lingerie. Many of the styles are reminiscent of intimate apparel previously only sold in adult entertainment stores—another visible aspect of Rihanna's overall acceptance and inclusion M-O.
According to the press release, the Series B financing follows “an exceptional year for Savage X Fenty in which it experienced explosive revenue growth of over 200%, while increasing its active VIP member base by over 150%.” Stats shared by a representative for L. Catterton noted that Savage By Fenty holds a 3-5% market share in intimates. A notable stat for a brand that is only in the market for two years and hasn't entered retail yet. Its core demo – women ages 18-35 — is expected to gain a much higher market share. By comparison, Aerie, which launched 14 years ago, report intimates make up just 31% of their total revenue which is estimated at $1 billion.
“The brand strikes a unique balance between affordability, fashion, and comfort, stands deeply for inclusivity and diversity, and has differentiated itself by building an extraordinary level of affinity and unmatched customer loyalty," said Jon Owsley, co-Managing Partner of L Catterton's Growth Fund in the release. "We believe the opportunities ahead for Savage X Fenty are enormous." LVMH partnered with the investment firm in 2016, thus rebranding at L Catterton. So, what's good for L Catterton is good for Bernard Arnault’s luxury group.
Move Over Victoria’s Secret
Additionally, Savage X Fenty is hitting its stride when sector leader Victoria's Secret succumbed to its woes that began even pre-pandemic. In May of 2020, they announced they would be closing 250 stores in the US. According to Euromonitor's research firm, Victoria's Secret share of the women's underwear market has declined from 34% in 2016 to 25.7% in 2019.
The intimates playing field has been heating up due to consumers trends as well. “We have seen the blurring of categories as intimates expands beyond underwear to outerwear (loungewear and casual wear), giving rise to a lifestyle intimates category, as we can see with American Eagles’ AEO aerie and Kim Kardashian West’s SKIMS. Rihanna and Savage X Fenty is better positioned to capitalize on market and consumer trends than Fenty RTW,” observes Driscoll.
LVMH has their eye on the prize in this regard. "They are looking at where the customer and opportunity are now," said Burke, "Rihanna is a great brand and spokesperson for it. I think this is a process of taping into how to use her talent best to reach the younger, forward-thinking audience that knows her best."
|
6ec97dbd3ae69096578edefcefc18663
|
https://www.forbes.com/sites/roxannerobinson/2021/03/03/small-business-101-three-former-editors-turn-entrepreneurs/
|
Small Business 101: 3 Former Fashion Editors Turned Entrepreneurs Share Their Stories
|
Small Business 101: 3 Former Fashion Editors Turned Entrepreneurs Share Their Stories
Super Smalls founder Maria Dueñas Jacobs and her three children. Photo Courtesy of Super Smalls
Career changes spring from desire and necessity. Whichever the route, few say they’ve regretted the move. As the once highly-sought jobs in media and retail, began to shrink in its allure as a long-term career goal, many editors and fashion directors have pivoted their skill and position into entrepreneurial roles. Often this meant learning a business acumen not commonly associated with the creative and good-taste required roles of their former positions. In time for International Women’s Month, I spoke to three former editors, mainly with accessories backgrounds, who reinvented their career and selves in three budding businesses.
Maria Dueñas Jacobs - Founder of Super Smalls, Established 2019 in NYC
Initial Investment: $800 with additional help from family as the business grew. Currently 100 percent self-funded.
What: Kids' accessories line inspired by glitzy, over-the-top grown-up jewels and fashion made for play. The brand and customer experience combines delighting the buyer as much as the recipient. Average retail price: $27
Why: With a passion for creating and 'self-imposed' challenge to wow her kids, Dueñas Jacobs transformed her treasured collection of 'shiny objects' aka jewelry that her children used to love to play with, into a stress-free and liberating toy. "I would explain that my things weren't toys, and they should play with their beads and the kids' jewelry' I had bought for them. When my oldest complained that 'It's not the same - yours are shinier and prettier!', I realized she was right.”
Sensing the void in the market for elevated play jewelry with a luxury mood, the mom and entrepreneur challenged herself to create a mini-play version of high jewelry from houses like Harry Winston and Tiffany. Dueñas Jacobs said she set a high bar for pieces that could pass her cool and clever aesthetic and pass the "could I wear this test." A testament to its success, the brand's revenue was up 416 percent from Holiday 2019 to Holiday 2020.
How: Dueñas Jacobs' well-trained editorial eye, a strength she brought to the brand, helped her conceive every aspect of the Super Smalls experience down to packaging logo and other non-product related details to produce a luxury-experience. Experience told her the packaging that real jewelry comes in is as important as the actual product. No expense was spared when choosing the cardboard box, which she says customers have saved and repurposed for other aspects of play. "Some of the packaging stories gave way to new product categories too, like our expansion into hair accessories and DIY crafts, " notes Dueñas Jacobs.
MORE FOR YOUYet Another JCP Misstep: Introducing Home Furnishing At The Wrong TimeReports Of A Full-Size Checkout-Free Amazon Supermarket Should Be Taken As Seriously As A Heart AttackIconic Design Brands Herman Miller And Knoll Join Ranks
Job Experience: Dueñas Jacobs’ roles at Glamour, ELLE, Stitch Fix, as well as being the mom of three young kids - aka her focus group - prepared her for Super Smalls in a 'particular way.' Styling experience for shoots, social media, art direction, brand imagery, and editor's eye to know what pops in an image. "I leaned on my network in enlisting photographers, graphic designers, and mom influencers as I navigate the start-up world," she said.
The Super Smalls founder applies the same high standard to designs as if she were editing a fashion story or luxury page, allowing the luxe factor combined with a 'cheekiness' to come across.
A selection of Super Smalls toy jewelry box sets Photo Courtesy of Super Smalls
"Brand imagery is how we tell our story; it informs our consumers, the way a good edit and curation tells a story in editorial," she explains, noting that her images capture kids at play with the products conveying authenticity.
Lessons Learned: "Mastering the supply chain was a definite learning curve," said the former editor adding, "Editors see beautiful end-product, but may not consider or understand the interminable steps it takes to get these samples, never mind execute their production!"
Learning to balance cost, quality, and ultimate product vision was a key lesson as well. "It couldn't be too precious, it had to be for kids, but it had to appeal to grown-ups like me. That's not an easy product to make," she says. It meant tough choices to move forward and abandon ill-fitting relationships, even if that harmed the bottom line. Like many young brands, the pandemic proved challenging but allowed for greater engagement with the growing consumer base.
Social Leverage: The Super Smalls founder brought a healthy 97K plus Instagram following to the new company but was careful not to overuse the storytelling platform. "I want followers to love Super Smalls, but my handle is about me as a whole person - not just my company. Some people follow me solely for Frankie – my 8-year-old British Blue cat – content. I cannot say I blame them," she confessed.
Best Advice: "Test and learn. Be ready to be wrong so you can make it right, quickly."
Parting Thoughts: "Super Smalls is all about creating things that encourage play, sharing, and all the best parts of being a kid. It's also about making 'gifting' a seamless and satisfying errand. "
Marina Larroude, Co-Founder and CCO of Larroudé, Established in 2020 in NYC
Initial Investment: 100K personal funds; then quickly converting the business to corporation status to fundraise as a start-up. Currently in the first seed round of fundraising.
A Larroudé slide created exclusively for Colette Paris recent online pop-up. Photo Courtesy of Larroudé
What: Reimagined classic staple shoe line made in New York and Brazil with new constructions and colorways allows customers to express individual moods and personalities. Average retail price: $275
Why: In some ways, Larroude's founding of the brand came from a setback that created an opportunity. "After 20 years working in the Fashion industry, I lost my job in early 2020, and deep inside me was a dream to start my brand," she said. She tapped into the creative talent pool she harnessed relationships with - such as photographer Hunter Abrams to shoot the first campaign– and set out to build a better future by developing a superior product with the final customer in mind. "Our mantra is You. Us. We. All. Everyone is welcome to share our story," she asserts.
How: Step one, according to Larroude, was to ask what she could offer the market. "The answer was simple, I could find great dresses, sweaters, jeans, all at attainable prices, but not shoes," she maintains, adding, "All good designer shoes are highly-priced and cheap ones fall apart and feel cheap wearing them." She applied her knowledge combined with a skilled shoe designer slash technician. She developed high-end designer shoes using the best quality materials such as leathers, heels, memory foams, all handmade using quality techniques and finishes. "We also cut a lot of middlemen in the development and production process and focused on delivering that outstanding quality directly to a larger audience of clients," said the founder.
Despite her traditional retail background or perhaps despite seeing the current model's cracks in the system, Larroude and her team envision other distribution forms beyond wholesale or even the popular DTC method. "We invented a QR system that gives each shoe an individual identification that our clients can share with their friends to earn and give credits," she explained, "We believe in our products so much that our best source for new clients is the existing ones."
Job Experience: Larroude's background as an editor at Condé Nast and, more recently, fashion director at Barneys honed her skills in creating an impactful image while the latter taught her what sells. "I didn't walk into my adventure so naïve about it all," she noted, adding, "I'm grateful for 20 years' experience in both sides of the fashion industry and the amazing network of colleagues and friends I cultivated along the way. It's like a big family; we support one another. "
Her role at Barney's fine-tuned her skill for curating what customers would buy, a gift she uses daily at Larroudé. But before this, she taps into her creative side by finding talent, ensuring the quality and manufacturing are perfect, along with packaging, storytelling, creating a campaign. Additionally, she "spends hours selecting the best shade of nude for a shoe; I edit every single aspect of it," she added.
Lessons Learned: Larroude said she also learned the power of a clear vision. "It's amazing how you can motivate a team and gain the support of the community by painting a clear common goal that makes sense," she attests.
Larroudé founder Marina Larroude trying on samples of her shoe collection. Photo Courtesy of Larroudé
Challenges Faced: While December 1st was the official opening, of course, the process started much earlier. “We started working remotely in July in the middle of a global pandemic. My entire team, based in NY, LA, Brazil, India - has never been together as a group." The factories used dealt with Covid-19 restrictions. Sales and press appointments were held on ZOOM. Warehouses were hired sight unseen and even flight restrictions posed challenges with every system implemented, initiated remotely. "The company Larroudé formed around a resourceful, go-get-it mentality and the process built our company resilience," she said, adding, "One colleague says, 'Can you imagine how easy it will be when things go back to normal, with proper resources?'
Social Leverage: Larroude's almost 70K Instagram followers represent a mid-size, loyal and engaged following."They've seen my career path, they've seen I never used the platform to advertise anything, just my point of view and taste," she notes. "A lot of my followers are colleagues from the industry – press/wholesalers/stylists… which is helpful. It's like putting a press release out."
Best Advice: "Do it! It's the most incredible journey! Find good partners; that is key. If you want to do something big, you will need a team. Follow your passion."
Parting Thoughts: More than sell high-quality shoes at a great price, Larroude hopes to use her brand "to start tough conversations, to break taboos, to help communities and to enhance women empowerment." Sharing stories and adding more voices to the mix is the goal. Larroudés' first campaign stars Dominique Castelano, a famous transgender model she met while working at Barneys. "She shared her stories of victory and struggles, which brings awareness to her cause." stated the shoe brand founder. Another example was cancer-survivor Erin Hazelton, who fundraises breast cancer foundations. On Valentine's Day, the shoe brand partnered with Womanizer sex toy company giving a free Liberty by Lilly Allen device with any Larroudé purchase. "The real shoegasm, but all jokes aside, women's sexuality and pleasure is one of the hardest conversations to have. And we think the hardest ones are the ones worth having."
Claudia Mata Gladish, Founder of VERTLY, Established in 2016 in California
Initial Investment: 10K personal funds with additional monthly funds until 2018, when the business supported its growth.
VERTLY founder Claudia Mata-Gladish Photo Courtesy of Vertly
What: VERTLY, a California clean skincare line that combines freshly extracted botanicals and CBD. An authentic garden-to-bottle brand made from slowly extracted locally grown plants in products produced fresh daily. "Our brand ethos is anchored on mindfulness— in how we create the products and in encouraging our community to set aside time for rituals to nurture themselves. Average retail price range: $22 - $55
Why: A transatlantic move from New York to California had Mata-Gladish considering a career pivot. Both of her brother-in-law's had been in the CBD business, and she positively affected her yogi and wellness expert husband. He applied it topically to soothe athletic injuries. "Having seen his positive results first-hand, I knew this was something I wanted to explore," she said.
How: The editor-turned-beauty-entrepreneur knew step one was educating people on the benefits of CBD. "When it first launched in 2017, the most commonly asked question was whether CBD gets you high -it doesn't—so I knew there were a lot of misconceptions about it," said Mata-Gladish, adding "the initial product couldn't be intimidating for newbies to experiment with." The first product, a lip balm, proved to be used multiple times daily and the gateway product (no pun intended) to ease people into using CBD topicals.
Job Experience: "I took quite a leap, literally from fashion to the farm!" Mata-Gladish admits. Upon arriving in California, she enrolled in herbalism school and studied plant wellness. "I am lucky to live in an area of Northern California that is a green-beauty Mecca, so I partnered with many local experts like botanical formulators, seasoned herbalists, master gardeners, and chemists so they could further advise me. It took a village as they say."
Her editor reflex muscle of sharing discoveries motivated her to start the brand.Combining CBD with fresh plants was effective and innovative and ahead of the current trendy CBD-frenzy. "I wanted to bring this newness into the skincare space," she said.
Mata-Gladish approaches VERTLY with transparency – how it's made and how to best use it in hopes of connecting authentically and building trust with its community. "I used to curate, and now I create—but I still share high-quality discoveries and information with an audience," she muses.
Challenges Faced: The founder described her first year of being an entrepreneur as "flying a plane while I was in the process of building it," with a learning curve along the way. Working with nature helped her be less of a "control freak," which can be incredibly unpredictable. "Fires can devastate a season of crops for local farmers, as can odd weather patterns, so I have to be humble about my level of control," she admits.
A face serum infused with CBD-oil from VERTLY Photo Courtesy of VERTLY
Lessons Learned: Mata-Gladish's key lesson was learning to share her concerns and questions on a network of other small business founders for advice and support. "The network is great for those days when things are rough, and I want to vent with someone who understands the struggles of entrepreneurship," she said.
Like everyone in the retail game, the past year has had its challenges. "All of our wholesale partners were affected, so we are looking forward to the day when more stores reopen because customers still want to be educated and in-person sales staff are always helpful.
Social Leverage: Mata-Gladish uses both her personal and Vertly accounts, which combined total around 25K, to help dispel CBD misconceptions and to present its wellness capacity. "My husband and I live in Northern California, have a healthy, green lifestyle; have young kids, are both active people—and were able to embody on social media what CBD for self-care looks like in ways people can relate to." She extolls the many uses such as to beautify the skin, soothe the body, and help with sleep in hopes of normalizing CBD, which admittedly gets easier in time as the ingredient has exploded in the last five years. "As a hands-on founder, you'll find me all over the feed: showing my skincare routines, self-care practices, my family, editors, customers who send us testimonials, we show it all!"
Best advice: "I think it's important to love whatever new endeavor you are jumping into because it takes a lot of work to start a company. As it will be on your mind 24/7, it's in your best interest to truly enjoy it!" enthused Mata-Gladish.
She also suggests trying something new, identifying strengths, and finding people to fill the holes lacking strong expertise. "I partnered with many experts to further advise me. If you have the vision, you can ultimately orchestrate the right players and make it all come together."
|
544d9f0ea27dc63fa74998502d385413
|
https://www.forbes.com/sites/roxannerobinson/2021/03/04/macys-shopify-michael-kors-ralph-lauren-theory-and-more-join-forces-with-fashion-makes-change/
|
Macy’s, Shopify, Ralph Lauren And More Join Forces With Fashion Makes Change
|
Macy’s, Shopify, Ralph Lauren And More Join Forces With Fashion Makes Change
Female workers participating in a Peer Educator Program in Bangladesh as part of the BSR_HERproject ... [+] within the Empower@Work initiative. Photo Courtesy of Fashion Makes Change
Making International Women's Day a give-back opportunity just got easier. To mark the global female recognition day on March 8, consumers and brands alike can easily donate to Fashion Makes Change or FMC, which focuses on female empowerment, education and climate action together as the driving force. Several high-profile brands such as Michael Kors, Versace, Ralph Lauren, Theory, plus major retailers Macy's M , Neiman Marcus and Nordstrom JWN will donate directly to the initiative or facilitate donations via the brand’s check-out system or through Shopify's help.
In a relatively novel approach for the fashion sector, consumers will be given a chance at the POS to add any amount or round-up their change, on top of their purchase, that is then donated to the designated project. Many brands match those funds or offer a donation on behalf of their customers, sometimes both, furthering the effort. While some brands and consumers will organize this within their own sales systems, others can allow the purchase function through Shopify, if they are currently on the selling platform. Cara Smyth, who chairs FMC, loves the simplicity of the impulse-centric POS round-up. "The goal of Fashion Makes Change is to make it easy for customers to join in and amplify gender equality, women's education, and empowerment in communities around the globe," she said.
Smyth said the Shopify component was a story of kindness and collaboration. Introduced by Accenture ACN , Shopify to help them with back-end coding for e-commerce partners, and the relationship blossomed from there. "Shopify was founded on a mission to make commerce better for everyone. With our partnership, we are joining forces to accelerate solutions for people and the planet," said the FMC Chair. Additionally, Shopify led FMC to app developer Pledge, the award-winning virtual fundraising platform that pioneered Shopify donations. This meeting led to a proprietary round-up app found on the Shopify app store, which allows Shopify merchants to install on Shopify checkout pages in minutes seamlessly – and all donations, collections, and tracking are automatic. Thus, creating an easier solution for brands who weren't already using a donation system to participate in the program.
Workers participate in a group training activity as part of Empower@Work Photo Courtesy of Fashion Makes Change
Specifically, fundraising for this initiative lasts through March and beyond for some will be donated to the Empower@Work collaborative - a joint effort of BSR's HERproject, CARE International CAI , Gap Inc.'s GPS P.A.C.E. and the United Nations' ILO-IFC Better Work program. Empower@Work seeks to leverage knowledge, skills and networks to drive collective action benefitting women workers and gender equity in global supply chains. The collaborative has created an integrated Worker Training Toolkit for women's empowerment to include in-depth training curriculum materials covering leadership, financial literacy, problem-solving, decision-making and family planning. The mission of the organization's core is to build a community between brands, non-profits, consumers, and supporting industries and act as a transformational ecosystem driving action on critical social and environmental issues related to fashion.
MORE FOR YOUBeautycounter Looks To Accelerate Growth As The Carlyle Group Acquires Majority StakeLowe's Doubles Down On Contractors With Store Revamp As Home Improvement Spending BoomsDressbarn’s Rebirth Is A Tale Of Digital Smarts And Perfect Pandemic Timing
It's one of the initiatives that newly formed Fashion Makes Change plans to support. The project, which launched in November 2020, is a project of the Rockefeller Philanthropy Advisors and 'provides actionable solutions that catalyze collective action, build resilient communities and work to reverse the climate crisis' according to a press release.
Smyth, the project's Chair, also had a role in the Fair Fashion Center. She says the project emerged from the CEO meetings at the Responsible Business Coalition housed at Fordham University's Gabelli School of Business. The group includes CEO’s from 275 brands, 102 Countries, and over $360B in revenue. From its inception, the fund recognized its impact considering "the size and global scale of the industry, the workforce and our ability to catalyze change," according to Smyth.
"During 2020, as the pandemic progressed, stores closed and customer's stopped shopping, it became ever more evident that the world is interconnected, and we are all reliant on each other," said Smyth noting, "Collective action was required. Each one of us plays a part in designing the future we hope to see."
Specifically, this first large-scale initiative is called "Your Change Can Change Everything" and allows brands to choose the length of their participation. But there is more in the pipeline. The second pillar of the project will support the decarbonization of global supply chains by accelerating the transition to renewable energy by working with the same communities on manufacturing methods.
After the International Women's Day kickoff, Earth Day and Mother's Day, climate & fashion month in September, and the period of giving thanks over the holidays will be key consumer initiative dates.
A look from Theory Photo Courtesy of Theory
Theory, as one example, has been closely involved with the Responsible Business Coalition for years. According to Wendy Waugh, SVP Raw Materials at Theory, they partnered to help guide the path towards a more sustainable future. "Empowering female leaders is inherent to Theory's DNA, so when given the opportunity to support the critical issue of education within the supply chain, we were thrilled to be at the forefront of the effort," said Waugh.
The new, sleek design company is focused on the industry evolving, which means using its platform to educate and empower its community through initiatives such as Theory for Good. This project houses the brand's conscious commitment to positive impact by creating sustainable solutions for products, people, and the planet.
She is a firm believer in the dialog between brands and suppliers of raw materials. Waugh suggests asking questions such as 'What raw materials are utilized and how can they be updated to be more sustainable? How much water is used during production, and what is the purification system of said water? What chemicals are present?'
"Opening the dialogue between companies and suppliers is an easy first step that allows for an opportunity to address sustainability issues and find creative solutions to additional concerns," said Waugh adding, "Once you have a thorough understanding of the journey aka traceability, a fiber takes - from its creation, through the manufacturing process, and into a garment in-store, the easier it is to identify where changes are needed."
Participating global retail & fashion brands include Michael Kors, Versace, Jimmy Choo, Macy’s, Neiman Marcus, Gabriela Hearst, Chloé, Nordstrom, Theory, The Conservatory, Larroudé, Markarian, Rosie Assoulin, Hill House Home, Ralph Lauren Corporate Foundation, The Coach Foundation, Stuart Weitzman, Kate Spade New York, Everlane, Madewell, AARMY, Morgan Lane, Sarah Flint, 1 Atelier, Kenneth Cole Productions, Inc., Eileen Fisher, Abercrombie & Fitch are among those supporting this first consumer launch. For a complete and up-to-date list, see the FMC website.
|
81d29944ee5827af1092684407fcb39f
|
https://www.forbes.com/sites/roysmythe/2014/09/22/delivering-health-care-by-drone/
|
Delivering Health Care By Drone
|
Delivering Health Care By Drone
“We may very well stand at one of those decisive turning points in history that separate whole eras from each other. For contemporaries entangled, as we are, in the inexorable demands of daily life, the dividing lines between eras may be hardly visible when crossed; only after people stumble over them do the lines grow into wall which irretrievably shut off the past.” -Hannah Arendt
I once asked a clinical colleague to describe what it had been like working as a trainee with a world-famous surgeon.
His response was surprising, and troubling – “Oh… he’s brilliant and talented, of course, but to be honest – he’s dangerous. He has become more or less indifferent to patient suffering, and even death – I guess because he has seen so much of it.”
Although infrequent, this type of desensitization, or inurement, unfortunately does occur in clinical settings - whereby health care workers that are constantly exposed to suffering become “numbed” to it over time.
Hannah Arendt, the German-American philosopher, coined the term “banality of evil” in her New Yorker series covering the Nazi war criminal trial of Adolph Eichmann – suggesting that blind allegiance to authority can lead to indifference to suffering. Although she was aggressively criticized by many for implying an apology for the Third Reich’s role in the Holocaust, those investigating the topic (most notably Stanley Milgram in his experimentsillustrating that college students, given the instructions to shock others by an authority figure will do so repeatedly) have supported her theory.
Despite the fact that desensitization, and the “Milgram” effect are real, what I am really concerned about in health care at this particular “decisive turning point in history” is neither of these – what worries me is “distance.”
Could the use of technologies that distance health care providers from the first-hand experience of the suffering of those they care for (such as telemedicine platforms and other forms of “virtual visits” or self-care tools) lead to a collective “stumbling over lines” with unfortunate consequences? On one side of these lines is empathy and understanding of the nature of suffering, and on the other, a loss of that perspective.
I recently spoke with Dr. Eric Cassell – a pioneer in the development of the specialty of Palliative Care. He wrote a landmark article published in the New England Journal of Medicine in 1982, entitled “The Nature of Suffering and the Goals of Medicine,” and later edited a well-respected textbook by the same name. We discussed both the possibility that technology could increasingly distance providers from suffering, and the fact that many physicians are “burning out” in a time when technology should actually be making their jobs easier.
“They are related,” he said. “The problem that physicians have now is not that they get too close to their patients, but that they do not get close enough… The suffering have special therapeutic needs, and those aren’t met by technology alone.”
Dr. Rushika Fernandapulle, the co-founder and CEO of Iora Health, a company that is growing a new model for primary care delivery leveraging high tech and high touch, shared his thoughts.
“The thing that heals people is relationships – the problem is that technology has the ability to actually facilitate relationships, but it can also get in the way of them.”
Karl Marlantes’ book about his experiences in Vietnam as a young soldier, “What it is Like to Go to War” examines the social and psychological consequences of fighting, killing and returning from those experiences, and provides an interesting analogy. He asserts that the contemporary use of drones and cruise missiles, and the lack of subsequent exposure to the suffering and damage that these weapons cause – may have important unintended consequences.
“Death becomes an abstraction, except for those at the receiving end,” he says. “What is at stake is not only the psyche of each young fighter, but our humanity… the chances for transformational psychological experiences are decreased enormously when you wage war with all the comforts of home. You have no way of knowing if you are in the sacred space of Mars and death, or coming home from it.”
Mars was the Roman god of war, and the Romans believed that Mars sanctioned war only as a means to achieve peace. In the spirit of this ancient viewpoint, Marlantes implies that for one to “enter the Temple of Mars” that he must understand fully (experience) the consequences of his actions, and only seek war as a means to more humane ends. Although the latter may be achieved with war from a distance, the former simply cannot.
The adoption and deployment of next generation technologies made possible by the digital revolution – those that move the locus of care closer to the patient, and “extend” the care capabilities of providers in a number of ways will be absolutely essential to improve the delivery of care.
However, as we use these new tools, let us take care to not allow them to create “walls difficult to traverse” between those that are providing care, and those that are suffering. Let us continue to immerse ourselves in the nature of suffering of the diseases we treat, as well as the suffering that is often created by our efforts to treat them. We must avoid, at all costs, simply delivering health care by drone.
|
5ce461d025aa607ef10e7f7fdfb5f6be
|
https://www.forbes.com/sites/roysmythe/2015/07/17/health-cares-current-productivity-paradox/
|
Health Care's Current "Productivity Paradox"
|
Health Care's Current "Productivity Paradox"
The real problem is not whether machines think, but whether men do.
- B. F. Skinner
There has been a great deal of wringing of hands and gnashing of teeth about the lack of generalized improvements in health care delivery as we approach the beginning of the end of initial electronic health record (EHR) adoption. For some, self-flagellation might be appropriately added when realizing that the purchase and implementation of such platforms can cost up to $70,000 per care provider. By the end of this year, it is anticipated that the overall EHR market may reach the astounding figure of more than $6 billion dollars annually.
Unfortunately despite the cost, there is a “dirty little not so secret” among the majority recently implementing EHRs – that productivity (moving patients through a health care experience and documenting the encounter) has worsened rather than improved. Most would identify with a recent health system study demonstrating that while EHR implementation may have a positive financial impact, work productivity can suffer. Another national survey of more than 200 ambulatory and hospital-based physicians across the U.S. recently reported that when it comes to working efficiency, the overwhelming majority are underwhelmed. Two-thirds (66%) said that they were seeing fewer patients than before, and the vast majority (85%) reported spending more time documenting visits.
A small number of organizations, namely those that have been in the EHR game for much longer periods of time, have realized improvements in clinical work flow and productivity using these tools. But I will go out on a relatively strong limb and say that in the moment, these organizations are absolute exceptions to the rule.
Is this a cause for alarm? Were the billions of dollars transferred from the several (health systems everywhere) to the few (the handful of EHR vendors located in Madison, Wisconsin and a couple of other locations) ill-advised? As is often the case, there are some interesting lessons from history that can be brought to bear.
It is useful to begin with the concept of the “general purpose technology (GPT).” A GPT is a technology that can affect an entire economy, and alter economic and social structures. These technologies also usually have three more specific characteristics – pervasiveness, an ability to improve over time and lower the costs of its users, and encourage the invention and production of new products and processes. As a GPT can be a product, process or system, some notable examples would include: domestication of plants and animals, the wheel, mass production, electricity, nuclear energy and the computer.
One could imagine a long list of GPTs specific to medicine, including such things as general anesthesia and the X-ray. What I would suggest is that the EHR is a prototypical GPT for health care – one that meets all of the foregoing criteria – it has already had an impact on the economics and structure of care, and is pervasive. It has proven the ability to improve over time, and it is directly responsible for the health care digital technology-enabled revolution, therefore dramatically fulfilling the enabler of new products and processes requirement.
However, the most fascinating thing about our current EHR experience, and the important historical lesson I allude to has nothing to do with those important characteristics, but rather the answer to this question – how could the adoption of a health care GPT with so much promise lead to a decrease in industry productivity?
In their recent book, The Second Machine Age, MIT Erik Brynjolfsson and Andrew McAfee discuss the concept of the “productivity paradox,” and referenced some of Brynjolfsson’s earlier work on the topic as well as work by Chad Syverson at the University of Chicago and Paul David at Stanford. David sums the overarching concept up nicely by saying that if we consider “thinking about transitions from established technological regimes to their respective successor regimes, many features of the so called productivity paradox will be found to be neither so unprecedented nor so puzzling as they might otherwise appear.”
What they tell us is that there were two previous slowdowns in productivity that were not anticipated, and caused great consternation – the adoption of electricity and the computer. The issues at hand with both were the protracted time it took to diffuse the technology, the problem of trying to utilize the new technology alongside the pre-existing technology, and the misconception that the new technology should be used in the same context as the older one.
Although the technology needed to electrify manufacturing was available in the early 1890s, it was not fully adopted for about thirty years. Many tried to use the technology alongside or in conjunction with steam-driven engines – creating all manner of work-flow challenges, and it took some time to understand that it was more efficient to use electrical wires and peripheral, smaller electrical motors (dynamos) than to connect centrally-located large dynamos to the drive shafts and pulleys necessary to disperse steam-generated power. The sum of these activities resulted in a significant, and unanticipated lag in productivity in industry between 1890 and 1920.
An old voltmeter sits on display at the Siemens AG dynamo factory in Berlin, Germany, on Tuesday,... [+] Sept. 28, 2010. Siemens AG, Europe's largest engineering company, predicted an increase in fiscal fourth-quarter profit to 'very satisfactory' levels as orders for industrial equipment rebound. Photographer: Michele Tantussi/Bloomberg
It does not take a great deal of inductive logic to understand the similarities between this period and the initial use of computing in business and manufacturing – slow diffusion, parallel technology use, and attempts to use the new in the old context. So not surprisingly, a strikingly similar slowdown in productivity was noted between the late 1970s and the mid-1990s – causing the Nobel (Riksbank) Prize-winning economist Robert Solow from MIT to remark that “we see the computer age everywhere, except in the productivity statistics.”
I hope that those reading this have already connected the dots to our current EHR “productivity paradox” in health care. Despite the fact that most have adopted, or are adopting these systems, it has been a relatively long diffusion period, and similar to the previous two example, we are living in the period of parallel technology use (digital and paper) in most institutions, even those that are “paperless.” Finally, we are literally so embedded in the use of this medical GPT that we cannot stop to “see” how we are using it in old contexts, but we are.
The good news, however, is substantial. In the two decades following the adoption of both electricity and the computer, significant acceleration of productivity was enjoyed. The secret was in the ability to change the context (in the case of the dynamo, taking pulleys down for example) assisting in a complete overhaul of the business process and environment, and the spawning of the new processes, tools and adjuncts that capitalized on the GPT.
We do not fully grasp what the new context in health care will be, or what exploring this particular frontier will demonstrate, but we know that it will involve the use of GPT-additive digital technologies in entirely new ways, and in new models of both the work flow and delivery of health care, and that productivity will likely improve dramatically as a result. We may also begin to think of the concept of productivity much differently as a result (i.e., what “patient throughput” actually means).
Regardless the future onslaught of “artificial intelligence”, human creativity will be among the last to fall to the inanimate. We have, as Skinner reminds, the unique ability to leverage technology, and not vice versa, to make our brief lives better.
|
56db5892ce68100e4a30992bd904e0ca
|
https://www.forbes.com/sites/roystonwild/2016/08/24/commodities-rout-is-far-from-finished-as-glencores-profits-sink-66/
|
Commodities Rout Is Far From Finished As Glencore's Profits Sink 66%
|
Commodities Rout Is Far From Finished As Glencore's Profits Sink 66%
Commodities colossus Glencore dipped to one-month lows in Wednesday business after latest half-year numbers highlighted the ongoing malaise whacking raw materials markets.
Glencore was last dealing 5% lower after announcing that net income slumped by two-thirds between January and June, to $300m, a result that narrowly missed broker estimates.
The business saw revenues at its Metals and Minerals division dip 4% in the first six months, to $30.9bn, as much of the base metals complex continued to struggle. Bellwether metal copper saw its value sink 21% in the period, for example, to $4,707 per tonne, Glencore noted.
And the top line kept on toiling at Glencore's Energy Products arm, too, with collapsing coal and oil prices pushing revenues 8% lower during in the first half, to $39.6bn.
Glencore chief executive Ivan Glasenberg is hopeful that the commodities giant is now on an upward... [+] trajectory as ambitious restructuring kicks in. Photographer: Simon Dawson/Bloomberg.
Over The Hump?
But the poor first-half performance could not prevent Glencore from striking a positive tone looking ahead.
Indeed, chief executive Ivan Glasenberg commented that "after a difficult start to the year, the more constructive tone of markets in recent months has helped support the pricing of many of our key commodities." Glasenberg did caution, however, that "we remain mindful that underlying markets continue to be volatile."
Glencore is particularly upbeat about the progress of its ongoing cost-cutting programme, the business having almost achieved its target of hiving off $4bn-$5bn worth of assets already.
And Glasenberg added that "we remain confident and focussed on achieving even lower than previously indicated net funding and net debt levels by the end of this year."
Glencore now aims to reduce net debt to between $16.5bn and $17.5bn by the close of 2016, down from its prior estimate of between $17bn and $18bn.
Visualization by Graphiq
!function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0],p=/^https:/.test(d.location)?'https':'http';if(!d.getElementById(id)){js=d.createElement(s);js.id=id;js.src=p+"://cdn1.findthebest.com/rx/widgets.js";fjs.parentNode.insertBefore(js,fjs);}}(document,"script","ftb-widgetjs");
Troubled Waters
Glencore has seen its share price detonate during the past year as hopes of a sustained recovery in commodity prices -- allied with the strong progress of Glencore's streamlining programme -- has fuelled investor appetite.
The firm has seen its stock value double since the start of 2016, the Swiss business striking one-year peaks earlier this month around 190p.
But while the company's restructuring efforts deserve to be lauded, I reckon the murky supply and demand landscape across many of Glencore's key markets still makes it a risk too far at the present time.
While Glencore shuttered much of its copper and zinc output last year to help mend chronic market imbalances, many of the industry's biggest drillers and diggers remain intent on raising production to offset lower commodity values. Indeed, mammoth project expansion measures and a raft of new 'mega mines' looks set to keep many sectors oversupplied in the coming years.
In addition to this, fragile trade data from China continues to cast doubts over demand levels looking ahead -- copper imports fell 14% month-on-month in July, to 360,000 tonnes, for instance.
Given its still-murky earnings outlook, I believe a forward P/E rating of 34.9 times -- soaring above the FTSE 100 average of 15 times -- makes Glencore far, far too expensive, particularly for risk-averse investors.
|
bc837854d4eb7fe6285a8ecbed5ca67c
|
https://www.forbes.com/sites/rpaige/2019/01/18/you-has-finally-found-the-terrified-audience-it-deserves-on-netflix/
|
'You' Has Finally Found The Terrified Audience It Deserves On Netflix
|
'You' Has Finally Found The Terrified Audience It Deserves On Netflix
There's no telling what Joe is thinking in 'You.' Courtesy of Netflix
A television series about a serial killer and stalker who literally hunts his victims for months on end and somehow gets away with it all doesn’t exactly scream, “must see TV.” That’s probably why Lifetime’s You, which premiered on the network during the fall of 2018, came and went with little fanfare. Starring former Gossip Girl crush Penn Badgley as Joe Goldberg, it’s about an unassuming bookstore clerk who falls for a customer, and then does literally everything within his power to make sure she’s his. He succeeds. What follows is a terrifying cat and mouse tale — but the audience is the only one clued in on Joe’s horrible antics. It’s also a cautionary tale for keeping your social media accounts private.
The series, which ran for 10 episodes on Lifetime, wrapped up in early November. Season 1 ended with a cliffhanger that set up Season 2. Honestly, at the time — and even though it was a good, guilty television pleasure — You seemed to be nothing more than a one-off cable show that drew a little attention, and a little chatter, but would just eventually fade away in favor of bigger budget series.
And then Netflix announced that they would be dropping You on the streaming service the day after Christmas. Oh, also they had picked up the show from Lifetime for Season 2. You was now a Netflix Original.
It’s obvious when Netflix really likes one of its shows, because it spends a lot of time posting about it on social media, like Stranger Things. You can tell when Netflix really likes one of the shows in its catalogue library, because they also spend a lot of time posting about it on social media, like Riverdale. From the amount of posts Netflix has done about the hit CW show, it’s clear that they are dying for it to be all theirs (which is more than likely why the streaming service scooped up the Riverdale spinoff, The Chilling Adventures of Sabrina). Netflix is like one Instagram post away from being a full Cole Sprouse fan account.
As soon as You started streaming on Netflix, it was obviously that the show was was being treated as one of the platform’s favorites (the memes!) and it didn’t take long for views to flock to it. Those who had watched it on Lifetime were suddenly rewatching it again. It also found a brand new audience thanks to word of mouth about the ridiculous plot, and probably helped by Badgley's recognizable face, since thousands of millennials were suddenly reminded of their Lonely Boy crush, circa 2007.
Netflix knows it hit a goldmine by acquiring You, and it’s something only Netflix could do. As rough as it is to say, remaining on Lifetime You would have never found the same success. On Thursday, Netflix's See What’s Next account tweeted out that since it began streaming the series had already been watched by over 40 million members. Meanwhile, the Season 1 finale on Lifetime was watched by just over half a million viewers.
Honestly, that extreme juxtaposition is not surprising. You was almost manufactured to be a Netflix original, even though it took a little bit of time to get it there. You has the three most important qualities that translate to success on Netflix:
An attractive cast A bingeable quality A meme-able quality
Riverdale has all of those things, and it was a runaway success for Netflix when it started streaming (and led to a huge increase in viewership on The CW for Season 2). The rom-com To All the Boys I’ve Loved Before also has those three traits, and it’s catapulted Peter Kavinsky into a household name. It might be too much of a stretch to say that when Netflix puts their weight behind something, it turns into numbers gold, but that notion isn’t far off.
A lot of it probably has to do with now how easy it is to watch You. Last fall if you suggested to someone that they should watch You, that required figuring out how to stream it off of Lifetime’s app, and does anyone really want to introduce a new app into their life? Now when you say, “Watch You, it’s on Netflix!” there’s zero effort put into binge-watching it.
With Season 2 now solely a Netflix Original, the streaming site now has the ability to go even further with storylines that were already pretty far out there. Season 1 of You featured zero nudity, zero swearing, and some gory moments, but not too grotesque. Netflix doesn’t have to follow those rules anymore. Oh god, imagine just what Joe could possibly do to his next victim?
The show was already pushing the envelope, and it's only going to get more bonkers going forward. Also, we're only going to grow more suspicious of our own social media accounts, considering the way Joe is tearing through them. And Netflix is going to meme it every step of the way.
|
bf606eb7d1db4b20e640755d3dea1e59
|
https://www.forbes.com/sites/rrapier/2015/12/18/are-oil-companies-cooking-their-books/
|
Are Oil Companies Cooking Their Books?
|
Are Oil Companies Cooking Their Books?
An Apache Corp. oil well in the Permian Basin in Garden City, Texas. (Photo by Spencer Platt/Getty... [+] Images)
Recently a friend and I were discussing the most recent quarterly results for certain oil and gas companies, and I pointed out that I was amazed that some are reporting solid free cash flow despite the plummet in commodity prices. He replied that the numbers are suspect, because in many cases companies are reporting negative income even as they report positive cash flow. He suggested that the discrepancy might be a result of "creative accounting," so I decided to investigate. What I discovered was interesting, and worth sharing with readers.
First, let me define some terminology. Free cash flow (FCF) is a measure of the amount of cash generated by a company that is available for reinvestment or distribution to shareholders. It is one measure of a company’s overall financial health. Oil and gas companies that have been slashing capital expenditures over the past year, and have managed not to spend all of their cash flow should be among those best able to withstand several more months of low oil prices.
A company's Standardized Measure (SM) is the present value of the future cash flows from proved oil, natural gas liquids (NGLs), and natural gas reserves, minus development costs, income taxes and existing exploration costs, discounted at 10% annually. The SM must be calculated according to specific guidelines set by the SEC. All oil and gas firms traded on a U.S. exchange must provide the SM in their annual filings with the SEC. It is a GAAP financial measure. (GAAP stands for generally accepted accounting principles, the most formal and inflexible set of rules for assessing a company’s finances.) The SM is calculated according to the average prices received over the past 12 months for oil, NGLs, and natural gas.
There are several ways to calculate FCF, but generally speaking the calculation begins with a company’s net income, adds back depreciation and amortization (because those non-cash costs relate to historical expenditures), adjusts for impairments to oil and gas properties (those non-cash impairments are applied against net income but not cash flow) and then subtracts interest paid, changes in working capital and capital expenditures:
FCF = Net income + Depreciation/Amortization + Impairments - Change in Working Capital - Capital Expenditure - Interest Costs
The reason for large discrepancies between FCF and income for some companies can often be found in the "Impairment" category. Since future cash flows are estimated on the basis of prevailing oil and gas prices, when prices are falling a company may have to take some oil and gas reserves off the books because they wouldn’t be worth extracting at prevailing prices. This results in an impairment, and it is charged against net income. However, this is merely a paper loss and it doesn’t reduce present day cash flow. Thus, in the FCF calculation, the impairment is added back to net income.
As an example, consider EOG Resources (NYSE: EOG), which is one of the largest oil and gas companies in the U.S. In Q3 2015 EOG reported net income of -$4.1 billion. However, for the same period the company reported FCF of +$1.8 billion -- a discrepancy of nearly $6 billion. Is the company guilty of creative accounting? No, but let's walk through the important financial measures to understand the reason.
At the end of 2014, EOG reported a standardized measure of $27.9 billion. But that was based on U.S. prices of $97.51/bbl for oil, $34.29 for NGLs, and $3.71/MMBtu for natural gas. The actual average price of West Texas Intermediate (WTI) in Q3 of this year was only $46.42 according to the Energy Information Administration. So EOG’s estimated future cash flows are now lower given the lower commodity price environment. As a result the company took an impairment of $6.3 billion in the quarter -- nearly 23% of its previously estimated future cash flow.
EOG had net revenue in Q3 of $2.1 billion, and a cost of goods sold of $1.1 billion. But in calculating net income, the $6.3 billion impairment was applied. This was the single biggest factor in the $4.1 billion net loss EOG reported for the quarter. In calculating free cash flow for the quarter, the impairment was added back (as was depreciation). The reality is that EOG generated cash during the quarter, but the impairment means the outlook for future quarters is lower.
There are a number of other companies that similarly reported a large loss but positive FCF. There will be many more in a similar position following the release of Q4 results. In most cases, the explanation will be the impairment due to lower oil prices. It's not an accounting trick, as these companies are generating cash in excess of what it took to operate the business. But a substantial impairment may change an investor's appetite for a company given the potential impact on future cash flows.
Robert Rapier's Most Popular
The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them Mastering MLPs: A Guide for Energy Investors U.S. Might Have More Oil Resources Than Saudi Arabia, But... The Price of Energy The Surprising Reasons Why Price Is No Object In Poorer Countries Thirsty For Oil
|
e7fac7ae68f36c175419a59013869e80
|
https://www.forbes.com/sites/rrapier/2016/01/21/the-u-s-blows-denmark-away-on-wind-power/
|
Denmark Ahead Of The U.S. In Wind Power? Why The Claim Is Drafty.
|
Denmark Ahead Of The U.S. In Wind Power? Why The Claim Is Drafty.
A Huffington Post article recently caught my attention with a headline that claimed, "Denmark Just Broke The World Record For Wind Energy," followed by the subtitle, "The U.S. could learn a thing or two from the Danes."
Nothing against the Danes, but I think articles like this paint a very misleading picture. So let me elaborate a bit on the topic to make the record clearer.
According to the 2015 BP Statistical Review of World Energy, in 2014 wind power production in the U.S. was 183.6 Terawatt-hours (TWh). That was in fact the most for any country in the world, ever, and was nearly 14 times greater than Denmark's 13.2 TWh of production. Texas alone produced 36.1 TWh, nearly 3 times Denmark's production. So, while 2015 data are still being finalized for the U.S., there is no way Denmark will come close to the amount of wind power produced in the U.S. for the year. (China's installed wind power capacity surged past that of the U.S. in recent years, but as of year-end 2014 they hadn't managed to produce as much wind power as the U.S.)
Graphically, it becomes clear that the U.S. has left Denmark far behind in the deployment of wind power:
So what is the deal then? Let's put things in perspective.
Denmark is a very small country surrounded by the North Sea. It has a population that is smaller than the Houston metropolitan area. If it was a U.S. state it would rank 42nd in land area, between West Virginia and Maryland. Because of its small size and proximity to the North Sea, the entire country has abundant wind resources.
Also key to Denmark's wind industry, the country has the ability to export wind power production to neighboring countries like Sweden, Norway, and Germany. That means that they can often produce at more than 100% of domestic demand, and because their demand is relatively small they can simply export that excess power to other countries with much greater demand. What that means is that they can -- on average -- generate a high percentage of their electricity from wind power. For 2015, that was the equivalent of 42% of the country's electricity consumption for the year, which was the highest ever percentage by a country for a single year.
A large country like the U.S. doesn't have that same level of flexibility. Weather patterns vary across the country such that the wind is never consistently blowing everywhere, and there are lots of areas where the wind resources are insufficient to support a wind farm. Further, U.S. power demand is much greater than that of our neighbors Mexico and Canada, so if we did get into a situation like Denmark where at times we produced >130% of our domestic demand, there is no way Mexico and Canada could absorb our excess.
So, while the Danes are to be commended on their achievement, it is in fact the U.S. that is producing more power from wind energy than any other country. The overall amount of U.S. wind power deployed has been a far bigger driver of the global wind industry than Denmark's high percentage of power from wind.
I am sure there are things that the U.S. can learn from Denmark, but we can't learn to be a very small country surrounded by water. Nor can we learn to have neighbors that can take a substantial fraction of our excess capacity. But we have clearly learned how to rapidly ramp up wind power production.
Robert Rapier's Most Popular
OPEC's Trillion-Dollar Miscalculation The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them Prepare For A Dramatic Decline In Oil Reserves Mastering MLPs: A Guide for Energy Investors U.S. Might Have More Oil Resources Than Saudi Arabia, But...
|
6b5f76e050be3b6cb71d42bdcb9d14fb
|
https://www.forbes.com/sites/rrapier/2016/08/12/the-top-10-natural-gas-producers/
|
The Top 10 Natural Gas Producers
|
The Top 10 Natural Gas Producers
Shell logos are pictured outside a Royal Dutch Shell petrol station in Hook, near Basingstoke on... [+] January 20, 2016. Royal Dutch Shell said it expected a sharp decline in full-year net profits, as plunging oil prices slash the earnings of leading energy companies. AFP PHOTO / ADRIAN DENNIS / AFP / ADRIAN DENNIS (Photo credit should read ADRIAN DENNIS/AFP/Getty Images)
As I started to formulate a list of the leading natural gas producers, it became clear pretty quickly that there are many ways to measure a Top 10. The most direct is to measure on the basis of natural gas production, but some of the largest producers in the world are either not publicly traded, are largely government owned, and/or they don't regularly publish production data.
You could also break down a list into companies that are primarily natural gas producers (which would exclude primarily oil producers like ExxonMobil ), or you could break it down by geographic region (e.g., North America's top producers). Ultimately I decided to produce a list ranked by global production of natural gas and based on data from the most recent fiscal quarter.
Let me first acknowledge that the Russian company Gazprom is by far the world's largest producer of natural gas, but it, like fellow major natural gas powerhouse PetroChina , is largely government-owned. They also do not provide regular updates on production volumes. As a result, they are excluded from the list, but it is duly noted that they are both indeed among the world's largest producers.
With that caveat, here are the companies that reported the largest daily natural gas volumes in the most recent fiscal quarter:
Data Source: S&P Global Market Intelligence
Vol - Billion cubic feet per day (Bcf/d) of natural gas produced globally on average in the most recent fiscal quarter EV - Enterprise value in billions of U.S. dollars at the close of business on August 12, 2016 EBITDA - Earnings before interest, tax, depreciation and amortization, in millions for the trailing twelve months (TTM) FCF - Levered free cash flow in billions Debt - Net debt at the end of the most recent fiscal quarter YTD Ret - Total shareholder return (TSR), including dividends, through August 12, 2016
Royal Dutch Shell continues to retool itself as a natural gas company, moving past U.S.-based Exxon into first place on the list. However, this move has come at a price, as Shell's free cash flow over the past year remained deeply in the red due to extensive spending on capital projects (like huge liquefied natural gas plants), and depressed oil and gas prices. Meanwhile, ExxonMobil and perhaps surprisingly BP are the only members of the Top 10 to generate positive FCF over the past year.
This Top 10 has performed well for shareholders year-to-date, with a total shareholder return of 15.7% - more than double the return of the S&P 500. Only ConocoPhillips is down for the year, while Canadian-based Canadian Natural Resource Ltd is up an impressive 51.5%.
In the next article, I will take a look at the Top 10 based on oil output.
(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)
Robert Rapier's Most Popular
OPEC's Trillion-Dollar Miscalculation The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them Prepare For A Dramatic Decline In Oil Reserves Leonardo DiCaprio's Carbon Footprint Is Much Higher Than He Thinks The 25 Biggest Oil And Gas Companies In The World
|
df0c302a2d04295597184431eab34dd3
|
https://www.forbes.com/sites/rrapier/2017/02/17/gevos-valentines-day-massacre/?sh=18f26fbb37e9
|
Gevo's Valentine's Day Massacre
|
Gevo's Valentine's Day Massacre
SAN FRANCISCO, CA: Vinod Khosla of Khosla Ventures speaks onstage during TechCrunch Disrupt SF 2015... [+] at Pier 70 on September 23, 2015 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)
Back in 2010-11, billionaire venture capitalist Vinod Khosla backed three advanced biofuel companies that went public. These companies, debuting on the NASDAQ, were KiOR, Gevo, and Amyris. The companies were hyped extensively, with claims of low production costs and low technology risks.
It has been almost exactly 6 years since Gevo's IPO in February 2011. If you had invested $10,000 in Gevo at the IPO and left it there, today that investment is worth about $2.36.
Had you put your investment in KiOR, those shares that debuted at $15 in June 2011 were delisted in November 2014, but now trade on the pink sheets for half a penny each. KiOR declared bankruptcy shortly after its shares were delisted.
Amyris is the star of this group. A share in Amyris bought at the October 2010 IPO for ~$17 is still hanging in there with a value of 55 cents today. (On a related note, in 2012 I was consulting for an institutional investor and advised the firm to steer clear of Amyris).
What happened to these seemingly-promising companies? In a nutshell, Mr. Khosla and his advisers seriously underestimated the technical and economic challenges involved in converting biomass into commodity fuels. This is the same thing I told Leslie Stahl on 60 Minutes when Mr. Khosla and I were both interviewed for a segment on advanced biofuels that aired in January 2014. He was hyping "no downside" on the segment, and I was saying "he is underestimating the challenges." I predicted in January 2014 that KiOR would be bankrupt by year-end, which was exactly what happened.
A year later I was feeling some pressure to repeat the KiOR prediction, and I toyed with the idea of making the same prediction for Gevo. I ultimately chose not to, for two reasons.
The first is that Gevo has some conventional corn ethanol production in Minnesota, and I felt like that trickle of revenue might be enough to keep investors hanging in there longer than they did with KiOR.
Second, and related to the first item, is that Gevo seemed to have mastered the art of raising money by simply issuing new shares when cash was dwindling. It became kind of predictable. They would issue an earnings release that showed they were bleeding cash (but showing some revenue), and in close proximity they would make some positive announcement about the future (like a new off-take agreement). On the strength of the positive news, they would then issue new shares -- which would tend to crash the share price. Wash, rinse, repeat all the way down.
On the way down, Gevo did two reverse splits to prop the price of the shares back up, so they would meet the NASDAQ listing requirements. In 2015 they did a 1-for-15 reverse stock split, but shares continued to decline. Last month the company did a 1-for-20 reverse stock split, and again shares continued to decline.
But it became clear to me over time that Gevo would continue this strategy for as long as it worked. And just this week, they used it yet again. The company first made a few "good news" announcements, which are typically about something that could benefit them in a hypothetical future in which they are producing commercial quantities of fuel (i.e., not 40 barrels a day). Rarely if ever do these news announcements amount to anything that will quickly add materially to the company's cash flow.
Late last month the company announced that the EPA had approved their isobutanol as an advanced biofuel, which means it is eligible for lucrative tax credits (but low fuel volumes mean the near-term impact is nominal). Then the company announced that a lender had granted them more time to pay back a loan. I actually joked with a friend earlier this month "It looks like they are setting up for another round of dilution."
Then at the beginning of this week Gevo announced that it has entered into a Letter of Intent (LOI) with HCS Holding GmbH to supply isooctane under a five-year off-take agreement. But at the same time the company did what it does. Gevo - which today has a market capitalization of about $12.5 million - announced a new $11.9 million public offering of common stock and warrants.
You can guess what happened next. It was a Valentine's Day massacre:
Gevo share price the week of February 13th, 2017. Chart from Google Finance.
The company quickly shed about a third of its market cap when they announced the new offering, and is down nearly 50% on the week.
Note that so far I haven't said a word about the viability of Gevo's process. As someone who spent years producing isobutanol commercially as a chemical engineer for a major chemical company, I do have some thoughts about their technical and economic viability. But that's a longer discussion for another day. The share price speaks for itself.
For now, Gevo will likely continue with the tactic that has served them well: rosy press releases and new stock offerings. And that will keep them in business as long as investors continue to purchase the offerings. It's amazing how long they have managed to execute this strategy, but it validates my decision not to predict bankruptcy in 2015. This "dead man walking" has mastered the art of slowing that walk to a crawl. But existing shareholders are getting shafted in the process.
(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)
Robert Rapier's Most Popular
OPEC's Trillion-Dollar Miscalculation The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them Prepare For A Dramatic Decline In Oil Reserves Leonardo DiCaprio's Carbon Footprint Is Much Higher Than He Thinks The 25 Biggest Oil And Gas Companies In The World
|
65a786253a9e53e55d0176092b1f4a3f
|
https://www.forbes.com/sites/rrapier/2018/04/18/opec-strategy-bears-fruit-as-oil-prices-break-out/
|
OPEC Strategy Bears Fruit As Oil Prices Break Out
|
OPEC Strategy Bears Fruit As Oil Prices Break Out
UAE Oil Minister and the current OPEC Conference President, Suhail Mohamed al-Mazrouei, attends the... [+] opening session of the International Petroleum (IP) Week 2018 conference in London on February 20, 2018. Photo credit ADRIAN DENNIS/AFP/Getty Images.
In late 2016 OPEC engineered significant oil production cuts in order to address an oversupplied oil market. Global crude oil inventories had reached record highs, and the price of oil had crashed following a disastrous decision by the cartel in 2014 to defend market share.
In contrast to the 2014 decision, this time OPEC’s strategy is having the desired effect. Over the past year, despite strong U.S. shale production growth, global inventories have steadily declined. According to the latest Oil Market Report from the International Energy Agency, supply is expected to lag demand for the rest of 2018, further depleting inventories:
Demand/Supply balance through 2018. International Energy Agency
In response to declining inventories, global oil prices have steadily increased, breaking through three-year highs last week and again this week. West Texas Intermediate closed last week above $67/bbl, while Brent closed above $72/bbl. These prices are approximately 50% higher than they were last August.
The latest bullish news for oil prices was a weekly report from the Energy Information Administration (EIA) showing another 1.1 million barrel drop in U.S. crude oil inventories. This now moves crude oil inventories down into the lower half of the range for this time of year.
But in addition to the drop in crude oil inventories, the EIA also reported that gasoline and diesel inventories each dropped by at least 3.0 million barrels last week, bringing the total drop in commercial inventories to 10.6 million barrels for the week. That's an unusually large (and bullish) draw on inventories.
Meanwhile, last week last week Bloomberg reported that Saudi Arabia (OPEC's leading producer) has its sights set on a target of $80/bbl. This week Reuters reported that the target could be as high as $100/bbl.
Given that Saudi Aramco is the single largest producer of oil in the world — with the power to move oil prices — this target should be taken seriously. Despite the disastrous price war on shale producers, Saudi Arabia usually achieves its aims in the oil markets.
However, $100/bbl would stimulate significant investment in U.S. shale production, which backfired the last time oil prices were at that level. But this is a clear indication that Saudi Arabia isn't going to abandon the production cuts any time soon.
As I have noted in the past, once Saudi Arabia embarks upon a strategy, it usually sticks with that strategy for an extended period of time. Especially when that strategy is having the desired impact.
|
4de6d49f26170f30c9f84659fc18d49e
|
https://www.forbes.com/sites/rrapier/2018/07/22/how-the-fracking-revolution-broke-opecs-hold-on-oil-prices/?sh=5ca4986648ef
|
How The Fracking Revolution Broke OPEC's Hold On Oil Prices
|
How The Fracking Revolution Broke OPEC's Hold On Oil Prices
VIENNA, AUSTRIA - JUNE 23: Saudi Arabian Energy Minister Khalid Al Falih, attends a news conference... [+] after a meeting of the 4th Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC Ministerial Meeting in Vienna, Austria on June 23, 2018. (Photo by Askin Kiyagan/Anadolu Agency/Getty Images)
In the previous article, Asia's Insatiable Oil Demand, I covered global and regional oil consumption numbers according to the recently-released 2018 BP Statistical Review of World Energy.
To recap, global oil consumption rose to a new record high in 2018, and has now increased in 31 of the past 34 years. Over the past decade, global oil consumption has increased by 11.1 million barrels per day (BPD). The primary driver behind the past decade's demand jump is the Asia Pacific region, which was the source of 77% of the world's demand growth over that time.
Today, I want to discuss the sources of the world's new oil production in recent years.
OPEC Holds All The Cards
A decade ago, in the summer of 2008, the price of West Texas Intermediate (WTI) crude was racing toward $150 a barrel. Over the previous three years, and despite strong demand growth, the world had only increased oil production by 1.2 million BPD, and it essentially all came from OPEC.
Many analysts, including me, were extremely concerned about the future hold OPEC would maintain over the world's oil supplies. It appeared that there would an enormous transfer of wealth from those countries dependent upon oil imports -- like the United States -- to OPEC countries. In many cases, these countries have interests that are hostile to those of the U.S., so this was very much an issue of national security.
A Different Future Unfolds
But the future played out differently than it seemed it would in the summer of 2008. Unbeknownst to most people, oil producers were experimenting with a marriage between two established oil drilling technologies -- horizontal drilling and hydraulic fracturing.
The success of this marriage would unlock oil in tight oil and shale oil deposits that had previously been too expensive to recover, and would result in one of the greatest oil booms the world had ever seen. In fact, the "fracking revolution" caused U.S. oil production to turn upward in 2009, and then rise over the next seven years at the fastest rate in U.S. history.
While it is still true that OPEC still produced 42.6% of the world's oil in 2017, the majority of new oil production since 2008 has come from the U.S.
Oil Supply Growth 2008-2017 Robert Rapier
Of the 10.3 million BPD of new oil production since 2008, the U.S. supplied 6.2 million BPD (60%). The world's two other major oil-producing countries, Saudi Arabia and Russia, saw their production increase by 1.7 million BPD and 1.2 million BPD respectively since 2008.
OPEC overall increased its production by 3.6 million BPD since 2008, primarily as a result of production growth in Saudi Arabia, Iraq, and Iran. But OPEC's gains were limited by production declines in Venezuela, Libya, and Nigeria. There were also regional production declines in Europe, Asia, Africa, and South and Central America.
Also notable is that Canada and Mexico are major oil producers (although Mexico's production has been declining). Overall, North America supplied 20 million BPD of the world's oil in 2017 (22%). This was ahead of every other region of the world except for the Middle East, which produced 31.6 million BPD, or 34.1% of the world's total.
According to the BP Statistical Review, the U.S. now leads both Saudi Arabia and Russia in crude oil production. This is in part because BP's definition of "oil" includes natural gas liquids (NGLs), which grew by about two million BPD in the U.S. as natural gas production boomed. Without the NGLs, the U.S. would probably still lag Saudi Arabia, but probably not Russia, in total oil production.
It is hard to overstate the consequences of the fracking revolution, because the U.S. oil production surge broke OPEC's stranglehold on global oil prices. Every country in the world would likely have paid much higher oil prices over the past decade if the new oil boom in the U.S. hadn't happened, further enriching OPEC and Russia in the process.
But U.S. tight oil production will inevitably slow and once again begin to decline. The key questions are how soon this will happen, and whether a return to >$100/bbl oil -- and in turn OPEC's stranglehold -- awaits that inevitability.
|
2bc86e982847b52a204d6eb8a48c66d9
|
https://www.forbes.com/sites/rrapier/2018/08/08/yes-the-u-s-is-the-worlds-top-energy-producer/?sh=4a59c1051fab
|
Yes, The U.S. Is The World's Top Energy Producer
|
Yes, The U.S. Is The World's Top Energy Producer
US President Donald Trump gestures as he speaks during a dinner with business leaders in Bedminster,... [+] New Jersey, on August 7, 2018. (Photo credit BRENDAN SMIALOWSKI/AFP/Getty Images).
Last night President Trump spoke to business leaders at a dinner. Daniel Dale, the Washington correspondent for the Toronto Star, posted several tweets about the dinner. In one, he wrote "Quick fact check: Trump spoke to business leaders for 14 minutes at dinner tonight. He made 15 false claims."
Several of the reported claims were related to energy, but one in particular caught my eye. The second "false" claim listed was "...unleashing American energy, where we're now the largest in the world." It isn't clear whether the President was talking about all energy, or just oil.
But Mr. Dale's fact check read: "U.S. government projects U.S. will be largest oil producer in 2023."
Fact check on President Trump claims Twitter screen capture by Robert Rapier.
If President Trump was talking about total energy production, he is absolutely correct. Further, per the BP Statistical Review of World Energy, the U.S. has been the world's largest oil producer since 2014 (primarily because BP counts natural gas liquids as oil). I pointed this out to Mr. Dale on his Twitter feed.
According to this year's BP Statistical Review of World Energy, in 2017 the U.S. ranked:
#1 in total energy production #1 in oil production #1 in natural gas production #1 in nuclear power #1 in geothermal power #1 in biofuels #2 in wind power #2 in solar power #2 in coal production #4 in hydropower
To be clear, the U.S. did assume the global lead in energy production early during President Obama's second term. However, U.S. energy production has continued to grow nearly every year since, and currently stands at an all-time high.
To Mr. Dale's credit, about half an hour after I pointed out that the U.S. is indeed the world's top energy producer, he issued a mea culpa (but not before the original fact-check had spread to other sites): "I messed up on #2 here. The US government revised its oil estimate in July and now says the US might become top crude producer as soon as next year. And if you broadly define "energy" to include more than oil, the US has been the world's top producer for some time."
I commend him for correcting the record on this point.
|
b280c22320705adc56ca69018aa62bc0
|
https://www.forbes.com/sites/rrapier/2019/05/19/could-a-chernobyl-happen-again/
|
Could A Chernobyl Happen Again?
|
Could A Chernobyl Happen Again?
South Korean environmentalists stage a rally marking the 33rd anniversary of the Chernobyl accident... [+] in Seoul, South Korea, Friday, April 26, 2019. Reactor No. 4 at the Chernobyl nuclear power plant in Ukraine, then part of the Soviet Union, exploded on April 26, 1986. The sign read: "The 33rd anniversary of the Chernobyl accident." (AP Photo/Ahn Young-joon) ASSOCIATED PRESS
My wife and I have been watching the new HBO miniseries on the 1986 Chernobyl nuclear disaster. During the second episode, she asked me the question that is probably on everyone's minds as they watch the drama unfold: "Could a Chernobyl-type event happen today?"
I told her "No, I don't believe that's possible." However, it's important to note that we never dreamed such an accident was possible in the first place. So, let's explore the question in a little more depth.
The Recipe for Disaster
An accident is the result of an initiating event or series of events and an inadequate response. Accidents are mitigated by lowering the probability of the event(s) and ensuring a response that prevents the consequences from escalating.
In the event that the potential worst case scenario is catastrophic, there needs to be substantial reduction in the probability of the event, as well as a response that reliably mitigates the consequence. A catastrophic consequence could be one that involved multiple human fatalities, huge environmental contamination, major property damage, or major financial losses.
But a catastrophic consequence would also include major disruptions to the population, like having to evacuate 50,000 people from their homes. In the case of Chernobyl, the evacuations happened on short notice, and they were permanent. I think if you have to permanently leave your home on short notice, that's a catastrophic outcome.
Further, in the second episode of the HBO series, they presented a narrowly-averted scenario in which millions of people could have died. I can't say whether those events actually unfolded -- or whether this is a dramatization to make for more exciting TV -- but viewers will certainly have the impression that Chernobyl nearly killed millions of people.
Thus, the public must have absolute confidence that another Chernobyl (or Fukushima) can't possibly happen again.
Reducing the Risks
There are still 11 operating RBMK reactors of the type involved in the Chernobyl accident. All of them are in Russia. Since Chernobyl, there have been significant design modifications that were recommended by the International Atomic Energy Agency (IAEA).
In 2006, IAEA deputy director Tomihiro Taniguchi told The Associated Press “Very significant changes have been made in the technology. The IAEA is firmly committed that such an accident not happen again.”
There's no doubt that the potential for a Chernobyl-type event has been greatly reduced as a result of design changes and additional training, but has it been reduced to zero? Hold that thought for a moment.
While there are no RBMK reactors in the U.S., around 30% of U.S. nuclear power plants use General Electric-designed boiling water reactors (BWR). This was the type involved in the core meltdowns in Fukushima following the 2011 tsunami off the coast of Japan.
Again, training and design changes have reduced the risks of a repeat, but has the risk been reduced to zero? Again, let's hold that thought for a moment.
The Unknown Unknowns
I do believe that the probability of having a similar set of events lead to a similar outcome has been reduced to zero for both Chernobyl and Fukushima-type events. The causes were identified and addressed in other plants with those designs.
But, bear in mind that nobody had any idea that such huge disasters were possible for either of these locations. Indeed, it took years to fully understand what had precisely caused the accident at Chernobyl.
As someone who has been involved in many safety reviews and incident investigations, what always concerned me more than anything were the things we might have missed.
In 2002, Defense Secretary Donald Rumsfeld made the following observation:
There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don't know. But there are also unknown unknowns. There are things we do not know we don't know."
Chernobyl was caused by one of these unknown unknowns. This is partially true for Fukushima as well, but at least in that case the causes were understood. They were just deemed to be highly unlikely, such as the possibility that a tsunami could breach the plant's 33-foot tall seawall.
Preventing Another Chernobyl
When someone asks if a Chernobyl could happen again, the engineer in me pauses and thinks about the unknown unknowns. By definition, we don't know what they are. Thus, the completely honest answer when someone asks me this question is "I don't think so, but I can't guarantee it."
Further, we have seen people deliberately crash airplanes. Could a disgruntled operator deliberately sabotage a nuclear plant and cause a catastrophic outcome?
Given the possibility of unforeseen events or even sabotage -- in combination with potentially catastrophic consequences -- nuclear power plants must approach the mitigation of consequences with overkill and redundancy. By that, I mean that if a series of events can take place that would potentially lead to a catastrophic incident, there should be several layers of potential mitigation. We have to ensure that even with a saboteur's best efforts, they couldn't cause a catastrophic release from a nuclear power plant.
Ultimately, there is no way to foresee all possible causes of an accident. Thus, we have to ensure that if a failure takes place, it results in a safe state. I discussed the example of an electrical fuse in a previous article. When the fuse fails, it does so in a safe state. The flow of electricity stops. I do believe our best minds can ensure such designs in the world's nuclear power plants.
If we can ensure that all nuclear power plants in the world are fail-safe designs, then we can indeed say that even though failures could happen, "No, another Chernobyl is simply impossible."
|
739982b7c3cd7cce004eb533574ccdf1
|
https://www.forbes.com/sites/rrapier/2019/09/01/get-high-yields-from-a-healthy-mlp-sector/
|
Get High Yields From A Healthy MLP Sector
|
Get High Yields From A Healthy MLP Sector
The Marlin Topaz tanker leaves after being loaded with 45,000 barrels of diesel fuel at Enterprise... [+] Products Beaumont Marine Terminal in Vidor, Texas. Enterprise Products is the largest master limited partnership (MLP) by market capitalization. (AP Photo/David J. Phillip) ASSOCIATED PRESS
Last week I received a news alert that highlighted the extent of the current bear market in energy stocks. Typically, late in a business cycle and with a potential recession on the horizon, some sectors that tend to fare well are utilities, real estate, and energy. That has been the case with the utilities and real estate sectors, as they are two of the top-performing S&P 500 sectors over the past year.
But the sell-off in energy has been brutal. Market data provider FactSet sent an alert last week that showed how many companies in various sectors were setting new 52-week highs and lows. The energy sector, in particular, stood out:
Source: FactSet alert on August 27, 2019. Robert Rapier
Note that while 95% of the 52-week marks in the utilities and real estate sectors were highs, that mark was 0% in the energy sector. Further, the energy sector had far more new 52-week lows than any other sector, with 42.
The most recent sell-off in the energy sector is a result of a plunge in oil prices brought on by the latest threats of tariffs in the ongoing trade war with China. The energy sell-off has been indiscriminate, taking down healthy and unhealthy companies and segments alike. It has even hit one of the healthiest sectors this year -- the master limited partnerships (MLPs) -- which consist largely of the companies that transport and store oil and gas.
Alerian is an independent provider of energy infrastructure and MLP market intelligence. Its benchmarks are widely used to analyze relative performance of the MLP sector. Alerian’s latest research note looks at distribution coverage for the 22 constituents of the Alerian MLP Infrastructure Index (AMZI). For context, the AMZI represented 94% of the total midstream MLP market capitalization as of the end of July.
Distribution coverage is one of the most important metrics for determining an MLP's financial health. Distribution coverage compares distributable cash flow (DCF) generated in a period to the total cash distributions paid for that period. A coverage ratio below 1.0x means that a company didn't generate enough cash in the period to cover its distribution. If coverage consistently falls below 1.0x, the MLP may have to cut its distribution.
Alerian's recent research note compared distribution coverage for the 22 AMZI constituents in the second quarter of 2018 versus the second quarter of 2019:
AMZI Distribution Coverage Alerian.
In contrast to much of the energy sector, this analysis shows a segment that is generating enough cash to cover its distribution, as well as one that has improved year-over-year. In 2018, these companies generated on average about 30% more cash than necessary to cover their distributions. A year later, that excess has risen to 40%. Notably, several of the companies that were on the lower end of last year's distribution coverage announced distribution cuts -- which is exactly the kind of warning signal a low distribution coverage can provide.
The AMZI Index presently yields 8.8% compared to its five-year average of 7.3% and ten-year average of 6.8%. With the bond markets at historic lows and investors desperately seeking yield (as evidenced by the performance of utilities and real estate), MLPs are presently extremely attractive. Their coverage ratios are healthy and getting better, yields are above normal, and the recent sell-off means the sector is on sale.
As the Alerian research note concludes, "Improving distribution coverage should give MLP investors confidence when it comes to the quality of the distributions being paid, even as yields remain elevated."
Further reading: MLP 2Q19 Distribution Coverage and Payout Ratios Provide Peace of Mind by Bryce Bingham, Energy Research Analyst, Alerian
|
11d88e69f3b7e7d8956424336ec9f49a
|
https://www.forbes.com/sites/rrapier/2019/12/28/the-top-energy-stories-of-2019/
|
The Top Energy Stories Of 2019
|
The Top Energy Stories Of 2019
A plant manager I once worked for was fond of the saying “Perception is reality.”
I hated the phrase. I am a logical math and science guy. After all, 1+1 is never 3, even if you believe it to be so. Reality is reality, regardless of what your perception may be.
But I came to understand what he meant by the phrase, even if I didn’t agree with it. How you perceive things influences your actions. It is your reality, even if isn’t objective reality.
That brings me to today’s oil markets. Of all the top stories this year – and for the past couple of years for that matter – the underlying theme is one of too much oil and not enough demand. That’s essentially true, but the perception for many is that slow demand is the dominant factor. This, in turn, is perceived to be a result of decarbonization trends like electric vehicles (EVs) taking a big bite out of oil demand.
This perception has affected oil markets so much that they now seem relatively impervious to news that would have sent oil prices skyrocketing a decade ago.
My reality is that the demand side of the equation remains strong. When the BP Statistical Review was released in June, it showed that annual oil demand had grown by 1.4 million barrels per day (BPD) year-over-year. That 1.5% gain to a new all-time high was ahead of the 10-year average of 1.2%.
Demand growth has been slowing somewhat lately, but the International Energy Agency (IEA) projects that 2019 demand grew by 1.0 million BPD, and 2020 demand growth will be 1.2 million BPD. But U.S. shale oil production has been expanding at a faster clip than demand growth, and that’s what’s really driving the ambivalent oil markets.
Thus, while many of this year’s top stories would have had a major and long-lasting impact on the oil markets before the shale oil boom, today they are quickly forgotten. As long as U.S. shale continues to grow at the current pace, global supplies are deemed to be adequate and oil prices will continue to face headwinds. And if U.S. shale continues to grow for another 5-10 years, EVs will likely begin to make serious inroads into oil demand and oil prices may never recover.
MORE FOR YOUJapan Will Release Radioactive Fukushima Water Into The Ocean, And Why That’s O.K.Will Nuclear Energy’s No-Carbon Quality Outweigh The Fukushima Accident?How Oxy’s New Carbon Venture Could Become A True Game-Changer
This theme underlies this year’s top stories. Below I present what I believe were this year’s top stories, followed by brief commentary on each.
1. Attacks on Aramco oil facilities.
The September attack on Saudi Arabia’s largest oilfields and the world’s biggest crude processing facility at Abqaiq knocked a total of 5.7 million BPD of oil production offline. This represented more than 5% of the world's oil production, and was the most significant attack on oil infrastructure ever. Yet it wasn’t the most consequential disruption, primarily because of the abundance of shale oil and because Saudi had built up inventories. There was a brief spike of nearly 20% in the price of oil, but it returned to normal relatively quickly as the damages were repaired.
2. Aramco IPO
In early December, Aramco finally carried out its long-awaited initial public offering. The company initially traded at a valuation of $1.7 trillion, but quickly ran up to the $2 trillion value that had been suggested by Saudi Crown Prince Mohammed bin Salman.
3. OPEC cuts production to prop up oil price
OPEC continued to respond to swelling U.S. shale oil production by reducing its own production. As I have argued before, this is really the only strategy that makes sense for the cartel. The group made two production cuts this year in conjunction with Russia and other oil-producing nations. This brings the total production cuts from OPEC and its allies to 1.7 million BPD.
4. U.S. oil production sets a new record of 12.8 million BPD
This could have been the top story of the year, because of its impact on the rest of the world’s oil markets. We would be living in a very different world today if not for the massive increase in U.S. oil production over the past decade. The new record was 1.2 million BPD higher than last year’s record, and it pushed the U.S. to net exporter status for crude oil exports and finished products for the month of October.
5. Norway announces fossil fuel divestment
The Top 4 were pretty clear to me, but beyond that there were several stories that could have landed in the fifth spot. I chose Norway’s announcement early in the year that its Government Pension Fund Global (GPFG) would divest certain fossil fuel investments. The announcement was symbolically important, given the size of the fund and the fact that the fund itself is a product of Norway's oil and gas history. Most of the reporting missed major context over the story — namely that the fund would actually retain most of its oil and gas investments. But the move follows similar moves around the globe, so I chose it as a representative example of the push to divest fossil fuel investments.
Beyond the Top 5, here were other 2019 energy stories of significance, in no particular order.
XOM wins climate lawsuit
ExxonMobil was sued by the state of New York, which charged that the company engaged in "a longstanding fraudulent scheme" on the the economic risks of climate change. In early December the verdict came down, which read in part that the: “Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor.”
Occidental acquisition of Anadarko
Chevron initially attempted to acquire Anadarko, but Occidental ultimately offered more in a transaction valued at $55 billion. The market deemed that Occidental overpaid, punishing shares mercilessly following the transaction.
Permian becomes top oil field
Ahead of its IPO, Aramco lifted the veil of secrecy around its oilfields. Production at the Saudi Ghawar oilfield — which has long been the world’s largest conventional onshore oil field — was reported at only 3.8 million BPD. That meant that the Permian Basin had surpassed Ghawar to become the world’s biggest oil-producing region.
Green New Deal
There were a number of important stories in the renewable/environmental space this year, but one of the most talked-about stories was the so-called “Green New Deal.” This referred to a pair of resolutions from Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA) to transition the United States to 100% renewable, zero-emission energy sources within 10 years. The deal received a lot of criticism — including from within the Democratic party — that many of the ideas didn’t represent realistic policy proposals. However, the story itself received quite a lot of coverage.
Greta Thunberg
As with the last story, there are lots of questions around whether real action will arise from this story. But the rise of 16-year-old Swedish environmental activist Greta Thunberg and the “strike for climate” received considerable media attention throughout the year. During the year, as she traveled the globe to challenge political leaders to take serious action on climate change, Thunberg addressed the United Nations and earned Time magazine’s ‘Person of the Year’ award. She even got the attention of President Trump, who singled her out more than once on Twitter.
Renewable capacity surpasses coal
The U.S. has been increasing renewable power capacity at a rapid clip over the past decade. A number of milestones have fallen in the process, as renewable energy and natural gas worked together to slash U.S. coal consumption. During the year, the Federal Energy Regulatory Commission (FERC) reported data that showed that renewable energy's share of total available installed U.S. generating capacity had surpassed coal’s share for the first time ever.
Trade war impact on ethanol
Over the past couple of years, there has been a constant battle between ethanol producers and oil refiners over how much ethanol must be blended into the nation’s fuel supply. But this year, another factor had a major impact on ethanol’s market. The trade war with China caused ethanol exports to that country to dry up, which put pressure on ethanol producers all year.
Russia's Floating Nuclear Power Plant
A story that received far more coverage internationally than it did in the U.S. was Russia’s deployment of the world’s first floating nuclear power plant, the Akademik Lomonosov. The plant was deployed to Pevek, a port town on the remote Chukotka Peninsula in the Russian Arctic and will provide power to about 100,000 homes. Greenpeace opposed the project, dubbing it “Chernobyl on ice”, while staging publicity stunts to get the message across.
Those are my picks for the year’s top energy stories. In the next story, I will offer up my energy sector predictions for 2020.
|
1a1b7a7a02212cf96efb6867223dcdf0
|
https://www.forbes.com/sites/rrapier/2020/12/13/the-worlds-top-lithium-producers/?sh=5234c2d85bc6
|
The World’s Top Lithium Producers
|
The World’s Top Lithium Producers
ESKISEHIR, TURKEY - JULY 24: A drone photo shows an aerial view of the Eti Mine Works, affiliated to ... [+] the Ministry of Energy and Natural Resources Kirka Boron Mining Enterprise is seen in Seyitgazi district of Eskisehir, Turkey on July 24, 2020. Preparations continue at the facility where lithium will be produced from boron sources. (Photo by Ali Atmaca/Anadolu Agency via Getty Images) Anadolu Agency via Getty Images
Last week I read a press release that piqued my interest. Vancouver-based Lithium Americas Corp. announced that they had received an environmental impact statement (EIS) from the U.S. government for a proposed lithium mining project in Nevada.
The EIS is required for certain projects that have the potential to significantly impact the environment. It is an important milestone in getting major projects executed. Lithium Americas said they expect final permitting to be approved in early 2021.
Lithium Americas uses an acid leaching process to extract lithium. The company intends to spend $400 million on Phase 1 of its Thacker Pass project in Nevada, with opening of the mine expected for 2023. The company also has a $565 million project under construction in Argentina.
Given the importance of lithium in a world that is becoming heavily reliant on lithium-ion batteries, I thought it would be worthwhile to review the world’s current lithium production, as well as the location of its reserves.
The BP Statistical Review of World Energy tracks lithium production and reserves numbers. According to The Review, global lithium production dropped 19.2% in 2019 to 77,000 metric tons, but that was still nearly four times the production level from a decade ago.
MORE FOR YOUBillionaire Reveals His ‘Secret’ To Beating China At ManufacturingERCOT Emergency Warning Shocks Texans On Mild April DayJapan Will Release Radioactive Fukushima Water Into The Ocean, And Why That’s O.K.
The production decline last year was attributed to oversupply that crashed prices. However, over the next five years lithium production is projected to nearly triple as purchases of electric vehicles (EVs) continue to surge.
Australia and Chile have swapped positions as the world’s leading lithium-producing country over the past decade. But Australia has aggressively developed its lithium reserves, and production jumped nearly 170% in 2018 to put Australia firmly in first place globally.
In 2019, the world’s Top 5 lithium producers were:
Australia - 52.9% of global production Chile - 21.5% China - 9.7% Argentina - 8.3% Zimbabwe - 2.1%
The U.S. ranked 7th with 1.2% of the world’s lithium production. Nevertheless, the U.S. is home to two of the world’s top-producing lithium companies: Albemarle and Livent.
However, the world is only producing a tiny fraction of its lithium reserves. Based on 2019 production levels, known global lithium reserves would last more than 200 years. In 2019, the world’s Top 5 lithium reserves by country were:
Chile - 55.5% of the world’s total Australia - 18.1% Argentina - 11.0% China - 6.5% U.S. - 4.1%
Given the abundance of lithium reserves and the current status of lithium production in their respective countries, it seems likely that Chile and Australia will remain the world’s lithium-production superpowers for the foreseeable future.
|
519afa87dbf24c92c39977c84429ae0c
|
https://www.forbes.com/sites/rrapier/2021/02/19/the-inherent-risks-in-president-bidens-energy-plan/
|
The Inherent Risks In President Biden’s Energy Plan
|
The Inherent Risks In President Biden’s Energy Plan
Democratic presidential candidate and former Vice President Joe Biden speaks at a "Build Back ... [+] Better" Clean Energy event on July 14, 2020 at the Chase Center in Wilmington, Delaware. (Photo by Olivier DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images) AFP via Getty Images
You may count me among those who want to see society move beyond fossil fuels. We all know there are negative consequences associated with fossil fuel usage, such as the emission of carbon dioxide and various other pollutants.
However, fossil fuel replacements come with their own risks and trade-offs, and it is important to understand and weigh these trade-offs as we transition from fossil fuels.
Two key issues are scale and reliability. Most people drastically underestimate our ongoing dependence on fossil fuels. According to the latest BP Statistical Review — which is the "bible" of energy statistics — in 2019 fossil fuels supplied 83.3% of our energy in the U.S.; nuclear power supplied another 8.0%. Renewables, including hydropower, just 8.7%.
Even though renewables are expanding rapidly, the percentage of energy we get from fossil fuels hasn’t changed that much over the years. After declining a bit a decade ago due to high prices, oil consumption in the U.S. has once again been on the rise (excepting last year’s pandemic-related collapse).
The U.S. has seen a drastic decline in coal consumption over the past decade (but global coal consumption has risen) as it has been displaced in the power sector by natural gas primarily, as well as renewables. As a result, natural gas consumption has increased by nearly 40% over the past decade in the U.S.
Meanwhile, most people still rely on the local service station for fuel for their cars, and they rely on their local utility to power their homes and businesses. There are occasional exceptions, but generally when we need energy we can count on it. Fossil fuels, despite their negative environmental aspects, are reliable and available at large scale.
MORE FOR YOUBillionaire Reveals His ‘Secret’ To Beating China At ManufacturingTax Attorney Facing Prison For Allegedly Helping Billionaires Robert Smith And Bob Brockman Dodge The IRSBiden’s ‘Infrastructure’ Bill Signals A Death Sentence For Natural Gas
I believe there will be a day when renewables — combined with backup storage like batteries — will reliably replace our massive fossil fuel consumption. We are moving in that direction. But, moving too fast can lead to unintended consequences.
The risk is that we develop unrealistic expectations for the load renewable energy is going to carry — and how quickly — and we underinvest in fossil fuel production and infrastructure. The reality is that we are still going to be using a lot of oil in a decade. The question is whether we will produce that locally, or go back to being dependent on foreign countries for that oil.
Consider the Keystone XL pipeline, as an example. This was an expansion of an existing pipeline. It was designed to bring more Canadian crude oil into the U.S., but would have also transported oil from the Bakken in Montana and North Dakota.
One of President Biden’s first actions in office was to revoke the permit for this pipeline. This is exactly the kind of action that makes it exceedingly difficult for energy companies to execute major projects that may take many years to complete. There is always a political risk that energy companies have to consider.
Environmental activists have argued that we don't need the pipeline. Let's take that argument first. If we ultimately don't need it, then a private company took a calculated risk, spent money building the pipeline, employed lots of Americans to build the pipeline, and then maybe it is underutilized. A private company created jobs to build something they believe will be needed. If we don't need it because our oil consumption declines, then they lost money on the investment.
Now, take the other side of that argument. Let's say they don't build it, and a decade from now renewables aren't displacing fossil fuels as quickly as had been imagined. Now we need the oil that the pipeline could have supplied. So instead of getting it from our friendly neighbor to the north, we have to get it from Venezuela, Saudi Arabia, or Russia.
This isn’t just theoretical. As I pointed out in a previous article, California is one of the most progressive states in the country when it comes to renewable energy. At the same time, the state is not known as being particularly friendly toward development of fossil fuel infrastructure.
What has been the result? Despite California being the fastest-growing market for electric vehicles in the U.S., its oil consumption (pre-pandemic) is nearly as high as it has ever been, and it has steadily grown in recent years. Further, California's dependence on foreign oil imports has tripled in the past 20 years. California now relies on OPEC for more than half of its oil needs. This is in stark contrast to most U.S. states, which have seen crude oil imports plunge over the past decade.
California's dependence on foreign oil continues to grow. CALIFORNIA ENERGY COMMISSION
If we prematurely discourage investment in fossil fuels — and then our dependence doesn't decline as rapidly as the Biden Administration envisions — that is a recipe for shortages, higher prices, and greater dependence on foreign nations for our energy.
I understand that the Keystone XL cancellation is more about messaging than anything else. It is a signal to the world that we are serious about combatting climate change. But if our message is undermined by our actions (e.g., failing to replace fossil fuels with renewables quickly enough), what have we accomplished?
|
462a2ce424cf16969ecf6f149509b31e
|
https://www.forbes.com/sites/rrapier/2021/03/06/who-is-to-blame-for-rising-gasoline-prices/
|
Who Is To Blame For Rising Gasoline Prices?
|
Who Is To Blame For Rising Gasoline Prices?
WASHINGTON, DC - MARCH 05: President Joe Biden speaks during a meeting with Treasury Secretary Janet ... [+] Yellen and Vice President Kamala Harris in the Roosevelt Room of the White House, March 5, 2021 in Washington, DC. Yellen has recently commented that bitcoin is an “extremely inefficient” way to conduct monetary transactions. (Photo by Al Drago-Pool/Getty Images) Getty Images
This past week the national average price for regular gasoline rose to $2.71 per gallon. That marks an increase of $0.46/gallon since the beginning of the year.
On a daily basis I see accusations on social media that this price rise is a consequence of Joe Biden winning the presidential election. I am going to explain why this is ludicrous, but I would pose the following to those who believe this to be the case.
Since Biden’s inauguration, daily Covid-19 cases have fallen by two-thirds. Daily deaths are down by nearly half. Is Joe Biden responsible for this? If you say “No”, or you feel the need to hedge or qualify your answer, then you probably realize that cause and effect isn’t quite as simple as that. The same holds true for gasoline prices.
The main reason I can say that Biden isn’t responsible for the rise in gasoline prices is that we understand pretty well why those prices are rising. Those reasons (mostly) have nothing to do with him.
Factor 1: Rising Oil Prices
The single biggest factor influencing changes in gasoline prices is almost always underlying changes in the price of oil. Show me a time that gasoline prices spiked or plunged, and the vast majority of the time you will find that oil followed the same pattern.
MORE FOR YOUBillionaire Reveals His ‘Secret’ To Beating China At ManufacturingTax Attorney Facing Prison For Allegedly Helping Billionaires Robert Smith And Bob Brockman Dodge The IRSJapan Will Release Radioactive Fukushima Water Into The Ocean, And Why That’s O.K.
On the first trading day of January 2021, the price of West Texas Intermediate (WTI) closed at $47.47 per barrel (bbl). Two months later, on the first trading day of March, the price closed at $60.54/bbl. During the time gasoline prices rose by $0.46/gallon, the price of oil rose by $0.31/gallon.
But gasoline prices often lag oil prices. In the past six months, the price of oil has risen by $0.56/gallon, while the price of gasoline is up $0.50/gallon. In other words, the vast majority of the gasoline price rise can be accounted for by the rise in the price of oil.
I will explain other factors influencing the price of gasoline below, but why are oil prices rising? Is Biden responsible for that?
The are two factors that have driven up the price of oil. One is that demand collapsed last year as pandemic measures were implemented and people stopped traveling. The price of oil plummeted. That, in turn, ended up idling 3 million barrels per day (BPD) of U.S. oil production relative to a year ago.
As the end of the pandemic nears, oil demand is bouncing back. Supply doesn’t respond as quickly, and therefore that puts pressure on prices. If you think Biden is responsible for hastening the end of the pandemic, then you can place some blame for the rise in oil prices on him. But that’s because the economy is beginning to recover, which is a good thing.
Second, unlike a year ago, OPEC and Russia recently decided to cooperate by extending most of the current output cuts. Despite some recovery in demand, Saudi Arabia kept in place a 1 million BPD cut. That decision sent oil prices sharply higher, and will likely ensure additional gains in gasoline prices.
Factor 2: Loss of Refining Capacity
Beyond oil prices, what other factors can impact gasoline prices? One of the most significant is any event that limits refinery capacity. If the crude oil can’t get refined, then gasoline supplies will start to run low. That, in turn, will cause gasoline prices to rise. This often happens when a hurricane is churning through the Gulf of Mexico, but it also happened last month when the winter storm swept through Texas.
During the first two weeks of February, refinery utilization in the U.S. was at 83%. Then the winter storm negatively impacted about a dozen refineries in Texas. By the last week of February, refinery utilization had plunged to 56%. Once again, it’s hard to pin that on Biden.
There are only a couple of mechanisms by which a President could have a short-term impact on gasoline prices. If they signed legislation changing the gasoline tax, which currently accounts for about 21% of the cost of gasoline, then that would quickly impact gasoline prices. Or, if a President announced a major release of oil from the Strategic Petroleum Reserve, that could cause oil prices to temporarily dip and might impact gasoline prices short-term.
Longer term, there are certainly things Biden can do to impact gasoline prices. Some of the moves he is making now may eventually impact prices. Cancellation of the Keystone XL Pipeline, for example, could eventually impact gasoline prices.
But those are long-term impacts. Other than the two mechanisms I mentioned above (or, I suppose he could also escalate military action in the Middle East), a President just doesn’t have a mechanism for sharply moving gasoline prices.
Factor 3: Transition to Summer Gasoline
Where are prices headed from here? Undoubtedly higher. One final fact that impacts gasoline prices is whether the U.S. is in winter or summer gasoline season. Winter gasoline blends are cheaper to produce, and demand is lower.
By summer, gasoline blends cost more to produce and demand is higher. Hence, the price of gasoline typically rises between January and May. Last year was a notable exception caused by the pandemic, but higher gasoline prices headed into summer is the norm.
|
23e3e02c339d496de0ba43de356a8b1c
|
https://www.forbes.com/sites/rrapier/2021/03/20/addressing-reader-feedback-on-rising-gasoline-prices/
|
Addressing Reader Feedback On Rising Gasoline Prices
|
Addressing Reader Feedback On Rising Gasoline Prices
UNITED STATES - MARCH 15: Gas prices are displayed at the Exxon station on Capitol HIll in ... [+] Washington on Monday, March 15, 2021. (Photo By Bill Clark/CQ-Roll Call, Inc via Getty Images) CQ-Roll Call, Inc via Getty Images
Over the past two years, I have written two articles for Forbes on gasoline prices that got more than half a million views each. That means there is obviously tremendous interest in the topic, but there is also a tremendous amount of misinformation circulating. It’s a subject that stirs great emotions in people.
I got a lot of feedback from readers on the previous article, Who Is To Blame For Rising Gasoline Prices? Today, I am going to address some of that feedback, and in the following article I am going to present a graphical representation of gasoline prices under the previous three presidents.
Regarding my previous article, one person wrote “I didn’t read your article, but I hope you eat your words.” I challenged him to actually read it, which he then did. Afterward he admitted that the points I made were accurate and that he had misunderstood what I was saying. Yes, that can happen when you don’t read the article.
To recap, my point wasn’t that President Biden’s policies will never impact gasoline prices. They may. My point is that the rise we have seen in gasoline prices in the two months he has been in office has absolutely nothing to do with Biden’s policies. We know why prices are rising. The price of oil has surged. We know why that has happened.
Some people asserted that cancellation of the Keystone XL pipeline permit had definitely caused gasoline prices to rise. Setting aside the fact that gasoline prices were rising well ahead of this announcement, I challenged people to explain cause and effect in this situation. Given all the global variables impacting oil prices — some of which are large and immediate — I asked for people to explain how canceling this project would cause a short-term impact on gasoline prices. Nobody was able to do this.
MORE FOR YOUBiden’s Big Bet On Offshore WindWhy Gas Prices Rise Nearly Every SpringHow Oxy’s New Carbon Venture Could Become A True Game-Changer
The Keystone XL pipeline project wouldn’t have been completed for years. It would have transported some crude oil from Canada and from the Bakken formation in the U.S. to refineries. Some crude oil from the pipeline may have reached the U.S. Gulf Coast for export.
Had the project been completed, the Keystone XL would have increased the capacity of the Keystone Pipeline by 510,000 barrels per day (BPD) to a total capacity of 1.1 million BPD.
For the record, I opposed cancellation of the permit. I explained the reasons in The Inherent Risks In President Biden’s Energy Plan. But my opposition aside, this does nothing to increase gasoline prices in the short-term.
True, a decade from now there might have been an additional 510,000 BPD of oil flowing to refineries through the Keystone XL. But OPEC regularly makes decisions on millions of BPD of oil with immediate consequences. Those have short-term impacts on oil prices, and subsequently gasoline prices. The loss of the Keystone XL volume may impact gasoline prices a decade from now.
But the Keystone XL volumes and the timeframe of the pipeline’s completion are tiny variables compared to OPEC production decisions and an economy recovering from the Covid-19 pandemic. U.S. oil production has fallen by more than 2 million BPD over the past year — a result of oil prices that crashed due to the pandemic. Demand is starting to rise, and that dynamic does have a short-term impact on gasoline prices.
If you believe that President Biden’s policies are hastening the end of the pandemic then you can put some of the “blame” on him. But I find that position is generally at odds with the belief that he is responsible for driving up gasoline prices.
One person wrote to me and asserted that gasoline prices are rising because President Biden is sending signals that he wants higher prices. First of all, that’s a misreading of the signals. He is trying to signal that we won’t need as much oil in the future as the world decarbonizes. In theory, that should lead to lower oil prices.
I disagree with this theory, as I explain in the article on Biden’s energy policies. But the signal he is sending isn’t that he wants high gasoline prices. And it wouldn’t matter if he did. Short term supply and demand issues move the oil markets, not a president’s wishes.
Finally, it was difficult to reconcile the opinions of people who 1). Bitterly complained about higher gasoline prices, while; 2). Simultaneously expressing support for the U.S. oil industry.
If you really believe that Biden is driving up oil prices, then that should be good for the U.S. oil industry. The oil industry was crushed last year as prices collapsed in the wake of the pandemic. As a consumer, you may have enjoyed last year’s low gasoline prices, but a prolonged period like that will result in lower U.S. oil production, and subsequently higher dependence on foreign countries for our oil needs.
So, pick your position: Either Biden is driving up gasoline prices, which helps the U.S. oil industry, or Biden’s policies have nothing to do with higher gasoline prices, and thus his policies are doing nothing to help the U.S. oil industry.
|
ffbda5c94ca70dea46bd46556d2903ca
|
https://www.forbes.com/sites/rscottraynovich/2020/12/22/tech-experts-point-to-an-accelerated-drive-to-a-virtual-omniverse/?sh=13a5f9e54f69
|
Tech Experts Point To An Accelerated Drive To A Virtual ‘Omniverse’
|
Tech Experts Point To An Accelerated Drive To A Virtual ‘Omniverse’
In response to the COVID-19 pandemic and economic crisis, enterprises have increased the pace of digital transformation, or converting processes and workflows to digital and cloud-based systems. Feedback from a variety of technology experts and CIOs indicates this is likely to continue for the foreseeable future, even after the pandemic subsides or is solved with a vaccine.
We already have clues in the stock market, with companies focused on collaboration technology and videoconferencing skyrocketing. Zoom Video Communications recently traded near a $140 billion market capitalization on only about a $3 billion revenue run rate, and Salesforce made the move to pay an astounding $27 billion for workforce collaboration company Slack, the company’s biggest acquisition ever.
Deals such as Salesforce's recent acquisition of the workplace-chat app Slack for $27.7 billion ... [+] demonstrate increased demand for collaboration tools. (Photo by Stephen Lam/Getty Images) Getty Images
The value creation is immense as technology investment floods into collaboration and cloud tools. But what are the patterns and how exactly does this unfold?
A panel of CIOs and technology experts at the recent NetEvent inter@active event, “CIO Roundtable on Predicting and Preparing for the New Normal,” concluded that as the world emerges from the COVID-19 pandemic crisis, digital transformation efforts will continue on an accelerated path now that businesses have realized the risks of not being up-to-date on technology — with an emphasis on artificial intelligence (AI), augmented reality (AR), virtual reality (VR), collaboration tools, as well as networking infrastructure to support all these applications.
Mixed Results in Pandemic Response
One of the key discoveries during the pandemic is that many enterprises and organizations were ill-prepared. As the pandemic crisis hit the world, it became apparent which companies and organizations were prepared and which weren't. In some cases, that has resulted in business failures.
"I think the story is mixed," said Steve Berez, a partner with consultancy Bain and Company on the NetEvents panel. “Some companies did a lot better than others. So we have a lot of success stories but a lot of companies have not done a great job."
MORE FOR YOUNVIDIA Announces Technology For Training Giant Artificial Intelligence ModelsThe Dell Tech And VMware Spin-Off Benefits EverybodyWhat’s Better, The New M1 MacBooks Or The Microsoft Surface?
Others portrayed this divergence in impact of the COVID-19 crisis in more stark terms. Kevin Deierling, Head of Networking Business Unit, NVIDIA, described the environment "Schumpeter's gale," in reference to the term from the influential Austrian economist Josef Schumpeter, who popularized the notion of creative destruction as a driving force in business.
"We are in the middle of Schumpeter's gale of economic destruction," said Deierling. "Businesses are being destroyed and new businesses are being created and rising. Any business will become an AI business. All of that has been accelerated."
AI, Collaboration, and Virtual Reality Benefit
AI, as mentioned by Deierling, is among a basket of technologies that are likely to benefit from the pandemic-driven acceleration of digitization and cloud. Others include virtual collaboration and AR/VR.
Ron Abreu, Global IT Director of SWM International, a manufacturing company, said the company has invested heavily in virtual reality tools to enable folks to maintain training and factory skills even when they can’t come to a manufacturing site.
“We have heavily focused on tools such as augmented reality,” said Abreu. “Instead of sending engineers to [manufacturing] lines, we have created augmented reality training, using the Hololens glasses.”
Abreu says the company has also focused on a variety of collaboration tools. This has also resulted in a need to upgrade networking infrastructure to support collaboration and AR.
HoloLens glasses can be used in training for manufacturing, such as demonstrated with this ... [+] two-armed, adaptable robot Youmi in this Bosch robotics laboratory in Renningen, Germany, 18 April 2017. Photo: Franziska Kraufmann/dpa | usage worldwide (Photo by Franziska Kraufmann/picture alliance via Getty Images) picture alliance via Getty Images
“We had to ramp up the infrastructure upgrade,” said Abreu.
Pathmal Gunawardana, Head of Americas, TATA Communications, agreed that a wide basket of technologies are showing benefits in the current environment.
“I think we have a good idea on what we will see in the post-pandemic world: Automation, AI/ML and all those technologies coming to the forefront,” said Gunawardana.
An Accelerated Roadmap and ‘Omniverse’
Bain’s Berez says that spending patterns will shift in response to the pandemic as digitization and digital transformations accelerate. He says companies need to think more about long-term strategic investments rather than short-term tactical shifts, because it’s been the companies with long-term strategic plans that have fared the best.
“A lot of companies are maintaining their technology spending, but that has been tactical spending and it hasn’t been strategic improvements,” said Berez. “That’s because there is quite a bit of a mixed bag in how companies are executing technology change.”
Berez said that CIOs are now looking at accelerating their build of new platforms, moving to the cloud, and looking to automate the workflows and security.
“All of it was in the roadmaps, but one word that resonates is acceleration,” said Berez. “All of us are accelerating the roadmaps. IT is no longer a cost center. It ’s an investment. For anybody that thought IT was a cost center, it was a wakeup call.”
NVIDIA’s Deierling also points out out that the new emphasis on virtual collaboration will permanently alter how people work, including perhaps reducing the amount of travel.
“People realized that we don’t have to travel 300,000 miles per year to do business. Some of the stuff we have seen people lean in on is a platform that creates a virtual world. We have this omniverse and it’s gotten accelerated.”
Yes, it’s a futuristic vision but it’s actually happening. The pandemic response has driven us into a new work VR, one that wouldn’t likely have been possible ten years ago without the current cloud infrastructure and collaboration tools. It’s not just science fiction as the data has already shown. A McKinsey survey published this summer indicated that COVID-19 has, in fact, caused companies to accelerate digital transformation technologies.
As the participants on the NetEvents panel observed, it’s now up to management and technology professionals to make these investments strategically and professionally, so they don’t get caught up in Schumpeter’s gale.
|
c8bbc2943d42c8c5477fdf7c19e888fb
|
https://www.forbes.com/sites/rscottraynovich/2021/02/24/aviatrix-pumps-up-multi-cloud-networking-with-75m-round/
|
Aviatrix Pumps Up Multi-Cloud Networking With $75M Round
|
Aviatrix Pumps Up Multi-Cloud Networking With $75M Round
The cloud networking market is red hot, punctuated this week by a $75 Series D round for Aviatrix, one of the leaders in cloud networking technology that can connect multiple and hybrid clouds, also known as multi-cloud networking (MCN).
That brought the company's total financing to $151 million. The valuation was reportedly above $700 million (as reported by The Information), but Aviatrix CEO Steve Mullaney says that’s no big deal — cause he’s going for an Initial Public Offering (IPO) worth multiple or tens of billions (more on that later).
The good news for the cloud networking market is this signals rising investment and valuations in virtualized technology that can help enterprises connect and manage their applications across multiple clouds or hybrid clouds using MCN. This has enormous potential to replace legacy networking technologies attached to proprietary hardware boxes based on premises or in data centers. Let’s delve into why this trend is gathering momentum.
The round was led by General Catalyst and includes new investors Greenspring Associates, Meritech Capital, and TrueBridge Capital Partners. Existing investors CRV, Formation 8, Ignition, and Liberty Global Ventures also participated in this round.
Mullaney Mans Up
Mullaney, the Aviatrix CEO, still thinks we're in the early innings of cloud networking. "Amazon recently announced that only four percent of enterprise workloads are in the cloud,” he told me in an interview this week. “Only four percent! And Amazon has a run rate of $50 billion. Wait until enterprise really starts coming in!"
Steve Mullaney, CEO of Aviatrix Aviatrix
MORE FOR YOUWhat’s Better, The New M1 MacBooks Or The Microsoft Surface?NVIDIA Announces Technology For Training Giant Artificial Intelligence ModelsThe Dell Tech And VMware Spin-Off Benefits Everybody
The shift does have the potential to be one of the largest in networking history. For the past few decades, enterprises built networks that connected workers and applications in their own offices or buildings – known as on premises or "on prem" — and then later focused on building and managing in-house data centers, which needed networks of their own.
But then came the cloud wave. Applications, infrastructure, and networks are moving to public and private clouds – in droves. That represents a wall of money that is being shifted to cloud infrastructure investment, including networks. But the largest cloud players – such as Amazon Web Services, Microsoft Azure, and Google Cloud – built their own networks and aren’t overly concerned with helping their customers to connect clouds together. Therein lies the opportunity for Aviatrix.
What Aviatrix does best is help medium and large enterprises build and manage networks that connect resources in multiple clouds. This includes connecting virtual networks across cloud gateways; providing visibility into these networks with Aviatrix's CoPilot software; and helping managers with challenging public-cloud operations, such as configuring firewalls and security inside their public-cloud instances.
Aviatrix already boasts hundreds of enterprise customers, including household names like Constellation Brands, Raytheon, Abbott, CBS, and NASA.
Mullaney has been in networking circles for decades and is best known for selling software-defined networking (SDN) pioneer Nicira to VMware for $1.3 billion in 2012. After that, he went into a mini-retirement for several years, but said he came back to join Aviatrix in 2018 because the opportunity was too large to ignore.
FuturiomSteve Mullaney Back in the Fray: The Futuriom Q&A
But the way Mullaney tells it, the $1.3 billion for Nicira (which would be worth about $1.6B in today’s dollars), is not enough. In fact, Mullaney thinks the opportunity is so large that he doesn't care about piddly $1 billion-dollar deals anymore.
“I’m not even going to think about a crappy $1 billion acquisition,” he said.
He thinks the market – and Aviatrix — is worth tens of billions of dollars and that traditional vendors such as Cisco and Juniper are going to be replaced by a whole new generation of cloud-native networking companies. That means, of course, that Mullaney has his sights on Initial Public Offering (IPO), which has been yielding eye-popping valuations for cloud infrastructure companies.
"This is not a minor transition," said Mullaney. "It’s going to be all new. It’s not going to be Arista, Cisco, or Juniper. They’re not even in the conversation. They’re with the last-thirty-year model. This is a computing model transformation."
Multi-Cloud Market Mavens
The wave of capital being thrown at Aviatrix and others indicates that the investment community believes the multi-cloud opportunity may be the real deal — the shift that finally transforms a networking market that has only experienced incremental innovation over the past couple of decades.
In fact, a whole raft of money has been flowing into cloud networking in recent months. Israeli cloud routing specialist DriveNets, which targets service providers, recently drew a massive $208 million round that puts its valuation over $1 billion. F5 Networks recently moved to buy cloud networking and infrastructure specialist Volterra for $500 million, only two years after that startup was founded. Cloud networking and security company Cato Networks just this week announced bookings growth of 200% with Fortune 500 customers. Cato last November raised $130 million and is generally understood to be worth more than $1 billion.
FierceTelecomIndustry Voices-Chua: Cato Networks goes from dark horse to $1B unicorn
As Futuriom covered in depth in its recent Future of MCN report, there are at least a dozen interesting venture-funded startups working on various facets of software-driven MCN challenges. Some of them include Arrcus, DriveNets, and Volta Networks in cloud routing; networking-as-a-service (NaaS) providers such as Aryaka Networks, Alkira, PacketFabric, and PurePort; integration technology from Itential; and cloud-based security specialists like Cato, NetFoundry, and Versa Networks. This list grows well beyond these groups, and it's not just startups; other interesting companies moving aggressively to supply software, tools, and even hosting for the cloud networking space include Citrix, Digital Realty, Equinix, Megaport, and VMware – to name a few. They all have a stories to tell about how they are helping managers tie together disparate cloud-networking systems.
Is this market going to grow to multiple tens of billions of dollars? Most likely. The virtual private networking (VPN) market itself is at least $50 billion. The enterprise routing and switching market is also a $50 billion-plus market. Cloud networking represents a convergence of the two - in the cloud. It will likely be bigger. It’s possible that the company that wins it would have a valuation as big or even larger than Cisco, whose valuation is about $190 billion on $50 billion in revenue.
All in the MCN Party Boat
What do the others think? They are happy to join the party.
“This market opportunity is huge because every communication service provider, web-scale operator, and enterprise needs a better way to connect with public clouds with open, interoperable, virtualized solutions," said Devesh Garg, CEO and co-Founder of Arrcus. "We are addressing this with the Arrcus MCN-based solutions.”
Arrcus, a cloud networking startup that is just down the road from Aviatrix in Silicon Valley, has raised about $50 million and is staffed with veterans from Cisco. The company is focused on providing a high-performance routing and network operating system (NOS), all driven by software in the cloud.
Another company that is often mentioned in the same breath as Aviatrix is Alkira, which was founded by Amir and Atif Khan, two brothers who built software-defined wide-area networking (SD-WAN) company Viptela, which was sold to Cisco for $610 million in 2017. Alkira has built an entire networking system into the cloud — meaning an enterprise doesn't even need a network, but can purchase it as if it were a software-as-a-service (SaaS) product.
“Alkira has built a transformative Cloud Networking Infrastructure as-a-Service from the ground up providing customers a secure, end-to-end multi-cloud networking offering,” said Amir Khan, Alkira CEO and Co-founder, when I asked about the market. “No hype, no pivot. Our vision is to reinvent the network for the cloud era.”
Alkira has raised $76M from top tier investors: Sequoia, KP, GV(Google Ventures) Koch. The Series B was $54 million in October
When asked about the competition, Mullaney says the market will lift all boats.
“Alkira will do fine. We’re all going to do fine.”
Whether or not Aviatrix gets its $1 billion-plus Unicorny valuation or an IPO has yet to be determined. But one thing is certain: The shift to MCN is driving a lot of new money and innovation into a networking world that has been somewhat sleepy for the past two decades. This next crop of MCN startups and innovation looks more interesting than ever before — and probably hasn't drawn as much interest from investors since optical networking got hot in the late 1990s and early 2000s.
Oh-oh. Did I just compare cloud networking to the optical networking bubble? Sorry, I didn't mean to do that.
|
94aea232b5aefd4010e4a2a37e73db36
|
https://www.forbes.com/sites/rscottraynovich/2021/03/05/inside-a-new-crop-of-future-cloud-ipos/
|
Inside a New Crop Of Future Cloud IPOs
|
Inside a New Crop Of Future Cloud IPOs
Nothing has been hotter in the market than cloud and communications infrastructure technology companies (well, at least until the last couple of weeks). Many of the hottest companies, such as a Snowflake (SNOW) or a Zoom (ZM), have been created in the just the past few years.
Most of the innovation in cloud and communications infrastructure has come from the startup community. Some of the great success stories we have followed in the cloud technology market that have had successful Initial Public Offerings (IPOs) include Atlassian (TEAM), Cloudflare (NET), Crowdstrike (CRWD), Datadog (DDOG), Fastly (FSLY), Fortinet (FTNT), Okta (OKTA), Snowflake (SNOW), and Twilio (TWLO), and Zscaler (ZS) – to name some of the biggest ones.
We expect a lot more opportunities in the next few years – and I’m about to tell you where to look.
Top Trends in Cloud Infrastructure
The scale and speed of innovation in cloud technology is truly astounding these days. This is most clearly demonstrated by Zoom, which was founded in 2011 by Eric Yuan, a former corporate vice president for Cisco Webex. Zoom went from idea to a $100 billion market cap in just nine years. So what’s next? Plenty of other giants are going to be created as the cloud market expands, creating opportunity for software and infrastructure plays in cloud automation, security, and networking.
NEW YORK, NY - APRIL 18: Zoom founder Eric Yuan make a toast after the Nasdaq opening bell ceremony ... [+] on April 18, 2019 in New York City. The video-conferencing software company announced it's IPO priced at $36 per share, at an estimated value of $9.2 billion. (Photo by Kena Betancur/Getty Images) Getty Images
Cloud and communications infrastructure – the underlying technology that delivers your Netflix or your Zoom call – requires immense scale and complexity. Moving forward, this infrastructure will be increasingly automated and software-based, requiring a range of tools driven by Artificial Intelligence (AI), Machine Learning (ML), and various forms of orchestration, security, networking, and automation software. Within the general cloud infrastructure, companies are vying for leadership in some key themes. Some of the specific trends we see accelerating in cloud infrastructure include unified cloud security, distributed cloud networking, cloud automation, edge cloud, and cloud data management.
Futuriom spent months analyzing technology trends and private companies in the cloud and communications infrastructure market to find the promising private companies. The results were recently released in our Futuriom 40 report, which detailed the top trends in cloud infrastructure. Let’s start with the top trends and then move to the top private companies.
MORE FOR YOUCisco All-In On XaaS, Observability, And Collaboration At Its 2021 Live! ConferenceThe Latest Chapter In IBM’s Quest To Build A Cloud For BanksThe Decoder Ring For VMware’s Multi-Cloud Offerings And Offers ‘As A Service’
First, let’s look at the key trends in cloud infrastructure:
• Cloud Infrastructure Automation. Humans can no longer keep up the scale and speed of the cloud. Cloud automation will use real-time collection of data, AI, and abstraction of infrastructure elements using Application Programming Interfaces (APIs) to build software orchestration and automation tools that respond to changing conditions and needs in real time.
• Distributed Cloud Networking. Software-driven networking technologies including software defined wide-area networking (SD-WAN) and multi-cloud networking (MCN) using Web interfaces and API gateways will be used to build secure, dynamic, virtualized networks to connect distributed applications running across clouds.
• Edge Cloud. The addition of new access methods such as 5G and satellite as well as the creation of billions of new connected devices will require a wide range of cloud and communications to deliver capabilities closers to the customers or devices. This will result in an expansion of the cloud known as the Edge Cloud.
• Cloud Data Management. As the scale of cloud workloads grows, so does the proliferation of data. It must be managed effectively and securely to service the needs of cloud applications.
• Unified Cloud Security. Just like humans can’t keep up with the changes and scale or cloud infrastructure, managing security is also an issue. Integrated cloud security tools will leverage automated data ingestion, artificial intelligence, and machine learning (ML) to monitor and detect applications and identity-driven behavior and remediate anomalies.
Promising Cloud Plays
Some of the innovators in cloud infrastructure, as I mentioned, have only just come to the public markets in the past year. With interest rates low and digital transformation efforts accelerating, expect the pace of innovation and investment to continue to accelerate. This can be seen in the private venture market, where 2020 was another record-setting year with $300 billion in venture capital deployed. Cloud infrastructure was a big beneficiary, with a large crop of private companies growing fast and attracting customers.
So who are the hottest private companies that might be future IPOs? Futuriom combed through 12 months of reports and analysis pieces, spotting the key companies in these developing trends. The Futuriom list included 40 companies we have been watching, but might be too many for one column. Let’s take a look at some of the promising companies that are going to be likely Merger and Acquisition candidates in the next year or two.
Let’s divide these companies into groups based on relative stage of development – 1) Mature potential IPO candidates 2) Growth Stars 3) Promising Prospects.
Working through the review of companies, it’s amazing how many companies have already achieved IPO-type scale in revenue, customers and funding. Many have raised hundreds of millions of dollars.
Top IPO Prospects
Based on market development, technology maturity, company size, and customers, some of the key companies to watch for potential IPOs in the next year or two (with the key trend) include: Aryaka (cloud security and networking); Aviatrix (cloud networking); Cato Networks (cloud security and networking); Cockroach Labs (cloud data); Cohesity (cloud data); Couchbase (cloud data); Darktrace (cloud security); Databricks (cloud data); Exabeam (cloud security); Hashicorp (cloud automation); Lacework (cloud security); Netskope (cloud security); Rubrik (cloud data); SUSE (cloud automation); and Versa Networks (cloud networking and security).
Growth Stars
Growth stars are companies demonstrating rapid market adoption. Their products have come to market and gained traction, and the companies are gaining significant investments, but might not be ready for IPO primetime. A lot Growth Stars are key acquisition targets before they reach IPO, so this is probably an area that will be fertile ground for M&A.
The Growth Stars we’re watching (with key trend) include: Alkira, Arrcus (cloud networking), DriveNets (cloud networking), Fivetran (cloud security), Itential (cloud automation), Kentik (cloud automation), NetFoundry (cloud security and edge cloud), PacketFabric (cloud networking), Pensando (edge cloud), StackPath (edge cloud), Tigera (cloud security), TrueFort (cloud security), Vapor IO (edge cloud), and WeaveWorks (cloud automation).
Young Prospects
I liken these companies to top draft picks that aren’t All Stars yet. These are companies are generally in the early stages of development. They have products that have recently come to market But haven’t fully fleshed out the team and are in early stages of funding. But many of the top prospects have intriguing products with a unique spin on the market, a top team, and well-known investors.
Some of the top prospects in cloud and communications infrastructure we are watching include EDJX (edge cloud), Fortanix (cloud security), Infiot (cloud security and cloud edge), and Netris (edge cloud and cloud automation).
All of these areas of cloud infrastructure, stretching from cloud automation to security, are going to be fertile areas of development in the future. The transition of applications from private enterprise and private cloud has just begun, with less than 20% of applications currently believed to be cloud-based. As we build the Information Technology infrastructure in the cloud, the thirst for new tools and technology will be strong for decades to come.
|
6ceee0413a80930cd597f54158d07e8c
|
https://www.forbes.com/sites/rsmdiscovery/2018/07/25/why-power-and-testosterone-are-a-seriously-dangerous-mix/
|
Why Power And Testosterone Are A Seriously Dangerous Mix
|
Why Power And Testosterone Are A Seriously Dangerous Mix
Shutterstock
Apart from a select few who have been very, very lucky in their working lives, chances are that we’ve all suffered from exposure to a narcissistic boss at some point in our careers. You know the type. Full of their own self-importance, right all the time (even when they are patently not) and willing to ride roughshod over anyone who gets in their way.
But how did they get into such a position on the first place? Is it simply because organizations of all shapes and sizes have a tendency to promote people with these qualities? Are they better than their more reasonable colleagues at manipulating the system? Or, building on the old adage that power corrupts, does a position of authority actually engender narcissistic behavior?
Given how much damage a narcissistic leader can cause to a department, a company or even a country, my colleague, Nicole Mead, and I thought it was about time to investigate this further.
What we were particularly interested in was whether power over others inflated narcissism among people who have high levels of testosterone as part of their physical makeup. To find out we recruited over 200 volunteers – both male and female – and started by testing for the hormone through saliva samples and then put them into a study of team dynamics. In the study half of the participants were told that they were in control of tasks while the other half were told that no-one was in authority. We then assessed each individual’s state of narcissism with the ‘Narcissistic Personality Inventory,’ the most commonly used measure of narcissism. We also asked how willing they were to misuse power with an established scale. For instance, they answered whether they would be willing to steal their subordinate’s idea and sell it as their own.
The results clearly showed something that we had suspected all along. Namely that the combination of power and testosterone is potentially a very toxic mix. Power alone is apparently not the problem. Participants with relatively low levels of testosterone for their gender simply didn’t get corrupted by gaining authority over others. Instead they continued being the largely thoughtful and reasonable people they had been before the exercise started. But for many of those with high levels of testosterone for their gender, the exercise of power meant that it was ‘Dr. Jekyll and Mr Hyde’ time. Not only did power make those people more narcissistic, it also made them more willing to misuse power for selfish ends.
So what can we do to keep this phenomenon under control? Should we insist on physical testing of hormone levels before a candidate can be approved for a leadership position? And how far should we then take this? What about testing before someone is allowed to stand for elected political office, for example? That might have resulted in some interesting changes to governments around the world in recent years…. The problem with this, of course, is that we risk straying into the territory of unfair discrimination. Should you really be disqualified from a role because of something over which you have no more control than your gender or ethnicity?
What we can, however, legitimately do is improve assessment processes which are still, in far too many cases, based on assumptions and unconscious biases. What we need to do is to make the whole business of evaluating candidates for leadership roles more robust and, crucially, more scientific. We need to stop being impressed by the sort of openly dominant or exploitative behavior that is associated with higher testosterone levels. Instead, we should see these behaviors as warning signs rather than any form of recommendation. In short we need to dig down and find out just how suited to a position of authority – in terms of competence, talent and skill - an individual actually is.
|
a2ce3853746a15b16131c27639c96c1b
|
https://www.forbes.com/sites/rsmdiscovery/2020/01/30/does-morality-matter-depends-on-your-definition-of-right-and-wrong/
|
Does Morality Matter? Depends On Your Definition Of Right And Wrong
|
Does Morality Matter? Depends On Your Definition Of Right And Wrong
Corporate superstars are often celebrated for their business acumen, innovation, and even edginess. But how often are they congratulated for their moral leadership? Our research shows that morality matters, regardless of industry, firm size, or the status and level of a leader in a company. The benefits range from individual and team performance, to financial measures, and perceptions of justice, trust, engagement and motivation. However, we also discovered you need to be both careful and smart about it to gain these benefits.
For our research into morality we reviewed some 300 studies on moral leadership. We discovered that morality is – generally speaking – a good thing for leadership effectiveness but it is also a double-edged sword about which you need to be careful and smart.
To do this, there are three basic approaches.
First, followers can be inspired by a leader who advocates the highest common good for all and is motivated to contribute to that common good from an expectation of reciprocity (servant leadership; consequentialism).
Second, followers can also be inspired by a leader who advocates the adherence to a set of standards or rules and is motivated to contribute to the clarity and safety this structure imposes for an orderly society (ethical leadership; deontology).
Third and finally, followers can also be inspired by a leader who advocates for moral freedom and corresponding responsibility and is motivated to contribute to this system in the knowledge that others will afford them their own moral autonomy (authentic leadership; virtue ethics).
MORE FOR YOUManage Your Boss With “The Rule Of Three”Is President Lopez Obrador Destroying Mexico?How Cryptocurrency Will Transform The Future Business Forever
A caution for managers
Most of us consider ourselves moral and feel that all people necessarily think the way we do about morality. However, managers should realise, that their form of morality may differ from that of their employees.
For example, what if you run a team of very proactive individuals and their definition of morality actually is more aligned to the idea that people should get their own freedom to do things their own way and be left alone to make their own ethical decisions. Or what happens if you're a leader who emphasizes the common good for a team of people who are actually more predicated on those individual freedoms.
Morality in organisations matters
The tensions between the multiple approaches to morality may mean that some benefits are reaped but others are lost, and that some followers are convinced (those adhering to the same moral philosophy) but others distance themselves. So, what do managers need to do?
The important thing managers and leaders should realise is that your morals might differ from those who you are leading, yes you might be a great moral leader, but if your morality doesn’t match that of your employees, you may not as effective as you think you are.
|
b9aceb1ea1ebe273b35772ae8e9f796a
|
https://www.forbes.com/sites/rubyleung/2020/05/25/singaporean-mobile-marketplace-carousell-launches-hong-kong-property-platform/
|
Singaporean Mobile Marketplace Carousell Launches Hong Kong Property Platform
|
Singaporean Mobile Marketplace Carousell Launches Hong Kong Property Platform
Siu Rui Quek, cofounder and chief executive officer of Carousell. Ore Huiying/Bloomberg
Carousell, a Singapore-based online marketplace, announced on Monday the official launch of a property listing platform in Hong Kong.
The startup is partnering with Hong Kong companies, including Midland Realty, one of the city’s biggest realtors, to provide listings of local and overseas residential and industrial properties for sale and rent through its Carousell mobile application.
The platform, called Carousell Property, also includes a variety of services, including Home Services (home repairs, moving, renovation), Home & Furniture (furniture, gardening) and Kitchen and Appliances, as well as a chat function to talk directly to merchants.
Since its soft launch in 2019, Carousell Property has seen increasing interest as part of a rise in demand for online shopping. “For a city like Hong Kong that pursues speed and efficiency, shopping on a one-stop marketplace like Carousell Property will help consumers save time,” said Cahill Kei, head of business development of Carousell Hong Kong, in a statement. “The Carousell Property marketplace gives merchants access to more consumers, and makes the entire process, whether you are renting or buying, easy and seamless.”
More on Forbes: 30 Under 30 Asia Alumni Taking Over The World
In addition to Midland Realty, other Hong Kong companies Carousell is partnering with for Carousell Property include moving company Going Moving and co-working company Metro Workspace. Carousell Property said it will be focusing on co-working spaces for the second half of this year.
MORE FOR YOUSingapore Superapp Grab To Go Public With $40 Billion Valuation In SPAC DealHouston, We Have A Problem. Oil Reserves Have Fallen Below 10 YearsXtep Clan’s Fortune Returns To $1 Bln As Nike Backlash Spurs China Sneaker Shift
Carousell was cofounded by Marcus Tan, Lucas Ngoo and Siu Rui Quek in 2012. Since then, Carousell has grown into a platform with more than 250 million listings. In 2016, Ngoo and Quek were honored as part of the Forbes 30 Under 30 Asia.
The startup is backed by Norwegian mobile operator Telenor Group, South African tech giant Naspers and venture capital firms Rakuten Ventures and Sequoia India. Carousell mainly operates in Singapore, Taiwan, the Philippines, Malaysia, Indonesia, Hong Kong, New Zealand, Australia and Canada.
|
b88132ec5df94295578fbca22efb73ed
|
https://www.forbes.com/sites/ruchikatulshyan/2013/12/06/this-amazing-hair-commercial-portrays-sexist-labels/
|
This Amazing Hair Commercial Portrays Gender Labels Effectively
|
This Amazing Hair Commercial Portrays Gender Labels Effectively
Lengthy arguments on gender bias have become commonplace: "Women can't have it all!" "Women must 'Lean In!'" But this ad from Pantene Philippines (a Procter & Gamble brand) brilliantly portrays gender labels, in all of one minute.
The commercial opens with a man and woman walking into separate meeting rooms. The man leading the meeting has the word "Boss" emblazoned behind him. The female leader has the word "Bossy." The video shows men and women doing the same things, but with different labels associated with their activities. Where the man is "persuasive," the woman is "pushy." A man working late is shown as "dedicated." The woman doing the same is labeled "selfish." More labels continue, until the ad closes urging women: "Don't let labels hold you back. Be strong and shine."
Simple. To the point. Effective.
A commercial like this in Asia is hard-hitting. All over the region, women are becoming a powerful part of the workforce. Asian women battle old societal traditions to get to the office, but when they get there, they are often labeled "selfish" or "too pushy." This becomes even more significant for women shooting for (or in) executive positions.
The Philippines ranks third for women's workforce participation in the Asia Pacific region, according to a MasterCard Worldwide Women's Advancement Index. But what's great is this commercial isn't only applicable to gender attitudes in the Philippines or Asia, solely. In fact, women all over the world are likely to identify. I like how it doesn't show men imposing labels on women: There are plenty of examples of women being each other's harshest critics. Just look at all the backlash against Marissa Mayer and Anne-Marie Slaughter!
Storytelling in Brands
It's hard to remember the spot is for shampoo. This campaign understands – as smart brands are catching on to – that customers of today don't want to be sold to. They want to make informed choices after weighing multiple options. With effective storytelling, brands can influence audiences by appealing to their values or emotions. Great advertising is even able to transcend culture, as this Google India ad shows.
The connection between gender equality and shampoo is tenuous at best. And yet, Pantene appears to align its brand to championing for women's rights with this video. We've come a long way from the days of hair commercials promising impossibly shiny hair with just one wash. Now, opportunities are ripe for companies to put out thought-provoking messaging that isn't afraid to challenge societal norms.
Did you find this commercial effective? Did it challenge you to question your own gender biases?
|
172fb6e4d6dfef996a51996831b80dd4
|
https://www.forbes.com/sites/ruchikatulshyan/2014/03/21/why-ban-bossy-matters-even-more-to-women-of-color/
|
Why Ban Bossy Matters Even More to Women Of Color
|
Why Ban Bossy Matters Even More to Women Of Color
Love it or hate it, chances are you’ve heard of Sheryl Sandberg’s “Ban Bossy” campaign.
“Words like bossy send a message: don't raise your hand or speak up. By middle school, girls are less interested in leading than boys—a trend that continues into adulthood,” according to the campaign’s website. With the help of the Girl Scouts, Beyonce, Condoleezza Rice and other heavy hitters, Sandberg is attempting to stamp out the “B" word.
The campaign has received an overwhelmingly negative response so far. Mainstream media has been “Ban Bossy’s” harshest critic. And the backlash has come primarily from white feminists. Absent from this conversation is diverse voices; Americans who are raising their children in more than one culture. This is a shame, because I find “Ban Bossy” has a big opportunity to effect real change among immigrant communities.
I’m not saying the campaign is perfect – nor does it have all the answers on how to encourage girls to lead. But I like how it opens up the conversation. We’re forced to confront the stereotypes we’ve all grown up with. It reminds us to be mindful of the words we use around our girls and boys.
The ideas we hear in childhood have a powerful impact on who we become as women. The message that girls should not be assertive is traditional and universal. But often, girls of color are not only are taught to be demure at school, but this pressure multiplies at home, especially in households where mothers and fathers play traditional roles.
From there, begins a lifelong discomfort with leadership. This directly impacts economic success for women of color. For example, despite Asian American women achieving high educational attainments, they make disproportionately less money than their male and white counterparts. And Latina women are significantly underrepresented in the workforce.
Assertiveness in the Latina Community
“Latinas are among America’s fastest growing demographic groups, and they have the potential to take the reins of leadership in the next century. But there are so many ways, actively and passively, society discourages Hispanic girls,” says Anna Maria Chávez, CEO of the Girl Scouts. Chávez herself was told she would never get into Yale because of her heritage.
“The message that girls should be seen and not heard has not faded with the passage of time, it’s just become more subtle. ‘Ban Bossy’ is about changing that dynamic, so girls of any background or ethnic group feel empowered and encouraged to lead.”
Marisa Salcines, co-founder and editor-in-chief of HealthyHispanicLiving.com says ideas from “Ban Bossy” and “Lean In” are important to bring change in the Latina community.
“The art of self-promotion, of being what the mainstream deems as “bossy” is not something our Mamis or Abuelas taught us to be. It can even be more difficult to overcome this hurdle because leadership and exhibiting leadership skills (as Sandberg aptly puts it in her book) is not something our families ingrained in us,” she says.
The Need to Ban Bossy in Asian American Communities
For Asian Americans too, "Ban Bossy" must overcome an additional challenge from cultural norms. Patty Chang Anker, author of Some Nerve: Lessons Learned While Becoming Brave says she was taught to respect authority, work hard, be modest and 'save face,' by her Chinese immigrant parents.
“Helping children who may have accents, fewer resources, less experience with American culture overcome their fears of embarrassment or failure in order to get the skills they will need to succeed would change the trajectory of their lives," she says.
"It will enrich all of our lives by bringing more women from diverse backgrounds out of the background and ready to lead."
Bringing “Ban Bossy” into Diverse Communities
I don't believe any campaign can ever fit everyone. Particularly today, when America is made up of such rich and diverse immigrant communities. But I encourage schools and other leaders in these communities to bring the "Ban Bossy" message to girls who often have to overcome an additional layer of cultural barriers to aspire to and accept leadership.
While the message works for the mainstream, says Salcines, for Latinas it needs to be made more relevant and culturally connected to Hispanic values: “It is important to bring Latino families into the fold, to make them part of this national conversation, so that they too realize that they have the power to change this way of thinking."
The campaign’s guidance to teachers and scout leaders on how to encourage girls to speak up and take leadership roles is promising, says Chang Anker.
“It's especially important for schools to encourage children from communities with different cultural expectations who might not get a 'be bold!' message at home.”
Personally, I’m not entirely convinced the literal ban on “bossy” will have much of a cultural impact. But the metaphorical implications of it – the reminder to choose the words and messages we relay to our girls mindfully – is infinitely powerful. The onus on families that are raising children in dual (or more) cultures to fuel this shift is even greater. I'm excited to see the healthy conversations it will inevitably spark. We must challenge the stereotypes we were brought up with, to afford greater leadership opportunities for our next generation of girls of color.
Do you agree? What are your thoughts on the "Ban Bossy" campaign?
|
6b4cbf9d89f6668fd87facae4205b6a0
|
https://www.forbes.com/sites/ruchikatulshyan/2014/04/30/can-women-achieve-it-all-under-30/
|
Can Women Achieve It All -- Under 30?
|
Can Women Achieve It All -- Under 30?
Every year, I eagerly anticipate the Forbes 30 Under 30 list. I get especially inspired by the stories of women that are disrupting the world we live in. But the list also fills me with incredible anxiety. As a millennial woman a few short years away from 30, my chances of getting on that list seem more fleeting as each year passes. Research shows I'm not alone – Generation Y is the most stressed of all the generations currently in the workforce.
Unemployment anxiety aside, even my millennial friends with steady jobs say they feel more pressured to overachieve than their parents. Social media shows us it's not enough just to have a job; we must build a personal brand, travel the world and serve on a nonprofit board. Add in the stress of finding the right person to have children with (at an age that's biologically possible) and I see many women I know struggling to "achieve it all" before their 30th birthday.
In a youth-obsessed society, there's pressure not only on older workers, but even young ones to constantly prove their mettle. Millennials are equally stressed to overachieve at a time when some of the most well-known millionaires haven't even been able to legally drink for a decade.
List of women 35+ starting up and starting over, courtesy of 40:20 Vision
It's a tough generation to be in. "The move toward individuality and the democratization of creative arts, publishing and accessibility to technology and micro-funding means that not only do you need to have a career in the traditional sense, you need a side hustle," says Christina Vuleta, founder of 40:20 Vision, a forum that connects women in their 40s to women in their 20s to share advice and mentorship.
"This is all part of your personal brand. It’s the FOMO syndrome in both your personal life and professional life: 'Look how much fun I am having and how many cool places I am going and what I have achieved in my job.'"
Celebrating women over 40
One byproduct of our affinity for youth, is the very little appreciation for older, successful women. Most millennials see success and youth going hand-in-hand. We are bombarded with entrepreneurs and App developers in their 20s, despite research showing that a 55-year-old has more innovation potential than a 25-year-old. Vuleta discovered the explosion of "Under 30" and even "Under 20" lists was negatively affecting both – 40-somethings and 20-somethings she worked with. Together with Whitney Johnson, author of Dare, Dream, Do, Vuleta created the first "40 Over 40" list, to celebrate women who are reinventing themselves and achieving on their own timeline.
Having an inspiring group of women to look up to – those disrupting at a later age – was one of the reasons millennial Pooja Parthasarathy became an organizing member of the awards. Despite a successful career in finance, Parthasarathy couldn't stop feeling anxious about excelling:
"It is very challenging in this youth-centered society to allow oneself the room to even think about excelling later in life. Ubiquitous social media that is currently constantly promoting the next overachiever doesn’t make it any easier."
Last year, the list celebrated women from entrepreneurs to venture capitalists to photojournalists. This year, Vuleta and Johnson hope to inspire even more women "from those who left the corporate world and have started something from home as a mom, to artists and scientists that don’t traditionally get included in these types of lists to those who show that there are still ways to innovate within a corporation," says Vuleta.
"So many of the women on the list are incredible examples of individuals in the middle of second/third careers and who have continued to flourish in their lives. They inspire women like me who constantly wonder what else needs to be achieved now," adds Parthasarathy.
Can we be super successful before 30?
Do I think initiatives like these will entirely resolve the anxiety millennials feel to overachieve? Not at all. But it's a great reminder that there is time to "achieve it all." More importantly, it sets realistic expectations that success often takes experience and perseverance. It reminds me that working hard and being ambitious doesn't necessarily need to have a clock attached to it. Most importantly, it's fine if I haven't figured my "thing" yet. It may be decades before I do and that's ok.
Maybe instead of killing myself to hit "30 Under 30" in the next 3 years, I'll give myself room to breathe. I've still got the Over 40 list to shoot for!
Do you feel stressed to achieve more, in less time? What helps you cope?
|
27e3fba0877c27c29dd38c2d24686a38
|
https://www.forbes.com/sites/rudysalo/2020/10/27/four-key-transportation-matters-to-watch-on-election-day/?ss=logistics-transport
|
Four Key Transportation Matters To Watch On Election Day
|
Four Key Transportation Matters To Watch On Election Day
The results of multiple races could have major impacts on the future of ride-sharing, ... [+] transit-funding, and infrastructure. getty
In less than a week, we will conclude an election during one of the most trying times in our nation’s history. Whether the final election results will be clear in less than a week is one of many unknowns surrounding this election. Transportation-wise, the results of multiple races could have major impacts on the future of ride-sharing, transit-funding, and infrastructure. Here are four key transportation matters to watch on November 3, 2020.
The Presidential Race: Democratic candidate Joe Biden has been a frequent rail transportation user, and is a proponent of public transportation and promoting non-fuel-burning vehicles. This is evidenced by the platform he proposed at the Democratic National Convention, which included $1.3 trillion over 10 years for highways, transitioning to low- and no-carbon vehicles, rail, transit and regional planning, aviation and freight. Specifically, Biden is championing zero-emissions public transportation (rail and/or buses) for every American city with 100,000 or more residents. Such a promise would bode well for transit agencies across the U.S.
While we have not yet seen details from President Trump on his transportation plan, this is amplifying the nervousness many transit systems are already feeling because of the significant drop in ridership and revenue resulting from the Covid-19 pandemic. Transportation experts believe public transportation funding has become increasingly political, noting that Republican administrations have tended to favor highways and Democratic administrations have more favored mass transit.
The Senate and Congressional Races: Whoever wins the Presidency will get more of his priorities approved by Congress if his respective parties control the Senate and the House. If the Democrats or the Republicans win the trifecta of the Executive, Senate, and the House, they will have at least two years to approve presidential priorities, including transportation and measures related to climate change. If, there is any split of control, getting everything a particular leader wants to pass will be difficult. Although, both parties are promoting infrastructure investments that would inevitably lead to some transportation-related improvements.
Proposition 22 and the Fate of Ride-Sharing in California: On January 1, 2020, California’s Assembly Bill 5 (AB5) went into effect. AB5 was the landmark bill that technically made a million ride-hailing workers, on-demand delivery drivers, and others in California eligible for the same minimum wage, benefits, and vacation days to which full-time employees are entitled.
The financial impacts of such reclassification are significant. The related costs of a driver now being classified as an independent contractor are expected to rise by at least 30% once classified as an employee. Ride-sharing companies have tried using the courts to battle against the reclassification of its drivers. Unfortunately for them, they have failed so far, with a California appeals court last week unanimously ruling that ride-hailing companies must reclassify their drivers in California as employees.
So, no one should be surprised that the companies have used California’s infamous voter initiative process to ask voters to weigh in on the future of their business in Proposition 22. A “yes” vote would define app-based transportation (i.e., rideshare) and delivery drivers as independent contractors and adopt labor and wage policies specific to app-based drivers and companies. Over $200 million has been spent, mostly by ridesharing companies, on Proposition 22 advertising and lobbying. The future of the gig-economy in California is weighing in the balance.
Various California Ballot Measures: Several dozen measures in various California counties and cities are asking voters to raise sales and other taxes for various purposes, including for the repair and expansion of existing streets and infrastructure. The timing of this request is tricky because while most Californians frequently complain of the pock-marked roads and other crumbling infrastructure, the state’s residents are also complaining of being over-taxed. This is especially true after the 2017 Tax Cut and Jobs Act infamously capped the federal deduction for state and local taxes at $10,000. This cap hurts the ability of state and local governments to raise taxes in high-tax states like California because residents are limited to a $10,000 write-off on their property and other local taxes. Because of this cap and the other hits Covid-19 has made to most people’s wallets, voting yes to higher taxes may be difficult for many California voters.
As has been stated many times previously, there is no crystal ball that could have predicted what the world would look like today. There is also no crystal ball that can predict what our world will look like in the next six, 12, or 18 months. However, after knowing the results of election day, the picture for transportation in our country may become clearer.
|
dae38ea5da1fb4f1fee7d501bdaee962
|
https://www.forbes.com/sites/rummanchowdhury/2017/09/12/moral-outsourcing/
|
Moral Outsourcing: Finding the Humanity in AI
|
Moral Outsourcing: Finding the Humanity in AI
Shutterstock
“Sexist algorithms.” “Racist AI.” Even at this narrow and nascent stage of applied Artificial Intelligence, we have not only humanized it, but we have decided that it is evil. We impose on this set of algorithms and code a sense of free will and emotion. In doing so, we disempower humanity and create an antagonistic reality where humans are pitted against an ever-smarter Artificial Intelligence.
Where's the human in the AI?
In a highly publicized critique, the COMPAS parole algorithm was argued to be biased based on race. That is, when it was wrong, it had over-predicted the likelihood of blacks to re-commit a crime, but under-predicted the likelihood of whites to commit a crime. However, at the end of each of these algorithms was a judge or parole board; a human who ultimately made a decision.
We are left with the question of who to blame – the AI engineer or data scientist who wrote the code? The company that created and sold the product? The judge who implemented the decision? By using lazy language, we have already placed the responsibility of any negative outcomes on the algorithm. We leave ourselves free to profit from the use of these products and perpetuate the myth of the objectivity of technology. Our AI is human when we want it to be, and simply a machine otherwise. We have successfully outsourced moral obligation.
Frankly, moral outsourcing sounds like an ideal situation for us creators. We get all of the benefit and none of the blame. Where’s the catch? When we remove human responsibility from the equation, we also remove human agency – that is, by absolving ourselves of the consequences of the outcomes, we also remove OURSELVES as primary decision-makers.
Does Moral Outsourcing Create our AI dystopia?
Moral outsourcing and the increasing humanization of AI begets fearmongering – we now accuse AI of creating secret languages, of taking a competitive stance and ‘defeating’ doctors at diagnosing diseases, of ‘stealing’ jobs from humans, to name a few. We humanize AI, blame it for our mistakes, then artificially create a competition whereby this now-evil AI is trying to defeat us. Ultimately, moral outsourcing creates the AI dystopia we fear, whether it takes the form of joblessness, obsolescence, or sentient robots who hunt humans.
How do we reverse this trend? Responsible and ethical Artificial Intelligence goes beyond creating systems of self-control for AI. A truly ethical and responsible AI solution is one in which human responsibility is paramount. While seemingly paradoxical, the way to avoid an AI dystopia is to avoid the temptation of moral outsourcing and shoulder the responsibility for our actions.
|
4ee7fe438df19bbbff7aa80ef3a91994
|
https://www.forbes.com/sites/runasandvik/2013/11/07/feds-reveal-arrest-of-another-silk-road-vendor-did-he-become-an-informant/
|
Feds Reveal Arrest Of Another Silk Road Vendor, Did He Become An Informant?
|
Feds Reveal Arrest Of Another Silk Road Vendor, Did He Become An Informant?
Digitalink's vendor profile. (Screenshot taken on Jan. 25, 2012)
On Wednesday, Ross Ulbricht, the alleged creator of anonymous online drug market Silk Road, appeared in a New York court for the first time in a nondescript hearing that seemed little more than a bureaucratic proceeding. Further developments in the Silk Road investigation, however, were revealed a day before the trial, as Maryland court documents suggested that a man in custody may have been used by federal agents to learn more about the illegal narcotics website.
Court documents uncovered by The Baltimore Sun show that Jacob Theodore George IV, a former Silk Road vendor going by the name "digitalink", pleaded guilty to selling heroin and bath salts on the online marketplace from about Nov. 2011 to about Jan. 18, 2012. However, based on forum posts and updates to the drug marketplace's website, George's alleged account was active as late as Jan. 26, 2012, suggesting that he may have possibly cooperated with federal authorities.
George's attorney said he had been in custody since last year, but the charges against him were not filed until after Ulbricht's arrest and the FBI's seizure of Silk Road around Oct. 1, 2013. A spokesperson from the Drug Enforcement Administration said George was among the first to plead guilty as part of the investigation into the site.
If George cooperated with law enforcement, it would not be the first time an alleged former vendor aided in the Silk Road investigation.
Unmasked: The Man Behind The Silk Road Click here to read about the shutdown of the illegal bazaar and its tale of online secrecy, murders-for-hire, courtroom drama and corruption.
Last month, The Smoking Gun revealed that Steven Lloyd Sadler, said to go by the alias "NOD" on the illegal drug website, had been cooperating with federal agents since late-July after his home in Bellevue, Wash. was raided by postal inspectors and Department of Homeland Security agents. Sadler was arrested on Oct. 2, 2013 after the FBI arrested Ulbricht in San Francisco, on suspicion of selling cocaine, heroin and methamphetamine.
Among the court documents filed on Tuesday is a criminal complaint showing that George was required to hand over $450, one HP laptop computer and one XFX / ASUS desktop computer. It is likely that both George and Sadler were required to assist agents in the analysis of computer data, customer lists or financial records.
George, who is alleged to have used the name "digitalink", first joined Silk Road in July 2011. His previous posts on the forum show a vendor who cared about his customers and frequently marketed his products by giving away free samples. On his vendor page, he wrote the following:
"Just know, as a customer myself, I love when a vendor makes getting your order out a priority... You can rest assure I make it my #1 priority to get your order out, this is my job.. this is how I support my family.. for now".
By Jan. 2012, digitalink was ranked 30th out of 278 vendors with 97.4% positive feedback from 272 transactions.
On Jan. 18, 2012, digitalink updated his Silk Road vendor page saying he was tired of all the drama and had decided to take down all his listings:
"Due to all the BS going on and the accusations on the boards I am no longer listing any of my products. You all whine and cry, instigate situations and I've had enough of it. My listings are being taken down until further notice".
Special Report: Mapping The Silk Road The Silk Road garnered over $1.2 billion in sales and left behind a global footprint.
The list of feedback on digitalink's vendor page in the days following the update show customers complaining about counterfeit products and packages going missing. One customer wrote the following:
"Okay, so I ordered this for a friend, not myself. I ordered two bags and my friend did both of them. He felt not a single thing from both fucking bags. Not a single fucking thing or itch or anything. And he has NO OPIATE TOLERANCE".
It is unclear how law enforcement were able to locate and identify George as Silk Road vendor digitalink, but the case documents filed on Tuesday show that he waived prosecution by indictment and accepted a plea agreement on Nov. 5, 2013. Sentencing is set for Feb. 20, 2014 at 9:15 am EST.
You can follow me on Twitter and email me (GPG public key).
|
fd2a6e8b43db4460ad1dc4eff4121968
|
https://www.forbes.com/sites/russalanprince/2013/08/08/how-hedge-funds-can-effectively-advertise/
|
How Hedge Funds Can Effectively Advertise
|
How Hedge Funds Can Effectively Advertise
Hedge funds, private equity companies and other firms can now advertise. While these firms will be allowed to advertise on television and through the Internet, they can still only provide their investment products to “accredited investors.” That means you have to have a net worth of US$1 million not including your primary residence or an annual individual income of US$200,000.
“The proposed rules, which are not yet final, are a double edged sword that increases flexibility for issuers to solicit purchasers through general solicitation, while imposing a more significant due diligence burden on issuers to verify that purchasers are accredited investors,” explains David S. Guin, Chairman of the Corporate and Securities Department at Withers Bergman LLP. While advertising might have drawbacks, there’s still strong interest among hedge funds.
According to Michael Patanella, partner, Grant Thornton, “Advertising is now another tool for hedge funds to get their message out. What's very important is that the hedge funds who seek to benefit from advertising have very clear and powerful messages that are also well targeted." Thus, for hedge funds to successfully use advertising requires well-conceptualized answers to the following questions.
What is the role of advertising in the overall capital raising efforts? It’s important that advertising be well integrated and supportive of all efforts to bring in new monies. What is the objective of the advertising? From building a selectively recognizable brand to being a lead generator, advertising can serve a function. Who should the advertising be targeting? Hedge fund mangers need to decide if its better to target accredited investors directly or for them to target intermediaries such as financial advisors, wealth managers and multi-family offices. Of course, different advertisements can be used to target both cohorts. What mediums will garner the most attention? There’s print, commercials on television and the Internet, mobile ads and so forth. What will likely work best is a function of the overall capital raising campaign strategy. What is the narrative? This is the storyline validating the investment acumen of the hedge fund managers. For example, by artfully positioning themselves as thought leaders they can readily highlight their investing brilliance.
In many respects, raising capital from the wealthy is harder than ever before. Advertising is another tool that hedge funds and other alternative investment managers can use to both attract new monies from new wealthy investors as well as acquire additional funds from existing affluent investors. There are other benefits as well such as communicating and potentially validating the expertise of the hedge fund managers.
|
0a7d50c8ef02cf0bc8a31ba1bf57a81d
|
https://www.forbes.com/sites/russalanprince/2013/11/12/the-multi-family-office-gold-rush/
|
The Multi-Family Office Gold Rush
|
The Multi-Family Office Gold Rush
There’s strong evidence that single-family offices are growing at a good pace. However, that’s nothing compared to the propagation of self-proclaimed multi-family offices.
Many of the larger financial institutions such as UBS and Goldman Sachs have groups to support their advisors in delivering family office services thereby enabling these advisors to “be” multi-family offices. Many investment advisors are adding services and proclaiming themselves to be multi-family offices. According to Linda Mack, president Mack International, “We see a continuing trend in the growth of new multi-family offices. The genesis of the new multi-family offices is coming from many sources, including accounting firms, financial planning firms, registered investment advisors, spin off teams from private bank and broker dealer wealth management platforms as well as spin off teams from investment management firms, who establish start up multi-family office platforms to provide independent, non-conflicted advice/solutions to their clients.”
There’s a very simple reason for these various and swarm of professionals taking on the mantel of a multi-family office. Its money, or more specifically, the ability to build a more profitable high-net-worth clientele.
In a survey of 611 financial advisors, about one out of five of them is interested in adopting the multi-family office model. The financial advisors who expressed interest were the more successful ones and were focused on affluent clients.
For these financial advisors, as well as other types of professionals, the principal reason for moving to a multi-family office business model is the increased ability to source more and wealthier clients. What’s very telling is that in today’s hyper-competitive environment, multi-family offices – even if it’s in name only – are ofttimes more effective at business development with the wealthy.
With so many professionals calling themselves multi-family offices, complications are arising. According to Steffianna Claiden, founder and editor-in-chief of Family Office Review, “Commercial multi-family offices are sprouting up everywhere, like potatoes in Idaho or corn in Iowa. Everywhere you look, there's another multi-family office. However, as anyone can use the term, because there's no real definition or regulation – yet – it's hard to tell if it really is a multi-family office. It could be a register investment advisor or a bank-backed family office or something else. You've really got to dig to figure out what you're really dealing with.”
For the wealthy, who are the desired clients of all these various advisors including multi-family offices, it’s important to get a clear idea of just what these firms are offering. Further, its essential for the wealthy to understand the business models of the multi-family offices they engage in so as to know if they truly are multi-family offices or just using the moniker for marketing purposes.
|
71c9136d5cf100070908a7bfb0f37d4f
|
https://www.forbes.com/sites/russalanprince/2014/10/20/establishing-a-new-ria-plan-to-be-a-multi-millionaire/
|
Establishing A New RIA? Plan To Be A Multi-Millionaire
|
Establishing A New RIA? Plan To Be A Multi-Millionaire
It’s a well-known fact that embracing entrepreneurial tendencies and going independent can help an investment advisor become seriously wealthy. It’s one of the primary reasons that the majority of advisory professionals housed within national and regional brokerage firms, private banks and even some of the larger registered investment advisors (RIAs) have, at one point or another, considered spinning out as a way of dramatically increasing their income – often by a factor of four or more – and assuming the degree of control they desire.
Ultimately, fewer than 15 percent of captive practitioners end up following through and setting up their own businesses. “Given the profitability potential, you’d expect the numbers to be higher,” says Hannah Shaw Grove, an international authority on advisory best practices and a founder of Private Wealth magazine. “But being an entrepreneur is not a role that most investment advisors are comfortable playing. Owning a small business presents a completely different set of challenges than the ones they are used to solving for their clients.”
Unfortunately, most investment advisors that do take the plunge are not doing everything possible to make the transition smoother and more successful while ensuring that their new businesses are set up to maximize tax-efficiency and personal wealth creation. “We've analyzed a lot of structures and it’s evident that most RIAs haven’t leveraged advanced planning strategies to their long-term benefit,” reports Grove. “Nearly all of them have simply not planned for any meaningful future growth and, as a result, will likely have to forfeit a big chunk of their profits down the road.”
Seems like a problem worth solving, so I contacted a handful of retirement, legal and advanced planning experts to get their take on the situation and hear about the cutting-edge strategies they use to accomplish similar goals for their institutional and ultra-high-net-worth clients. “Business owners can use a combination of retirement structures to make all the appreciation in the company tax free to themselves and other senior executives,” explains John Vitucci, a nationally recognized authority on retirement planning with the accounting firm O’Connor Davies. “Setting up an RIA in this way can be somewhat complicated on the front-end, but if the firm is successful, the tax and economic savings are enormous.”
According to Frank Seneco, president of the advanced planning boutique Seneco & Associates, “There are a number of ways to use onshore and offshore captive insurance companies to mitigate taxes and address a variety of risks. Some very sophisticated investment professionals are incorporating captives into their firms’ equity structures to set the stage for further tax savings down the line.”
And in cases where a transfer of ownership – either to a junior partner, family member or third-party buyer – is anticipated, some of the more common advanced planning strategies can be employed. “From using trusts to freezing the value of a firm for estate tax purposes to leveraging offshore structures to address asset protection issues, it’s possible to generate significantly more personal wealth for business owners,” says Anthony J. Carone, managing member of the specialty law firm Carone & Associates. “While many of these strategies can be adopted anywhere in the lifecycle of a business, some of them produce a bigger impact if they are incorporated when the firm is initially established.”
It’s clear that there are a variety of tax mitigation and advanced planning techniques that can help RIAs be more successful and retain a bigger percentage of their profits, and that many of them should be considered during the formation stages in order to provide the greatest possible benefit. As Grove concludes, “Investment advisors who believe in their future success should plan accordingly for it and reap the rewards.”
|
24705793d0dd44bfe959f46c5626d4af
|
https://www.forbes.com/sites/russalanprince/2014/10/30/robo-advisor-2-0-a-brave-new-financial-services-industry/
|
Robo-Advisor 2.0: A Brave New Financial Services Industry
|
Robo-Advisor 2.0: A Brave New Financial Services Industry
Simply put, today’s robo-advisors are computer programs that will create and manage an investment portfolio less expensively than flesh-and-blood investment advisors. Let’s call these robo-advisors, Version 1.0.
In many respects, robo-advisor 1.0 is just a less expensive form of investment back-office than some of the turn-key asset management programs or model portfolios that many investment advisors rely on. While there is a segment of the investing population that will find using Version 1.0 appealing, it’s more likely that these platforms will be employed by industry professionals as a way of streamlining their practices. For example, Betterment recently established a strategic relationship with Fidelity Institutional Wealth Services allowing the registered investment advisors on its platform to use the services with their existing clients and to attract new business.
Robo-advisor 1.0 is, to a large degree, just an augmentation of a traditional investment advisory practice already in transition. “The big opportunities in the early stages of robo-advisor platforms have to do with cost and scalability,” says Hannah Shaw Grove, the author of Advisor2000: Strategies for Success in the New Millennium and a founder of Private Wealth magazine. “Advisors can rely on technology-enabled solutions to handle a portion of the activities they used to manage themselves. This will result in certain operational and cost efficiencies that can improve profitability or be passed along to clients, while also allowing the advisor to service a larger number of accounts.”
Robo-advisor 2.0 is where the paradigm shift starts. Whereas Version 1.0 is basically a tech-driven, user-friendly version of what quantitative investors and turn-key asset management programs have been doing for years, Version 2.0 will likely evolve toward the provision of investment and comprehensive holistic financial advice geared to the expressed needs and wants of clients. How is this possible? Cognitive computing. Think IBM’s Watson.
Watson interacts with people on their terms. It can read and understand natural language. It can “reason” and it can “learn,” thereby improving with experience. In sum, Watson (or something similar) will be used to provide recommendations and solutions across the entire range of financial services that investment advisors, life insurance agents, tax authorities, bankers, and private client lawyers are delivering today.
The integration of cognitive computing and financial services will be incremental, but monumental. It will literally transform the industry in a variety of ways. While there will certainly be segments of investors – say digital natives and DIYers – that will choose to engage directly with robo-advisor 2.0 platforms eliminating the need for human interaction entirely, the most feasible application will still be among industry professionals who will integrate this enhanced capability into their practices to create a more scalable wealth management deliverable. “A cross-disciplinary capability from robo-advisors would be a game-changer,” declares Grove. “In effect, it will further commoditize what are already considered commodities in the realm of financial services and all professionals will, at least conceivably, be able to deliver state-of-the-art technical solutions to their clients with greater transparency and responsiveness.”
As such, Version 2.0 could have interesting implications for the barriers to entry into many professional services areas. If and when technical expertise is no longer a critical differentiator, barriers will exist only if they are artificially maintained through regulations backed by large-scale efforts like lobbying and unionization. A good example? There are millions of legal resources and documents online but, by law, only attorneys can draft a legal document or provide legal advice to another individual. This notwithstanding, the next phase of robo-advisors has the potential to completely change the competitive environment and intensify pricing pressure.
Despite all the headlines proclaiming a robo-advisor revolution, it’s probably going to be an evolution – developing and changing in stages as new technologies emerge and advisors adjust to playing a different role in the process. In Version 3.0, process expertise will be added to the broad-based technical expertise of Version 2.0 to create something that looks and feels like a personalized family office meaning more people with less wealth will get better advice from fewer professionals. “A bespoke financial solution delivered faster and cheaper would be very attractive to both providers and consumers,” agrees Grove, but notes that the democratizing effect of Version 3.0 could have a bifurcating effect on the advisory business. “In the future, I expect fewer elite practitioners than we see today but exceling a much higher levels, while the rest of the advisory universe is left behind to determine how it can best function in the new landscape.”
My bet? A considerable number of professionals will leave the industry in pursuit of greener pastures while the remainder will be forced to adapt to diminished and possibly less lucrative roles, like marketing and relationship coordination, that facilitate a robo-advised deliverable.
|
044a4e4ab77172e5125fa11fcb46dd52
|
https://www.forbes.com/sites/russalanprince/2014/11/11/774/?utm_source=followingimmediate&utm_medium=email&utm_campaign=20141111
|
Life Insurance For Billionaires
|
Life Insurance For Billionaires
As life insurance becomes a critical component of estate plans, often ultra-wealthy families need as much coverage as they can get. Family offices and specialty providers can help.
Death and taxes are certainties, even for the ultra-wealthy. Most billionaires face hefty taxes on their estates when they pass away. While there are some ways to mitigate estate taxes through sophisticated planning, most are underutilized.
One area that has captured the interest of the exceptionally wealthy is the use of life insurance policies to help pay the estate taxes. While there are ways to reduce the estate tax liability, this does not mean the estate taxes still will not need to be paid. “Options such as extensions and loans to pay estate taxes can be very useful,” notes Anthony J. Carone, managing member of the specialty law firm Carone & Associates. “However, such an approach can be problematic especially when we’re dealing with extensive family businesses and significant non-liquid assets.”
In most scenarios, life insurance is a significant component of the overall approach to paying estate taxes. What’s very telling is that many billionaires are unable to purchase enough life insurance to cover all the estate taxes owed. The estate tax obligation for someone with US$1 billion in assets residing (and dying) in New York State, for example, could approach or exceed $550 million. Meanwhile, the total amount of life insurance across more than 25 carriers including reinsurers is somewhat more than US$400 million.
“Even though family offices have proven capable of helping billionaire clients tackle nearly any challenge that arises, you still can’t ‘take it with you.’ By using life insurance in estate planning, however, ultra-wealthy families can more effectively orchestrate the transfer of assets – protecting the family fortune and legacy for future generations,” explains Rick Flynn, managing partner at FFO (Flynn Family Office). “Sourcing life insurance for billionaires is today the domain of a few high-end specialists. Since there are only a few ways to secure the levels of coverage needed, policy portfolios tend to look very similar. Therefore, what we look for is an exceptional life insurance expert who can work closely with us to optimize coverage for our ultra-wealthy clients.”
In order to obtain higher amounts of life insurance than they can get on themselves, billionaires will often need to secure coverage on family. According to Frank Seneco, president of the advanced planning boutique, Seneco & Associates, “The ability to use private placement life insurance as well as specialty products can be very effective in obtaining hundreds of millions of dollars in additional coverage. The key is how to tie all these pieces together in the context of the billionaire’s estate plan.”
“It’s essential to recognize that life insurance is only part of the solution in managing estate tax obligations. All tactics need to be reviewed against an established long-term wealth strategy to ensure that the life insurance and related approaches are deployed optimally in pursuit of family goals,” said Flynn. “When we facilitate the estate planning process for our ultra-wealthy clients, the focus is on ensuring that wealth is transferred to loved ones and charitable causes, rather than to the IRS.”
|
b09e0c224e85e44d5925289bad1af039
|
https://www.forbes.com/sites/russalanprince/2014/12/01/wealthy-investors-want-more-private-equity/
|
Wealthy Investors Want More Private Equity
|
Wealthy Investors Want More Private Equity
While the affluent population has always invested in privately held firms, interest in private equity as an asset class has surged in recent years prompting a commensurate response from the financial community. The range of opportunities available today to private investors is growing and includes from direct investments, funds, angel groups and everything in between.
The appeal of private equity is also increasing among a number of wealthy sub-segments. “Single-family offices are interested in ‘club deals’ and participating in networks that help them access direct and co-investment opportunities alongside other families,” says Hannah Shaw Grove, an expert on the high-net-worth markets and a founder of Private Wealth magazine. “They also rely on financial and legal professionals to source unique investment opportunities for them.”
Younger generations are curious about private deals too. In a recent study of ultra-wealthy inheritors, those who expect to inherit US$100 million or more, 22 percent of the inheritors are already doing deals and 65 percent plan to become more involved in buying and selling substantial assets.
Given these trends, it’s not surprising that many financial advisors want to expand their platform of capabilities to include private equity. “The investment process, the vernacular, and the client experience can all be somewhat different with private equity than it is with traditional public investments,” explains Grove. “A fund structure will probably make the most sense for advisory professionals who don’t yet have a lot of experience with this asset class because it’s a familiar vehicle and can often address the risk and diversification concerns associated with a more concentrated investment.”
The other option for financial advisors is to facilitate direct investments in companies for their wealthy clients. This step, however, might be too bold for a number of advisory practitioners. According to Keith M. Bloomfield, president of Forbes Family Trust and a former M&A attorney at Simpson Thacher & Barlett, “Working with clients on direct investments in private companies takes technical skills and knowledge that is not the norm for most financial advisors and even some registered investment advisors. An understanding of deal structure and the multitude of legal issues involved is required.”
Strategic relationships with investment banks can provide access to direct deals, of course, but must be structured in ways that assure roles, responsibilities, and payment models are aligned to help the partnership succeed and avoid the kinds of improprieties that prompted so many Wall Street investigations more than a decade ago. It’s also essential that advisors deliver the right degree and kind of information to their wealthy clients, especially those who are exploring private investments for the first time and may have a different set of expectations.
Many high-end financial advisors are being forced to examine their offerings and expand them accordingly as their more affluent clients – qualified purchasers – are looking for different types of alternative investments that offer non-correlated returns, access to cutting-edge thinking, and serious growth potential. “Research shows that the wealthiest people in the world are already heavily invested in private equity, but I believe there’s still a big opportunity with $10 million to $50 million investors, many of whom still have a relatively low allocation to alternatives and an even smaller one to private equity,” says Grove. “Now is a perfect time for asset managers and technology providers to step up and help financial advisors meet the demand.”
In this environment, at least initially, the majority of monies allocated via financial advisors will likely find its way into private equity funds. Down the road, we can expect greater allocations to direct investments regardless of how advisors manage to source the deals.
|
497c395696c591a45da4236619fef0c5
|
https://www.forbes.com/sites/russalanprince/2015/01/13/business-owners-are-ideal-clients-for-a-wide-array-of-professionals/
|
Business Owners Are 'Ideal Clients' For A Wide Array Of Professionals
|
Business Owners Are 'Ideal Clients' For A Wide Array Of Professionals
Among a diverse and extensive number of professionals, the appeal of working with successful business owners has never been greater. For a variety of reasons, these professionals recognize the multiple ways they can provide their expertise to business owners and the solid financial returns they’ll attain for doing so.
In a survey of 807 diverse professionals with average annual income over the previous three years of $300,000 or more, 72.2 percent said their field is “very or extremely competitive,” with the rest of the professionals reporting the business environment to be competitive. No professional said his or her business environment wasn’t competitive.
According to Marc Rinaldi, a partner-in-charge of O’Connor Davies’ Financial Services group, “There are a number of reasons the businesses of various professionals are so competitive. Professional services have been, in many ways, commoditized. More and more people are entering the professions. Technology is marginalizing some professionals. Also, different professionals are encroaching on each other’s area of expertise.”
Considering the big picture, for professionals to be more successful they need to control their costs while generating greater revenues. While costs tend to often be controllable, the real and more demanding issue is how to generate more revenues. The unquestionable answer for most professionals is in sourcing and doing more with high-quality clients.
Of the professionals surveyed, more than nine out of ten of them said that finding more high-quality clients for their offerings is instrumental and essential to their success. This sentiment is consistent with decades of similar research conducted with a broad cross-section of financial and legal professionals regarding their future plans and impediments to success: accessing new high-quality clients is their number one issue.
When it comes to defining who is a high-quality client, about three-quarters of the professionals reported that successful business owners perfectly fit the bill. This sentiment is most pronounced among life insurance specialists and trusts and estate attorneys. It’s least prominent among investment advisors, as many business owners have limited discretionary assets. However, there are often assets in their companies’ retirement plans that can benefit from talented investment professionals.
What this means is that, overall, various types of professionals are looking at business owners and often their businesses as the type of client they very much want to work with. They’re the high-quality clients that can result in the success of a professional’s practice. This translates into considerable leverage for business owners in selecting and working with the broad array of professionals.
|
e8e86444d74dbb956916fa464e145fca
|
https://www.forbes.com/sites/russalanprince/2015/01/21/most-middle-market-family-businesses-need-a-succession-plan/
|
Most Middle-Market Family Businesses Need A Succession Plan
|
Most Middle-Market Family Businesses Need A Succession Plan
A recent survey of 154 middle-market business owners conducted by PwC finds that only 27 percent of them reported having a substantial and documented succession plan.
According to Alfred Peguero, PwC’s US Family Business Survey Leader, “While optimism around growth prevails, our survey has brought to the fore a number of challenges and issues which family business leaders will need to navigate throughout 2015 and beyond in order to succeed. One of the key challenges remains the issue of succession planning. Too often we see the current generation hesitant to address this often touchy subject with their family members. What is needed is clear and open communication among the family members so that everyone is on the same page when it comes to passing the baton.”
It is clearly a pervasive and difficult problem for these business owners with the potential result the demise of the family firm. “It’s a complex topic for many business owners with the need to smartly address financial, operational, family, and corporate governance issues,” explains Frank Seneco, president of the advanced planning boutique Seneco & Associates. “For example, many times the family fails to take the requisite steps to effectively transfer their equity in the business to heirs as tax efficiently as possible.”
“There are a number of actions beyond addressing the transfer of equity that family business owners should consider,” notes PwC’s Peguero. “To achieve effective growth and thrive in today’s market, all family businesses must take action and make difficult decisions to adapt faster, innovate earlier and become more professional in their day-to-day operations,” he added. “There also needs to be a flexible long-term succession plan that includes rotations in senior management positions across the business, in addition to having work experience outside the family company. This will not only transfer valuable skills, but also help successors gain credibility and trust among key stakeholders.”
What is clear is that by being proactive and attentive – by developing and executing a succession plan – the perpetuation of the family business is significantly improved. “Family businesses have begun to recognize the need to become more nimble, forward-thinking and professional in how they run their operations. We are encouraged by this recognition and have every faith that if family business are able to meet the challenges highlighted in our survey that they will continue to be a significant driving force for the overall economy,” explains PwC’s Peguero.
|
f2c9458db4e27e73ebd299688c350006
|
https://www.forbes.com/sites/russalanprince/2015/02/09/many-hedge-funds-can-significantly-benefit-by-using-captive-insurance-companies/
|
Many Hedge Funds Can Significantly Benefit By Using Captive Insurance Companies
|
Many Hedge Funds Can Significantly Benefit By Using Captive Insurance Companies
Hedge funds are famous for innovation, both in their investment strategies and in their approaches to mitigating enterprise risk. Today, there are many hedge fund managers who are astutely exploring the potential of captive insurance companies in addressing risk and reducing overall taxes incurred.
“Captive insurance companies sound imposing, but are actually a simple and effective tool used by hedge fund managers to better manage conventional risks including losing a general partner, and director and officer liability,” explains Anthony J. Carone, managing member of the specialty law firm Carone & Associates. “We also work with hedge funds to help them address industry specific concerns such as cyber liability and tortious interference – when a manager leaves to start a new fund and poaches clients or intellectual property.”
“Captive insurance companies can be used to provide superior coverage as well as significant financial benefits,” says Alan Kufeld, a partner at Flynn Family Office (FFO). “Hedge fund general partners, single-family offices, and advisors to ultra-wealthy families find captive insurance companies appealing because of the risk management advantages they provide. The ability to get better customize coverage is the draw. The potential to enhance profits at the same time seals the deal.”
The profit possibilities are especially present with offshore captive insurance companies. “If the captive insurance company has excess capital to issue a dividend, the monies are taxed to the hedge fund partners at a preferential tax rate rather than at prevailing personal income tax rates. If the captive insurance company is liquidated, the monies in the company are taxed as long-term capital gains,” explains Frank Seneco, president of Seneco & Associates, an authority on captive insurance companies and author of Maximizing Personal Wealth: An Advanced Planning Primer for Successful Business Owners. “Offshore captive insurance companies can be especially interesting to hedge fund managers. A hedge fund domiciled in the US, for example, can put in additional funds into an offshore captive insurance company at start up. When profits are repatriated, the taxes can potentially be significantly less than if managers had used a US-domiciled captive insurance company.”
The multiple benefits of captive insurance companies for hedge funds will likely result in more and more of them considering the structure. While certainly not appropriate across the board, the ability to more efficaciously address critical risks will result in their greater adoption by hedge funds.
|
fe756d8ff69c52a1937ff87162b08e85
|
https://www.forbes.com/sites/russalanprince/2015/02/16/most-business-owners-are-missing-significant-personal-wealth-enhancement-opportunities/
|
Most Business Owners Are Missing Significant Personal Wealth Enhancement Opportunities
|
Most Business Owners Are Missing Significant Personal Wealth Enhancement Opportunities
For business owners, making their money work harder often translates into more of it. And, there are ways they can heighten, and sometimes even super-charge, their ability to boost the wealth they’ve created with their companies. Wealth enhancement is the process of using advanced planning strategies to mitigate taxes resulting in greater personal wealth creation.
“There are a wide variety of strategies that can be utilized to enhance wealth,” explains Anthony J. Carone, managing member of the specialty law firm Carone & Associates, “Using charitable trusts, for example, cannot only be instrumental in enhancing wealth, but can enable a business owner to appreciably benefit others. The use of qualified retirement plans and other retirement-oriented strategies is another way for them to enhance their personal wealth.”
According to Frank Seneco president of Seneco & Associates, an advanced planning boutique, “For wealthy business owners with significant investable income some of the most attractive strategies incorporate private placement life insurance. Then there are a wide variety of qualified retirement plans that can be instrumental in boosting a business owner’s personal wealth.”
In a survey of 513 business owners, it’s not surprising that nearly all the business owners surveyed are extremely or very interested in ways to legally lower their personal tax bills However, among those who are indeed interested, only about a quarter of them are actively working with professionals to do so.
“Although there’s strong interest among business owners in enhancing their wealth by lawfully lowering their tax bill, relatively few of the business owners are actively pursuing the range of opportunities,” notes Carlo A. Scissura, president of the Brooklyn Chamber of Commerce and author of Maximizing Personal Wealth: An Advanced Planning Primer for Successful Business Owners, “While many are doing something such as establishing a qualified retirement plan, for example, few business owners are actively evaluating and implementing qualified retirement plans that maximize their own personal wealth. This means there are many opportunities open to business owners to enhance their personal wealth.”
|
fe4bc9212cbea6d7557caa28c81919b0
|
https://www.forbes.com/sites/russalanprince/2015/03/31/two-almost-always-necessities-for-most-successful-business-owners/
|
Two Almost Always Necessities For Most Successful Business Owners
|
Two Almost Always Necessities For Most Successful Business Owners
If something bad happens to you, such as an illness, disability or even death, there are often many people who want to make sure the business remains viable and that your loved ones benefit from the hard work put into making the business successful. To these ends, there are two strategies you need to put in place: key person life insurance and buy/sell agreements.
Key person life insurance is sometimes a necessity. There are a number of times when such insurance is important such as replacing profits or loss of capital due to the death of a critical employee, or to provide the financial resources to recruit and replace key employees.
Based on a survey of 513 business owners, a little fewer than three out of five of them have key person life insurance on someone at their company, if not themselves. Meanwhile, for those business owners without key person life insurance, almost three-quarters said that if something happened to them or another key employee, the business would fail or be harshly handicapped.
A further complication is that the key person life insurance was potentially dated and conceivably insufficient. In most of these situations, the business owners had not revisited the need for key person life insurance within the last three years. Hence, there’s a good chance that the key person life insurance might not be adequate or even properly structured to address the present needs of the company and the owners.
Aside from key person life insurance, when there are partners in the business, buy/sell agreements are usually very smart to have. “Few business owners want to be in business with the spouses or children of a partner who is no longer able to carry out his or her duties,” notes Frank Seneco, president of Seneco & Associates, an advanced planning boutique. “Severing ties in this type of situation is best accomplished with buy/sell agreements.”
“A buy/sell agreement is a legal contract that ensures when a trigger event occurs, such as the death of an owner, his or her equity in the business will be purchased and the proceeds of the sale will go to the heirs using a predetermined valuation criteria,” explains Anthony J. Carone, managing member of the specialty law firm Carone & Associates. “The agreement should also be structured to provide funding for the buyout. Commonly, life insurance is used for the funding.”
Of the 424 business owners surveyed with partners in their companies,nearly four out of five had buy/sell. Problematic is the fact that very few business owners have reviewed their buy/sell agreements or their funding mechanisms within the last three years. Meanwhile, many business owners in the survey reported meaningful changes in the fortunes of their companies making it likely that their buy/sell agreements and funding plans are likely out of date.
According to Carlo Scissura, president of the Brooklyn Chamber of Commerce and author of Maximizing Personal Wealth: An Advanced Planning Primer for Successful Business Owners, “Many business owners recognize the need for key person life insurance and buy/sell agreements. However, by not monitoring the situation and staying current, there are likely to be complications if something catastrophic were to happen. Mistakenly, for quite a number of business owners, the fact they did something is enough. They’re marking them complete on their to-do checklists and forgetting about them.”
|
16e7e22b1ed04ed0b1ea8b34eb42e662
|
https://www.forbes.com/sites/russalanprince/2015/04/12/how-artificial-intelligence-will-eliminate-the-need-for-the-vast-majority-of-life-insurance-agents/
|
How Artificial Intelligence Will Eliminate The Need For The Vast Majority Of Life Insurance Agents
|
How Artificial Intelligence Will Eliminate The Need For The Vast Majority Of Life Insurance Agents
All the professions are going to be reconfigured by artificial intelligence. The result will be fewer professionals and many of their roles “downgraded.”
Advances in artificial intelligence, also known as cognitive computing, are starting to cause a seismic shift in the professions. The eventual result is the eradication of many positions and the changing – usually lesser – roles for the “survivors” of this transformation.
All the professions such as investment advisors and accountants will be impacted. Life insurance agents will also be severely affected. While this paradigm shift is going to take years and is dependent on technological innovation, coupled with the speed of complementary social change, it is an eventuality.
The ability to source and construct life insurance portfolios, facilitate underwriting, and monitor policies can all be accomplished by the robo-life agent. Such an approach would often prove to be both substantially more efficient, a way to provide superior solutions, and considerably less expensive. It is these critical reasons, the vast majority of life insurance agent of today will, in time, become a relic of a previous generation.
There will be strong and determined opposition to this industry transformation. Certainly, many of today’s life insurance agents will do everything in their power to fight back. They will likely slow down the process, somewhat. Moreover, many of the life insurance carriers will also push back for this evolution of the distribution system will severely and detrimentally impact some of them resulting in consolidation. Nevertheless, advances in cognitive computing will ultimately make this industry transformation a fait accompli.
It is important to note, that even as today’s life insurance agents succumb, robo-life insurance agents will predominantly not directly replace them. People can certainly buy life insurance direct, but that is not having a meaningful effect on the sale of life insurance by agents. As the saying goes: “Life insurance is sold, not bought.” What will likely happen is that other professionals – primarily attorneys and secondarily accountants – will incorporate the services of robo-life insurance agent into their practices. Instead of taking a commission, they will take a dramatically lower fee. The significant cost savings will be passed onto the purchasers. It is also important to keep in mind that the traditional business models of attorneys and accountants will also be upended by artificial intelligence.
None of this is going to happen quickly. However, it will occur incrementally, and when it does occur the life insurance agent of today will pretty much become an anachronism. This will certainly be the case as the commission structure that supports agent-based distribution of life insurance is eradicated.
Very importantly… there will be exceptions. There will be a select percentage of innovative, forward-thinking life insurance agents who will leverage the technology and the accompanying changing industry dynamics to create tremendous value for others. These agents will, consequently, create considerable personal fortunes providing life insurance.
|
bb959240f628292578b62ca55d627b58
|
https://www.forbes.com/sites/russalanprince/2015/05/31/three-key-qualities-of-successful-thought-leaders/
|
Three Key Qualities Of Successful Thought Leaders
|
Three Key Qualities Of Successful Thought Leaders
Professionals gain a significant strategic and financial advantage by being thought leaders. One of the most important components of a high-caliber thought leadership campaign is the individual professionals.
The world of professionals – financial advisors, accountants, attorneys, bankers, life insurance agents, and so forth – is a world of commodities. This does not mean that some professionals are not better than others. It just means that at the high-end of each specialty the respective professionals are all equally technically competent, thereby able to deliver the same high-quality solutions. Consequently, thought leadership becomes a very important differentiator and is often critical to a professional’s accomplishments.
Professionals who are thought leaders are disproportionately able to generate revenues for themselves and their firms. This is, no doubt, motivating many of them to take the time and effort to become thought leaders. Some will be very effective. More will be somewhat effective. Many will be moderately successful to ineffective.
Part of the reason for not exceling as thought leaders is a lack of ability to construct meaningful content. Another determining reason for missing the mark is incapacity to effectively distribute content to preferred audiences. Essential to the success of a professional becoming a thought leader are the professionals themselves.
Based on extensive research, professionals who are successful thought leaders are characterized by a number of personal qualities. Three of the key qualities are:
Drive: Professionals have to be passionate about their work. They must have a sense of purpose that goes beyond making money (though making money is a part of it). This commitment is essential because becoming a thought leader requires considerable time, effort, and resources. It’s hard work. Expertise: Professionals directly or through their firms must be technically astute. They must be appropriately skilled and knowledgeable. Thus, clients are well served when they engage them. Presence: Professionals need to have a certain level of gravitas when communicating with intended audiences, prospects, and clients. Part of this is a function of their profile as thought leader; part of it is a function of technical expertise; and part of it is the person.
While drive is there or it isn’t, the other two qualities can be learned and refined. The easier one of the two is often expertise. As noted, professional services are commodities. Hence, through education or a new hire, professionals and their firms can ensure they have the requisite technical understandings and capabilities.
Presence tends to be a little harder to master, but certainly not an obstacle. This is not about being inherently charismatic. Instead, for instance, it’s about being able to – in person – convey a sense of self-efficacy as well as a conviction and precision in messaging (e.g., good public speaking skills).
In an increasingly hyper-competitive environment where high-caliber professionals are regularly indistinguishable based on their deliverables, success is a product of business development. Thought leaders are often vital to bringing in new business. Moreover, if a professional is intensely determined, he or she can develop and upgrade the other two personal qualities required to be a thought leader.
|
775cedeb46e0e1209e54acc0fb5d1964
|
https://www.forbes.com/sites/russalanprince/2015/06/03/many-asian-single-family-offices-will-likely-become-high-functioning/
|
Many Asian Single-Family Offices Will Likely Become High Functioning
|
Many Asian Single-Family Offices Will Likely Become High Functioning
The explosion in private wealth in Asia is fostering the growth of single-family offices. This, combined with the “best practices” of single-family offices throughout the world, will result in many Asian single-family offices becoming high functioning.
Estimates of Asian families with $100 million or more in assets range between 10,000 and 20,000. These ultra-wealthy families are mostly first generation and are fueling the boom in single-family offices. Many of the ultra-wealthy families are using their single-family offices to control a percentage of their affluence as a substantial number of them continue to have business interests that created their fortunes.
Across the world, only about one in five single-family offices can be defined as high functioning. It is very likely that a disproportionate number of Asian single-family offices will be high functioning with in the next five years compared to their peers that are domiciled in other regions.
“We are seeing many Asian single-family offices learning from the best managed single-family offices in other parts of the world,” explains Usha Bhate, Executive Director and Head of The Americas for the Family Office Network at Institutional Investor. “Although many of them, for example, are not maximizing the deliverables from providers while mitigating the costs, this probably will change in the near future. It is likely many of them will marry their considerable family involvement with institutional structures and approaches that characterize the best performing single-family offices.”
More and more Asian single-family offices are actively networking with other single-family offices and key providers to gain insights as to how to best use and capitalize on their relationships. According to Bhate, “One of the most significant advantages of events exclusively for single-family offices as well as similar environments is their ability to network and openly share ideas, concerns, accomplishments, and mistakes. In these situations they’re not being sold anything and have the opportunity to openly share.”
The combination of a very well motivated ultra-wealthy family and a considerable amount of verified information – “best practices” – will enable Asian single-family offices to quickly move up the learning curve. This will probably result in many of them becoming high functioning.
|
a51cd50e7572732310cc83b20714b86a
|
https://www.forbes.com/sites/russalanprince/2015/06/30/thought-leadership-shorter-sales-cycles-higher-closing-rate-premium-pricing/
|
Thought Leadership = Shorter Sales Cycles + Higher Closing Rate + Premium Pricing
|
Thought Leadership = Shorter Sales Cycles + Higher Closing Rate + Premium Pricing
Take a moment to consider the following questions:
Has the length of time increased between first meeting a prospect and that prospect purchasers your services or products? Is it getting more difficult to convert prospects into clients? Do prospects for your services of products ever shop around for a better price?
If your answer to any of these questions is “yes,” then becoming a thought leader can prove amazingly beneficial to the sales success of your business.
Generally, among professional services such as law, accounting and management consulting as well as with a wide variety of products especially luxury products such as cars and jewelry, the purchasers are in a very strong bargaining position. The prices for these services and products while “officially set” can often be negotiated.
For example, the price of high-end jewelry can be discussed resulting in a sale at a lower price. Similarly, corporate legal services can often be renegotiated after the fact.
This is a function of the fungible nature of the vast majority of services and products. That’s not to say that certain accountants, for instance, aren’t technically superior to their peers. However, most clients are not adept at making the distinctions resulting in one accountant readily replaceable by another. Intense competition among service and product providers coupled with more discerning and demanding clients makes for more difficult sales and the potential to have to adjust pricing downward.
Service and product providers can do a lot to proactively mitigate and sometimes completely negate these adverse conditions. As noted, the answer is by being an industry thought leader.
According to Bruce Rogers, Chief Insight Officer at FORBES and one of the world’s foremost authorities on thought leadership, “By being recognized and strongly appreciated as one of the leading experts in your field, you’re engaging in a form of business development where qualified and already motivated buyers of your services or products are seeking you out. By being a thought leader, you’re perceived by clients, prospects, and key referral sources as the go-to source for your services or products.”
When done well, thought leadership campaigns (also known as content marketing) result in buyers of your services or products coming to you directly or by introduction. Thus, they’re well primed to purchase. Since they’re prepped to buy, the time between initial meeting and purchase tends to shrink. This also results in a very highly likelihood that the buyer will indeed buy. In other words, thought leaders tend to have a disproportionately high closing rate. A lot of the decisions around the nature of your offerings have already been made. Hence, the final obstacle is the purchaser’s chemistry with you.
Not only is the sales process accelerated and enhanced, but also you’re able to charge handsomely for your services or products. Because you’re one of the best at what you do or can deliver some of the very best products, and this has been confirmed, as you’re a thought leader, then you’re very likely to be able to get premium prices. In effect, you’ve successfully differentiated your services or products from those of competitors so that the purchasers with whom you connect are willing to pay for the exceptional quality and expertise only you can provide.
|
5ef10ff88ff361022c8457a4840cb64c
|
https://www.forbes.com/sites/russalanprince/2015/07/07/many-single-family-offices-are-investing-in-newer-hedge-funds-and-maximizing-these-relationships/
|
Many Single-Family Offices Are Investing In Newer Hedge Funds And Maximizing These Relationships
|
Many Single-Family Offices Are Investing In Newer Hedge Funds And Maximizing These Relationships
Overall, hedge funds are under pressure. In some cases performance has been trailing their benchmarks. For many of them, raising money has become much more arduous. For example, intuitional monies such as pension funds tend to be directed to the larger, more established funds. Along the same lines, many cap-into professionals are having an ever-harder time finding investors for start-up and smaller funds.
Based on extensive studies with single-family offices, a solid percentage of them are capitalizing upon these scenarios faced by new hedge funds. These single-family offices are committing billions of dollars to alternatives including hedge funds and are often very interested in investing in smaller (hopefully nimble) funds, which can profit in today’s volatile economic environment.
In some situations, single-family offices are pressuring these newer hedge funds to lower their fees. Many of them are not only getting better than conventional fee arrangements, they are also often getting better terms with respect to lock up periods and hurdle rates.
What is very telling is that the leverage of many of these single-family offices is not only in their ability to directly provide significant funds, but also the fact that a majority of them will actively solicit additional monies from other single-family offices as well as ultra-wealthy investors. These additional investors brought to the newer hedge fund by the single-family office are ultra-wealthy individuals and families that would otherwise be exceedingly unlikely to be sourced by the newer hedge funds on their own. This pooling of high-net-worth investors can easily deliver tremendous amounts of capital to a new hedge fund making the trade-off on fees and terms quite reasonable.
In the end, the ability of the newer hedge fund to deliver solid investment returns will decide its future. Still, many hedge funds need more capital in order to get the opportunity to shine. Today, it is very clear that many single-family offices are willing to bet and bet heavily on newer and smaller hedge funds including start-up funds as well as raise capital for these funds from their peers.
|
ea21ea0749d3ce0532221bed5e14b12c
|
https://www.forbes.com/sites/russalanprince/2015/09/28/using-captive-insurance-companies-to-address-cyber-security-risks/
|
Using Captive Insurance Companies To Address Cyber Security Risks
|
Using Captive Insurance Companies To Address Cyber Security Risks
Cyber security due to a multitude of data breaches is a major concern of companies and one that is going to become increasingly significant. Corporate data from customer information to intellectual property can all be stolen to the extreme detriment of a company.
Given the potential losses due to cyber breaches, captive insurance companies can be very powerful risk management tools. “Putting resources into prevention is a necessity. Nevertheless, companies are going to suffer losses when they are hacked, and all the cyber security measures available are not going to stop all the technologically sophisticated criminals. In these situations, cyber insurance is regularly extremely useful in enabling companies to respond and mitigate their financial exposure,” explains Joseph McNulty, a partner at FFO Business Management & Family Office an international authority on captive insurance companies. “The objective of the insurance is to help businesses quickly address the breach, restore operations, and deal with all the often diverse financial costs. Captive insurance companies can fill a very important role when it comes to cyber insurance. Risks that are currently not insured or underinsured can be addressed by using a captive. There is also the possibility of getting highly customized coverage and lower pricing.”
According to Frank Seneco, president of the advanced planning boutique Seneco & Associates and author of Maximizing Personal Wealth: An Advanced Planning Primer for Successful Business Owners, “Captive insurance companies are increasingly being used to address cyber risk. The versatility of the captive gives senior executives the opportunity to create customized risk management solutions. For example, a company can be cost-effectively insured for revenue loss due to technology failures. The captive can provide answers for multiple related problems such as the losses from hackings and the hit to their reputations.”
“The advantages of captives to deal with cyber security risks are considerable. The senior executives in just about every company should therefore consider them. A captive insurance company can be used in conjunction with traditional insurance coverage, or it can be used to replace that coverage. It all depends on particular situation,” says McNulty.
|
fe2e02e15db51f0896d112fe70311fbe
|
https://www.forbes.com/sites/russalanprince/2018/01/10/what-super-rich-heirs-want-most-to-know-about-wealth-management/
|
What Super-Rich Heirs Want Most To Know About Wealth Management
|
What Super-Rich Heirs Want Most To Know About Wealth Management
Without question, many of the super-rich (net worth =US$500 million or more) are concerned about the ability of their heirs to smartly deal with the monies and business assets they will inherit. According to Angelo Robles, founder and CEO of the Family Office Association and author of Effective Family Office, “Overall, where educational resources are generally lacking is how to handle and manage substantial amounts of financial assets. When heirs are going to one day have tens if not hundreds of millions of dollars, considerable anecdotal evidence shows that a fair percentage of them will make serious mistakes with these funds.”
Many organizations provide programs teaching the next generation the mechanics of investment management. These programs address a wide array of issues from the very basic, such as the difference between a stock and a bond, to more advance investment management concepts such as asset allocation, rebalancing, and investment selection. This type of education is very useful for some heirs, but those inheritors are in the minority.
“The great majority of wealthy inheritors aren’t very interested in learning even the fundamentals of money management and wealth planning,” says Ellie Peters, wealth advisor at FFO Business Management & Family Office and an authority on wealthy inheritors. “Most of them are going to turn to professionals to invest their monies, help them deal with tax matters, and enable them to protect their fortunes from unfounded legal assaults. More specifically, very few wealthy heirs are going to personally manage their substantial inheritances. As there are so many ineffectual and corrupt advisors around, knowing how to find, screen, and work with high-caliber experts is very high on their list of concerns and tends to be their primary concern when it comes to wealth management.”
“We’re seeing more and more very wealthy families taking steps to provide their heirs with a solid education on how to source, negotiate, and oversee the investment managers, wealth planners, and all the other types of professionals they might hire,” says Robles. “Already there are strong indications is that this approach is proving very effective for the older and subsequent generations.”
|
e2808572e12dae52afcb8cd560777c7a
|
https://www.forbes.com/sites/russdsouza/2016/05/13/for-drake-beyonce-and-others-on-tour-venue-choice-a-weighty-decision/
|
For Drake, Beyoncé And Others On Tour, Venue Choice A Weighty Decision
|
For Drake, Beyoncé And Others On Tour, Venue Choice A Weighty Decision
Beyonce performs during the opening night of the Formation World Tour at Marlins Park on April 27,... [+] 2016 in Miami, Florida. (Photo by Frank Micelotta/Parkwood Entertainment via Getty Images)
Planning a major concert tour is a challenge from both a business and operational standpoint. Over the course of several months - and on occasion, years - each stop in every city and country can present a host of new complications from ticketing to audio to crowd control. But before the planning can begin, artists, management, and promoters must make an important decision: what type of venue the shows will take place in.
For major summer tours with the option to perform outdoors, artists have the choice of scheduling at either arenas or stadiums. This can often become a complex analysis and estimation game of expected attendance and fan demand for tickets, and two of the summer’s biggest touring acts, Beyoncé and Drake, have come to different conclusions on venue choice. Drake and fellow rapper Future will be playing the country’s biggest arenas, such as Madison Square Garden (18,200 seating capacity) and the United Center (20,500), while Beyoncé will be performing at stadiums that, in some cases, can hold three times as many people, including Soldier Field (61,500) and Levi’s Stadium (68,500).
The factors in this decision, of course, go beyond ticket sales. In 2011, as he kicked off his Club Paradise Tour in support of the album Take Care, Drake said that he “fought” to perform in venues that he considered more intimate for his fans. He played mainly college arenas for the first leg of the tour, and in an interview with MTV News, the rapper said “I fought for this tour, I fought really hard for this tour because, of course, they want me to go get the big bucks, go into the stadiums and cash out...But I was just like, ‘I really made this album for the same people that supported me since day one.’” Two albums later, Drake’s stardom has risen to a different planet than it was on five years ago, but his arena over stadium choice again this summer can be seen as a similar decision.
Drake seen at his album launch party for "Views" at La Vie on Friday, April 29, 2016, in Toronto,... [+] ON. (Photo by Ryan Emberley/Invision/AP)
The counterpoint to this argument comes in a simple examination of supply and demand. With three times as many seats available at each tour stop, more of Beyoncé’s fans might have the opportunity to catch a show - and possibly at a more reasonable price point. Logistically, too, the schedule might be easier to manage for everyone involved in show production. Beyoncé’s Formation Tour, for example, will play two Citi Field shows in New York in early June. When Drake and Future’s Summer Sixteen Tour comes to town in August, the duo will play what will surely be an exhausting four shows in five nights at MSG, and will still fall short of the combined seating capacity available at the Citi shows.
There is also an issue of optics and public perception at play. The smaller arena shows are typically in what is seen as more intense demand - many of Drake’s shows sold out in minutes and are now a pricey ticket on the secondary market - which supports the notion that these concerts are hot events. Some of Beyoncé’s stadium stops, on the other hand, did not sell out, and in many cases the media has made this out to be a sign of decreased interest. However, there is no guarantee that Drake would have sold out stadium shows, as he’s never tested that market - and while a less-than-full audience may not be great for appearances, some short-term media scrutiny may be worth the greater ticket inventory available for sale.
Venue choice is only one factor among a wide variety of decisions that need to be made for each major concert tour, and this summer’s biggest acts have settled on different directions: Drake, Adele, and Justin Bieber will play arenas, while Beyoncé, Coldplay, and Guns N’ Roses will play stadiums. Fans, media members, and artists all have their preferences, but comparing the bottom lines of each tour at the end of the summer will be the best way to measure success.
|
75957eb6df07801fd7def3680bbe3ad3
|
https://www.forbes.com/sites/russellflannery/2011/06/15/chinas-bosideng-takes-step-overseas-with-london-purchase-flagship-store/
|
China's Bosideng Takes Step Overseas With London Purchase, Flagship Store
|
China's Bosideng Takes Step Overseas With London Purchase, Flagship Store
Bosideng International, the Chinese down apparel manufacturer and retailer led by billionaire Gao Dekang, has taken a big step into the European market with the purchase of property for a flagship store in London.
The company said in a statement today it has acquired property at 28 South Molton Street near the Oxford Street shopping area in the West End of London for approximately $31 million. The space will be turned into Bosideng’s down apparel and menswear flagship store and its headquarters in Europe. This will be Bosideng’s first overseas down apparel and menswear flagship store.
The building also neighbors Oxford Street, a major shopping area attracting over 30 million tourists annually. The building is 20 meters away from the Bond Street exit of the London Underground with an annual traffic flow of 24 million and opposite to the Bond Street Station of Cross Rail, the company said.
Bosideng is expanding abroad at a time when foreign retailers including Tiffany, Wal-Mart and Coach, among others, are flooding into China looking to tap into the country’s double-digit growth in consumer spending.
Bosideng chairman’s Gao ranked no. 736 on the 2011 Forbes Billionaires List with wealth of $1.7 billion.
|
53d4166ddd496cf1ab84218f3d579d78
|
https://www.forbes.com/sites/russellflannery/2011/06/26/cartiers-chien-belles-sheng-are-among-the-2011-forbes-china-fashion-25/
|
Cartier's Chien, Belle's Sheng Are Among The 2011 Forbes China "Fashion 25"
|
Cartier's Chien, Belle's Sheng Are Among The 2011 Forbes China "Fashion 25"
The second annual list of “25 Influential Chinese in Global Fashion” unveiled on Saturday by Forbes China, the licensed Chinese-language edition of Forbes, comes amid a changed business environment compared with the last time the list was published a year ago. The global economic recovery is facing question marks, and fashion companies and investors are looking more than ever to China for growth.
This year’s list of 25 influential Chinese in global fashion focuses on executives and entrepreneurs that are leading the charge. (Click here for the full list.) We include for the first time leaders at multinational fashion companies that are playing a crucial role in those foreign firms’ success in China, including Joe Wong at Gucci and Josephine Chien at Cartier. This year we also highlight an e-commerce apparel leader whose marketing success has turned his company into one of China’s most successful e-commerce sites at a time when the field is hotly competitive: Vancl’s Chen Nian.
The much-anticipated listing of Prada of Italy in a multi-billion-dollar IPO in Hong Kong on Friday also underscores how the global fashion industry is increasingly turning its focus to capital markets in Greater China to raise money and boost its profile in the fast-growing region. This year’s list also includes Chinese entrepreneurs that are tapping into stock exchanges in Greater China, such as Bryan Yiu, whose second-hand fashion retailer Milan Station’s IPO was more than 2,000 oversubscribed in Hong Kong earlier this year. This year we also for the first time note members of the investment world that are working as catalysts for some of those listings, such as Jeacy Yan of IDG and Hanji Huang at L Capital, an investment arm of LVMH.
Besides foreign companies marketing their own brands, Chinese entrepreneurs in the mainland have done increasingly well distributing foreign-branded fashion or modifying items to local tastes. Among that group, Zhang Yongli has turned Jeep into a remarkable success in China with hundreds of stores and Terry Siu, who works with foreign brands such as Armani, debuts as our first-ever list member from Macau.
Compared with last year, we have expanded our focus to a wider swath of market segments, notably jewelry, one of few businesses where Greater China’s own brands compete head-to-head with European brands. Among that group, Chow Tai Fook, under the leadership of Adrian Cheng, stands out. It made a big splash at a fashion show in Paris this year and with the launch of a new luxury line last year. The company is also looking to launch a multi-billion-dollar IPO soon.
Members of this year’s list also include two of Greater China’s greatest homegrown successes in footwear: Sheng Baijiao, the CEO of Belle International, who leads China’s top shoe retailer, and also Jack Chiang of Stella International, whose brands are expanding around the world : Stella Luna operates stores in Thailand, the Philippines, Lebanon and United Arab Emirates and “ What For” shops in Thailand and the Philippines.
The ”Fashion 25” list seeks to call attention to individuals born in Greater China that have made a mark in the past year. Rather than a quantitative ranking, the selections are based on interviews with dozens of executives in the fashion field worldwide.
-With research by Chloe Chen, Mao Yanjie, Hilary Flannery, Maggie Chen and Shee Shee Jin
|
5c6441035b46114ac2561e9738147556
|
https://www.forbes.com/sites/russellflannery/2011/06/26/chinas-fashion-industry-has-plenty-of-room-to-grow-idgs-jeacy-yan-says/
|
China's Fashion Industry Has Plenty Of Room To Grow, IDG's Jeacy Yan Says
|
China's Fashion Industry Has Plenty Of Room To Grow, IDG's Jeacy Yan Says
Image by Getty Images via @daylife
China’s fashion industry has plenty of room to growth in the coming years, yet investors looking to profit should also beware of key risks. To learn more about the industry outlook, I exchanged on Friday with Jeacy Yan, a partner at investment company IDG in Beijing and a member of 2011 Forbes China Fashion 25 List. Yan has led IDG’s investments in Bosideng International and other Chinese fashion companies. Excerpts follow.
Q. Your company traditionally is associated with tech and Internet investments in China, such as Ctrip and China Finance Online. How is it that IDG became interested in fashion companies?
A. China is transforming itself from an export-oriented economy into a consumption-driven economy. Urbanization and rural consumption are on the rise. We see fast growth in consumption as a sustainable trend in China, and have been very positive on Chinese consumer brands and the services sector beginning a few years ago. Fashion brands account for a big part of consumer brands, and naturally fell on our radar.
Q. You have invested in Chinese apparel retailers in the past few years. What's your approach in picking among companies this group to invest in?
A. We do systematic research on subsectors of the apparel sector, including women’s wear, menswear and casual wear. We pick either existing market leaders or up-and-coming brands with unique DNA and great growth potential in each subsector.
Q. In what segments of the apparel industry do you expect growth in China to be best in the next few years?
A. We see great growth potential in high-end casual wear, fast-fashion brands and luxury brands.
Q.
Where are some of biggest areas of risk for investors that are looking to put money into China -- fashion or otherwise?
A. Firsst, with the founding team. The founders need to be motivated, focused, capable and ethical. It is hard to replace the founders with professionals in China like in Western countries. A second area is corporate governance.
Q. China already has a big shoe retail leader, Belle. What's ahead for that market?
A. Belle is clearly market leader in women’s shoes sector. They are expanding into online business, which also has big room to grow. Except for Belle, there are also a few other players in this sector, like Daphne, ST&T, Kisscat and Stella Luna, that are also performing well. This sector still enjoys high growth and there is still space for new brands, especially for the mid- to high-end ones.
|
93cf52223acca1cb8cf8754b2c056fca
|
https://www.forbes.com/sites/russellflannery/2011/11/28/two-hours-and-a-world-away-from-europes-crisis-and-shanghai/
|
Two Hours And A World Away From Europe's Crisis and Shanghai
|
Two Hours And A World Away From Europe's Crisis and Shanghai
Shanghai’s economic growth is slowing down, and there’s a scent of international crisis in the air. The fallout from Europe's debt woes is starting to reach China's shores, adding pressure on an economy that's already being affected by inflation and problems in the United States.
Only about two and a half hours away is a wonderful offset. naked Stables Private Reserve, a resort that had a soft opening last month, is set in a valley in the rolling Moganshan (“Mount Mogan” ) area of Zhejiang Province. The region was a getaway for Shanghai expats before China’s Communist revolution, but today it attracts Chinese and foreign visitors alike. The facility’s quirky blend of kid- and eco-friendliness and Chinese-African themes illustrates how boutique resorts that don’t bear an internationally known brand name can also prosper amid the country’s current great wealth boom.
For those that don’t travel much around China, the car ride out of Shanghai in the direction of Zhejiang itself provides a good example of the highway maze that surrounds many of the country’s major cities today. Eventually, the roads narrow, and the grimier factories of the southern Zhejiang industrial heartland come into focus. After passing through beyond Deqing’s main urban district, the hills of Moganshan move in closer, along with rural denizens long gone from central Shanghai. Chickens pause for passing vehicles; geese flap their wings near puddles set along the edge of the bamboo forest. As you head up the mountains and the forest advances to the edge of the country roads, you can easily make out the ownership markings of individual bamboo trees written in black Chinese characters on their trunks.
On arrival on a sunny day yesterday at naked Stables, almost on cue, one of the three recently arrived (from Qingdao) horses rolls over on its back in a big front yard, as if asking to have its huge belly rubbed by new visitors. This happily reminds me of my own family dog, Nick. The 20 stables that line the entrance, along with the main check-in clubhouse and its outdoor patio, are overlooked by a mountainside tea farm. Inside is a corporate group from Industrial and Commercial Bank of China, one of the world’s biggest banks, sitting on and around their bags, waiting to check out.
“Mr. Naked,” who also goes by the name Doug Lapuc, is also there, waiting to answer questions about the resort. The Zhejiang hand has been living in the area since the owners opened up a smaller site five years ago called naked Home Village that’s located further up the mountain, and knows all of the local hiking trails. When naked Stables first opened about two months ago, according to the Cape Cod native, more than half of the customers were foreigners. Today, they’re mostly local, the same as at Home Village. There is barely any advertising for either, he says. You find out about it through friends or the web. Plainly, it’s worked out.
Visitors would likely find the relaxed setting and international service two of naked Stable’s top draws, compared with the stables themselves. As of now, there are only three horses actually there. Beyond that, I was impressed -- and initially attracted to the place -- by its “tree top” villas. I received a press release last month about the design, which was done by co-owner Delphine Yip -- one of China’s most successful foreign architects and who has worked on China’s landmark Xintiandi series of shopping and restaurant areas. It was tough to visualize things from afar, though.
The villas are built on steel beams that sprout from a mountain slope, and sit atop a row of trees that also form the resort and mountain skyline. It’s only when you look up from below from a conference center (or elsewhere) that you can see the full effect. The TV in each of the 30 two- to four-bedroom spots is inconveniently tucked away to help make sure you chill out while there. An outdoor jacuzzi installed on the outdoor porch of every unit also helps. Each is also equipped with environmentally friendly heating and water systems that will appeal to "green" travelers. The resort also has 40 one-room "earth huts" made with structurally reinforced rammed earth that forms “mud walls.”
naked Stables has daily activities to encourage wellness, including a morning run that starts at 7 a.m. and lasts an hour, meditation and a “decompression walk.” Reflecting the heritage of Grant Horsfield, Yip’s husband and the South African-born co-owner, there is African art and influence dotted around the facility. Certainly, you won’t find this Chinese-African mix at your typical Intercontinental, Marriott or Hyatt back in Shanghai. I didn’t have time to sample the food, but it most is locally grown, the resort says. Because naked Stables is still in a soft-opening phase, a potentially interesting museum about the area’s bamboo industry hasn’t opened.
If you’re impressed enough to want your own piece of naked Stables, you can buy one of the villas, and the owners will try to rent it out when you’re not there. Prices start at 5.5 million yuan, or just under $900,000. Credit’s tight in China, and if you or your business have that much cash to spend, you'll probably have good bargaining power.
Horsfield and Yip, who hails from Hong Kong but was educated at Harvard, also own another 21 beds further toward the top of Moganshan at what they call naked Home Village. Unlike naked Stables, you have walk a bit of the side of a mountain to reach most of them. The room rate is about 1,500 RMB for a bedroom – about the same as at naked Stables during its soft opening. There was no shortage of Shanghai dwellers paying that at either for some peace of mind there yesterday.
For more information about the resort, click here. For information about Delphine Yip, click here.
|
b9e54348c7dc6733333d001b55ceaab9
|
https://www.forbes.com/sites/russellflannery/2011/11/30/china-internet-icon-jack-ma-joins-lunch-for-hk-billionaires-jewelry-ipo/
|
China Internet Icon Jack Ma Joins Lunch For HK Billionaire's Jewelry IPO
|
China Internet Icon Jack Ma Joins Lunch For HK Billionaire's Jewelry IPO
Chinese Internet billionaire Jack Ma joined a group of Hong Kong’s richest people, among others, for an investor lunch on Monday in connection with this month’s initial public offering by Hong Kong jewelry chain Chow Tai Fook, the Standard newspaper reported on Tuesday.
The company’s offering will likely be one of the largest this year in Hong Kong.
Other billionaires on hand included Lee Shau Kee from Henderson Land and Joseph Lau, both from the real estate industry, as well as MGM China’s Pansy Ho from the casino business, the newspaper said. Chow Tai Fook is controlled by Hong Kong billionaire Cheng Yu-tung.
It might be more fun for Ma to ponder the future performance of Chow Tai Fook than the recent share price of his own Hong Kong-listed company, Alibaba.com. Shares in Alibaba.com, which is partly owned by Yahoo, have plunged as much as 20% this month on worries about the impact of slowing global economic growth.
Ma ranked no. 39 on the 2011 Forbes China Rich List published in September with wealth of $1.9 billion.
|
b7436048d6cc63be9e5af7408d131158
|
https://www.forbes.com/sites/russellflannery/2012/03/30/china-bans-comments-on-popular-twitter-like-services-until-april-3/
|
China Bans Comments On Popular Twitter-Like Services Until April 3
|
China Bans Comments On Popular Twitter-Like Services Until April 3
China today banned users of the country’s two popular Twitter-like microblogs from making comments about posts until April 3. The announcement appeared this morning for users of Weibo, run by U.S.-listed Sina, and t.qq.com, operated by Hong Kong-listed, Shenzhen-based Tencent.
China's state-run Xinhua news service in a report today said the two were “punished for allowing rumors to spread.” Some 16 websites have been closed and six people have detained for recently fabricating rumors about “military vehicles entering Beijing and something wrong going on in Beijing,” the report said.
Rumors of a coup spread earlier this month after Communist Party moved to remove a top official, Bo Xilai.
A spokesman for the State Internet Information Office said the two big microblogs have been “criticized and punished accordingly” by authorities in Beijing and Guangdong, according to the Xinhua report.
In a country where self-censorship and censorship among traditional media is common, China’s relatively unfettered microblogs that attract hundreds of millions of users are seen by many as expressing the zeitgeist of the country’s current golden age, especially among its relatively well-educated young.
Although comments aren't permitted until April 3, users of the Weibo and qq services can still post material.
|
7cfe47d8ae514582de286b317e546f91
|
https://www.forbes.com/sites/russellflannery/2012/04/21/live-by-apple-die-by-apple/
|
Live By Apple, Die By Apple?
|
Live By Apple, Die By Apple?
Shares in a number of Taiwan suppliers to Apple fell sharply on Friday on reports that the U.S. company will be changing its component mix when its next version of the iPhone hits the market.
Shares in TPK dropped by their 7% daily limit on reports that the touch panels used in the new Apple phones will use in-cell technology from Japanese and Korean suppliers, rather than that currently provided by TPK, in order to create a thinner phone. Shares in another Taiwan panel supplier, Wintek, also fell.
Analysts say that in-cell technology hasn’t yet been proven viable on a large-scale, and TPK is already working on key improvements to its own existing processes and promoting sales into new channels. Macquire put out a "outpeform" on TPK on March 16 with a 12-month target price of NT$650. It closed at NT$388 yesterday.
Casing supplier Catcher Technology shares also dropped by their daily limit on a report that Apple will also change the material that houses the next iPhone. Hon Hai Precision, the big Apple contract manufacture in China better known by its trade name Foxconn, fell also by 2.4%. yesterday. Hon Hai is led by Taiwan billionaire Terry Gou.
Taiwan’s Commercial Times said today that the iPhone 5 is rumored to have a launch date in October.
The volatility in the shares underscores how ties to booming Apple are a double-edged sword for suppliers. They're great when the business is growing quickly, but dependence on one company -- be it Apple or anyone else -- can create its own risks and edgy shareholders.
Follow me on Twitter @rflannerychina
|
79b21c7dea035d32903990c145e5bc5f
|
https://www.forbes.com/sites/russellflannery/2012/06/24/taiwan-court-orders-reinstatement-of-two-cpdc-board-candidates-as-contested-vote-nears/?feed=rss_home
|
Taiwan Court Orders Reinstatement Of Two CPDC Board Candidates As Contested Vote Nears
|
Taiwan Court Orders Reinstatement Of Two CPDC Board Candidates As Contested Vote Nears
In a new twist in a case that is spurring discussion about corporate governance in Taiwan, a court there has ordered the reinstatement of two candidates for independent board seats that had been disqualified by the China Petrochemical Development Corp. just before a sign-up deadline ahead of its June 27 board election, according to a press release issued by Taiwan’s Lealea Group.
A shareholder group led by Lealea chairman James Kuo and two others that holds about 30% of CPDC is trying to replace the current chairman and his board with what they say is a more independent slate of directors which would focus more on shareholder value creation. Kuo and the two others were members of a list of “20 Businesspeople to Watch in Taiwan” published here last week. (See link here.)
The two independent board candidates to be reinstated are establishment figures in Taiwan: Lu Daung-yen is the current chairman of the Taiwan Corporate Governance Association, the former chairman of the GreTai Securities Market and a previous holder of top Taiwan government regulatory roles; Chia-ying Ma is an accounting professor at Soochow University and a member of a several industry and regulatory committees.
Petrochemicals maker CPDC, whose share trade at the Taiwan Stock Exchange, has a market cap of about $1.7 billion.
|
7df8680d21a25ef413dfa76d4a6d5684
|
https://www.forbes.com/sites/russellflannery/2012/08/12/hits-and-misses-by-past-forbes-china-fashion-25-list-members/
|
Hits And Misses By Past Forbes China "Fashion 25" List Members
|
Hits And Misses By Past Forbes China "Fashion 25" List Members
Click here for the 2010 list of “25 Influential Chinese in Global Fashion”
Click here for the 2011 list of “25 Influential Chinese in Global Fashion”
Click here for the 2012 list of "25 Influential Chinee in Global Fashion"
---
The annual list of “25 Influential Chinese In Global Fashion” published this weekend by Forbes China, the licensed Chinese-language edition of Forbes, by design excludes past members in order to highlight fresh faces and new thinking. What have some been some of the major developments among previous list members in the past 12 months?
Given the tough global economy, it’s the bad news that stands out. One of the most stunning setbacks among the group was at Alfred Chan’s Ports. Shares in the pioneering China luxury brand fell after the disclosure of rule breaches at the Hong Kong Stock Exchange (see story here). Its shares are down by more than 40% in the past year. Ports continues to operate the BMW Lifestyle retail chain in China.
It’s also been a tough stretch at Chen Yihong’s China Dongxiang and China Olympic icon Li Ning’s enterprise, both sportswear suppliers. China Dongxiang’s shares have plunged by about 60% in Hong Kong; Li Ning’s stock has lost 45% in the past year amid inventory management and other problems in the industry. Li Ning has given more room to investment firm TPG to help run the business (see related story here).
It’s not only sportswear companies that have hit rocky waters. Just on Friday, Hong Kong apparel outsourcing giant Li & Fung, whose business partners include Wal-Mart, had 19% of the value of its shares wiped out in a day after a disappointing first-half profit report. (See related story here.) Brothers Victor and William Fung made our list in 2010. 2011 listee Sham Kar Wei’s I.T this month also reported lower profits. (See related story here.)
Although e-commerce remains full of promise, listee businesses have been mixed. Alfred Gu’s Mecoxlane have lost more than half in the past year and an anticipated IPO by Chen Nian’s Vancl has yet to happen.
One big winner in the past year: Silas Chou, who made the “Fashion 25” list based on successful investments in Tommy Hilfiger and Michael Kors. Michael Kors has been one of the most successful IPOs in the U.S. the past year, and catapulted Chou on our Forbes Billionaires List this spring. Daughter Veronica Chou made our list last year.
-- Follow me on Twitter @rflannerychina
|
378868a9455602bee275f90784f870cf
|
https://www.forbes.com/sites/russellflannery/2012/08/12/plunge-in-li-fung-shares-reduces-wealth-of-hong-kongs-fung-family-by-more-than-1-billion/
|
Plunge In Li & Fung Shares Reduces Wealth Of Hong Kong's Fung Family By More Than $1 Billion
|
Plunge In Li & Fung Shares Reduces Wealth Of Hong Kong's Fung Family By More Than $1 Billion
A 19% plunge in the stock price of Hong Kong’s Li & Fung, the global sourcing giant whose business partners include Wal-Mart, wiped more than $1 billion from the controlling Fung family’s wealth on Friday.
Shares tanked after the company said a day earlier that operating profit declined by 22% to $221 million in the first half of the year amid weak revenue in Europe. The drop also came on a day when China said exports in July rose by only 1% from a year earlier, suggesting weak global demand continued to cloud Li & Fung’s core apparel and toy sourcing businesses.
Victor and William Fung ranked No. 7 on the Hong Kong Rich List published in January with wealth of $6.2 billion. (Please click here for the full Hong Kong list.) They own about a third of Li & Fung shares, according to the company’s latest annual report.
Li & Fung was the most actively traded stock at the Hong Kong Stock Exchange on Friday, according to exchange figures. Wal-Mart shares lost 0.2% on Friday.
-- Follow me on Twitter@rflannerychina
|
d322f67aa927285e1e1e831830670966
|
https://www.forbes.com/sites/russellflannery/2012/10/11/screens-in-his-sights/
|
Screens In His Sights
|
Screens In His Sights
A notable "mover" among the ranks of China's Richest is Dalian Wanda Group Chairman Wang Jianlin. He jumps to No. 3, doubling his estimated worth to $8 billion in a year when it got decidedly tougher at the top.
Wang Jianlin, Credit: Imaginechina
Wang's wealth mostly stems from years of property development, with hotels and other commercial structures widely branched out from his Liaoning Province in the northeast. Like many such fortunes, Wang's has only recently taken on more transparency as he raises investment money from outsiders (this has helped FORBES ASIA better estimate his holdings). But one thing the mogul is public about is his interest in building up China's presence in popular entertainment. His name is now widely known in Hollywood after he completed the purchase of financially struggling AMC Entertainment for $2.6 billion. The move turned Wanda and Wang into the world's largest movie theater operator with more than 400 cinemas and 5,000 screens.
"Wanda's moves in the entertainment field are enormously ambitious and offer a potentially great bridge between the movie industries of China and the U.S.," DreamWorks Animation CEO Jeffrey Katzenberg e-mailed FORBES ASIA after meeting Wang over dinner. He "is a very commanding personality and seems to have unlimited ambitions (qualities that I can easily relate to)," Katzenberg cheekily noted.
Click here for our full list of China's Richest
See our gallery of China's 100 Richest
In an interview in Shanghai in September shortly after returing from a whirlwind U.S. trip that took him to Los Angeles, Seattle, Boston, Washington, D.C. and Kansas, Wang displayed a sense of humor himself, jokingly comparing his initial push into the entertainment business seven years ago to a centuries-old Chinese novel Outlaws of the March, in which 108 struggling individuals are forced to do something they'd rather not--climb Mount Liang to join the underworld.
Now, Wang says, he sees the industry in a different light. Its prospects in China are the best they have been in six decades, he's keen to invest, and he hopes to be a key conduit between the U.S. and China. Translated excerpts from the discussion follow.
How was your trip to the U.S.?
The main reason for going was to complete the AMC transaction. I also met with leaders of six major studios. We discussed how to link the China and U.S. entertainment industries. It was a very open discussion, and the response was very good. Many companies expressed preliminary interest in cooperating with us. I think an aftereffect will be that leaders of many entertainment companies will visit us.
This trip had three goals. The first was to promote Wanda. The second was to understand U.S. politics and the economy. The third was to develop Wanda's cultural business and the cultural industry.
How did you become interested in the last?
In fact, we were "forced to climb Mount Liang." In 2005 we started to put our theaters into our malls. Previously we had rented space to other theater operators. We were thinking about finding a stable partner [for the theater business]. So right at the beginning we looked for Warner Bros. and cooperated for a year. But China restricted foreign capital to 49% [of ownership], and they wanted 70-30. The government wouldn't approve it, and they gave up. Then we sought out Shanghai Media Group [a state enterprise, but the deal fizzled]. We had more than ten theaters ready to open. There was nothing to be done. We decided to run them ourselves.
Between 2005 and 2012 we entered the movie theater business. Our goal was, if we are going to do it, to be at least No. 1 in China and seek a world ranking. If we want to do it, we want to do it big. Besides movie theaters, we have film production and media, and [stage] performances.
Why are you optimistic about that business here?
When we started we were practical. Movies and shows could support our large-scale travel and vacation areas and real estate communities, and help us raise prices. But after doing it for several years we felt it didn't only have that effect. Even more important, we discovered that the cultural industry can be big, with room for profit. Also, it's very influential. A movie can be influential ... around the world. A play can be performed for 50 years or 100 years. It's not like an ordinary product. So three years ago we decided to make a real plan in the cultural industry and that the Wanda Group would fully pursue this. Sales [for entertainment] this year will be 20 billion yuan [$3.1 billion]. Our goal for 2015 is 40 billion yuan, and in 2020, 80 billion yuan.
I think China's cultural industry has entered the best period in the 60 years since the country was founded. There are three main reasons. First, the Party, government and society have never paid as much attention as today to the cultural industry. Second, we have the conditions for the development of the cultural industry. The income of ordinary people has been gradually rising. Third, the biggest companies in the global cultural industry are paying a lot of attention to China.
What do China's cultural consumers want?
Chinese consumers, relatively speaking, like Hollywood movies. Why? They like the completely new creativity, the storytelling. There is a fixed approach to learning in China. Memorize, test, memorize ... it lowers students' creativity. Take, for example [the DreamWorks Animation film], Kung Fu Panda . How can China not produce a panda? How can it be that we let the U.S. produce this?
You mentioned that you talked to big Hollywood bosses about how to integrate U.S. and China cultural industries?
I think, first, China has to admit there is a gap. Let's take the film industry. From many angles, including shows and technology, the gap is too big. We have to admit there is a gap, and honestly study [the problem]. We have to bravely be students.
Second, I think we have to bring in American top-level people and technology. If you only have technology without the people, [your own] people won't be able to perform. Third, American companies can see the huge market in China and want to come a little early to develop. Like 25 years ago, Daimler-Benz and BMW had the courage to come to China. Also Wal-Mart. At the time China was so poor, could people afford to buy things? But they dared to come.
China's economy hasn't been as good as many have hoped recently. Where do you see risk?
I'm an optimist about China's economy. The reason is that I think the great force for China's economic development is cities and villages. China's urbanization rate is 50%. According to our country's planning, that will increase by 0.8 to 1 percentage point annually. That means that 10 million to 13 million farmers will become urban residents. My own judgment is that at least 70% of China will become urbanized. It might slow--maybe it will increase only 0.1% a year, it's hard to say.
Urbanization will bring a huge demand for housing, demand for steel, demand for cement, demand for roads, job opportunities and the need for culture. So, in fact, China isn't short of demand for its economic development. That will determine the future of China's economy for the next 15 to 20 years. Growth won't be lower than 7% to 8%. This is no problem. China's economy absolutely won't collapse.
Of course there are risks. First, decision-making levels have to be correct in their judgment about the trend. If they see things accurately, there will be good countermeasures before the worst results come out. They could halt any easing. China has the room and the ability to make some adjustments. There are financial resources. Banks have money. Yet if [decision makers] wait until everyone can see clearly there is a problem, it might take a long time to make an adjustment. This is a risk.
A second risk is that businesses shouldn't be too blind. Businesses should consider safety. They can appropriately reduce investment and wait for opportunity. The most important thing to think about is cash flow. I do business management, and all along I have felt that cash flow is the most important thing. I feel cash flow is much more important than debt ratios. Debt ratios are just a financial statement. How much your profits are is a problem, but cash flow is the most important thing.
Third, if the government invests too much, it will squeeze out room for private-sector companies to survive, and China's economy would truly guo jin, min tui [state companies would thrive while private ones wither]. That will be trouble. During the last round [of Chinese government stimulus in 2009] 40 trillion yuan of support was provided to state-owned enterprises. For this ?[newest] round, you can see the situation isn't very good. The projects that have received accelerated approval by the National Development ;& Reform Commission are basically still for state-owned enterprises. When the economy isn't doing well, it's always SOE items [that receive government preference].
In the future perhaps the biggest risk is that the SOE share will be bigger and bigger. We already have the proof of 30 years that the road of developing SOEs doesn't succeed. If that road succeeded, Deng Xiaoping wouldn't have adopted reforms. The private-sector economy now accounts for more than half of the economy. Regardless of whether it is local government or the national policymakers, both should fully recognize this point: We have to greatly develop the private economy and private enterprises.
Click here for our full list of China's Richest
|
a50e7d03e2d1b1efb77405bde9328d31
|
https://www.forbes.com/sites/russellflannery/2013/01/13/chinas-gcl-poly-warns-of-loss-amid-vicious-solar-industry-competition/
|
China's GCL-Poly Warns Of Loss Amid 'Vicious' Solar Industry Competition
|
China's GCL-Poly Warns Of Loss Amid 'Vicious' Solar Industry Competition
GCL-Poly Energy Holdings, one of the world’s largest suppliers of polysilicon and silicon wafers, warned investors on Friday that it expected to post a “substantial” loss for 2012. It didn’t say how large it would be.
The imposition of U.S. anti-dumping duties last year and impact of the European debt crisis have saddled the industry with “clear overcapacity,” GCL-Poly said in a statement. At home meanwhile, GCL-Poly said “overseas enterprises began dumping viciously low-priced polysilicon to China." (Click here for the company’s strong statement.) Falling prices in the U.S. for natural gas, a substitute for solar power, also haven't helped.
GCL-Poly’s Hong Kong-traded shares have declined by about 9% in the past year, though they rose 1.9% to HK$2.12 on Friday before the company’s profit warning. They have plunged from a recent high of HK$5.55 in April 2011. Chinese solar panel maker Suntech has lost more than a third of its value in the past year, and debt-laden LDK has tanked 57%.
Even though GCL-Poly is losing money, its chairman Zhu Gongshan is a rarity in China's financially troubled solar business in one respect: he is still a billionaire. Zhu ranked no. 78 on the 2012 Forbes China Rich List with wealth of $1.2 billion. (Click here for the Forbes China Rich List 400.)
GCL-Poly also noted in its statement that photovoltaic product prices began to stabilize in December. “There are signs to mark the bottom” of the market, it said.
The company expects to post audited 2012 results by the end of March.
-- Follow me on Twitter @rflannerychina
|
7c5c1bb37948a70fd45211d14a1c4999
|
https://www.forbes.com/sites/russellflannery/2013/03/11/2013-forbes-billionaires-list-self-made-chinese-women-below-the-cut-but-on-the-move/
|
2013 Forbes Billionaires List: Self-Made Chinese Women Below The Cut But On The Move
|
2013 Forbes Billionaires List: Self-Made Chinese Women Below The Cut But On The Move
China’s self-made women billionaires are once again well-represented on the latest Forbes Billionaires List. Among them are Cheung Yan, the chairlady of Nine Dragons Paper, and Zhang Xin, CEO of Soho China (see related story here).
Yet China also has a good number of potential members in the pipeline. Underscoring the success of women in business in the country, international accounting firm Grant Thornton last week said half of senior management jobs in China are held by women, far above a global average of 24%. (See report here.)
Who are some of the country’s top female entrepreneurs poised to make our billionaires list in the future? Here are some members of 2012 Forbes China Rich List and other successful women entrepreneurs that didn’t make the cut for this year’s billionaires list but who are in the rise in business in the country.
*Li Binlan, A. Best
Li Binlan chairs A. Best, a department store and supermarket chain based in Shenzhen with more than 100 locations around China that competes with the likes of Wal-Mart. The privately held company ranked No. 28 on a list of China’s biggest retails published by the China Chain Store and Franchise Association last year, with 2011 sales of $2.8 billion. Li ranked No. 267 on the 2012 Forbes China Rich list with wealth of $600 million. She is a graduate of Sun Yat-Sun University.
*Fion Luk, Agile Property
Fion Luk is the vice chairlady and co-president of big Guangdong Province real estate developer Agile Property.Luk shares her fortune with her husband, Agile’s chairman Chen Zhuolin; the two were members of the China Rich List with wealth of $1.2 billion in 2012 but couldn’t make the cut individually for the Forbes Billionaires List. Click here for an interview this month with Luk about the outlook for China’s property market.
*Mou Jinxiang, Lianhe Chemical Technology
Mou Jinxiang, 58, chairs and holds a 37% stake in Lianhe Chemical Technology, a pharmaceuticals and chemicals maker that went public at the Shenzhen Stock Exchange in 2008. Its customers over the years have included Dupont. Sales last year rose by 15% to $476 million; that helped to lift its net profit by a quarter to $59 million. Mou ranked No. 249 on 2012 Forbes China Rich List with wealth of $630 million.
*Wang Huimin, Xiao Nan Guo Restaurants
Wang Huimin is the chairlady of Xiao Nan Guo Restaurants, a Shanghai restaurant icon owing to its local style cooking. She owns about half of the Hong Kong-listed company, which has a market cap of $258 million.
*Wang Laichun, Luxshare Precision Industry
Wang Laichun, 45, chairs and owns about a third of Shenzhen-listed Luxshare Precision Industry, a manufacturer of connectors whose customers include Apple. Wang worked for Hon Hai Precision, a big Taiwan contract manufacturer for Apple, HP and other global tech giants led by billionaire Terry Gou for nearly 10 years before she founded her own business in 1997. Luxshare went public at Shenzhen Stock Exchange in 2010. Sales last year rose by 23% to $508 million. Wang ranked No. 291 on 2012 Forbes China Rich list with wealth of $585 million. She holds an EMBA from Tsinghua University.
*Zhai Meiqin, Heung Kong Group
Zhai Meiqin, with her husband Liu Zhiqiang, are co-founders of the Heung Kong Group. From a small start in 1990 selling furniture, its affiliated businesses today employ 20,000 people and have total assets of more than $8 billion. Both are active in the business: Liu is chairman, Zhai is the president. The couple’s Kinhom is today one of the largest furniture retail chains in China with more than 200 stores. They hold stakes in real estate, finance and energy businesses. Deutsche Bank signed a strategic cooperation agreement with Heung Kong last September. Zhai, 48, has attended Tulane University. The couple ranked No. 75 on the 2012 Forbes China Rich List with wealth of $1.2 billion.
*Zhang Lan
Zhang Lan leads South Beauty, an upmarket Chinese-style restaurant chain. From one store in Beijing in 2000, it today has almost 70 located in 15 provinces.
*Zhou Yaxian, Shenguan Holdings
Zhou Yaxian chairs Shenguan Holdings, China’s largest maker of artificial sausage casing made from collagen proteins. (See bio here.) She ranked No. 136 on the 2012 Forbes China Rich List with wealth of $890 million.
*Zhu Chongyun, Marisfrolg
Zhu Chongyun leads Shenzhen Marisfrolg Fashion, a homegrown Chinese women’s brand that is slowly gaining traction around Asia with stores in Singapore, Seoul and Macau among its total of 300 shops. The company employs more than 3,000 people. Zhu ranked No. 349 on the 2012 Forbes China Rich List with wealth of $510 million.
-- with Maggie Chen and Elaine Mao
-- Click here for a look at why young women entrepreneurs face more hurdles than men in China
-- Click here for a list of the 10 richest Chinese on the 2013 Forbes Billionaires List
-- Click here for a list of 30 rising entrepreneurs in China under 30 years of age
-- Click here for a list of 10 newcomers from China on the 2013 Forbes Billionaires List
-- Follow me on Twitter @rflannerychina
|
1261f1c44f84a9cc7aae1782f647d0d7
|
https://www.forbes.com/sites/russellflannery/2013/03/11/forbes-china-30-under-30-meet-30-young-entrepreneural-disruptors-in-china/
|
Forbes China 30 Under 30: Meet 30 Young Entrepreneurial Disruptors In China
|
Forbes China 30 Under 30: Meet 30 Young Entrepreneurial Disruptors In China
Long gone are the days when China’s Internet pioneers such as Jack Ma could be labeled young. The 48-year-old e-commerce titan, who ranks No. 395 with wealth of $3.4 billion on the 2013 Forbes Billionaires List published last week, has already announced plans to step down as CEO of his Alibaba Group and move younger people up the company’s management ranks. (See related post here.)
So who will be one of the next e-commerce giants in China? Or Internet leaders akin to search giant Robin Li?
To provide readers some leads, Forbes China, the licensed Chinese-language edition of Forbes, today unveiled its second “30 Under 30” list of top Chinese entrepreneurs under the age of 30. The report is modeled on Forbes magazine’s “30 Under 30” list published in the United States. This year's members include founders of businesses involved in everything from online advertising to Dropbox-like storage in China. Only one list member is female (see related story here).
Forbes China’s crop is listed in alphabetical order below. Click here for the Chinese version for this list and links to related articles.
1. Chen Di
Age: 26
Founder and CEO
Company: Youmi
Industry: Entertainment
City: Guangzhou, Guangdong Province
Website: www.youmi.net
Click here for more details.
2. Chen Ou
Age: 29
Founder
Company: Jumei.com
Industry: E-commerce
City: Beijing
Website: http://sh.jumei.com/
Click here for more details
3. Mingo Chin
Age: 26
Founder and CEO
Company: Wei Wo
Industry: Internet
City: Guangzhou, Guangdong Province
Website: www.weiwo.com
4. Han Nianshi
Age: 27
Chairman
Company: Suzhou Parsun Power Machine
Industry: Manufacturing
City: Suzhou, Jiangsu Province
Website: www.parsun.com.cn
Click here for more details.
5. Hou Anyang
Age: 28
Founder and Chief Investment Officer
Company: Shenzhen Frontsea Asset Management
Industry: Finance
City: Shenzhen, Guangdong Province
Click here for more details.
6. Huang Kai
Age: 27
Chief Designer
Company: Beijing Yoka Games Culture Development
Industry: Games
City: Beijing
Website: http://www.yokagames.com/
Click here for more details.
7. Ji Yichao
Age: 20
Founder: Peak Labs
Industry: Internet
Click here for more details.
8. Jiang Lei
Age: 29
Founder and CEO
Company: Beijing Tie Xue Science and Technology
Industry: Entertainment
City: Beijing
Website: www.tiexue.net/company/
Click here for more details.
9. Lin Zuoyi
Age: 27
Founder
Company: Alishunlin Furniture
Industry: E-commerce
City: Foshan, Guangdong Province
Website: http://linshimuye.com/
Click here for more details.
10. Liu Chengcheng
Age: 24
Founder and CEO
Company: Beijing 36Kr Media Tech
Industry: Entertainment
City: Beijing
Website: http://www.36kr.com/
Click here for more details.
11. Luo Yi
Age: 29
Founder and President
Company: Hangzhou Xiangshuo Trading
Industry: E-commerce
City: Hangzhou, Zhejiang Province
Website: http://www.beely.com/
Click here for more details.
12. Rick Olson
Age: 29
Founder and CIO
Company: Yunio Inc
Industry: Internet
City: Shanghai
Website: www.yunio.com/
13. Pan Hao
Age: 29
Founder and Executive Director
Company: Seeed Studio
Industry: Technology
City: Shenzhen, Guangdong Province
Website: www.seeedstudio.com/depot/
Click here for more details.
14. Shi Kaiwen
Age: 23
Founder
Company: Jing.fm
Industry: Music
City: Beijing
Website: http://www.jing.fm/
Click here for more details.
15. Shu Yi
Age: 28
Founder and CEO
Company: Beijing i-Media Advertising
Industry: Entertainment
City: Beijing
Website: http://www.imedia-asia.com/content/home.html
Click here for more details.
16.Tang Minhong
Age: 27
Founder
Company: Shanghai Meike Corp.
Industry: Internet
City: Shanghai
17. Xiang Ji
Age: 29
Founder and Vice President
Company: Teeii Clothing (Shanghai) Co.
Industry: E-commerce
City: Shanghai
Website: aiken.nzw.cn
18. Xu Ruiming
Age: 25
Chairman
Company: Shandong Jiker Network Technology
Industry: Internet
City: Linyi, Shandong Province
Website: http://www.159.com/index.html
19. Wang Bin
Age: 28
Founder
Company: Alternative China
Industry: Internet
Website: www.alternativaplatform.com/en/
Click here for more details.
20. Wang Jianjun
Age: 28
Founder
Company: Shenzhen Gourd Sibling Technology
Industry: Technology
City: Shenzhen, Guangdong Province
21. Wang Wenji
Age: 27
Founder and CEO
Company: Rabbibox
Industry: Education
City: Beijing
Website: www.rabbibox.com
22. Wu Zhuhua
Age: 29
Founder and Executive Director
Company: Shanghai PeopleYun Information Technology
Industry: Internet
City: Shanghai
Website: http://peopleyun.com/
23. Yang Xinmiao
Age: 27
Founder and CEO
Company: Blingstorm Entertainment
Industry: Internet
City: Beijing
Website: www.blingstorm.com.cn/
24. Ying Xiangyang
Age: 23
Founder and CEO
Company: Fuzhou YouBox Electronic Technology
Industry: Logistics
City: Fuzhou, Fujian Province
25. Yuan Xu
Age: 28
Founder
Company: Sichuan Xunyou Network Technology
Industry: Games
City: Chengdu, Sichuan Province
Website: http://www.xunyou.com/
Click here for more details.
26. Zhang Lianglun
Age: 26
CEO
Company: Husor Inc
Industry: E-commerce
City: Hangzhou, Zhejiang Province
Website: www.mizhe.com/
Click here for more details.
27. Zhang Xuhao
Age: 27
Founder and CEO
Company: Rajax Holding
Industry: E-commerce
City: Shanghai
Website: ele.me
Click here for more details.
28. Zhang Yan
Age: 29
President
Company: UC Nano
Industry: Electronics
City: Suzhou, Jiangsu Province
Website: http://www.ucnano.com/
Click here for more details.
29. Zhang Yichi
Age: 29
CEO
Company: Greedy Intelligence
Industry: Entertainment
City: Hangzhou, Zhejiang Province
Website: http://www.greedyint.com/
Click here for more details.
30. Zhang Yiming
Age: 29
Founder
Company: Byte Dance
Industry: Science and Technology
City: Beijing
Website: www.bytedance.com
-- Follow me on Twitter @rflannerychina
|
75d840385d38186a81149d059e46232e
|
https://www.forbes.com/sites/russellflannery/2013/04/16/h7n9-bird-flu-illnesses-in-china-climb-by-eight-to-71-cases/
|
H7N9 Bird Flu Illnesses In China Climb By Eight To 71 Cases
|
H7N9 Bird Flu Illnesses In China Climb By Eight To 71 Cases
The number of confirmed H7N9 bird flu cases in China increased by eight to 71 today, according to the official Xinhua news agency. The number of deaths was unchanged at 14.
National emblem of the People's Republic of China (Photo credit: Wikipedia)
The latest illnesses were in the eastern China region where the disease has been concentrated since the outbreak began. Three new cases were reported in Jiangsu province and five in Zhejiang province.
Beijing and major eastern Chinese cities have closed live poultry markets and are taking other precautions to limit the spread of the new virus. Shanghai state media today declared the H7N9 situation “stable.” (See related story here.)
That upbeat assessment will be welcomed by China’s auto industry. One of the country’s most important auto exhibitions this year will be held in Shanghai next week. GM and Ford are among the world’s most important automakers that will be on hand and trying to woo consumers in the world’s biggest auto market.
-- Follow me on Twitter @rflannerychina
|
d4a4bea78d31944d5785763a882e06d0
|
https://www.forbes.com/sites/russellflannery/2013/04/24/h7n9-bird-flu-spreads-beyond-mainland-china-as-taiwan-reports-first-case/
|
H7N9 Bird Flu Spreads Beyond Mainland China As Taiwan Reports First Case
|
H7N9 Bird Flu Spreads Beyond Mainland China As Taiwan Reports First Case
Taiwan today reported its first case of deadly H7N9 bird flu, and said three hospital staff that had contact with the patient had developed symptoms.
The patient is a 53-year-old Taiwanese man who became sick after returning to Taiwan from Jiangsu Province in China, according to Taiwan’s Central News Agency, citing the Central Epidemic Command Center.
An SVG map of China with Jiangsu province highlighted Legend: Image:China map legend.png (Photo... [+] credit: Wikipedia)
Eastern China, where Jiangsu is located, has been the center of the outbreak of the new disease since the first case was reported last month. Taiwan is an important investor in eastern China, and a popular region for Taiwanese living in the mainland.
As the Taiwan H7N9 patient reportedly had no contact with poultry while in the mainland, the case will likely raise new concerns about human transmission of the disease. Chinese state media has said repeatedly there is no evidence of human-to-human transmission. Michael O'Leary, the World Health Organization representative in China, said earlier this week, however, H7N9 "is still an animal virus that occasionally infects humans." Up to half of mainland victims have been reported to have had no contact with poultry.
The number of confirmed H7N9 bird flu cases in China increased by four to 108 yesterday, the official Xinhua news agency reported. The number of dead rose by one to 22.
-- Follow me on Twitter @rflannerychina
|
83b69f86074136d3352d1bc3b4433541
|
https://www.forbes.com/sites/russellflannery/2013/04/28/china-h7n9-bird-flu-cases-keep-rising-mainland-total-reaches-120/
|
China H7N9 Bird Flu Cases Keep Rising, Mainland Total Reaches 120
|
China H7N9 Bird Flu Cases Keep Rising, Mainland Total Reaches 120
The number of confirmed H7N9 bird flu cases in mainland China stood at 120 as of yesterday at 7 p.m. Beijing time, according to China National Radio. The number of dead was 23.
The latest case of the deadly new flu includes the first illness in Hunan Province.
Cases continued to rise after World Health Organization officials this week concluded a trip to China and lauded the country’s efforts to control the deadly new flu.
Consumers have been wary of chicken, even though the government says cooked meat is safe. Yum!, the U.S. operator of the KFC fried chicken chain that has relied on China for much of its growth in recent years, has been hit with a decline in KFC sales in the country.
The disease has continued to spread from the eastern China area where it was first discovered. Taiwan also reported its first case this week. China’s government claims sovereignty over Taiwan, and mainland media have combined Taiwan with the mainland’s H7N9 total number of cases.
-- Follow me on Twitter @rflannerychina
|
811547ce792e800aaa04cc2b98d53d9e
|
https://www.forbes.com/sites/russellflannery/2013/06/24/china-stocks-dive-to-new-six-month-lows-on-worries-tighter-credit-will-hurt-profits-growth/
|
China Stocks Dive To New Six-Month Lows On Worries Tighter Credit Will Hurt Profits, Growth
|
China Stocks Dive To New Six-Month Lows On Worries Tighter Credit Will Hurt Profits, Growth
China stocks plunged to fresh six-month lows today on worries that a recent rise in short-term interest rates will increase liquidity risks in the banking system, hurt financial industry profits, and ultimately slow the country’s economic growth.
The main index of the Shanghai Stock Exchange lost 5.3% to close at 1963.24, its lowest finish since last December. An index of banking shares tanked 7.4%, led by China Minsheng Banking , which fell by its 10% daily limit. ICBC , the bank that topped this year’s Forbes Global 2000 list of the world’s largest companies, lost 3%. Property developers whose business would be hurt by higher interest rates and tighter bank credit also dropped.
China’s monetary authorities have let interbank industry rates climb this month in what Fitch said last Friday was an effort to squeeze shadow lending. Traders looking for relief today received a mixed message when the People’s Bank of China , China’s central bank, said in a statement posted at its website today that liquidity levels in the banking system were “reasonable.” (See link here.) The country's overnight repo rate later closed down more than two percentage points to 6.64%, according to a Reuters report, suggesting eased funding pressure.
With worries about slower economic growth rife, shares in retailers also fell. Among them, Suning Commercial, China's No. 1 electrical appliance retailer controlled by billionaire Zhang Jindong, fell 7%.
Bank woes also hurt Hong Kong stocks today. Four of the five most actively traded shares were banks, and they all declined. Among them, HSBC lost 1.7%.
-- Follow me on Twitter @rflannerychina
|
25d7de9d678d9ed57c4d6ee11a4aa0ec
|
https://www.forbes.com/sites/russellflannery/2013/06/25/chinas-billionaire-ranks-shrink-as-stock-plunge-hits-the-rich/
|
China's Billionaire Ranks Shrink As Stock Plunge Hits The Rich
|
China's Billionaire Ranks Shrink As Stock Plunge Hits The Rich
China in the past decade has been one of the world’s largest sources of new billionaires. On the 2013 Forbes Billionaires List published in March, it had 122, second only to the United States. Yet the plunge in stock prices in the country in recent days amid worries about bank liquidity and the economic outlook has quickly shifted that growth in billionaires into reverse.
Underscoring the trend: seven individuals indentified by Forbes as new billionaires since the end of May have already seen their wealth fall below that bar: Zhou Hongyi, Xu Mingbo, Fan Xiulian, Yan Xijun, Xue Xiangdong, Liu Zhenfeng and Liu Zhenguo.
Other entrepreneurs still safely in the billionaire ranks have had their wealth shrink as shares in their key listed business fall. Shares in China Minsheng Banking , whose largest investors including billionaires Shu Yuzhu and Lu Yonghao, plunged 10% yesterday; real estate billionaire Lu Zhiqiang’s Shenzhen-listed Oceanwide Real Estate Group also fell 10% yesterday, before losing another 4% today. Among U.S.-traded shares in companies led by Chinese billionaires, Robin Li’s Internet search business Baidu lost 3.8% on Monday.
At a tough time for the rich, China’s wealthiest man Zong Qinghou has perhaps been relatively lucky in that he hasn’t had to endure the daily ticks of falling stock prices. His main business, beverage giant Wahaha, is unlisted.
-- with Maggie Chen
-- Follow me on Twitter
|
4fe38e04de20f1ddcc98d11866e183e4
|
https://www.forbes.com/sites/russellflannery/2013/07/02/china-minsheng-bankings-hong-qi-tops-forbes-chinas-best-ceo-list/
|
China Minsheng Banking's Hong Qi Tops Forbes China's Best CEOs List
|
China Minsheng Banking's Hong Qi Tops Forbes China's Best CEOs List
Hong Qi of China Minsheng Banking topped a new list of China’s best business leaders announced today by Forbes China, the licensed Chinese-language edition of Forbes.
Hong, as the bank’s president, led the company to a 34% rise in net profit last year. Minsheng is China’s largest non-government controlled bank. Hong, who holds a doctorate in economics from Renmin University, is also the bank’s vice chairman.
Rounding out the top five on the new Forbes China list are Tsai Eng-Meng of snack food maker Want Want China , Dong Mingzhu of air conditioning manufacturer Gree Electric, Qi Yumin of automaker Briillance China and Ma Huateng of Internet giant Tencent Holdings .
Forbes China surveyed companies that are publicly traded in the mainland, Hong Kong, the U.S. and elsewhere that do most of their business in mainland China compiling the list.
Click here for the full Forbes China's best CEOs list in English; click here for a link to ForbesChina.com
Last year’s No. 1, Robin Li of Baidu, dropped to No. 40 this year amid slower growth in profits and a fall in the company's stock price.
In compiling the list, Forbes China reviewed three years of figures. In the past month, shares of China Minsheng and other Chinese banks have been hit hard by a rise in overnight interest rates amid government moves to tighten shadow lending. Some 13 members of the best CEOs list are also members of the 2012 Forbes China Rich List.
-- Follow me on Twitter @rflannerychina
|
a68d642d6208a70fc58cfefb7b1eedfb
|
https://www.forbes.com/sites/russellflannery/2013/07/04/mainland-chinas-youngest-ceos-and-their-compensation/
|
Mainland China's Youngest CEOs And Their Compensation
|
Mainland China's Youngest CEOs And Their Compensation
Whether it involves business, sports or another field, many of us are curious about rising stars. Forbes China, the licensed Chinese-language edition of Forbes, unveiled its annual list of China's best CEOs this week (see details here and here), and as part of that report, identified mainland China’s youngest CEOs at listed companies. These 29 individuals are the business leaders from their survey below 40 years of age:
(Name, age, compensation, listed business)
- Ke Jixiong, 29, $171,000, Youyuan International Holdings
- Wang Yifeng, 29, $160,000, Zhejiang Century Huatong Automotive
- Yao Shuobin, 30, $143,000, Shanghai Yaoji Playing Cards
- Gao Wangwei, 32, $223,000, Zhejiang Hailide New Material
- Tan Wen, 32, $220,000, Jian ePayment Systems
- Xu Tuanhua, 34, $290,000, Guangdong Delian Group
- Zhang Bin, 34, $270,000, China Shanshui Cement Group
- Xu Zhihua, 34, $248,000, Peak Sports Products
- Zhu Xiaodong, 34, $195,000, Ningbo Yunsheng
- Cao Jianwei, 35, $204,000, Zhejiang Jingsheng Mechanical and Electrical
- Hoi Wa Fong, 35, $178,000, Powerlong Real Estate
- Wu Xianliang, 35, $161,000, Suzhou Kingswood Printing Ink
- Jin Zhigang, 36, $559,000, Kaisa Group Holdings
- Wang Aiming, 36, $147,000, Meidu Holding
- Wang Ping, 37, $195,000, Lianhe Chemical Technology
- Li Jun, 37, $163,000, CCID Consulting
- Zhou Xinzhong, 38, $497,000, Zhejiang Baoxiniao Garment
- Xu Weiwei, 38, $456,000, Shanghai Shimao
- Lin Feng, 38, $446,000, Cifi Holdings
- Kang Jie, 38, $433,000, Xiao Nan Guo Restaurants
- Jia Xiaoping, 38, $272,000, Glodon Software
- Lu Zhenyu, 38, $187,000, Yonggao
- Shen Li, 39, $480,000, Credit China Holdings
- Xing Wei, 39, $288,000, Everyday Network
- Jackson Chim, 39, $199,000, CECEP COSTIN New Materials Group
- Ma Yin, 39, $195,000, Yeland Group
- Fang Hanlin, 39, $191,000, Hundsun Technologies
- Liu Luyuan, 39, $168,000, NetDragon Websoft
- Yao Jinlong, 39, $147,000, Shanxi Meijin Energy
-- with Cherish Xiong
-- Follow me on Twitter @rflannerychina
|
402bf2e0eb618c770960d8e57892d614
|
https://www.forbes.com/sites/russellflannery/2013/07/15/baidu-to-buy-netdragons-mobile-apps-subsidiary-91-wireless-websoft-for-1-9-bln/
|
Baidu To Buy NetDragon's Mobile Apps Subsidiary 91 Wireless Websoft For $1.9 Bln
|
Baidu To Buy NetDragon's Mobile Apps Subsidiary 91 Wireless Websoft For $1.9 Bln
Baidu, China’s biggest search engine, said today it has signed a memorandum of understanding to acquire 100% of mobile app distribution company 91 Wireless Websoft.
The company plans to purchase a 57% stake in 91 Wireless Websoft from Hong Kong-listed NetDragon, and buy the remainder from other shareholders based on the same terms. The total valuation is $1.9 billion, according to a press release.
Baidu in May stepped up its push to become a powerhouse in another growing Internet busines with the $370 million acquisition of the online video service of PPS.
That acquisition, when combined with Baidu’s existing video platform iQiyi, will create the biggest online video service measured by the number of mobile users and video viewing time, Baidu said in a statement. PPS will be a sub-brand of iQiyi.
Baidu Chairman Robin Li ranked No. 172 on the 2013 Forbes Billionaires List with wealth of $6.9 billion.
-- Follow me on Twitter @rflannerychina
|
426dcc461ad224be666a77502c2ab727
|
https://www.forbes.com/sites/russellflannery/2013/07/15/shares-in-chinese-entrepreneurs-eye-care-chain-aier-climb-on-profit-outlook/
|
Shares In Chinese Entrepreneur's Eye-Care Chain Aier Climb On Profit Outlook
|
Shares In Chinese Entrepreneur's Eye-Care Chain Aier Climb On Profit Outlook
Shares in Aier Eye Hospital Group of China climbed at the Shenzhen Stock Exchange on Monday after the company saidover the weekend net profit in the first six months of 2013 was likely to rise 10-15% from 91.6 million yuan, or $15 million, a year earlier.
The company cited increases in eye care spending in China, expansion of its service network and tighter management efficiency for the rise.
Aier’s chairman Chen Bang ranked No. 300 on 2012 China Rich List with wealth of $565 million.
– With Maggie Chen
-- Follow me on Twitter @rflannerychina
|
07dd45250d0c2326b1b4281ce5110bae
|
https://www.forbes.com/sites/russellflannery/2013/10/06/an-eye-for-opportunity-lifts-chinese-heathcare-entrepreneur-into-the-worlds-billionaire-ranks/
|
An Eye For Opportunity Lifts Chinese Heathcare Entrepreneur Into The World's Billionaire Ranks
|
An Eye For Opportunity Lifts Chinese Heathcare Entrepreneur Into The World's Billionaire Ranks
A big rally in the stock price of Chinese eyecare chain Aier Eye Hospital Group has lifted the company’s chairman Chen Bang into the ranks of the world’s billionaires.
Aier’s Shenzhen-traded shares closed up 2.32 yuan, or 8%, to a record 31.07 yuan last Monday ahead of a week-long holiday, putting the value of his holdings in the company at the equivalent of $1 billion. Chen ranked No. 300 on the 2012 Forbes China Rich List published last October with wealth of $565 million.
The new billionaire told me in an interview back in 2005 that he came up with the idea to start an eye care chain after learning that China has plenty of potential customers and eye doctors, but that the country’s state-led hospital system wasn’t putting the two together. Click here for our profile in Forbes Asia in 2005.
China boasted 122 members of the 2013 Forbes Billionaires List published in March, second only to the United States. The country has been the world’s fastest-growing source of new billionaires in the past decade amid brisk economic growth. Luo Fei, the chairman of a Chinese infant formula company fine two months ago for price fixing, also joined the world’s billionaire ranks this week (see story here).
Aier shares last changed hands at a pricey 66 times earnings, according to an estimate by China’s Hexun financial news website, making it hard to say how long Chen will remain in exclusive billionaire space. Aier shares have gained more than 80% in the past year.
Forbes reported last month that Chinese real estate tycoon Wang Jianlin, who also owns of the AMC movie chain in the U.S., has surpassed beverage entrepreneur Zong Qinghou to become the country’s richest man with an estimated fortune worth $14 billion.
We'll be taking the wraps off of the 2013 edition of the Forbes China Rich List later this month. Follow us here at Forbes.com for all of the news and analysis.
-- with Maggie Chen
-- Follow me on Twitter @rflannerychina
|
c16f5db00ac8f289486cc5cbbdf83d61
|
https://www.forbes.com/sites/russellflannery/2014/01/06/shares-in-china-state-controlled-railroad-builder-fall-4-after-presidents-mysterious-death/
|
Shares In China State-Controlled Railroad Builder Fall 4% After President's Mysterious Death
|
Shares In China State-Controlled Railroad Builder Fall 4% After President's Mysterious Death
Shares in China 's No. 2 railway builder China Railway Group fell 4% at the Hong Kong Stock Exchange on Monday after the company said its president Bai Zhongren passed away “due to an accident.”
No other details were offered by the government-controlled company. Media reports said Bai jumped to his death from the building he lives in.
China’s railway builders have created the world’s largest nation network of high-speed trains, but their image has been tarnished by corruption. Liu Zhijun, a former railway minister, was convicted last year of taking bribes amid a government crackdown on graft. Prosecutors investigated 20,442 “major and important” corruption cases in 2012, an increase from 18,464 in 2011, the state-published China Daily reported yesterday. Some 36,907 people were sentenced for embezzlement and bribery in the first 11 months of 2013, the paper said.
China Railway Chairman Li Changjin has assumed the post of president after Bai’s death, the company said. The company's shares have lost a fifth of their value in the past year.
-- Follow me on Twitter @rflannerychina
|
0821f4ed2fe43ec1499cef7622d0aeb0
|
https://www.forbes.com/sites/russellflannery/2014/01/15/sequoias-neil-shen-tops-forbes-china-ranking-of-best-venture-capital-investors/
|
Sequoia's Neil Shen Tops Forbes China Ranking Of Best Venture Capital Investors
|
Sequoia's Neil Shen Tops Forbes China Ranking Of Best Venture Capital Investors
Neil Shen, a founding partner of Sequoia Capital China, topped a recent list of China’s best venture capital investors compiled by Forbes China, the licensed Chinese-language edition of Forbes magazine.
The list is modeled on the “Midas List” of successful VC investors in the U.S. published annually by Forbes magazine. It takes into account returns earned for investors on exits dating from July 2008. Overseas investments were excluded in the calculation. Forbes China’s list was unveiled in December.
Shen’s best-performing investments of late include Internet firm Qihoo, whose U.S.-traded shares have gained almost threefold in the past year, and e-commerce firm VIPshop, whose stock has increased more than four times in the past 12 months.
Here’s the full list in English below. (Click here for Forbes China's full report in Chinese.)
1. Neil Shen, Founding and Managing Partner, Sequoia Capital China
2. Feng Tao, Founder and CEO, NewMargin Ventures
3. Andrew Y. Yan, Managing Partner, SAIF Partners
4. Kathy Xu, Founder, Capital Today
5. Suyang Zhang, General Partner, IDG Capital Partners
6. Haitao Jin, Chairman, SCGC
7. Quan Zhou, Managing Director, IDG Capital Partners
8. Hugo Shong, General Partner, IDG Capital Partners
9. Vincent Chan, CEO, Spring Capital
10. Jixun Foo, Managing Partner, GGV Capital
11. Tina Ju, Managing Partner & Managing Director and General Partner, KPCB China & TDF Capital
12. Chauncey Shey, Executive Managing Partner, SBCVC
13. Jeff Jie-Ping Yao, Founding and Managing Partner, Prax Capital
14. Chen Wei, Chairman and Founding Partner, Oriental Fortune Capital
15. Kevin Wang, Founder and President, Envision Capital
16. Roman Shaw, Managing Partner, DT Capital Partners
17. Houjun Lv, CEO, GP Capital
18. Richard Liu, Managing Director, Morningside Ventures Capital
19. Weihe Zheng, Chairman of the Board and Founding Partner, Cowin Capital
20. Tim Gong, VC, SIG Asia Investment
21. Bing Xiao, Managing Partner President, Fortune VC
22. Lip-Bu Tan, Chairman, Walden International
23. Daniel D. Yang, Partner, SAIF Partners
24. Gabriel Li, Managing Director, Orchid Asia
25. Chen Hao, Managing Director and CIO, Legend Capital
26. Forrest Zhong, General Partner, South River Capital Partners
27. Huang Yan, Founding Partner, CDH Venture
28. Luo Fei, General Manager, Green Pine Capital Partners
29. Fumin Zhuo, Partners, GGV Capital
30. Mark Qiu, CEO and Managing Director, China Renaissance Capital Investment
31. Hurst Lin, General Partner, DCM
32. Stanley Xiao, Chairman, CDF-Capital
33. David Zhang, Founding Managing Partner, Matrix Partners China
34. Kui Zhou, Partner, Sequoia Capital China
35. Sean He, Senior Partner, Ares Management
36. Jenny Lee, Managing Partner, GGV Capital
37. Feng Deng, Founding and Managing Director, Northern Light Venture Capital
38. Peimin Zong, Chairman, Sinowisdom Capital
39. Liu Erhai, Managing Director, Legend Capital
40. Don Ye, Founder and Managing Partner, Tsing Capital
41. York Chen, Founding Managing Partner, iD TechVentures Inc.
42. JP Gan, Managing Partner, Qiming Venture Partner
43. Steven Ji, Partner, Sequoia Capital China
44. Boquan He, Founder, Nowadays Investment
45. Fei Yang, General Partner, IDG Capital Partners
46. Thomas Tsao, Managing Partner, Gobi Partners
47. Ruby Lu, General Partner, DCM
48. Zhang Wei, Managing Partner, Chairman, Co-stone Capital
49. Fu Zhekuan, formally of Fortune VC, Fortune VC
50. Sun Jiping, Investment Manager, China Venture Capital
-- With Cherish Xiong and Yu Lu
-- Follow me on Twitter @rflannerychina
|
4991d81e7e85415af3f61384015e72d9
|
https://www.forbes.com/sites/russellflannery/2014/03/03/2014-forbes-billionaires-list-growing-chinas-10-richest/
|
2014 Forbes Billionaires List: Growing China's 10 Richest
|
2014 Forbes Billionaires List: Growing China's 10 Richest
There no shortage of skeptics about the economic outlook for China. Yet buoyed by some of the world’s best economic growth, mainland China boasts a record 152 members of the 2014 edition of the annual Forbes Billionaires List. That’s an increase from 122 last year and second only to 492 members from the United States.
Which entrepreneurs are leading the pack from the mainland? Here’s an introduction to this year’s top 10:
1. Wang Jianlin, No.64, $15.1 billion
The richest man on mainland China, Wang Jianlin, owns 75 department stores, 85 shopping plazas and 51 five star hotels. After buying U.S. movie chain AMC in 2012, Wang listed it on the New York Stock Exchange in December. He flew in celebrities Leonardo DiCaprio and John Travolta to help launch an $8 billion mini-Hollywood in the coastal city of Qingdao in September 2013. Wang, born in Sichuan Province in 1954 just after the Communist revolution, spent the first few decades of his life in anything but luxury. In 1970, Wang entered the military, where he remained until 1986 when he took a city government job in Dalian in Liaoning Province. Wang became chairman of Wanda, which was government-run, in 1989 at age 35. (Click here for a related story.)
2. Ma Huateng, No. 80, $13.4 billion
Ma is the founder and CEO of Tencent Holdings , China's largest publicly traded Internet company measured by market capitalization. Ma has ascended into the No. 2 spot among mainland China's wealthiest on the strength of Tencent's share price, which has doubled in the past year. The company's main website qq.com regularly ranks among the world's 10 most popular. Tencent makes most of its money from online games, but pushed into search in September 2013 when it paid $448 million for a 36% stake in Sogou of China. It's also looking to boost its e-commerce revenues. A big star of the past year: its WeChat mobile communication service.
3. Robin Li, No.91, $12.1 billion
Robin Li is the CEO of Nasdaq-listed Baidu, China's No.1 online search company, and ranks No. 3 among mainland Chinese on this year's billionaires list. Shares of Baidu have increased over the past year on investor enthusiasm for acquisitions that have expanded the business beyond desktop search. Last May, Baidu paid $370 million for the online video business of PPS. In August, it bought app store 91 Wireless for $1.9 billion; and in the same month, it agreed to purchase 59% of group-buying website Nuomi for $160 million in cash.. He has a bachelor's degree in information science from Peking University in China and a master's degree in computer science from the State University of New York at Buffalo.
4. Zong Qinghou, No.94, $11.6 billion
Zong Qinghou chairs Wahaha, China's largest homegrown beverage company. Its main sellers: bottled water, teas and other ready-to-drink concoctions. Zong was the richest man last year among mainland Chinese. His fortune stayed flat amid a lack of attention-grabbing new drinks. Zong sustained injuries to tendons in two fingers when he was attacked in August 2013 by a man with a knife who was disgruntled after Zong declined to offer him a job. He was back in the office a few days later. Daughter Kelly is Zong's heir apparent.
5. Li Hejun, No.117, $10.3 billion
Li is the highest-ranking debut from China on this year's billionaires list and chairs Hanergy Holding Group. Through a series of acquisitions, the company in the past year and a half has become one of the world's largest producers of thin-film solar panels and equipment. He also owns one of the world's largest privately held hydro-power plants, located in western China.
6. Jack Ma, No.122, $10 billion
Jack Ma is the main founder of Alibaba Group, China's largest e-commerce business whose IPO may be one of the world's largest this year if it finally happens. After failing to win Hong Kong regulatory support for a listing under its current shareholder structure last year, the company held off on an expected IPO that could value it at as much as $150 billion. Besides Ma and vice chairman Joseph Tsai -- both members of this year's Forbes Billionaires list-- key investors include Yahoo and Japan's Softbank.
7. He Xiangjian, No.190, $7.1 billion
He Xiangjian is the founder of Midea Group. The company's roots go back to 1968 when He led 23 local residents in the village of Beijiao in setting up a bottle lid workshop. In 1980, they started making fans, an entry into the household appliance market that put Midea on course to become one of the industry's largest producers worldwide. After a restructuring, Midea Group began trading at the Shenzhen Stock Exchange on September 18 last year, and the shares have slipped on worries about growth, though net income in the three quarters to September rose. Leader He is an active philanthropist and enjoys golf.
8. Wei Jianjun, No.196, $6.9 billion
China's emergence as the world's largest auto market has created a fast lane for ambitious entrepreneurs. The richest among them is Wei, who chairs Great Wall Motor, one of the largest non-state businesses and a big maker of SUVs. Wei runs his empire from Baoding, south of Beijing, in Hebei Province--not exactly a Detroit of sector concentration. Sales at the company in the first three quarters of last year rose by nearly a third from a year earlier to $9.3 billion. For all of last year, it produced 127,141 pick-up trucks, 421,593 SUVs and 208,785 sedans. Great Wall was a member of Forbes Asia's Fab 50 list of the region's best large companies last year.
9. Yang Huiyan, No.196, $6.9 billion
Publicity-shy Yang took over her father's stake in Country Garden before the company's IPO in 2007, and today ranks as China's richest woman. Strong residential property sales have lifted Country Garden's sales and shares in the past year. The company in February announced plans to enter the Australian market by buying a development site in Sydney for $65 million.
10. Chan Laiwa, No.234, $6 billion
Chan chairs the Fu Wah International Group, one of Beijing's largest landlords. She invests in luxury hotels, clubhouses, apartments and office buildings. Properties include Regent Beijing, Legendale Hotel Beijing, Park Plaza Beijing Wangfujing, Jinbao Tower, the Hong Kong Jockey Club Beijing Clubhouse, and the Chang’An Club.
--wth Mao Yanjie, Cherish Xiong, Yu Lu and Hilary Flannery
-- Follow me on Twitter @rflannerychina
|
d888a3850c9d5e80c3429f7329dc5f11
|
https://www.forbes.com/sites/russellflannery/2014/08/02/mcdonalds-boosts-china-orders-at-brazils-marfrig-local-billionaires-sunner/
|
McDonald's Boosts China Orders At Brazil's Marfrig, Local Billionaire's Sunner
|
McDonald's Boosts China Orders At Brazil's Marfrig, Local Billionaire's Sunner
McDonald’s, hit by a wave of bad publicity and product shortages in China following a reported food safety scandal at a key supplier, has increased its orders from two other companies, the government-published China Daily reported today, citing McDonald’s China communications director Regina Hui.
The two are Fujian Sunner Development, a meat supplier controlled by the billionaire family of Chinese entrepreneur Fu Guangming, and McKey Food Services, a unit of U.S.-based Keystone Foods.
Keystone, in turn, is owned by Marfrig Global Foods of Brazil, according to Marfrig’s website.
McDonald’s announced this week it would halt purchases in China from Illinois-headquartered OSI after a reported food safety scandal affected the restaurant chain’s operations in mainland China, Hong Kong and Japan.
Visitors to McDonald’s China Chinese-language website today (click here) are greeted a series of formal statements about moves to sever ties with OSI. McDonald’s New York-traded shares fell last week as the damage to the company’s business in mainland China became apparent and fallout spread to Hong Kong and Japan. McDonald’s reportedly operates more than 2,000 restaurants in China.
Yum!, the operator of KFC and Pizza Hut restaurants who had also sourced meat from OSI in China, has cut its ties with OSI globally. Yum!'s shares fell in New York last Thursday after it said the reported scandal had had a "significant, negative impact" on same-store sales in China, a key market.
The alleged safety problem came to light last month after an undercover reporter for a Shanghai TV station posing as a worker at OSI unit Shanghai Husi filmed colleagues who combined expired meat with fresh cuts. Five senior Husi executives has since been said to be detained. Sales of out-of-date meat were reported to have gone on for years.
-- Follow me on Twitter @rflannerychina
|
7c7b080dcd11673287af8947c5c2ac37
|
https://www.forbes.com/sites/russellflannery/2014/11/19/china-internet-titans-eye-shares-in-huayi-as-web-movie-industries-entwine/
|
China Internet Titans Eye Shares In Huayi As Web-Movie Industries Entwine
|
China Internet Titans Eye Shares In Huayi As Web-Movie Industries Entwine
Shares in Chinese movie studio Huayi Brothers Media rose by their 10% daily limit at the Shenzhen Stock Exchange yesterday after the company said it planned to raise $588 million in a stock sale to investors including Internet giant Tencent and a company backed by e-commerce billionaire Jack Ma, China’s richest man.
According to a company statement, Huayi plans to issue near 145 million new shares to four institutional investors to repay debt and improve it competitiveness. Hangzhou Alibaba Venture Capital, 80% owned by Ma and 20% held by Alibaba billionaire Simon Xie, and Tencent was expected to purchase 61.8 million (or 4.5% after offering) and 51.6 million new shares. Ping An Asset Management and China Securities will purchase the remaining 27.4 million and 4.3 million new shares. Regulatory approval is required.
Ma personally held an additional 49.9 million shares or 4.03% before the offering. Tencent owned 4.9% of Huayi before the offering and the number will increase to 8.08% after this offering.
Huayi also said it signed a strategic cooperation agreement with Tencent and Alibaba China. Huayi will work to develop movies based on Tencent's online games and literature, and Alibaba will help Huayi to expand e-commerce. As part of the agreement, Huayi will allow Tencent and Alibaba to invest in into up to 10% of its own new films. According to the statement, Huayi will co-produce five movies together with each of Tencent and Alibaba in next three years.
Jack Ma and Ma Huateng ranked No.1 and No.3 on the 2014 Forbes China Rich list with wealth of $19.5 billionaire and $14.4 billion. Wang Zhongjun, chairman of Huayi Brothers Media ranked No. 268 with $910 million.
-- with Maggie Chen
--Follow me on Twitter @rflannerychina
|
fc8b4bbbfe62fa53319e9256c02ed4ab
|
https://www.forbes.com/sites/russellflannery/2015/01/04/youngest-among-36-dead-in-shanghai-bund-stampede-was-age-12-list/
|
Youngest Among 36 Dead In Shanghai Bund Stampede Was Age 12 (List)
|
Youngest Among 36 Dead In Shanghai Bund Stampede Was Age 12 (List)
Shanghai officials have reportedly identified all of the 36 dead in the city’s New Year’s Eve stampede tragedy in the Bund tourist area, and all but two were under the age of 30. The youngest was 12 and the oldest was 37. Mostly, they were young women. Officials here in the key Chinese international business hub are facing criticism for crowd control that evening, as well as reportedly working in the aftermath to censor press coverage and intimidate those that spoke out online about the government’s handling of the event. Here’s the list of victims published on the China News website.
1. Li Xiang, 25, Male
2. Zhou Xiaoyang, 23, Male
3. Mou Binbin, 20, Male
4. Chen Changsheng, 17, Male
5. Du Shuanghua, 37, Male
6. Gu Yinli, 25, Female
7. Mao Yongjie, 12, Male
8. Mei Hechun, 19, Male
9. Pan Haiqin, 25, Female
10. Yang Shengyong, 25, Male
11. Du Yijun, 21, Female
12. Feng Xueqian, 22, Female
13. Liu Houjun, 28, Male
14. Wu Cuixia, 24, Female
15. Pan Ping, 22, Female
16. Zhou Yian, 23, Female
17. Yuan Lila, 25, Female
18. Tan Wei, 21, Female
19. Xing Zhengqiao, 19, Female
20. Meng Yan, 21, Female
21. Luo Dali, 23, Female
22. Wu Jing, 34, Male
23. Zhan Yang, 23, Female
24. Li Na, 23, Female
25. Zhang Yan, 21, Female
26. Yang Chunyu, 21, Female
27. Yang Jiafei, 26, Female
28. Zong Chengwei, 19, Male
29. Wu Jiao, 25, Female
30. Xie Luyan, 21, Female
31. Yu Miao, 19, Female
32. Qi Xiaoyan, 21, Female
33. Xu Xiaojun, 21, Female
34. Liang Liang, 26, Female
35. Guan Jinglei, 21, Female
36. Liu Yajie, 18, Female
-- Follow me on Twitter @rflannerychina
|
53b9b817435d84bffcb17da58b98d23f
|
https://www.forbes.com/sites/russellflannery/2015/02/08/taiwans-richest-man-faces-tougher-times-in-mainland-china/
|
Taiwan's Richest Man Faces Tougher Times In Mainland China
|
Taiwan's Richest Man Faces Tougher Times In Mainland China
Want Want China Holdings, the Chinese snack food and beverage flagship controlled by Taiwan’s richest man Tsai Eng-Meng, warned shareholders today of declines in sales and profits during last year.
After growing for about 20% annually in 2008-13, sales and profits for 2014 “may record a low single-digit percentage decrease due mainly to the weakness in the overall consumer market” in mainland China, the Hong Kong-listed company said in a statement. It also blamed shorter periods of sales in the accounting year.
Profit, meanwhile, “may record a mid to high single-digit percentage decrease due mainly to the high cost of milk powder used in the production of dairy products in 2014.” That expected fall in sales wouldn't help earnings, either.
Weaker economic activity in China was apparent in a January trade figures announced by the government yesterday. Imports dropped 19.7% in January from a year earlier. Exports fell 3.2%.
Want Want, after first honing its production and sales skills in Taiwan's Chinese-style snack food market, expanded into mainland China in the 1980s and has mostly thrived since.
Tsai’s fortune is currently worth $9.6 billion, according to the Forbes real-time billionaire’s list.
Want Want’s China rivals include Coca-Cola, Pepsi and Unilever.
--Follow me on Twitter @rflannerychina
|
c07bd7948511a1a830da7557d28b8167
|
https://www.forbes.com/sites/russellflannery/2015/05/19/china-billionaire-wants-to-help-drones-lift/
|
China Billionaire Wants To Help Drones' Lift
|
China Billionaire Wants To Help Drones' Lift
China’s once obscure brands have been making inroads around the world in the past several years. When it comes to PCs, there’s Lenovo. In smartphones, it also has Huawei or, if you live in Asia, Xiaomi.
And then there’s the new but fast-growing market for drones. China’s champ is easily DJI, the world-leading supplier of consumer drones that’s won a big following among hobbyists. DJI made headlines in January after one of its flying robots crashed onto the White House lawn by accident, part of a recent string of embarrassments for the U.S. Secret Service.
Another Chinese company looking to profit in the drone business is taking a different tack by focusing on components. Chongqing Zongshen Power said this month that an engine it supplied for flight by a “Rainbow 3” drone developed by the government-run China Academy of Aerospace Aerodynamics passed a key test on April 29. As a result, Zongshen, a supplier of motors for scooters and motorcycles, plans to make a push into the aviation business. Zongshen developed the engine with the Tianjin Internal Combustion Engine Research Institute.
China sales alone look promising for Zongshen. The country’s market for drones – including for commercial and military uses -- will reach a cumulative 300 billion yuan, or $48.4 billion in the next decade, and sales of engines will account for a third of it, according to a report this month on the People’s Daily website citing China Galaxy Securities analyst Chen Xianfan. Most of the engines are imported, leaving plenty of room for import substitution, the report said, citing Zongshen.
Zongshen also recently signed agreements with Qingdao Hong Baichuan Metal Precision Products to boost its drone (also called unmanned ariel vehicle, or UAV) business. Zongshen, for instance, will invest 33.5 million yuan, or $5.4 million, for a 67% stake in a new company that will make drones and parts. Earlier, Zongshen invested 70 million yuan, or $11.3 million, into Hong Baichuan for a 28% ownership stake.
Coming amid a bull market in China shares, Zongshen’s Shenzhen-listed shares have been flying high with a nearly 500% rise in the past year in part on its drone efforts. Zongshan’s billionaire chairman Zuo Zongshan shares his fortune with his family.
--with Maggie Chen
--Follow me on Twitter @rflannerychina
|
498c3a123fc9968c28c859933bc83a83
|
https://www.forbes.com/sites/russellflannery/2015/06/24/fosuns-tsai-family-tops-new-forbes-taiwan-rich-list/
|
Slowing China Growth Saps Fortunes Of Taiwan's Richest Entrepreneurs
|
Slowing China Growth Saps Fortunes Of Taiwan's Richest Entrepreneurs
Rising competition for lessening demand in mainland China has weighed on many of Taiwan's largest businesses in the past year. As a group, Taiwan's 50 Richest have flatlined accordingly: Their overall wealth of $117.1 billion was $300 million short of last year. The entrance fee is up to $890 million (from $750 million last year), but 23 tycoons are poorer than they were a year ago, and an additional 8 slipped off the list altogether.
Click here for the complete Taiwan Rich List
The year's biggest loser was Tsai Eng-Meng (No. 2), chairman of beverage and snack food behemoth Want Want China . Tsai's sum dropped $1.3 billion as he relinquished a three-year hold as Taiwan's richest person. Want Want's first slip in sales since its 2008 IPO has been largely attributed to China's higher costs in dairy products combined with weaker consumer spending. The list's next-biggest fall was likewise from Taiwan's fast-food royalty: The Wei brothers (No. 3) fell $1.1 billion with their instant noodle and beverage company, Tingyi, hit by slower mainland demand. Net sales fell in 2014 for the first time since 1998.
Yet this year's drops were not just food-related--they have taken a toll across industries. In often-robust technology, spousal team Cher Wang and Wenchi Chen (No. 37), backers of pioneer mobile phone maker HTC , were down $410 million as their smartphones failed to win over customers in a fiercely competitive market. At a shareholder meeting in June, Wang, who took back the CEO reins in March, apologized for disappointing products.
The finance sector enjoyed some good news as attested by the Tsai clan led by Daniel and Richard Tsai (No. 1), whose Fubon Financial shares shot them up 45% to the top spot on the list thanks to returns from insurance units. This Tsai family is technically new, taking the spot of their late father, Tsai Wan-Tsai (d. 2014).
A dozen others got richer, and another seven made their debuts, including retailer Wang Ren-sheng (No. 28) and art collector Pierre Chen (No. 14). Sometimes the secret was location, location, location: Tsai Yung-Lung's (No. 18) Gem-Year Industrial, one of Asia's largest suppliers of bolts, screws, nuts and fasteners, happens to be listed on the Shanghai exchange. It tripled amid China's big stock boom, making Tsai the list's biggest winner--up 96%.
Among this year's departures is Formosa Plastics Group cofounder Wang Yung-Tsai, who died last November and whose more than $3 billion of stock holdings hasn't been divvied up as of press time.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.