Tuesday 25 October 2011

Gupta the next Rajaratnam?

Next big hedge fund manager to be convicted for insider trading(maybe). The SEC is working alongside the FBI to find these powerful businessmen who are doing side-deals and informing each other of potential opportunities. With the new technology available, the SEC is making it harder for such transactions to occur, however it also increases the flow of information that the traders are receiving, expanding their market knowledge into possible illegal grounds. However, they could make the case that any information that came into their hands was acquired by the internet so it was already public knowledge and therefore could not be pursued in court.
I'm interested in seeing the direction into which this case goes.

Monday 24 October 2011

Netflix Shares Drop

Netflix shares dropped a total of 70% from its high of 300 in July. Although PE is now at around 30, it was a lot higher a few months ago. The strange thing is that save for the shocking increase in prices announced by Hastings  in September, the overall stock price has been slowly declining since the summer. What is the cause for this? Was it the anticipation of Hastings' intentions to shift the business towards online streaming rather than physical products? Another announcement that has hurt share price is the expansion of Netflix into Europe with sincere warnings issued in a letter to shareholders that the profits made in the U.S are not going to be enough to cover the necessary R&D and infrastructure costs that will arise in Europe. Also, spending has gone up and will continue to go up as Netflix acquires more streaming rights for their instant play.
Despite all these negative signs, I believe that in a few months or even years, Netflix will return to be the Wall Street star it was a few months ago. Everything that has caused revenues to decline comes from efforts to expand the business and is directed in the correct direction, one that agrees with the overall trend of the industry. I believe that shareholders should pull through this down stretch in order to make substantial profits in the future.

Wednesday 12 October 2011

Steve Jobs

I read an article talking about all the things that were unknown about Steve Jobs' life. He was a very private person and therefore not much of his personal life was known to the public, including even his most avid fans. However, there are many things that are unknown about his life, for example that he had an estranged daughter outside of marriage, or that he had done LSD among other drugs earlier in his life. All of these little quirks about him could've been the reason he was such a technical genius and an innovative mastermind.
We mourn the loss of a truly great figure in the technical world.