If things change enough, a new yardstick is required.
The ebb and flow in the capital market cycle, which can infect almost anyone with fever when things get rolling as they are now, or deep depression when they are in a free fall or moribund.
I think the potential for information markets is much larger than usually reported. I also think the reluctance to try them is deeper than most want to admit and thus it will take longer to catch on.
If truly understanding a firm’s operating cash flow is important to you, don’t just rely on someone else’s calculation thereof; and avoid the temptation to rely on widely-quoted measures of operating cash flow that may actually hide more than they reveal. Unless you don’t mind losing money.
How in blazes Vonage could put its customer relationships at even greater risk by making it so easy to participate in the IPO is beyond me.
On top of an unprecedented amount of capital sloshing around the globe, not just in the U.S. and Western Europe, the big change this time is the role of hedge funds.
This crowd of seasoned pros, who’d all lived through several economic cycles, feel a slowdown coming on like a cold, damp rain.
Let’s not pooh-pooh cash flows in the cable industry, even if it’s now mature and earnings are expected. One needs both to fully understand a firm’s performance.
Hybrids now offer the corporate finance holy grail: a lower cost of capital and lower tax burden.
IPOs are meant to be sold.
Even though Side Pockets reconcile several of the differences between hedge funds and private equity, such that the former can more easily invest in the latter, the question of valuation is still bouncing around like a just-fumbled football.
These are but two of the many reasons cynics will cite when they say hedge funds are playing with dynamite and don’t know it. That is to say, pricing discipline and thorough due diligence are the hard lessons learned in the 30-year history of the private equity market.
One can understand the cynics who say these are two worlds that should never, ever converge. Indeed, it could be a collision with bodies strewn everywhere. But opposites do attract, and it’s equally easy to see how their distinguishing features make them perfect complements.
It seems that more than a few got taken on this one. And while it’s too early (and unfair) to render guilty verdicts, there is no doubt that many were at least asleep at the switch, if not driving the train toward disaster.