A Christmas Story

Just a few weeks before Christmas, I was a volunteer at a holiday party for underprivileged children.  Underprivileged isn’t my word.  To get to the party they had to be identified as ‘at risk’ by their teachers.

I was helping my friend Carol who had been a volunteer at the event for several years and ran the ornament booth. Groups of kids, organized by their elementary school, descended upon our ornament station along their merry journey to all the booths, each one created exclusively for their delight. read more

The Spouting Whale Gets Harpooned

With his high profile arrest and perp walk this morning, Martin Shkreli has a massive public relations problem on his hands.  As the photo demonstrates, the full force of the law is lined up against him.

Mr. Shkreli is the hedge fund manager turned pharmaceutical entrepreneur who provoked outrage when his Turing Pharmaceuticals increased the price of cancer and AIDS drug Daraprim by 5000%

I would offer his current problem with the media has its roots in a poor public relations strategy right out of the gate.   Sometimes blunting exposure is more important than gaining exposure.  Better to lay low and gauge sentiment than arrive on the scene with guns blazing.  His 5000% price increase might have ultimately faded from view if he stayed out of the spotlight.  And what he learned from the reaction of a smaller more manageable audience might have given him clues how to manage a larger national audience. read more

50 Questions Your Business Plan Should Answer

Sadly, most investors don’t read business plans.  However, writing one is the only way you will be able to answer the following 50 questions you will be asked before investors show up to the closing table.

1. What is the price of your product or service and why?

2. How much capital is required to execute your business plan?

3. How much is the company is worth?

4. What are your company’s existing products/services?

5. What are the use of the proceeds?

6. On a summary basis, what is the historical financial performance of the company (even if, and perhaps particularly if, you have no revenues)? read more

APPL In, T Out & The Remains of the Day

In March of this year, Apple Inc. was added to the elite, 30-member Dow Jones Industrial Index, and AT&T was unceremoniously removed.

In their press release, S&P Dow Jones Indices, said “The timing of Apple’s addition to the DJIA hinged on two stock splits: Apple’s 7:1 last June and Visa’s 4:1 on March 19th this year.”

Because the Dow is a price weighted index, the March 2015 Visa split underweighted the information technology sector, while Apple’s earlier split will enabled it to join the Dow index without a disproportionate effect. read more

Pfizer: Representation Without Taxation

Inversion sure is the right word for the Allergan/Pfizer deal.  Because what got the colonists lathered up enough to fight a war against the one global super power at the time was taxation without representation.

Somehow that idea got turned on its head, and now one of the largest drug companies in America wants the representation the United States has to offer without the commensurate taxation (all this, mind you, from a voter registered as Republican).

From a shareholder perspective, it’s easy to connect the dots.  Lower taxes means higher earnings, and higher earnings means a higher stock price, and presto, shareholder value has been increased.  What else would anyone expect the senior leadership and board to do? read more

Where The Rubber Hits The Road: Investor Presentations

Among investors, there’s a premium placed on the selling and presentation skills of the founder or CEO. Investors in private companies know their payday will only occur if the CEO or founder can sell the company or take it public. Investors in public companies want to know the CEO can continuously attract new investors that will offer them the liquidity they need to get out.

This is why you hear investors say things like: “I’d rather invest in a really good company where the founder/CEO ‘gets it’ than a great company run by a physicist.” And so, it this one regard, style actually does finally win one over substance. read more

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