Tag: value

One year after Donald Trump was elected president, stocks are at record highs.

While Trump frequently claims that the former caused the latter, the technology industry might beg to differ.

Tech giants Apple, Alphabet, Microsoft, Facebook and Amazon are the five top contributors to the S&P 500’s advance in 2017, accounting for 28% of the index’s gain, according to Howard Silverblatt, a senior index analyst at S&P Dow Jones Indices.

That’s over $1 trillion of increased market value from five companies.

Facebook is the top performer in the group, up 57 percent this year as of Monday, followed by Apple at 52 percent. The lowest of the five is Alphabet, up 32 percent, still well ahead of the S&P 500’s 16 percent gain.

A war of words
Trump has never had a particularly friendly relationship with tech.

During the campaign, as Hillary Clinton was staffing her digital team with people from Google, Facebook and Twitter, Trump was attacking Apple for manufacturing abroad and accusing Amazon of somehow using The Washington Post, owned by Jeff Bezos, to keep the e-commerce giant’s taxes low.

Now imagine if Trump had followed through on his promise to go after Amazon for, as he claimed, not paying its fair share of taxes. Or if he’d somehow forced Apple to start manufacturing in the United States.

More broadly, remember when Trump promised to levy a 45 percent tariff on products made in China? Apple and Microsoft manufacture devices there, and Amazon counts on Chinese sellers for a disproportionate number of products sold on its marketplace.

Tech has also taken public stances against many Trump proposals.

Since Trump took office, tech companies have adamantly opposed his immigration restrictions, whether the travel ban or his move to end protections for people who were brought to the country illegally as kids.

In July, Google and Amazon were among companies to participate in an online protest against the Trump administration’s effort to unwind net neutrality rules that force large internet providers like CNBC owner Comcast and AT&T to treat all content equally.

Tech leaders have spoken out against Trump’s order to ban transgender people from serving in the military, and they criticized the president in August for suggesting that “many sides” were to blame after a white supremacist rally in Charlottesville, Virginia, turned violent.

But apart from the rhetoric, little has actually changed in Washington since Trump took office. And for tech companies, that’s just fine.

Tech has ‘optimized the rules of globalization’
Kate Mitchell, a partner at venture capital firm Scale Venture Partners, said that if Trump did follow through with protectionist trade policies that made it harder for big American companies to grow, the Trump stock rally would disappear in a hurry.

She predicts that U.S. leaders would lose ground to Chinese tech giants Alibaba and Tencent, the world’s sixth and seventh most-valuable tech companies.

“If we have a trade war so that Amazon, Apple and everybody else is being discriminated against globally because we’re being so protectionist, Alibaba and Tencent will say, ‘Move on over,'” Mitchell said. “They are very interested in taking share away.”

After attacking Apple several times during the campaign, Trump told The Wall Street Journal in July that CEO Tim Cook plans to build three plants in the U.S. But there’s no evidence that Cook made such a promise, and it would cost Apple a fortune to move iPhone production from China, home to the world’s best manufacturing technology for
consumer electronics.

“You cannot manufacture smartphones at scale in the United States,” said Denny Fish, who invests in tech stocks at Janus Henderson, where he helps manage $4.7 billion. “There’s rhetoric from the president, but it’s not based in reality in terms of what you could actually do.”

Fish, who owns shares of each of the five biggest tech companies, said he hasn’t changed his view on the industry since Trump became president, “because the reality is that not much is happening.”

In fact, while Trump has touted an “America first” message of economic nationalism, the companies most benefiting during the Trump era are the identical brands that flourished the most under his predecessor. They’re winning from the same trade policies that have existed for decades.

“You look at companies like Microsoft, they’ve pretty much optimized the rules of globalization for 30 years,” said Jack Ablin, chief investment officer of BMO Wealth Management, which oversees $70 billion in assets. Despite Trump’s campaign pledges, “there are a ton of entrenched interests saying we want things to stay the same,” he said.

Taxes represent one area where Trump and tech have been on the same page. Heading into the election, Trump’s tax repatriation proposal called for allowing companies to bring back the huge sums of cash they hold overseas and pay a one-time tax of just 10 percent, as opposed to the corporate tax rate of as high as 35 percent.

The tax plan that the Trump administration has proposed includes an unspecified repatriation benefit and a corporate tax rate of 20 percent. But those changes haven’t happened yet, and it’s not clear if he’s got the votes in Congress to pass the bill.

A political crackdown?
Otherwise, tech investors like Fish are happy with the status quo. As a stakeholder in Alphabet and Facebook, Fish said he is watching to see if any new regulations emerge that could thwart the growth of the dominant digital advertising companies.

New data protection rules go into effect next year in Europe that can limit how those companies use personal data in targeting ads. The U.S. has yet to take similar steps, but Fish said there could be some political pressure on these platforms as it becomes more evident how online ads and fake news were created and manipulated by foreign actors ahead of the presidential election.

“If anything were to change their ability to monetize in the same way, that’s where we would be more concerned,” Fish said.

He was quick to point out that for now, “We don’t see that.”

Ari Levi and Josh Lipton for CNBC

5 of the biggest South African start-up deals of all time

In early October, Cape Town GetSmarter concluded a $103-million (R1.4-billion) sale to US-based technology firm, 2U, making it one of the most valuable start-ups in the South Africa’s history.

The deal, which is believed to be the biggest ever for a South African edtech company, was first announced in May, and further bolsters Cape Town’s position as a leading technology hub in the country.

As not all sale prices are reported directly, it is difficult to say exactly how GetSmarter fits in compared to South Africa’s other most valuable start-ups, but it appears that the record still belongs to Mark Shuttleworth’s Thawte which sold for $575 million in 1999.

This is also the closest the country has come to having its own “unicorn” evaluation – a company valued at $1 billion, according to Jason Levin, author of a June report on the state of start-ups in the country.

“The total value of all the tech and innovation startups in Joburg and Cape Town together, is about $1.5 billion: a similar size to Melbourne’s, smaller than Lagos’, and half the size of Sao Paolo’s, said Levin.

He confirmed that Mark Shuttleworth’s Thawte is the start-up that has come the closest (its 1999 price tag of $575 million equates to about $850 million in modern money).

However South Africa has also lost out on start-ups which have chosen to move their business out of the country, said Levin.

“Mimecast, founded by South Africans Peter Bauer and Neil Murray, is a unicorn with a current market cap of $1.2 billion – but was created in 2003, a year after the pair left the country.”

BusinessTech looked at some of the other companies which have come close to this “mythical” evaluation.

Thawte – $575 million (sold in 1999)

While perhaps best known as the first South African in space, Mark Shuttleworth first made headlines for his 1999 sale of online security firm, Thawte, to Verisign for $575 million.

Run from Shuttleworths parent’s garage, Thawte was originally aimed to produce a secure server not fettered by the restrictions on the export of cryptography which had been imposed by the United States.

Using a “web of trust” model, Thawte would issue free email certificates, while the person’s identity was assured by meeting face-to-face with one or more “Thawte Notaries” who needed to see identification and keep a copy of it.

Kapa Biosystems – $445 million (sold in 2015)

Kapa Biosystems, co-founded by Trey Foskett, Paul McEwan, Ron McEwan and Chris McGuinness in 2006, pioneered the use of directed evolution to develop a suite of high-performance reagents for a range of life science applications

Their products are used by thousands of scientists around the world and cited in more than 4,000 peer-reviewed publications.

They are continuing to develop innovative solutions that accelerate genomics research that can impact the future ability to diagnose, monitor and treat cancer and complex inherited and infectious diseases.

Kapa Biosystems was bought by Roche, a Swiss multinational healthcare company, for $445 million in 2015.

GetSmarter – $103 million (sold in 2017)

GetSmarter provides short, competency based online courses to working professionals around the world in collaboration with leading universities.

Founded by brothers Rob and Sam Paddock, 2U entered an agreement to acquire the startup for approximately $103 million, with an earn-out payment of up to $20 million in cash.

It has served more than 50,000 students since inception, with course completion rates averaging 88%.

GetSmarter’s portfolio includes over 70 courses offered with its university partners, and operates under a revenue share model with the universities.

Fundamo – $110 million (sold in 2011)

Fundamo’s platform enables the delivery of mobile financial services to unbanked and under-banked consumers around the world—including person-to-person payment, airtime top-up, bill payment and branchless banking services.

The company’s vision is for a truly connected financial services ecosystem that supports the ubiquity of mobile devices.

Fundamo had some 50 deployments in over 40 countries, including 27 countries in Africa and the Middle East and another 10 globally.

Prior to its sale, Fundamo was privately held by a group of investors in South Africa that included Sanlam, Remgro Limited, and HBD Venture Capital.

Nimbula – $110 million (sold in 2013)

In March 2013, Oracle announced it has agreed to acquire Nimbula, a provider of private cloud infrastructure management software.

Nimbula’s technology helps companies manage infrastructure resources to deliver service, quality and availability, as well as workloads in private and hybrid cloud environments.

It was founded in late 2008 by Chris Pinkham and Willem Van Biljon, who had developed the Amazon Elastic Compute Cloud (EC2).

Source: Business Tech

Is Amazon under-valued?

Amazon is one of the largest companies in the world, but its valuation leaves plenty of room for growth. The stock’s valuation multiples don’t do justice to the growth prospects of this e-commerce giant.

Amazon experiences 27% year-on-year sales growth and this growth profile is simply too good for a company trading at only 3,2-times revenue.

Relatively weak operating margins have long been a roadblock for Amazon. But massive growth in both sales and margins in Amazon Web Services (AWS), as well as the growing dominance of Amazon Prime in the US, mitigate such concerns and make a strong case for undervaluation in the equity.

Amazon’s international segment currently operates at negative operating margins. However, the trend looks set to reverse as Amazon Prime penetrate these markets.

Future growth

Amazon’s primary top-line growth factors are international expansion and Amazon Web Services. AWS will improve overall margins, but international expansion is still in a negative margin situation. The trends have exacerbated in 2016.

In the full year 2016, North America represented almost 60 percent of total revenue while international and AWS represented roughly 30% and 10%, respectively. There is room for growth here, and it isn’t unreasonable to expect Amazon to be able to replicate North American success in other developed regions of the globe.

Source: www.seekingalpha.com

As any employer or HR practitioner will know, expensive schooling and impressive certificates are not always a reliable indicator that your candidate has what it takes to do the job you’re hiring them to do. While education is vital, more and more business owners are waking up to the value of apprenticeships as they build and groom their next generation of star employees.

Many business owners, perhaps justifiably, view apprenticeships with a certain amount of suspicion. Taken on for the wrong reasons or managed incorrectly, apprenticeship programmes can indeed be a drain on company resources with little advantage to show for it. In the South African context, we’re seeing a lot of companies establishing government-sponsored apprenticeships. Sadly, many only use their programmes as a way of getting cheap or free labour, with no idea of just how mutually beneficial apprenticeships can be if done right.

Apprenticeships are not cheap labour. In fact, they can be a significant drain on a company’s resources, compared to an experienced hire. Implementing an apprenticeship programme is therefore likely to entail much more work for you and your team, not less. The upside is that if all goes according to plan, you will have taken a common resource and made it into a rare one. Here are ways that implementing an apprenticeship programme can revitalise your business:

Providing a skilled workforce for the future
Apprenticeships help to ensure new recruits develop exactly the skills they need to successfully join the organisation, which can only benefit a business in the long term. Managers can ensure that the competencies being developed are exactly those that the company will need more of in the future – filling in any gaps and allowing the business to source future leaders from within.

Increasing staff loyalty and retention
Employees trained in-house tend to be more highly motivated, committed to their role, and supportive of the company and its objectives. Apprenticeships encourage employees to stay with the company longer by demonstrating its willingness to invest in its new recruits and treat them as a valued and integral part of the workforce.

More efficient recruitment
Apprenticeships can revolutionise the efficiency of your human resources efforts – saving you time and money lost to the recruitment process, as well as helping to make the need to replace employees a far less frequent bother. Apprenticeships are a great way to incubate the talent of your company’s future leaders and test the waters in a safe, insulated environment. You’ll also get to oversee and mould that talent as it develops. What’s more, having an apprentice around is a good insurance policy in case one of your team members should suddenly leave, because they’ll be leaving a trained “understudy” behind who can help pick up the slack.

Freeing up existing staff members’ time
As your business grows, your team will probably find their time being taken up by smaller tasks that tend to derail their main work responsibilities. Delegating these tasks to apprentices not only provides them with the hands-on upskilling they expect, but also frees up the time for your other employees to be more productive and less distracted.

A breath of fresh air
Bringing new, young people on board often translates to a fresh approach and a renewed positive attitude in the workplace, which can have the effect of enhancing workplace morale and cementing team unity. Apprentices inspire existing staff members to be willing to lend a hand in their training, as well as focus on improving their own skills. Apprentices from a variety of backgrounds and with different educational histories also give you fresh insight and out-of-the-box ideas to your business operations, encouraging change and innovation.

Companies considering taking on apprentices should not do so without considerable planning and the willingness to oversee every aspect of their apprentices’ progress. It is vital to be clear about your expectations as well as theirs, and make them a welcomed part of your team. With guidance, encouragement and good communication, you may find a few hidden gems among your new recruits, who may eventually show themselves to be your star employees in the future.

By Pieter Scholtz, leading business and executive coach and SA’s Co-Master Licensee for global franchise company ActionCOACH

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top