Why Would Investment Bankers Embrace Social Media During a Downturn?
I was thrilled to be asked by Bob London, a friend of 2i, to offer my perspective on the effect of the recession on my investment banking practice. You can read the article in Bob’s Executive Perspectives Blog or below.
At 2i we read a wide range of financial resources, from the standard print media to the blogosphere to subscription databases. Depending on what you read and who you follow, there seems to be some consensus that the general economy may have bottomed, and although it may be a long tunnel, there could be some light at the end of it in Q4-2009 and Q1-2010. The Dow Jones Industrial Average, a leading economic indicator, is only down 3.5% since the beginning of the year. The unemployment rate, a lagging indicator, continues to rise to 8.9% currently. While the broad economy is a fundamental driver of the internet industry, we like to maintain our focus on the Internet-Reliant industry.
We’re posting four blogs over the next few days on the Q-1 State of the Internet Industry. Once all the blogs are posted, we’ll put them all into a PDF document and include it on our Reports page.
James Kwak of the influential economic blog, The Baseline Scenario, posted a blog earlier this week titled “70% Off Sale”. His point: Granted, stable companies need to conserve cash and avoid risks, but this economic environment provides great deals for savvy companies.
Filed Under Merger & Acquisitions, Recession
We continue to follow the discussion regarding the threat to intangible property caused by the recession. While the information assurance industry is large and has always been vital to the information economy, company executives are increasingly aware of a relatively new security threat to intangible assets, particularly intellectual property: laid-off employees, disgruntled or just desperate to pay the bills. McAfee commissioned an excellent report titled Unsecured Economies: Protecting Vital Information from information assurance professors at Purdue University and the Center for Education and Research in Information Assurance and Security (CERIAS). A few highlights that relate to 2i topics follow:
Filed Under Intangible Assets, Intellectual Property, Recession
Following our blog last week tracking two articles discussing IP in the recession, I happened across Michael Moberly’s and JongPil Cheon’s article Use Intangible Assets to Weather the Financial Crisis (you may need to sign up for the trial subscription to download the PDF). The article provides a good theoretical overview on the importance of, and how to identify, intangible assets. Mr. Moberly is a long-time educater, practitioner and advocate of the strategic importance of intangible assets. I’m a regular reader of Mr. Moberly’s Business IP and Intangible Asset Report and Blog, where he discusses other important aspects of intangible assets from a strategic perspective.
Filed Under Intangible Assets, Intellectual Property, Recession
You know times are tough when there is more than just the occasional article discussing intellectual property issues. We think IP is cool, exciting stuff but it’s not a big seller of newspapers and magazines. (Ironically, these are the folks that should consider selling IP to supplement their obsolete business model.) Bloomberg and Bank Systems Technology each published interesting articles on the subject today.
What’s a business valuator to do? So much has changed in just the last few months, particularly the compression of asset prices across the board, that the normal data sources used for valuations are obsolete. This was the buzz and the subject of an excellent presentation by Stuart Bassin of the Zitelman Group at the latest Maryland chapter meeting of the National Association of Certified Valuation Analysts (NACVA), one of four primary associations for business valuation professionals (the others being AICPA, IBA, and ASA).
There is no shortage of databases to get business valuation metrics — BizComps for “Main Street Businesses”, IBA for asset transactions of 100% controlling interests, Done Deals for private and public middle market transactions. There are plenty of others. Each has its strengths and limitations and most provide some reasonably acceptable data points for companies based on industry, size, location, transaction type, and other important criteria. Where is the database, however, for valuation metrics in the months (and possibly years) following a loud pop of a worldwide asset bubble? Hmm, well . . . . there is none.
Filed Under Business Valuation, Recession
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