National / International News

We've got a peak at Alibaba's books. Thoughts?

Marketplace - American Public Media - Wed, 2014-05-07 09:53

We asked Brian Hamilton, the chairman of the financial information company Sageworks, to give us his thoughts on Alibaba's planned IPO.

1. Alibaba's IPO filing says it will raise $1 billion, analysts say it will raise closer to $15 billion and reports say it could be valued at $200 billion. Can you translate that for me? 

Valuation is calculated by multiplying a company's share price by the number of total outstanding shares. For example, when Amazon went public in 1997, it had 23.8 million total outstanding shares at an IPO share price of $16; therefore it was valued at approximately $381 million (23.8 million x 16 = 381 million).

One should never look at the valuation in isolation. Instead we should look at valuation, in relation to sales and profits. The sales multiple (the company's valuation divided by the company's revenue) and the profit multiple (the company's valuation divided by the company's net profit) give a better indication of "relative value." For example, the dollar amount of Twitter's IPO valuation was much less than the dollar amount of Facebook's; however, taking the sales multiples into account, Twitter'srelative value to sales was more than twice that of Facebook, indicating a richer valuation.

At this point we do not have a confirmed IPO share price for Alibaba, so we do not have a precise valuation. Reports have Alibaba valuing itself at $109 billion as of April, but other analysts estimate that Alibaba may be seeking a valuation upwards of $200 billion when the IPO debuts. Unfortunately, until we get the confirmed number of total shares outstanding and the share price at the time of the IPO, we will not know the company's official valuation.

2. Now that you've gotten a better look at Alibaba's financials, what do you think of the company?

The fundamentals are really, really strong. This is a company with positive cash flow, nearly one and half billion dollars in profits, a solid net profit margin, and solid revenue growth. This appears to be a real company with real profits and revenue.

3. Does Alibaba's valuation seem fair? / 4. How does that valuation compare to other Internet companies (such as Facebook, Twitter) when they went public?

We'll have to see what the final valuation is when the company prices it's IPO shares, but even when you look at the very "conservative" self valuation of $109 billion, it's a very rich valuation. They'd be valued at, at the very minimum, 20 times sales and 80 times profits, but most likely closer to 30 times sales and 125 times profits, if the final valuation ends up being closer to $170 billion-$200 billion. That's not quite as rich of a valuation as Twitter, which went out 40 times sales, but compares Alibaba's relative value to that of Microsoft when it went public. Microsoft was less than one-eighth of the relative value of Alibaba, even looking at the most conservative valuations of Alibaba.

Surgeon, Mom, Republican — But Conservative Enough?

NPR News - Wed, 2014-05-07 09:47

Neurosurgeon Monica Wehby, who's running for U.S. Senate in Oregon, has captured the imagination of the Republican establishment. But social conservatives are critical of her position on abortion.

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Children stable after murder attempt

BBC - Wed, 2014-05-07 09:34
Two children stabbed in Newport are in a stable condition, police say.

Rivals could take Woods's top ranking

BBC - Wed, 2014-05-07 09:29
Tiger Woods's 14-month spell as world number one could be ended at the Players Championship, starting on Thursday.

Broken windows, busted real estate market

Marketplace - American Public Media - Wed, 2014-05-07 09:25

Building inspector Derrick McCall spends much of his day in a noisy city truck making his way through a list of 25,000 vacant properties in Philadelphia.

He’s part of a novel new program that seeks to get landlords to do something about the city’s vacant buildings, and make the city money at the same time. His goal: to make sure every vacant home in Philadelphia has working doors and windows.

“I’ll go by a property to see the condition, to see if it has boarded doors and windows, and attempt to bring it to compliance,” said McCall, a burly man who drives a gurgling city truck through some of Philadelphia’s toughest areas.

If McCall does find a home with boarded-up doors and windows, he’ll staple a bright pink poster on the door, informing the owner that the building is in violation of a law that prohibits boarded-up doors and windows. The fine: $300 per opening, per day. Owners must go to Blight Court to fight the fine.

Building inspector Derrick McCall pauses at a home in Philadelphia after citing it for doors and windows violations and posting a pink poster on the door to inform the owners. 

Alana Semuels

The idea: force building owners to fix up their homes and make them habitable, or sell them to someone who will.

“We can make them do something now,” said Rebecca Swanson, who runs the city’s vacant property strategy. “If we can catch them now, we can get to the point where we can save it from being something that falls into disrepair.”

The city came up with the strategy after realizing it was spending millions a year on tearing down blighted properties, but that newly decrepit homes seemed to be popping up every year. And it was costing a lot to tear down the homes – around $15,000 each, a big deal in a city constantly strapped for cash.

The initial goal of the strategy was to prevent homes from falling into disrepair, but other benefits have emerged, Swanson said. After spending the money to fix the doors and windows, landlords are deciding to spend an extra bit of money so they can fix their properties enough to rent them out. All those permits for fixing their homes and renting them out make the city money.

The city points to the neighborhood of Francisville, now bustling with new development, as an example of a place where the city’s strategy has led to a makeover for an entire area.

“We found all these tangential benefits as we’ve gone along,” Swanson said.  “Increased tax collection, improved neighborhoods, getting more revenues through licensing and permits.”

A study by the Reinvestment Fund, a group that finances neighborhood revitalization, found that the strategy led to a 31 percent increase in home prices in the neighborhoods targeted by the city. Comparable neighborhoods saw home prices rise just 1 percent.

Philadelphia has many row houses, so decay in one house can affect another quickly and bring down property values.

Alana Semuels

“Essentially, if you’re smart and you’re targeted and you’re focused, and you send a very clear market signal that blighting properties are not going to be tolerated in a place,” said Ira Goldstein, who authored the study.

Before, Goldstein said, there was a perception in Philadelphia that landlords could hang onto vacant buildings for a long time, and that the city wouldn’t do anything about them. That perception has now changed because of the enforcement strategy, he said.

But there are still some owners that the city can’t reach. Though it used a database also used by the IRS, it hasn’t been able to find all of the property owners who own vacant homes in the city. That’s why the home next to James Culler is falling into disrepair, even though he’s called and complained many times.

Philadelphia has started enforcing a law that would fine the owners of buildings like this one $300 for each boarded-up door or window in an effort to get owners to fix up the buildings. 

Alana Semuels

As Derrick McCall walks up the rickety concrete steps to inspect the home, Culler sticks his head out of his door and asks if the city is finally doing something about the house that’s attached to his.  Vagrants keep breaking in and he’s worried they’ll burn the place down.

“My wife done called a couple of times, ain’t nobody respond,” Culler said to McCall.

“It is in the system, to try and get the owners to repair the doors and windows,” McCall assures him. “It’s a slow process, but it does work.”

It’s a lesson other cities, like Detroit and Buffalo that have thousands of vacant properties to deal with: cleaning up blight takes time. But it does work.  Eventually. 

A Symbol Of Syria's Uprising, Homs Reverts To Assad's Control

NPR News - Wed, 2014-05-07 09:20

More than 1,000 rebel fighters in the central city began leaving Wednesday under terms of a conditional surrender.

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Baying for blood at a golfing theatre

BBC - Wed, 2014-05-07 09:10
Graeme McDowell talks carnage, fans baying for blood and the theatre of the Players Championship at Sawgrass with its infamous 17th hole.

Universe evolution recreated in lab

BBC - Wed, 2014-05-07 09:00
An international team of researchers has created a detailed visual simulation of how the Universe evolved.

Turner Prize 2014: What's the verdict?

BBC - Wed, 2014-05-07 08:48
It's full of surprises, but what do the experts think?

Party rule changes after Rigby case

BBC - Wed, 2014-05-07 08:45
Rules on party political slogans are to be changed after criticism of references to murdered soldier Lee Rigby.

Move Over Chickens, Here's Something Duckier For The Backyard

NPR News - Wed, 2014-05-07 08:41

A small but growing number of people are discovering the joys of raising ducks. They say the nutritional and agricultural benefits of the eggs outweigh the cost of feeding the birds.

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DEA Raids Target Synthetic Drugs' Makers And Sellers

NPR News - Wed, 2014-05-07 08:32

Federal agents acted on hundreds of warrants Wednesday, in an operation that included at least 25 states.

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£9,850 fine for banana throw racism

BBC - Wed, 2014-05-07 08:28
Villarreal are fined €12,000 (£9,850) by the Spanish Football Federation after a fan threw a banana at Barcelona's Dani Alves.

Dove tops list of mothers' 10 favorite brands

Marketplace - American Public Media - Wed, 2014-05-07 08:22

Just in time for Mother's Day, research organization YouGov has found that American mothers perceive Dove as the best brand, according to their BrandIndex report. The soap and beauty product maker tops a list of mothers' favorite brands despite backlash to the company's "Real Beauty" ad campaign that went viral in the past few months.

In it's press release, YouGov even speculates that the "Real Beauty" campaign and its "highly-viral" nature is what propelled Dove into the top spot.

This is the second year YouGov has tracked brand perception among American mothers, and the first year Dove made it in to the top 10. Joining Dove on the list are brands like Johnson & Johnson, Amazon, Cheerios and Samsung.

YouGov also mentions that, while they didn't crack the top 10, brands like Facebook and Victoria's Secret saw the greatest gains in perception compared to last year. Pillsbury and Discovery Channel, on the other hand, fell out of the top brands.

YouGov on their survey methods:

YouGov BrandIndex filtered their entire 1,250+ brand universe for respondents who identified themselves as women over the age of 18 with children under 18 years old. The firm then ranked them using their flagship Index score, which measures brand health by averaging sub-scores on quality, satisfaction, impression, value, reputation and willingness to recommend. The scores reflect surveying over the past 30 days.

See the full list in the graphic below.

Keep your eyes on the ball: The NFL draft starts

Marketplace - American Public Media - Wed, 2014-05-07 08:19

From the Marketplace Datebook, here's a look at what's coming up Thursday, May 8:

In Washington, a Senate subcommittee on tourism discusses a plan to attract 100 million international visitors to the U.S. annually by the end of 2021.

In New York, the first round of the NFL draft takes place.

And across the country, are consumers shopping? Chain stores are scheduled to report April sales.

We spent a lot of time with her in "Little House on the Prairie." Actress Melissa Gilbert turns 50.

And it's the 69th anniversary of Victory in Europe Day, commemorating the surrender of Germany to Allied forces.

Johansson wins Women's Tour stage

BBC - Wed, 2014-05-07 08:18
Sweden's Emma Johansson fights off Marianne Vos amid feverish crowds to win the first stage of the Women's Tour of Britain.

'On The Runs' linked to 295 murders

BBC - Wed, 2014-05-07 08:17
A senior NI police officer tells MPs that 95 of the 228 republicans who received controversial letters from the government have been linked to 295 murders.

Officer 'reckless' over riot deaths

BBC - Wed, 2014-05-07 08:16
A detective who investigated the deaths of three men in Birmingham during the 2011 riots would have had a case to answer for gross misconduct if he had not retired, the IPCC says.

Irish justice minister resigns

BBC - Wed, 2014-05-07 08:11
Ireland's Justice Minister Alan Shatter has resigned, Prime Minister Enda Kenny announces.

Fugitive 'Skull Cracker' in custody

BBC - Wed, 2014-05-07 08:07
A fugitive armed robber nicknamed the "Skull Cracker", who absconded from an open prison, is arrested in east London.

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