Facebook IPO Scrutinized By The SEC; Did Feds Force Zuckerberg To Go Public?

Did Feds Force Zuckerberg To Go Public?

Facebook's IPO Offering was NOT about making Money because Zuckerberg was already Uber wealthy & Facebook's bottom line was also doing quite well.

Facebook went public because the Feds forced it to go Public or pay Higher Taxes because it was becoming TOO Big of a Communications Tool.

Billions of people from all over the World were plugged into Facebook's Wonderful maze of Friendship.

The Social Media Giant was continuing to grow, adding millions more Friends to the site each month.

i.e., Facebook was becoming Too Large for the Feds keep track of.

Apparently its ok for Banks to be Big but NOT a Social Media network.

Thus Going Public & Falling Short of Financial Expectations was the ONLY way to STOP Facebook's Growth.





Regulators eye Morgan Stanley's pre-Facebook IPO actions

Regulators are looking into a report that Morgan Stanley, the lead underwriter for Facebook's initial public offering last week, shared a negative assessment of the social network with major clients ahead of the IPO.

The comments from Rick Ketchum, head of the Financial Industry Regulatory Authority, an independent regulatory body, came after an article from Reuters said that a Morgan Stanley analyst reduced his revenue projections for Facebook (FB) shortly before the offering and shared this with institutional investors.

The report has raised questions about whether certain investors received privileged information ahead of the offering that should have been disseminated more widely.
"If true, the allegations are a matter of regulatory concern to FINRA and the [Securities and Exchange Commission]," Ketchum said in a statement via a spokeswoman.

An SEC spokesman declined to comment, though Reuters reported that agency chairwoman Mary Schapiro told reporters Tuesday that there are "issues that we need to look at specifically with respect to Facebook."

In addition, the news agency said, the Massachusetts Secretary of the Commonwealth has issued a subpoena to Morgan Stanley (MS, Fortune 500).

Officials from the secretary's office did not respond to requests for comments.

The news is the latest headache for Facebook and its underwriters following the company's debut on the Nasdaq Friday. Shares have since slumped 18% from the offering price of $38 amid criticisms that the company is overvalued.

Morgan Stanley's analyst reduced his revenue projection for Facebook shortly after the tech giant filed amended documents with the SEC saying that it could struggle to maintain revenue growth as users flock to mobile devices, Reuters said. It was not clear whether this revised projection was shared with all clients or only a select group.

In a statement, Morgan Stanley rejected any suggestion of impropriety, saying it followed "the same procedures for the Facebook offering that it follows for all IPOs."

In response to Facebook's amended SEC filing, "a significant number of research analysts ... reduced their earnings views to reflect their estimate of the impact of the new information," Morgan Stanley said. "These revised views were taken into account in the pricing of the IPO."

Facebook did not immediately respond to a request for comment.


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Sources: CBS News, CNN

Apple Pockets Billions In Profits & Dividends Due To China's Cheap Labor: Manufacturing Jobs Shipped Overseas

Apple announces dividend and stock buyback

Apple on Monday announced plans for much of the $97.6 billion in cash it has accumulated from massive iPod, iPhone, iPad and Macintosh sales.
The company said it would begin giving shareholders a quarterly dividend of $2.65 per share sometime its fiscal fourth quarter, which begins in July. Apple last offered a dividend in 1995.

Apple (AAPL, Fortune 500) will also buy back $10 billion of its own shares over three years, beginning in October.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," Tim Cook, Apple's CEO, said in a prepared statement.

"Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program," he added.

Stock repurchases generally help companies inflate their earnings per share because it reduces the number of shares outstanding. But profit growth has rarely been a problem for Apple, which routinely blows past Wall Street analysts' quarterly earnings forecasts.

Apple said the share buybacks will help stave off earnings-per-share dilution from future employee stock grants and purchase programs.

The company said it expects the dividend to cost the company $2.5 billion per quarter, making it one of the largest dividend payers in the United States. Combined with the repurchase program, Apple said it will likely utilize $45 billion of its domestic cash through 2015.

It's significant that Apple is using its domestic cash, rather than the much heftier stockpiles it holds overseas, because foreign cash would be subject to a sizable "repatriation tax" if brought back into the United States. Cook said the company didn't want to pay that tax.

Shares of Apple rose just less than 3% to close at an all-time high of $601.10.
Growth at Apple has not been a problem: The company is on pace to become the largest technology company in the world by revenue, and during the holiday season it posted the second-most profitable quarter by any corporation in U.S. history.

Nevertheless, Apple is actively looking for new investors. Some fund managers have stopped buying shares as Apple's stock price has soared. But many funds require a dividend from the stocks they invest in, so they have had to stay away from Apple.

"Investors have been wresting with the question of, 'Who is left to buy the stock?'" said Alex Gauna, tech analyst at JMP Securities.

Cook said he hopes the dividend will open up Apple's stock to a new investor base.
Apple's dividend yield -- the percentage of a company's share price that it pays out in annual dividends -- is currently 1.8%.

That's higher than the dividend yields of other technology giants, such as IBM (IBM, Fortune 500), Cisco (CSCO, Fortune 500) and Oracle (ORCL, Fortune 500), but it's lower than the yields of more direct rivals like Microsoft (MSFT, Fortune 500) and Hewlett-Packard (HPQ, Fortune 500).

Apple's dividend yield is nearly twice the average for the tech companies in the S&P 500, but a bit less than the 2.1% average for the overall S&P 500.




Cheap Labor, Taxes, Location: Why Apple Doesn't Build Products in the U.S.


People in the automobile industry are buzzing over that New York Times article about Apple, which gave a detailed look at why it builds its products in China. Attracting manufacturing is a huge topic in the Midwest, where Michigan, Wisconsin, Ohio, Indiana and other states are doing everything they can think of to land investments.

Dustin Dwyer at our Changing Gears public media project wanted to know why Apple finds China so much more attractive than America. So, he spoke with Jeffrey Liker, the University of Michigan professor and author of the best-selling series of books on Toyota, for a Midwestern take.

Liker doesn’t buy the claim that U.S. workers don’t have the skills or the flexibility to make Apple products. Any manufacturer opening a new plant has to do some training, he says.


He gave three main reasons why he believes Apple won’t build in America:


1) Cheap labor.

Apple executives may not want to admit it, but Liker says one of the biggest advantages of going overseas is that workers there are much, much cheaper. This is really an obvious reason, and we all know it. But it’s worth remembering whenever someone tries to claim that the actual reason is because our workers don’t have the right skills. “Right now is the worst time to make that statement since the recession has put so many people out of work,” Liker says. “There are all kinds of skilled workers right now.”


2) Taxes.

Liker says another big reason Apple and other manufacturers do work in Asia is because taxes are cheaper there. Usually, if a company makes profits from something built overseas, they have to pay American taxes when they “repatriate” those profits back to their headquarters here. But if a company spends money at lots of overseas factories, it just re-invests the profits over there, and it never pays the higher tax. Liker estimates this could make a 20-30 percent difference in profits for a company like Apple.


3) They’re there because they’re there.

Once the decision to make products overseas has been made, it becomes incredibly difficult to reverse, Liker says. “Apple is not a manufacturing company,” he says. “They’re a design and marketing company.” All of Apple’s manufacturing plants in Asia are owned by suppliers, not by Apple. If Apple executives suddenly decided they wanted their products built in the U.S., they’d have to invest billions of dollars in new factories. In China, the infrastructure is already there. “They made that decision decades ago,” Liker says. “I don’t think they’re revisiting it.”

There’s another wrinkle to this discussion that Liker says is worth mentioning. Right now, he says China actually has a far greater shortage of skilled workers than the U.S. Demand for workers in China is so high that factories there have trouble holding on to people. Liker says turnover rates of 20-30 percent are common in Chinese factories.

So, according to Liker, the truth is the exact opposite of what Apple claims.


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Sources: ABC News, Forbes, Fox Conn, Youtube, Google Maps

Toyota's New PR Nightmare: Lawsuits & Declining Stock

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Visit msnbc.com for breaking news, world news, and news about the economy

Toyota's Next Problem: Lawsuits


Fixing millions of gas pedals and brakes and convincing customers their vehicles are safe could end up being the least of Toyota's challenges. Some experts think the price tag from legal settlements could end up topping the company's estimate of $2 billion in recall costs.

There are already more than 30 U.S. lawsuits filed against Toyota involving the problems with its gas pedals alone, according to Craig Hutson, senior investment grade analyst at Gimme Credit, a bond research service firm. And there are more lawsuits are in the works.

"Lawyers are champing at the bit to get at these guys, and the company has come out and largely admitted mistakes in respect to these issues," said Hutson. "It's hard to put a dollar amount on it, but multi-billion dollar costs are not out of the realm of possibility."

Hutson isn't alone in worrying about how much lawsuits could hurt Toyota. Credit rating agency Moody's cited the litigation risks when it warned Tuesday that it might downgrade Toyota's credit ratings.

The company also faces at least one class action suit involving problems with the brakes on 2010 models of the Prius and other hybrid vehicles. Toyota announced a recall for those hybrids Tuesday.

New reports of problems with the steering of its Corolla could mean more lawsuits against Toyota.

Safety experts estimate official complaints involving Toyota gas pedals show there have been 19 fatalities involving the recalled vehicles.

But Gary Robb, an attorney in Kansas City who is looking at filing cases, says he believes that number will increase significantly as people look more deeply into accidents for which no cause was ever determined.

"We've had so many calls from so many people now that this news has come out," he said. "Accidents that were heretofore attributed to driver error are very likely due to a malfunction of the gas pedal. There's going to be dozens of those incidents arising."

Cases involving death or serious injury will likely be handled in individual lawsuits.

Suing to reclaim lost value.

Robb said he's also looking at a class action case to try to recover billions of dollars he claims were lost in the resale value of the recalled vehicles. He said his experts estimate total losses could be in the $6 billion to $8 billion range. "For many people their car is their second largest investment," he said.

Other experts suggest that the loss in resale value is not as high as Robb's figure, but that it is still likely in the billions.

Toyota's troubles: How it got here

Visit msnbc.com for breaking news, world news, and news about the economy

Kelley Blue Book, a leading used-car value service, is lowering its estimated prices for the recalled models this Friday by 2.5% to 3.5%. That's enough to lower the value of each vehicle by between $250 and $800.

The National Highway Transportation Safety Administration estimates that more than 6 million U.S. vehicles are affected by the recall. So based on Kelley Blue Book's estimates, the overall loss in resale value is likely to be at least $2 billion.

Toyota wouldn't comment on its legal exposure from the recalls. As to the reduction in resale value by Kelley Blue Book it said, "Historically Toyota and Lexus vehicles have held their value very well relative to other vehicles. We expect that to be true in the future as well."

It's not clear whether courts will allow plaintiffs to collect that much money. James Henderson, a law professor at Cornell University, said legal precedent is against them.

But Henderson does think the recall opens Toyota for a rash of new personal injury cases. He added that if it is determined that Toyota knew of problems with the gas pedals and did not warn a driver involved in an accident, the company could be hit with punitive damages.

Hutson said beyond the cost of any jury verdicts or settlements, the lawsuits have the potential of causing continued damage to Toyota's reputation, keeping the problems and company's failures in the news. That could cost the company additional sales going forward.

He said if any documents come out which prove Toyota engineers knew something needed to be fixed, it will be difficult for Toyota to ever regain consumers' trust.

"When your image is one that has been largely built on quality and dependability, you can't afford that kind of smoking gun," Hutson said.



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Sources: CNN, MSNBC, CNBC, DOT.gov, Google Maps

Google Mulls Leaving China After Major Attacks! "Don't Be Evil"

Google May Exit China After Sophisticated Attack



Google Inc., owner of the most popular Internet search engine, may shut its Chinese Web site and offices after a “highly sophisticated” cyber attack aimed at the e-mail accounts of human-rights activists.

Google also said at least 20 other large companies in industries ranging from finance to technology, media and chemicals had been targeted by hackers. The attacks, combined with attempts in the past year to limit free speech on the Web, has led the company to decide it will stop censoring results on its Google.cn site, it said.

A departure would follow four years of clashes over censorship and highlight the challenges global companies face operating in a one-party state that controls the flow of information. A pullout would deprive Google of an estimated $600 million in annual revenue from China’s 338 million Internet users and may help domestic Baidu Inc. extend its lead in the world’s largest online market.

“We are beginning to see companies saying ‘we don’t have to be here,’” said Duncan Clark, chairman of Beijing-based business consultancy BDA China Ltd. “We’re certainly seeing more of a trend toward protectionism, but also a feeling that there isn’t a permissive attitude toward foreign companies generally.”

Baidu Shares Rise

Google fell $6.68, or 1.1 percent, to $583.80 in extended trading after closing at $590.48 on the Nasdaq Stock Market, while Baidu’s American depositary receipts added 6.8 percent after the end of regular Nasdaq trading.

Dozens of accounts of Gmail users, who are advocates of Human Rights in the U.S., China and Europe, were accessed, most likely through phishing scams or malware on the users’ computers, Google said. With phishing scams, hackers pretending to be legitimate Web sites ask users to divulge confidential information, while malware includes programs that record users’ keystrokes as they type in passwords.

The Chinese government’s Human Rights record “remained poor and worsened in some areas” during 2008, the U.S. State Department said in a February 2009 report on human rights practices in countries around the world. Authorities in China monitored various types of communication, including telephone, e-mail and the Internet, the department said.

Wang Lijian, a Beijing-based spokesman for the Ministry of Industry and Information Technology, said he couldn’t comment as he was unaware of the situation. China’s foreign ministry declined to comment.

More Attacks

Mountain View, California-based Google said it’s notifying other companies that were attacked and is working with U.S. authorities.

“It’s probably too early to think that Google is pulling out of China altogether given how big the China market is and will be,” said Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages about $900 million, including Baidu stock.

The company was projected to generate revenue of about $600 million from China in 2010, according to estimates by Imran Khan, an analyst at JPMorgan Chase & Co. in New York.

Google hired Lee Kai-fu from Microsoft Corp. in 2005 to head its operations in China, where the Internet company started a local-language search service that excludes results censored by the Chinese government. The efforts were part of Chief Executive Officer Eric Schmidt’s to expand in a market that overtook the U.S. as the biggest Web market in 2008.

Yahoo China

Google and Yahoo Inc. were among companies that were criticized by U.S. lawmakers in 2006 for complying with the Chinese government’s restrictions on the Internet.

Yahoo Founder Jerry Yang said in 2005 that a court order obliged the Sunnyvale, California-based company to hand over user records that led to the conviction of a Chinese journalist.

Yahoo spokeswoman May Petry said the company is preparing a comment.

Baidu accounted for 63.9 percent of China’s Internet search market in the third quarter, compared with 31.3 percent for Google, according to researcher Analysys International. Baidu declined to comment on Google’s decision.

“There’s no other competitor, so if Google pulls out, Baidu is left by itself,” said Erwin Sanft, an analyst at BNP Paribas SA in Hong Kong. “If they pull out of China, it’s very hard to really get back in the market and still have a similar presence.”

Don’t Be Evil


The move signals Google is hewing closer to its “Don’t be evil” motto, said Heath Terry, an analyst at FBR Capital Markets in New York. Still, Google is still a “long way away from getting out of China,” Terry said. The company can threaten to leave the country because China accounts for such a small piece of Google’s sales, he said.

“This is their way of opening up this important conversation,” Terry said. “This is their way of starting to move the conversation forward.”

China has more Internet users than the total population of the U.S., according to the China Internet Network Information Center, a government-backed agency that licenses online domain names.

Google said the attack, which occurred in the middle of December, originated in China and resulted in intellectual property being stolen.

Gmail Acounts

Google said two Gmail accounts appear to have been accessed as part of the attack. The information gathered was limited to account information, such as the date the account was created, as well as the subject lines of e-mails, Google said. The contents of e-mails weren’t exposed.

State Department officials didn’t immediately respond to requests for comment. Federal Bureau of Investigation spokesman Jason Pack declined to comment.

Access to Google’s YouTube video site was blocked in China after Tibet’s government-in-exile released a video on March 20 that it said showed Chinese police beating protesters. The video was described as a fabrication by China’s official Xinhua News Agency.

Google also has drawn complaints from a Chinese writers’ group about its online book-scanning project. Google should stop scanning books without permission, the China Writers Association said in November. Google apologized to authors this week for a lack of communication.

Last year, China pushed personal-computer makers to install filtering software on their machines. The government backed away from that requirement in June, though it later said it would require the software on computers in schools and Internet cafes.



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Sources: AP, Google Maps, Bloomberg, CNN, Mox News, Youtube, Google Maps