The Media Has Already Lost Interest In Twitter

Here’s another snapshot of how much mindshare Twitter has in its post-IPO era with respect to Facebook, courtesy of Bloomberg: the number of news reports about Twitter has, since going public, fallen sharply.

Bloomberg is able to assess how many news stories across a variety of outlets (Bloomberg says it is more than 100 authoritative sources) were published about Twitter — and other companies — with its data, as can be seen in the chart below. As expected, the number of stories about Twitter (the white line) has fallen sharply since it went public, but for the tech story of 2013 it’s completely dwarfed by Facebook.

Even going back as far as nearly a year before Facebook’s initial public offering, Twitter has many fewer mentions than Facebook. That makes sense, given that Facebook is (and was) a much larger company with many more users, but it is still rather telling.

Twitter, at its peak, was mentioned in 591 stories weekly, whereas Facebook was mentioned more than 1,300 times in a week during its peak (also when it went public).

This snapshot is from June 27, 2011, to today, November 18.

It’s also worth noting, however, that much of the press following Facebook’s initial public offering was negative — the first-day trading glitches, selective discussions with banks, and such — while Twitter’s IPO was quiet and went through without much fanfare (though the stock did nearly double in its first day of trading).

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These Five J.Crew Executives Just Made A Boatload Of Money

J.Crew creative director Jenna Lyons. Chelsea Lauren / Getty Images

The holidays came early for five J.Crew executives, including creative director Jenna Lyons and Chief Operating Officer James Scully.

The company, which sold $500 million of debt last week to fund a payout to the private equity companies that own it, also paid some of that money to top executives, who rolled over vested stock options in J.Crew as part of its buyout in March 2011.

Lyons got $1.9 million and Scully got $1.2 million, according to a filing today. Libby Wadle, president of the J.Crew brand, got $949,426; Lynda Markoe, executive vice president of human resources, received $474,713; and Stuart Haselden, chief financial officer, got $103,487. That would suggest Lyons and Scully have the most shares.

J.Crew said it’s making the “dividend equivalent payments” instead of reducing the exercise price of the executives’ rollover stock options. Chief Executive Officer Mickey Drexler isn’t receiving such a payout because he doesn’t hold such options, according to the filing. Drexler entered a different agreement when the buyout occurred.

The figures are large compared to the annual salaries of the executives. Lyons, for example, most recently made $1.8 million while Scully and Wadle made $1.2 million and $1.1 million, filings show.

TPG Capital and Leonard Green & Partners, which took J.Crew private a little more than two years ago for $3 billion, received the bulk of the proceeds from the dividend deal.

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Private Equity Sinks Teeth Into Casual Dining Deals

Private equity executives are more apt to dine at Daniel or Per Se than T.G.I. Friday’s or P.F. Chang’s. But lately they have been feasting on acquisitions of traditionally middle-market, suburban, value chain restaurants and so-called quick service restaurants (QSRs), like Chipotle and Chop’t, as consumer spending on food consumed outside of the home has reached record highs.

U.S. consumers now spend a record-high 85.4 cents on food and beverages consumed outside of the home for every dollar they spend at the supermarket, according to a May research note by Andrew Wilkinson of Miller Tabak. This signals that, despite payroll tax increases, U.S. consumers are more willing to spend their disposable income dining out at restaurants. In other words, instead of baking a cake at home, families are now celebrating birthdays at Chili’s — literally.

Shares of Brinker, the parent company of Chili’s and other chains, started the year at around $30 and have steadily climbed to about $40 over the last five months. Shares of Darden, which owns chains like Red Lobster and Olive Garden, have followed a similarly consistent trajectory, going from around $44 in January to more than $52 in recent days.

The value restaurant chain and franchise sector has typically been ridiculed for performing weakly in poor economic times. However, the relative success of these chains lately, coupled with the increase in consumer spending on dining out, suggests that investment thesis might be past its expiration date.

“There definitely was a dark period where dining out was replaced by food prepared in the home, but we are seeing a change in that,” said Daniel Bonoff, partner at New York–based private equity firm Goode Partners, whose portfolio includes Rosa Mexicano and Chuy’s restaurants. “We believe the restaurant sector is a great place to be making money right now. There’s also been sort of a Darwinian survival of the fittest where really new concepts are emerging on the scene and growing really rapidly.”

New concepts getting noticed by private equity firms include more ethnic food chains and value restaurants. Centerbridge and Angelo Gordon last year bought P.F. Chang’s and Benihana, respectively.

For his part, Bonoff says Chuy’s has turned out to be one of Goode Partners’ best investments. It took the Tex-Mex chain, which has locations throughout the South and is reminiscent of the national brand Chevy’s, public last summer at $13 a share. Just this week its stock reached more than $32.50. The chain has the secret sauce that private equity wants in restaurant deals right now: quick service with an ethnic component.

Bonoff said the most desired chain plays in the private equity market are “places that are trying to be the next Chipotle.”

“Mediterranean, Asian — a lot of that serves the purpose of getting high-quality, healthier foods than your greasy burger, but also doing it in an efficient way,” Bonoff said. “It’s not just people eating out there for dinner, but you can get a lunch day part as well.”

The hot market is creating fierce competition for deals among “strategic acquirers,” companies like Brinker and Darden. On Wednesday, for instance, Houston-based private hospitality company Landry’s Restaurants bought the steak and seafood chain Mastro’s.

Some have actually started to call a bubble given how rich deals are being valued at and how fast they are happening.

“Restaurant investing is one of the most cyclical segments in private equity, and in the time frame where the world is very dark, there were very few firms actively looking in the restaurant sector,” Bonoff said. “Now it’s happened very quickly. Money has flown in. Some might say this is a sign of a bubble in restaurants across the board.”

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Kenneth Cole Decided To Tweet Something Completely Stupid About Syria

5. This is, uh, not the first time Kenneth Cole’s Twitter account has decided to jump on a popular news event…

6. It’s not the second time they’ve done this either…

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Why These Three Economists Won The Nobel Prize

1. Three financial economists won this year’s economics Nobel Prize: Robert Shiller, Eugene Fama, and Lars Hansen. The Royal Swedish Academy of Sciences said they “have laid the foundation for the current understanding of asset prices.”

Michelle Mcloughlin / Reuters

Jim Young / Reuters

Handout / Reuters


The Nobelists, Robert Shiller, Eugene Fama, and Lars Hansen

3. Starting with his dissertation in 1965, Fama wrote a series of papers while at the University of Chicago that eventually formed the “efficient market hypothesis.”

4. Fama’s basic insight was that you could not predict the future price of a stock from what they had done previously or from publicly available information, which was already reflected in the price.

5. Basically, all these charts are worthless. You can’t predict a stock’s price based on its past movements.

7. Fama’s work is the basis for indexed mutual funds, which don’t pick individual stocks but try to track the overall market. Fama says that “active management is a zero-sum game. That’s not hypothesis, that’s arithmetic.”

Although it was controversial when it was first introduced, many personal finance experts and academics swear by this low-fee, passive approach to investing.

8. Funny enough, one of Fama’s teaching assistants in the 1980s was future billioniare hedge fund manager Cliff Asness.

Asness says that he “still feels guilty when trying to beat the market” because of his time working with Fama at the University of Chicago.

9. Robert Shiller, however, is a major critic of the efficient markets approach. Starting in 1981, Shiller pointed out that stock prices were far more volatile than simple models of future returns would suggest.

This paper, published in 1981, is one of the most cited economics papers of all time and helped launch “behavioral finance,” which tries to explain how financial assets move in price in ways that might appear to be irrational.

10. Shiller, a Yale professor, became famous outside the ecnomics community when he spotted the tech bubble in the late 1990s, predicting it would burst. He was right.

11. Shiller even warned Alan Greenspan, in 1996, about “irrational exuberance” in the stock market. Greenspan used the phrase in a speech and Shiller’s own book came out just as the NASDAQ peaked in 2000.

Princeton University Press / Via

12. Shiller called another bubble in 2005: This time, it was housing. Home prices had almost doubled in just five years and the market would peak less than two years later.

13. Since the housing bubble collapsed, Shiller and his fellow Nobelist George Akerlof have led the push to get academic economists to consider how big a role emotion — or “animal spirits” — plays in the economy.

Princeton University Press


14. Lars Hansen, while a very important figure in analyzing asset prices, did work that is less accessible and easy to explain. Sorry, Lars! If you really want to know, click here.

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Death By A Thousand Cuts: The Law’s Pursuit Of Steven Cohen

Steve Marcus / Reuters

Steven Cohen is no stranger to federal regulators. The Securities and Exchange Commission has been after his fund SAC Capital for the better part of a decade, and now a federal grand jury has brought charges against SAC alleging wire and securities fraud.

Cohen himself is not named in the indictment — he is referred to repeatedly only as “SAC Owner” — and over the last ten years, the Feds haven’t gathered enough evidence to nail him, despite taking down several of his top lieutenants on insider trading charges, including Richard Lee, who was charged with the crime on Tuesday. The closest they came was in March, when Cohen agreed to pay $616 million to settle insider trading allegations brought against him by the SEC.

Without enough evidence to charge Cohen personally with criminal wrongdoing, regulators appear to be using a death by a thousand cuts approach to bringing him down — first going after several of his portfolio managers, then bringing a civil suit against him, and now taking the rare step of filing criminal charges against his entire firm.

The latter move has drawn comparison’s to the Department of Justice’s indictment of accounting firm Arthur Andersen as part of the Enron accounting scandal. There are several reasons for why bringing charges against an entire company is rare, not the least of which is that once painted with a brush of alleged criminality it is nearly impossible to continue operating, which in turn typically results in massive job losses for both the accused and the innocent.

In SAC’s case, if the objective of regulators isn’t to bring down the entire firm, then it is to at least stop Cohen from investing other people’s money. Indeed, the indictment describes SAC as a company that “systemically” looked for an investing “edge” not just in trading but also in its hiring practices, not so subtly implying that as the founder and “SAC Owner” it was Cohen who turned a blind eye, if not outright encouraged, this type of behavior.

“The SEC has always taken a position that they’re not there to carry out personal vendettas,” said one New York hedge fund attorney. “That said, they seem to have the staff and their commissioners have a collective belief that [Cohen] violated the law.”

Already, a steady stream of redemptions have followed the investigation. The fund was dealt a heavy blow in May, for instance, when private equity giant Blackstone said it would ask for a “significant portion” of the $550 million it had invested in SAC back before its latest redemption request deadline. According to the New York Times, roughly $5 billion of the $6 billion in outside money managed by the company has been redeemed.

As a result, Cohen may have no choice but to close SAC in its current configuration and go the way of the family office model, relinquishing his management of public funds and only investing his personal wealth, estimated at $9 billion. Provided Cohen isn’t barred from trading entirely as a result of the civil action brought against him last week — which is possible — industry observers are already of the opinion that he is done running public money and transitioning to a family office is almost certain.

“Most likely he’s going to go family office,” the hedge fund attorney, who is not related to the SAC case, said. “With the expense of defending this, and who would be willing to give him money going after this? If you’re a fiduciary you certainly can’t.”

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39 Ridiculously Expensive Weird Items On Etsy

1. $21,000 — Bedazzled chair

2. $24,000 — Giant red high heel sculpture

3. $100,000 — Painting of a boat

4. $6,000 — Dog dress

5. $7,500 — Giant queen’s cape

6. $100,000 — Mask

7. $50,000 — Painting titled “Liplock of Chaos”

8. $3,900 — Real crocodile rug (not legal to ship to the U.S.)

9. $18,871.93 — Receipt in lucite box. The receipt total is the selling price.

10. $10,000 — Dining table

11. $1,925 — Latex dalmatian suit

12. $5,000 — Effie Trinket-inspired dress

13. $4,000 — Painted ceramic coaster

14. $100,000 — Photo of some flowers

15. $1,000 — Chrome browser pillow

16. $34,876 — Fork with googly-eyes

17. $11,500 — Working BBQ grill decorated as a pirate’s treasure chest

18. $2,500 — Pop-up book about the history of clams

19. $87,000 — Ceramic vase

20. $2,100 — Crocheted curtain of a woman that looks a little like a Patrick Nagel

21. $37,411 — Artwork that appears to be a colander on a cardboard box

22. $91,199.99 — Meteorite that looks like a monk screaming

23. $16,000 — Outdoor fountain

24. $5,800 — Painting of two tigers

25. $100,000 — Guitar made from a single cut of wood

26. $9,999 — Sand painting of horses

27. $10,000 — Bust of Bruce Springsteen

28. $29,000 — Bob Marley painting on canvas sheet

29. $75,000 — Fairy treehouse

30. $55,000 — Seashell fireplace

31. $12,995 — Knit motorcycle cover

32. $30,000 — Quilt with motorcycle patches

33. $10,000 — Painting of a Disney Cruise ship

34. $7,000 — Wooden bench with horse relief

35. $60,808 — Model of an airport

36. $9,999 — Giant penis sculpture

37. $45,000 — Magic wand (with authentic magic powers)

38. $4,800 — Santa chair

39. $10,000 — Knitted scarf (not even real wool; it’s acrylic!)

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Financial Fitness: A Behind The Scenes Look At IPO Boot Camp

Penguins ruled the NYSE during SeaWorld’s IPO on April 19, 2013. Richard Drew / AP

Boot camps typically conjure up images of sweaty, muscled men in combat boots and camouflage navigating rugged terrain amid hostile fire. Well-groomed men in Bruno Magli shoes and Paul Smith suits sitting around tables in plush corporate boardrooms, it is safe to say, are usually furthest from the mind.

But at the New York Stock Exchange’s IPO boot camp, if you aren’t prepared to do your spreadsheet sit-ups, you may as well be as dead as a silver dollar.

Against the backdrop of a fierce battle between stock exchanges for listings in recent years, the NYSE has been conducting widely popular if little known IPO boot camps for prospective public market debutantes.

Roughly three to six times per year, the NYSE partners with a large firm that would have a hand in the IPO process — such as an accounting or law firm — and hosts an educational financial seminar that serves as an IPO dress rehearsal. The sessions are closed to the media and anyone not involved in taking a company public, but through interviews with past participants and sources close to the boot camps BuzzFeed was able to reconstruct an accurate representation of what the financial workout involves.

The boot camps — which are held in New York, San Francisco, Houston, Austin, Miami, Chicago and other major cities across the country — are attended by about 30 to 50 executives per session representing companies looking to go public in the next 18-24 months, according to Aamir Husain, national lead partner for IPO Readiness Services at KPMG, which partners with the NYSE on some boot camps. Identities are protected as much as possible — only the first name of attendees are known and no company data or role is divulged.

“This is not a regurgitation of SEC rules and accounting standards, but to discuss the pitfalls that can happen on the way to going public,” said Husain, who has spoken at several boot camp events. “One of the biggest things is planning and keeping your optionality open. Most companies happen to be private equity or venture capital backed, so they will always be either looking to go public or sell the company. They’re usually more inclined to sell.”

With IPO activity poised to rise this year, many private companies are weighing the option of going public. But preparing for an IPO is often more complicated than many startups believe, and not thinking through all of the components of IPO process can have a serious financial impact on a company’s newly issued stock.

Just ask Facebook, whose public market debut on Nasdaq, a rival to the New York Stock Exchange, was seriously botched — so much so that Nasdaq had to pay a $10 million penalty to the Securities and Exchange Commission related to “its poor systems and decision-making during the initial public offering and secondary market trading of Facebook shares.”

For most boot camp attendees, the high cost of going pubic represents one of the biggest hurdles and least known aspects of the IPO process.

“The biggest takeaway has been the enormity of the cost, you have so many balls in the air at the same time and you need to be prioritizing costs,” Husain said. “A lot of these private [companies] are run in a very lean manner, so they need to manage their resources intelligently.”

Another issue is the sheer amount of paperwork required to be in compliance with the strict regulatory environment in which public companies live.

“Either I’m filing an SEC return or preparing to file an SEC return,” Husain said he was told by a recent CEO of a public company.

At the boot camps, executives are taught to “have the infrastructure for dealing with that in place before the IPO or within a couple of quarters of going public,” Husain said.

Other topics on a boot camp agenda include choosing an exchange (for some, the NYSE might not be the best option), “financial reporting 101,” underwriter selection, the kinds of new employees needed to maintain a pre- and post-public company, and a state of the market review.

Recent boot camps have also include a new agenda item: social media and how to navigate its use as a public company. Now that the SEC and the JOBS Act has deemed social media an acceptable marketing tool, executives learn to be conscious of “gun jumping,” meaning the risks of selective or incomplete disclosure forms regarding social media activity, as well as how stock exchanges address social media’s “real-time communication” on the trading floor.

“One common theme is visibility and predictability,” said Doug Chu, Senior Vice President and Head of the NYSE’s Silicon Valley Office and Western Region for its Global Corporate Client Group. “Your requirements as a private company are a lot lower than as a public company. Financial and accounting is a big jump as well. There’s a lot to cover in each of these areas, financial, accounting legal, investor relations, public relations, marketing. They give an attendee an overview and a smattering of the points they should be aware of and the various areas that are important and requirements of the public markets.”

The boot camps can foreshadow the strength of the market, and so far it seems that 2013 is one of the stronger years for companies going public, Chu said.

“It’s an interesting barometer, almost a slightly leading indicator of IPO activity,” Chu said. “We’ll do more of these in years where the market is very strong, and it got very strong last year into this year. You’ve seen these boot camps really pick up.”

Hope the startup industry’s C-suite can keep pace.

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Where do America’s foreign students come from?

Where do America’s foreign students come from?

This map from a report by the Brookings Institution shows the hometowns of international students studying at U.S. schools on F-1 visas, which are the most common visas for foreign students. The size of each circle shows the number of students from that city who came to the United States to study from 2008 to 2012. The cities that sent the most students were Seoul, Beijing, Shanghai, Hyderabad and Riyadh, in that order. The U.S. schools that accepted the most students were the University of Southern California, Columbia University, and the University of Illinois. For more data, click below. A tip of the hat to Conrad Hackett.

– Max Ehrenfreund

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