Weekly Digest (19-23 Jan)

Date: 19th to 23rd January 2008
Segments: Editorial, Discussion, Stories, Events

Editorial
We’re in the middle of the earnings season, and I can’t help but compare the investors earnings calls for this quarter with those I’ve listened to over the years. In the past, most calls have been focused on asking companies about where they are investing their money, how they are diversifying, and what they are doing in order to expand their consumer base. That is, how they are “maximising shareholder value” by scaling up their businesses. In some instances – particularly in case of the Internet businesses, one often felt that the analysts didn’t understand the business well enough, and some cases – neither did the top management that was addressing the questions on the call.

Many a media company hived off their Internet businesses, or announced plans for multiple TV channels, with an eye on an eventual listing on NASDAQ or AIM. Never mind the revenues: they felt that if they could put together a portfolio of properties and use search engine marketing to showcase a large user base, they could get a multi-million dollar valuation. If you weren’t scaling rapidly, you were going to miss the IPO bus.