Daily Investment Tips

Bloomberg news is reporting Zynga is in talks to raise funding from T. Rowe Price Group Inc. and Fidelity Investments at a valuation of close to $10 billion.

Valuation of these new generation tech companies seems to be rising every passing month. Facebook has hit $50 billion, little Twitter has just hit $6 billion and now Zynga valuation is estimated now at $10 billion.

Zynga Secondary Market Valuation

As off  February 2011, Zynga was valued at $6.2 billion on secondary exchange SharesPost Inc.

The stunning thing about this rush to buy shares in private market is, investoras are punting their money without having a look at the tech companies financial statements.

Investors are betting on making a killing in the IPO market. They were right when they said, IPOs are for gamblers!

Zynga 2011 revenues

Zynga is a private company and the only revenue numbers out are rumours  from people close to the company. The latest estimate is Zynga revenue topped $600 million in 2010. With the successful launch of latest game, cityville in 2010, these revenue can only rise in 2011.  Zynga is thought to be profitable.

written by Constantine Njeru \\ tags: Bloomberg News, Cityville, Facebook, Fidelity Investments, Financial Statements, Gamblers, Investors, Ipo Market, Ipos, Launch, Market Valuation, New Generation, Private Company, Private Market, Revenue Numbers, Rush, T Rowe Price, T Rowe Price Group, T Rowe Price Group Inc, Twitter

Pandora Media, the internet radio station has just announced plans of an IPO. Pandora has filed to raise up to $100 million in an IPO.

Pandora IPO Price

Pandora did not reveal the IPO price range or the number of shares it plans to sell in the IPO. We only know for now is they plan to raise $100 million.

Pandora IPO date

Barring any regulatory hiccups the IPO coud happen in the second half of 2011.

Pandora Financial Statements 2010/2011

• The company generates most of its revenue from advertising, while also offering a subscription service to listeners.
• Pandora, has over 80 million registered users.
• The company posted a net loss of $16.8 million in 2010
• Revenues of $90 million through the first three quarters of 2011. With a loss of $328,000.
• Pandora said it expects to incur annual operating losses at least through fiscal 2012.

written by Constantine Njeru \\ tags: 100 Million, Financial Statements, Hiccups, Internet Radio Station, Ipo Price Range, Listeners, Losses, Pandora, Second Half, Subscription Service, Three Quarters

I got the following email this morning from a technology newsletter I subscribe;

Well, a very wealthy customer of  Goldman Sachs decided to leak Facebook’s financials yesterday after receiving it over lunch: ‘… during the first nine months of 2010, Facebook generated $1.2 billion in revenue. Net income at the firm was $355 million. The financial statements were not audited and offered little detail about how Facebook generates its revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.’ Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income.

written by Constantine Njeru \\ tags: Facebook, Financial Statements, First Nine Months, Goldman Sachs, Lunch, Net Income, Non Disclosure Agreement, Technology Newsletter

When you apply for a mortgage, the mortgage lender will evaluate your application based on these four factors, capacity, capital, collateral and credit.When you meet them for face to face interview the questions will revolve around these four factors. Your ability to answer the questions in a satisfactory manner will determine whether your mortgage loan application is approved

What Mortgage Lenders Evaluate

This four factors are well explained by the following article that was originally published at Freddie Mac Website

Capacity

Capacity is your current and future ability to make payments. Lenders will look at your income, employment history, savings, and monthly debt payments.

Capital

Capital, or cash reserves, refers to the reserves of money and savings, investments, properties and other assets that belong to an individual and that can be sold relatively quickly for necessary cash.

Lenders will evaluate your application more favorably if you can verify that you have cash reserves. Cash reserves show the lender that you can manage your money well and that you can count on other funds, in addition to your income, to pay the debt.

Collateral

The lender will take a look at all your possessions and property that you can pledge as security for debt.

Credit

Lenders look at your credit and on-time payment history to see your record of paying bills and debts.

Lenders will ask for financial statements to see if you meet all of their criteria. Sometimes your strength in one area can cancel out your weakness in another.

written by Constantine Njeru \\ tags: Assets, Cash Reserves, Collateral, Credit Lenders, Debt Credit, Debt Payments, Debts, Employment History, Financial Statements, Freddie Mac, Income Employment, Mac Website, Mortgage Lender, Mortgage Lenders, Mortgage Loan Application, Payment History, Pledge, Possessions, Satisfactory Manner, Time Payment