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Venture capitalists are keeping a list of unicorns most likely to die. What would be on your list?
Venture Capital
<p>There's been a lot of chatter about the burgeoning number of unicorns out there. In fact, unicorns are giving way to what Re/Code calls "decacorns" --startups valued at more than $10 billion.</p> <p>Well, now venture capitalists are creating lists out there predicting the death of many of these unicorns, Fortune is reporting. Who is on the list? Mum's the word. CB Insights has a list of dying startups -- but it will cost you $6,895 to access it. A bargain basement price for a list that could save you millions.</p> <p>Is a bubble about to burst? VC par excellence Marc Andreessen declared last year that many startups will "vaporize."</p> <p>Some might argue there was never a bubble -- just a pretty good illusion of one. Those billion-dollar valuations? They may have been real for only a handful of investors who were promised that they would be first in line when a company went public or got sold: If the benighted unicorn sold for less than $1 billion, the VC would still get paid as if it had sold for $1 billion.</p> <p>Now that's what I call magic.</p> <p>According to a survey of 37 deals by Silicon Valley law firm Fenwick and West, if the company does even better than expected? You guessed it. The benighted investors get a larger share of the profit.</p> <p>Fortune keeps a list of unicorns. You can find it here. Any on it that you think deserve to be on the deathwatch?<br /> Photo: yosuke muroya<br /> &nbsp;</p> <p>&nbsp;</p>
Forget moon shots, says Elon Musk, I’m nuking MARS!
Lifestyle, 4:01
<p>There are ambitious entrepreneurs and then there's Elon Musk.  Not content with revolutionizing the electric car, and commercial spaceflight, the founder of Tesla and Space-X now wants to nuke Mars -apparently.</p> <p>It may sound like a plan befitting a super villain or a Sith Lord but there is method in the madness. The idea came up in an interview on “The Late Show with Stephen Colbert” as Musk spoke about his plans to make Mars a more hospitable place for humans.</p> <p>“There’s the fast way and the slow way,” said the PayPal co-founder, calling Mars “a fixer upper of a planet.” The fast way would be to drop nuclear bombs on each of the planet’s poles to trigger a chain reaction that would terra-form the planet, making it fit for habitation.</p> <p>Pretty neat, right? Well, don’t get too excited. Musk has since qualified his earlier statements saying:</p> <p>Btw, not saying we *should* nuke Mars -- just layin' out a few options …<br /> — Elon Musk (@elonmusk) September 12, 2015</p> <p>So it seems the planet is safe. For now.</p>
Daily Scan: Stocks fall before Fed meeting
Capital Markets
<p>&nbsp;</p> <p>Good evening,</p> <p>The highly-anticipated Fed interest rate decision is just a couple days away now. The Dow, S&amp;P 500, and Nasdaq all fell, without too much movement during the day. The Dow lost 0.4%, the S&amp;P 500 dropped 0.5%, and the Nasdaq fell 0.34%. The Stoxx Europe 600 lost 0.6% Monday after starting the morning with a slight boost. Oil dropped again, falling to just over $44/barrel.</p> <p>Here’s what else you need to know:</p> <p>NYC opens first new subway station in more than 25 years. The 34th Street-Hudson Yards station took eight years to build, with a price tag of $2.42 billion. There's a lot of firsts for the new station. It's climate controlled, column-less, holds an inclined elevator, and has the longest escalator in the Subway system. Gothamist</p> <p>Shooter loose in Mississippi. Ethan Schmidt, a professor at Delta State University, was shot and killed in Cleveland, Miss. Schmidt's death may be linked to another area shooting. A "person of interest" is being shot in relation to the deaths. CNN</p> <p>Russia pointing tanks at Syrian airfield. U.S. officials say it's not clear what Moscow's intentions are, but the country has been pressured globally to explain its support of Syrian President Bashar al-Assad. Reuters</p> <p>Deutsche Bank to cut one quarter of its total staff. The bank will ax about 23,000 jobs, mainly with layoffs in technology activities and a spin off of its PostBank unit. Deutsche CEO John Cryan took control of the firm in July, and promised to slash costs. Reuters</p> <p>Aussie PM ousted. Australian PM Tony Abbot will be succeeded by Malcolm Turnbull as the country's conservative party shakes up its approach to many hot issues, including the economy, climate change, and same-sex marriage. Wall Street Journal</p> <p>Died: NBA star Moses Malone. Malone passed away unexpectedly Sunday at age 60. Malone was an NBA Hall of Famer, and the first modern star to go pro straight after high school. In 1996 he was named one of the best 50 players of all time. CNN</p> <p>Chinese shares continue to fall. Despite edging higher at the open, Chinese shares ended the session deep in the red today largely thanks to mixed data from the weekend as well as the upcoming Fed decision. The Shanghai Index fell 2.67% while Shenzhen tanked a whopping 6.65%. Japan’s Nikkei Average meanwhile dipped 1.63%. Surprisingly, Hong Kong shares proved to be more resilient, with the Hang Seng Index climbing 0.27% and the Hang Seng China Enterprises Index eking out a 0.11% gain. NexChange</p> <p>Japan industrial production falls short of estimates. The land of the rising sun’s industrial output fell -0.8% last month, worse than the preceding month’s -0.6% reading and missing estimates of a -0.6% fall. Investing</p> <p>China factory output and fixed-asset investment data misses estimates. China’s been punching in some disappointing data lately and </p>
Buying a castle and a piece of history
Lifestyle, 4:01
<p>We all know that our home is our castle, don’t we? Whether it is a two-bedroom apartment in an scruffy part of town, a suburban villa or a rural retreat we protect it with locks and maybe a dog - or in the US, perhaps with an armory.</p> <p>But there are now good opportunities in Britain to buy if not a whole castle, then a piece of one, according to The Daily Telegraph.</p> <p>Oversley Castle, which was once owned by Thomas Cromwell, Henry VIII’s chancellor and protagonist of Wolf Hall, has been split up into five apartments with the addition of a four-storey circular turret and nine barn conversions in 65 acres of Warwickshire countryside.</p> <p>Prices range from £300,000 up to £2 million, so it helps if you receive a banker-size bonus.</p> <p>There are plenty of other fortified strongholds up for sale too. Most were built during Britain’s bloody medieval period when barons fought for power and wealth like modern-day gangsters.</p> <p>It’s now much more genteel, of course.</p> <p>“We envisage the castle as providing lock-up-and-leave properties,” says Paul Harvey, who has developed Oversley Castle. “The kind of place where you chuck your keys to your neighbors while you go off to Spain for three months.”<br /> Photo: Karen Roe</p>
A cornered tiger, Alibaba lashes out
Capital Markets
<p>Chinese internet giant Alibaba is on the offensive after a recent article warned that the firm could lose up to 50% of its value.</p> <p>The furor started with an article posted in Barron’s over the weekend. Journalist Jonathan Laing had wrote that the NASDAQ-listed firm was massively over-valued, and faces losing half of its value amid an "array of problems". </p> <p>This only adds to Alibaba's stress. As of Friday, Alibaba’s stock was trading at $64.68, having slipped below its $68 IPO price from it when it went public a year ago.</p> <p>Laing raised red flags regarding business practices, counterfeit goods, conflicts of interest, and corporate governance. Needless to say Alibaba was not happy and promptly published a point-by-point rebuttal on its website in the early hours of this morning, accusing the journalist of factual inaccuracies and using selective use of information.</p> <p>Alibaba’s stock has not been in great shape for a while. It peaked at around $119 a share in November last year and have been steadily declining ever since. No doubt the Barron’s article will have an impact on the company’s stock, how much may depend on how well Alibaba has argued its case. We will see when the US markets open today.<br /> Photo: Patrick Bouquet</p>
A bull on China
Asset Management
<p>While high-profile hedge fund managers such as Ray Dalio go full-on negative on the region, Nikko Asset Management Asia’s Peter Sartori says that China, as well as Asia’s emerging markets, will continue to beat its first world peers.</p> <p>According to the Straits Times, Sartori argues that there’s still a compelling case for a “long-term bull market” in the region, despite all its recent routs and regulatory missteps:<br /> “The pace of initiatives appears to be increasing in China, particularly in the state-owned enterprises and financial services space…While naysayers argue that the attempted shift from an investment-led economy to a consumption-led economy will result in a major dislocation in financial markets, we believe that the government has enough tools and capital at its disposal to make the transition successfully.”<br /> He also adds that the nation’s highly-scrutinized GDP doesn’t really mean anything to the equity market, saying:<br /> “Does GDP matter from the stock market point of view? No. There's no strong correlation between economic growth and stock market returns. In fact, it's the opposite. When Japan and Korea's economies were growing, their stock markets' returns were lacklustre. When growth slowed in those countries, their markets went through a long and sustained bull market. That's what's under way now in China.”<br /> While he does have a point, low growth in the new and open China seems to be uncharted territory for most, and the fact that Beijing’s been behaving like a riddle wrapped in a mystery within an enigma doesn’t help his argument either.</p> <p>That said, Sartori’s also betting on India in the medium term, asserting that all the nation’s recent troubles “provide scope for looser fiscal and monetary policies.”</p> <p>India bulls are sure to love that.<br /> Photo: groucho</p>
Video: The fabulous life of…Steve Cohen
Lifestyle, 4:01
<p>Steve Cohen is known for three things: SAC Capital, buying a dead shark for $8 million, and having a bit of a bother with the SEC.</p> <p>The latter two aside, SAC Capital’s impressive run of two decades of 30% returns – net of his hefty, nay, enormous 50% fee – has allowed Cohen to surround himself with more toys and art aside from the aforementioned rotting shark. Here are a few of them, plus the shark, via Business Insider:</p> <p>If I was worth $11 billion, I’d probably be doing the same too.<br /> Photo: jwilly</p>
Why China is like the movie Predator
Hedge Funds
<p>Investors are no doubt full of quirky analogies they can employ to describe their experiences of China, but perhaps the best comes from Russel Clark, the CIO of hedge fund Horseman Capital, who recently compared China to the 1987 sci-fi action movie Predator.</p> <p>ZeroHedge reports that Clark offered up this gem in his firm's monthly letter after the $2.5 billion fund was up a staggering 9.4% for August following China’s market rout. </p> <p>Clark recalls how the film features a special ops team ordered on a mission to a South American jungle, that are slowly hunted down by an alien creature. </p> <p>They try to trap the creature, but it defies anything they have seen before: it can turn itself invisible, has infrared vision, and uses a shoulder mounted laser rifle. Nearly all of them succumb to the Predator.  </p> <p>The explanation is long and can be read here. In short, for bears, the Chinese government is like the Predator: continually using special abilities that were previously unknown. Bearish investors meanwhile have been picked off relentlessly and effortlessly by the government and the central banks. </p> <p>But things have unraveled since. The stock market began to sell off and pressure  built on the currency, prompting the Chinese to devalue the renminbi. This had the unwanted effect of stoking fear in the investing public, increasing  both capital outflows and pressure on the exchange. Clark concluded his analogy:<br /> “In my experience, in the mind of the international investment community, small devaluations tend to encourage even more capital outflow, which in turns leads to even large devaluations. Or to borrow, a line from Predator, 'If it bleeds, we can kill it'.’’<br /> One wonders what other movie analogies work to describe the Chinese economy. <br /> Photo: Malte Sörensen</p>
Indonesia: A rising fintech powerhouse?
<p>When it comes to financial innovation in Asia, it’s China that has gobbled up most of the headlines of late, with tech giants like Alibaba and Tencent expanding aggressively into areas such as payments and banking. But perhaps we should be casting our gaze further south, to Indonesia?</p> <p>There are plenty of reasons to be bullish about Indonesian fintech. With around 255 million people, it is the region’s third most populous country after India and China, and has the fourth largest population globally. </p> <p>A large chunk of this population is also unbanked. According to Deliotte, the country has 110 million "bankable unbanked" citizens. Indonesians are crying out for fin-tech solutions and companies are coming into fill the breech. </p> <p>TechInAsia, recently put together a list of nine Indonesian startups that currently springing up across areas as such as payments, product comparison., lending, cloud technology, and data services. The sheer diversity of this nascent space indicate Indonesia might be one to watch.<br /> Photo: Bindalfrodo</p> <p>&nbsp;</p>
Hong Kong companies face tougher scrutiny
Capital Markets
<p>There was an encouraging nugget in an otherwise worrying report on Friday by leading Asia-based brokerage CLSA.</p> <p>First the bad news: a record 38% of Asian companies are destroying shareholder value, returning less than their cost of capital; the proportion burning cash is at a three-year high; and 20% of them are borrowing to pay dividends, according to the Financial Times (paywall).</p> <p>CLSA’s findings were part of a report screening 2,500 of the biggest companies in Asia-Pacific (ex-Japan) for “red flags” that could indicate problems with the quality of their earnings or balance sheets.</p> <p>Companies with several balance sheet-related red flags tend to underperform the broader market by 18%, notes CLSA, while those with poor-quality earnings do so by 7%.</p> <p>Hong Kong-listed companies look especially vulnerable. As many as 1,285 have filed profit warnings this year, which is the most in eight years.</p> <p>But, here’s the good news – although at first glance it might seem perverse.</p> <p>The number of companies that had their shares suspended for financial distress and accounting issues both doubled last year and are set to be even higher this year.</p> <p>For years investors have complained about poor governance and opaque accounting practices at the Hong Kong’s listed but tycoon dominated companies, and despaired at lax stock market supervision.</p> <p>Now, the territory’s regulators might actually be raising their game.<br /> Photo: Barbara Willi</p>