Taiwan's Foxconn plans $5 billion investment over five years in Indian facility: Taiwan's Foxconn, the world's largest contract electronics manufacturer and a key supplier to Apple, on Saturday signed a pact with India's Maharashtra state to invest $5 billion over five years on a new electronics manufacturing facility. The announcement was made by Foxconn founder Terry Gou and Maharashtra Chief Minister Devendra Fadnavis after the signing of an accord in the state capital Mumbai. The Foxconn announcement will bolster Indian Prime Minister Narendra Modi's "Make in India" campaign, which aims to turn Asia's third-largest economy into a manufacturing powerhouse. Gou said Foxconn, the trade name for Hon Hai Precision Industry Co Ltd which also counts Blackberry, Xiaomi and Amazon as clients, was looking for local partners for the facility in the western Indian state. He declined to say if the Taiwan-based company would make mobile phones at the facility. On Tuesday, Gou said in New Delhi that he was looking at setting up manufacturing units in various Indian states and possible partnerships in the world's fastest growing smartphone market. He had said in May that Foxconn was aiming to develop 10-12 facilities in India, including factories and data centers, by 2020.
Insight: Tesla burns cash, loses more than $4,000 on every car sold: The Silicon Valley automaker is losing more than $4,000 on every Model S electric sedan it sells, using its reckoning of operating losses, and it burned $359 million in cash last quarter in a bull market for luxury vehicles. The company on Wednesday cut its production targets for this year and next. Chief Executive Elon Musk said he's considering options to raise more capital, and didn't rule out selling more stock. Musk has taken investors on a thrill ride since taking Tesla public in 2010. Now he's given himself a deadline, promising that by the first quarter of 2016 Tesla will be making enough money to fund a jump from making one expensive, low volume car to mass producing multiple models, and expanding a venture to manufacture electric power storage systems. Tesla's shares fell almost 9 percent on Thursday and slipped another 2 percent on Friday as investors and analysts weighed the risks of Musk's ambitious plans for expanding Tesla's auto and energy storage businesses. Tesla had just $1.15 billion on hand as of June 30, down from $2.67 billion a year earlier. Barclays analyst Brian Johnson disagreed with the company's estimates, and said he expects Tesla's capital spending will go up in 2016 and 2017 as the company ramps up its battery factory and Model 3 development. "Their small scale means the cash generation is not as great as they might have hoped for," he said. Musk said this week Tesla expects to have $1 billion in cash over the next year, and told analysts "there may be some value" in raising capital "as a risk reduction measure." Tesla's stock is still about 70 percent higher than it was two years ago, and 8 percent ahead of its level on Jan 1. With a market capitalization of $31 billion, Tesla is worth more than Fiat Chrysler Automobiles NV, the much larger maker of Ram pickups and Jeep Grand Cherokees. "A capital raise, given the way they're burning cash today, given the fact that they have future investment needs, seems very likely at some point," said UBS Securities analyst Colin Langan, who has a sell rating on the stock.
China's JD.com quarterly revenue tops estimates, third-quarter growth seen slowing: JD.com Inc, China's second-largest e-commerce site by sales, reported a 61 percent year-on-year rise in quarterly revenue, topping expectations, powered by a jump in the number of shoppers and goods bought on its platform. But the company's growth rate is expected to slow in the third quarter. JD.com said it sees third-quarter revenue of between 43.2 and 44.7 billion yuan, which would be up 49 to 54 percent from the previous year. JD.com, a distant rival to Alibaba, is investing heavily in its offline operations to complement its internet platform, taking activities like warehousing and deliveries into its own hands. This business model, similar in style to Amazon.com's, takes its toll and the company made a net loss of 510.4 million yuan, shrinking only slightly from the previous year's 583 million despite the leap in revenue. The catalyst for that jump was the 118 million annual active customer accounts on JD.com in the 12 months ended June 30, up 72 percent from the same period a year earlier. Those customers drove an 82 percent jump in the total value of products sold on the company's platforms in the quarter, to a total of 114.5 billion yuan. Shares in JD.com have risen 41.79 percent since the beginning of the year.
Raising Money Is Like Buying Dinner, Spending Money Is Like Getting Fat: How A Big Round Can Hurt Your Startup: When you’re a struggling team eating away at your meager savings and trying to get your startup profitable, venture capital funding seems like the holy grail. Raising money from investors gives you the resources to grow your team, buys you time to do things properly and gives you no small amount of credibility in the eyes of other entrepreneurs, prospective hires and even some clients — not to mention mom and dad thinking you’re now successful. While all of this is true, there’s a pervasive belief in the industry that entrepreneurs should aim to raise as much money as possible, as often as possible. It might be true in some circumstances, but here are three reasons why raising as much money as possible is often not in the best interest of the entrepreneur or the company. Raising Money Is Like Buying Dinner, Spending Money Is Like Getting Fat, and Raising Big Rounds Is Like Stunt Driving. In the end, it’s most important as an entrepreneur that you focus on the right decisions for your company. Don’t raise funds to get a big splash in the tech press. Don’t push for the biggest valuation to please preferred stockholders. And don’t optimize for the fanciest publications or the most street cred. All of those things are fleeting sugar highs of entrepreneurship. Plan for the long-term success of your company by knowing how much you actually need and stopping once you hit that number.
HTC Trading Near Cash Leaves a Smartphone Brand - Once the leader in the US - With No Value: A 56 percent plunge in HTC’s stock this year has brought its market value near to cash on hand. That means investors are effectively saying th smartphone maker’s brand, factories and buildings are almost worthless. At NT$52.2 billion ($1.6 billion), HTC’s market price is barely above the NT$47.2 billion cash it had at the end of June. A further 9.5 percent drop in its stock from the NT$63 close on Friday would bring the two figures into alignment, signaling investors put no value on the rest of the company. HTC’s fall from a market capitalization of more than NT$900 billion in 2011 charts the perils of a product and marketing strategy that’s failed in the face of stiffer competition from Samsung Electronics and Huawei Technologies. Once the best-selling brand in the U.S., the failure of its One, Butterfly and Desire smartphones to drive sales has pushed HTC outside a global top-10 now dominated by Chinese brands. Its forecast for third-quarter sales of as much as 48 percent below analyst estimates follows a 35 percent cut to projected revenue in the preceding period and indicates that the Taoyuan, Taiwan-based company has little chance of regaining market share in the short-term. “HTC’s cash is the only asset of value to shareholders,” said Calvin Huang, who has a NT$46.50 price target on the stock at Sinopac Financial Holdings Co. in Taipei. “Most of the other assets shouldn’t be considered in their valuation because there’s more write-offs to come and the brand has no value.”
As private and public multiples diverge sharply, some investors bet on public companies : Airbnb’s valuation has ballooned over the last few years as large financial firms like Fidelity Investments and T. Rowe Price have rushed to invest in the start-up. But a small San Francisco-based hedge fund called Pier 88 Investment Partners has decided that the fervor for Airbnb shares creates a different kind of opportunity. While other investors paid dearly to buy a piece of Airbnb — the start-up’s latest funding round valued it at $24 billion — Pier 88 did not invest directly in the privately held online home-rental company. Instead, Pier 88 put money into HomeAway, a publicly traded Internet company that competes with Airbnb, but has a market capitalization of just $2.95 billion. Frank Timons and LeAnne Schweitzer, the co-founders of Pier 88, believe there is money to be made on this big gap between public and private company valuations. In their view, the public companies are such relative bargains that they will make great acquisitions for purchasers that want to better compete with upstarts like Airbnb. Then, when those publicly traded companies are snapped up — often for a premium of more than 50 percent — Pier 88 can profit from the bet. Some elite start-ups are now vastly more expensive than their publicly traded cousins. Apart from Airbnb being pegged at eight times the value of HomeAway, the ride-hailing start-up Uber was recently valued at around $51 billion, compared with $7.3 billion for the rental-car company Hertz. The storage start-up Dropbox has a valuation of around $10 billion, while its publicly traded rival Box has a $1.9 billion market capitalization. It’s not perfectly accurate to directly compare market capitalization and private company valuations, since private companies keep their true financial pictures hidden. Still, “the easy private financing environment has created an interesting trade opportunity,” said Kenneth J. Heinz, the president of Hedge Fund Research, which tracks hedge funds and their performance. “With such a disparity between public and private multiples, it’s a reasonable fundamental approach to believe that in this environment, the public company valuation will come up or the company will be acquired.”
