Twitter, Inc. Initial Review BUY

TWTR : NASDAQ
US$52.91 BUY 
Target: 62.00

COMPANY DESCRIPTION:
Twitter is the world’s leading real-time one-to-many
communication platform for discovering and sharing unique
content. With over 270 million global monthly users, Twitter has a
diverse user base including influential individuals such as world
leaders, celebrities, athletes, and leading organizations such as
sports teams, media outlets, and brands. Each Tweet is limited to
140 characters of text, and can conclude photos, videos, and
applications.

Technology — Internet
ENGAGEMENT & MONETIZATION TRUMP USER GROWTH; INITIATING AT BUY
Investment recommendation
We believe Twitter is early in defining what is possible as the world’s
real-time interest sharing platform. The evolution will likely be bumpy,
but the platform should continue to become more mainstream. Slowing
user growth is a challenge, but we believe the company has levers to
pull to fight back. Meanwhile, our positive stance is based largely on the
engagement and monetization momentum we expect over the next few
quarters. We believe this should lead to upward estimate revisions as
Twitter benefits from engagement and monetization groundwork that
has been laid over the past year.
Investment highlights
 Users & engagement may be mixed – MAU growth may not
accelerate, but logged-out users could tilt the discussion favorably;
engagement metrics should rebound in Q3 & Q4.
 However, monetization holds significant upside – Twitter monetizes
at less than half the level of Facebook, but newer ad products
should help it catch up fast.
Valuation
Our $62 price target is based on 45x our 2018 EPS estimate, discounted
to present at a rate of 10%. We note that our estimates do not include
potential dilution from yesterday’s announced convertible debt offering.
On a growth-adjusted EV / Revs basis, TWTR trades at a significant
discount to peers.
Risks
User growth may disappoint, especially in the U.S. where monetization
is highest; platform shift to voyeurs (away from Tweeters) may impact
advertiser interest; new ad products may fail to gain momentum.

Blackberry Jumps with Movirtu

BLACKBERRY LTD.

BlackBerry Ltd. (BBRY) has acquired mobile technology company Movirtu Ltd., shoring up its smartphone management features as it targets business users.

London-based Movirtu uses a virtual SIM card enabling customers to connect more than one phone number to a single device. The service lets employees who use one phone for work and home to switch easily between business and personal profiles with billing clearly separated, the Waterloo, Ontario-based company said in a statement today.

As BlackBerry’s share of the smartphone market has diminished, the company has shifted focus to selling software-based services to businesses and governments and exploiting the bring-your-own-device trend, where employees use work-related apps and features on their personal phones. Gartner Inc. predicts half of employers will ask workers to use their own phones for business by 2017.

We’ve been very clear as part of our turnaround strategy that we had full intention to not only manage BlackBerry devices but to manage iOS, Android and Windows Phone devices,” John Sims, head of BlackBerry’s enterprise services business, said in a phone interview. “It’s a sizable market opportunity.”

BlackBerry plans to start offering the phone-splitting software to customers early next year, Sims said.

The company’s shares rose 4.9 percent to $10.78 at the close in New York, the biggest daily gain since July 24.

Founded in 2008, Movirtu is run by CEO Carsten Brinkschulte and has 22 employees. It received $5.5 million in a 2010 funding round.

Disclosure BBRY is the largest long position in Jack A. Bass Managed Accounts

Performance ! Guaranteed !

Guaranteed Investment Performance Or You Don’t Pay

In the same way that I urge investors to use an adviser I too have a business coach. This week I complained that my performance of a 31% gain in 2013 was not gaining me the respect or new clients to which I thought I was entitled.

He challenged me :
a) I was not ” entitled ” to anything more than I earned by performance
b) My performance allowed me to guarantee an annual 12 % return or I will forfeit the 1 % annual fee and the 20 % performance fee.

The Challenge – a guarantee for your annual investment return despite all risks to our performance and our costs .

Investors and pensions need efficient methods to screen, research, perform due diligence and monitor managers in their quest to deliver returns. They need to know the data they are using is accurate and fresh — and represents the best options available worldwide across every asset class. They must take into account their own assets and liabilities and the impact to portfolio risk while screening strategies and tracking exposures. They also need polished reports and presentations to provide evidence of a sound, inclusive selection processes for regulators and committees.

Placing these decisions in Jack A. Bass Managed Accounts removes the work from your hands to ours .

Meeting the Challenge

Jack A. Bass Managed Accounts offers a comprehensive suite of solutions for screening and monitoring, as well as risk assessment leveraging the data of the most important databases. In fact, 89% of surveyed clients agree that Jack A. Bass Managed Accounts helps them save their time during the due diligence process, while 75% of pension clients agreed .

The answer to When? – is always NOW ! – not tomorrow.
Contact Information

Information must proceed action and that is why we offer a no cost / no obligation inquiry service if you are not already a client.

Email info@jackbassteam.com

or Call Jack direct at 604-858-3202 – Pacific Time 10:00 – 5;00 Monday to Friday

Apple BUY Target Price $112

AAPL : NASDAQ : US$97.99 BUY 
Target: US$112.00

Technology — Communications Technology — Wireless Equipment
APPLE DELIVERS WITH PORTFOLIO OF INNOVATIVE PRODUCTS AND SERVICES; FEATURES
CONSISTENT WITH RFIC, SEMI SUPPLIER THESES
Investment recommendation:

We believe Apple delivered a portfolio of impressive new products with the 4.7”
iPhone 6, 5.5” iPhone 6 Plus, and two Apple Watches, along with innovative
services such as mobile payments and health-related services. Based on our
analysis of global iPhone sales by region, we believe consumers slowed the
pace of iPhone upgrade purchases during the iPhone 5 and 5s product
cycles, and we believe the extended replacement rates combined with new
larger-screen iPhones position Apple for record iPhone 6 sales. While we
anticipate limited initial supply of the iPhone 6 Plus and were slightly
disappointed the Apple Watches will not ship until C2015, we keep our
estimates above consensus, and reiterate our BUY rating and $112 target.
Investment highlights
 While Apple’s product launches were consistent with our expectations in
terms of hardware products, we believe the event met lofty investor
expectations. Further, we believe the increased focus on software and
services could result in a higher multiple longer term.
 In the near-term, our supply chain analysis and conversations with global
distributors indicate the channel is preparing for a record iPhone 6
launch, and we anticipate strong sales of the 4.7” iPhone 6 during the
December quarter. However, we believe the 5.5” iPhone 6 will ship in
limited volume through the end of C2014 due to supply constraints, but
this could result in strong March quarter follow-through sales with an
improved ASP and margin mix. We were impressed with the Apple Watch
products, but initial shipments in C2015 were later than our belief a
couple million could ship in C2014.
 We have slightly reduced our iPhone ASP assumptions, added the Apple
Watch products to our forward estimates, and slightly increased iPad
estimates given our expectation for a new 9.7” iPad.

This results in our
F2015 EPS estimate increasing from $7.50 to $7.55, and we are introducing our F2016 EPS estimate of $7.92.
Valuation:

Our $112 price target is based on shares trading at roughly 14x our F2016 EPS estimate.

Franchising Your Business : Real Estate Office as an example

Franchising Your Real Estate Office.

Summary of the article / our services in franchise development

Here is the actual letter I wrote a client last year :

Jack A. Bass will provide:

Documentation to permit you to franchise your  business( Real Estate company ) in the State of (now doing business as HRM Realty)

Basic documents required :

At a minimum, you will need a written franchise disclosure document, a franchise agreement, an offering circular, and audited financial statements. We can work together to develop training manuals, operation manuals etc. and can assist you in selecting suitable franchisees.

There is a lot of paperwork to be developed. You may need a Master Franchise Agreement if you are selling territories to be developed.You will need Conversion Agreements for each real estate office that will convert to your new brand.

The Federal Trade Commission (FTC) regulates franchising at the national level and has adopted minimum standards.

We will provide you with a handy reference guide –    To read more please click on the link Franchising Your Real Estate Office.

Iron Ore Price Drop No Relief to Shipping Sector

Price drop will not increase demand from China – and not increase shipping demand.

Iron ore declined sooner than expected this year as supplies exceeded demand and prices are unlikely to recover, according to Goldman Sachs Group Inc., which said 2014 will mark the end of a so-called iron age.

This year “is the inflection point where new production capacity finally catches up with demand growth, and profit margins begin their reversion to the historical mean,” analysts Christian Lelong and Amber Cai wrote in a report today titled: “The end of the Iron Age.” The 2016 forecast for seaborne ore was cut to $79 a metric ton from $82 and the 2017 outlook was reduced to $78 from $85, according to the New-York based bank, which stuck with a forecast for $80 next year.

The raw material tumbled into a bear market this year as the biggest producers including Rio Tinto (RIO) Group expanded low-cost output, betting higher volumes would more than offset falling prices while less competitive mines were forced to close. The decline in prices came sooner than expected, according to Goldman, which said in November that iron ore would probably drop at least 15 percent this year. The commodity is seen in a structural downtrend, JPMorgan Chase & Co. said today.

“The price decline has been dramatic, but a weak demand outlook in China and the structural nature of the surplus make a recovery unlikely,” Lelong and Cai wrote. “Lower prices for iron ore and steel are unlikely to boost demand in a material way. Instead, the day when steel production in China will peak gets ever closer.

Lowest Level

Ore with 62 percent content at the Chinese port of Qingdao fell 39 percent to $82.22 a dry ton this year, the lowest level since September 2009, according to data from Metal Bulletin Ltd. The Bloomberg Commodity Index (BCOM), which doesn’t include iron ore as a member, lost 2 percent in the period. Within the index, soybeans fell the most.

Before the surplus emerged, iron ore supplies were tight and producers had above-trend profits even as costs increased, according to Lelong and Cai. That period, dubbed by the bank as the Iron Age, is now ending, they wrote.

“The current exploitation phase in iron ore could last for a decade,” the analysts wrote. “Iron ore markets went through a 20-year period of declining prices in real terms during the previous exploitation phase that ended in 2004.”

The global surplus will more than triple to 163 million tons in 2015 from 52 million tons this year, according to Goldman. The glut was seen expanding to 245 million tons in 2016 295 million tons in 2017 and 334 million tons in 2018.

Producers’ View

The biggest suppliers see higher prices. Ore may increase as the higher-cost output exits the market, Nev Power, chief executive officer of Perth-based Fortescue (FMG) Metals Group Ltd., said in an Aug. 20 interview on Bloomberg Television. Vale SA also sees prices rebounding as supply growth slows and mines close, Jose Carlos Martins, the Rio de Janeiro-based company’s head of ferrous and strategy, said on July 31.

Iron ore may see a dramatic recovery this half, Paul Gait, an analyst at Sanford C. Bernstein, said in a report on July 9, citing factors including a seasonal increase in the second six months and an end to China’s policy tightening. Asia’s largest economy accounts for about 67 percent of seaborne demand.

Credit growth in China missed estimates in July and new-home prices fell in almost all the cities the government tracks, putting pressure on policy makers to step up stimulus as they seek to meet an economic growth target of 7.5 percent.

About 110 million tons of global supply will close next year and a further 75 million tons in 2016, Goldman estimated in the report. While the majority of closures would be in China, seaborne producers will not go unscathed, it said.

Exceed Demand’

“New seaborne iron ore supply delivered into China is expected to exceed demand growth over the next three to four years,” Daniel Kang, an analyst at JPMorgan Chase & Co. in Hong Kong, said by e-mail in response to Bloomberg questions. “In short, we see iron ore in a structural downtrend.”

Rio Tinto, the biggest supplier after Vale, plans to boost output to more than 330 million tons in 2015, according to a company estimate. Vale will raise production 8.4 percent to 348 million tons in 2015. BHP Billiton Ltd. sees an 8.9 percent increase from its Western Australian mines in the year from July 1, while Fortescue may boost shipments by 25 percent.

Fortescue’s stock declined 32 percent in Australia this year, while in London Rio shares lost 5 percent and BHP rose 0.4 percent. In Brazil, Vale dropped 23 percent.

“The shift into structural oversupply is barely six months old but seaborne prices have already declined 38 percent year-to-date,” Lelong and Cai wrote. “Rather than representing the trough for this cycle, we believe the downward pressure is set to continue.”

 

Stratasys BUY Target Price $150

SSYS : NASDAQ : US$120.63
BUY 
Target: US$150.00

COMPANY DESCRIPTION:
Stratasys Ltd. is a global provider of 3D printing solutions,
including a wide range of 3D printers, consumable print
materials and services. Stratsys Ltd. was formed with the
merger of Stratsys and Objet in a stock-for-stock merger
completed in December 2012. The combined company
has an impressive portfolio of 3D printing and direct
digital manufacturing solutions.
All amounts in US$ unless otherwise noted.

Transportation and Industrials — Manufacturing Technology
ANALYST DAY EFFECTIVELY COMMUNICATES MANAGEMENT’S STRATEGIC VISION
Investment recommendation
SSYS management laid out a solid case for driving strong top line organic
growth (25%+ over next 3-5 years) during Monday’s analyst day in New
York. Momentum remains healthy at the high end for Fortus and
Connex3, which is likely to yield strong follow-through materials sales
and gross profit, while new product introductions are continuing at a
rapid pace (41 in 2014) and should keep the channel invigorated. The
presentations also clearly illustrated compelling synergies between a
recently expanded service bureau capability (Solid Concepts and Harvest
acquisitions) and strategic sales efforts for hardware and materials that
address the desire of large global customers to explore the full range of
3D printing’s ROI potential in their manufacturing and design activities.
We are reiterating a BUY rating and $150 price target, and see EuroMold
(late November) as a looming positive catalyst for SSYS based on 10+
additional new product introductions to be made during the show.
Investment highlights
 SSYS at the analyst day announced the launch of two new Connex1
and Connex2 printers at lower price points to complement the
Connex3 printer that has strong customer traction. The new printers
add increased functionality and share a common family platform with
Connex3 and replace the Eden Series of Connex printers. Additionally
SSYS announced the launch of the new FDM ASA outdoor material
offering targeted at automotive applications. Management expects to
announce more than 10 new products at EuroMold this November.
 Stratasys reiterated its 2014 guidance for revenue of $750-770M
compared to our estimate of $759.6M and consensus of $758.8M and
EPS of $2.25-2.35 compared to our in-line estimate of $2.31.
Management reiterated a long term revenue target of 25%+ growth
with long term operating margins of 18%-23%.

Apple Shakes Doubters as Stock Surge Greets IPhones Blackberry To Benefit

AAPL:US98.36-0.61 -0.62%
98.36
09/08/2014

Apple Inc. (AAPL)’s prospects seem a lot brighter than they were the last time Tim Cook introduced an iPhone.

When Chief Executive Officer Cook unveiled two new smartphone models 12 months ago, Apple’s stock was slumping and the company was losing market share to Samsung Electronics Co. and low-cost manufacturers such as Xiaomi Corp. Questions abounded about whether Apple could keep innovating without co-founder Steve Jobs.

Fast forward to a year later and the company’s stock is flirting with a record high. Anticipation is building for the bigger-screen iPhones, a wearable device and a mobile-payments system that people with knowledge of the matter have said Apple is set to announce today. Even the recent stolen pictures of naked celebrities such as Kate Upton from Apple’s iCloud service have done little to derail investor enthusiasm.

Driving the change are shifts in the smartphone industry and how investors have come to accept that Cook is firmly in charge of Apple. Rival Samsung (005930) is losing momentum as its multiple-device strategy to please all people at all prices is stalling, making Apple’s decision to stick just with high-end phones look smart. Cook is also set to give investors what they’ve been seeking: a new category of products, and larger-screen devices that consumers have been craving.

 

They’re on top of the world,” said Tim Bajarin, an analyst at Creative Strategies Inc. “The No. 1 difference between last year and this year is the fact that Wall Street and even the customers have embraced the fact that this is Tim’s company — he’s proven that he not only can pick up the mantle of Steve Jobs but advance it.”

Even Cook’s venue choice for tomorrow’s event is symbolic, Bajarin said. Apple will reveal its latest gadgets near its Cupertino, California-based headquarters at the Flint Center for the Performing Arts. That’s where Jobs introduced the Macintosh computer in 1984 and the iMac in 1998, both of which triggered growth spurts at the company.

Cook still has a lot to do to maintain Apple’s growth streak. The wearable device, which may include features for tracking health and fitness activity, along with a push into mobile payments, will test Apple’s ability to integrate hardware and software to make the products easy to use. Competition against deep-pocketed Samsung remains stiff in smartphones and other mobile devices.

Trudy Muller, a spokeswoman at Apple, declined to comment.

Bigger IPhones

Apart from investors, software developers are also optimistic about Apple’s prospects. Mark Kawano, CEO and co-founder of Storehouse Media Inc., said he’s looking forward to iPhones with larger screens, a better camera and an operating system that will likely let his company’s storytelling application be better utilized.

“More and more, the iPhone is just getting better and better at things that a traditional computer used to be good at,” he said. “Those things are what we are really well positioned for.”

Apple’s perceived renaissance dates back to earlier this year. At the end of 2013, Samsung, with its panoply of multipriced Galaxy devices running on Google Inc.’s Android operating systems, loomed large. The Suwon, South Korea-based company’s share of the global smartphone market had surged to 31 percent, while Apple held about 15 percent, according to researcher IDC.

Facing Critics

Apple, meanwhile, faced criticism from analysts and investors for holding to a single phone style and high prices. Its then-new iPhone 5s started at $199 with a wireless contract and the less-expensive iPhone 5c was offered at $99 with a contract. The unsubsidized iPhone 5c was priced at $549 in the U.S. and 4,488 yuan ($733) in China while Xiaomi’s handset cost 1,999 yuan and Lenovo Group Ltd.’s flagship K900 IdeaPhone sold for 3,299 yuan.

“There was speculation in the tech media that the 5cs were going to be the low-price phones, so when they came out and the pricing didn’t really address the broader emerging markets that wanted cheaper phones, that obviously led to some level of disappointment and sell off,” Walter Piecyk, an analyst at BTIG LLC in New York, said.

Samsung Slowdown

Yet Samsung — instead of ratcheting up its revenue at Apple’s expense — began facing slowing sales growth as it got squeezed by competitors such as Xiaomi on the low end and Apple on the high end. Samsung’s global smartphone market share slid to 25 percent in the second quarter from 32 percent a year earlier, according to IDC. In July, Samsung reported sales and profit that missed analysts’ estimates.

“The loss of momentum at Samsung creates an unforeseen buffer globally — and is timed perfectly into a launch of larger screened phones with the potential to even get customers to switch back to Apple,” Ben Reitzes, an analyst at Barclays, wrote in a July note to investors.

By contrast, Apple steadily reported increasing year-over-year iPhone sales that topped analysts’ estimates. The new handsets “primarily” fueled Apple’s 12 percent sales gain by unit during the first three quarters of the company’s 2014 fiscal year, according to a filing with the U.S. Securities and Exchange Commission.

Best Ever

At the same time, Apple executives began a drumbeat to raise anticipation for new products. In May, Eddy Cue, head of iTunes, said products to be introduced later this year are the the best pipeline Apple has had in 25 years. In July, Chief Financial Officer Luca Maestri echoed that by saying he was “expecting a very busy fall.” Cook chimed in and said the company has an “incredible pipeline” that “we can’t wait to show you.”

Cook has appealed to investors in other ways as well. In April, Apple said it would expand its shareholder payout program, increasing its share repurchase authorization to $90 billion from $60 billion and announcing a 7-for-1 stock split, as well as a bigger dividend. The company’s stock surged in the aftermath of the announcements.

The CEO has also shown he’s serious this year about boosting growth through acquisitions. In May, Apple agreed to pay $3 billion to buy headphones and streaming-music service Beats Electronics LLC, the company’s biggest-ever purchase.

By the end of trading yesterday, Apple’s stock was up 38 percent from a year ago, ending the day at $98.36. Shares are up 23 percent so far this year, exceeding the 8.3 percent gain of the Standard & Poor’s 500 Index.

There’s a new willingness by investors to see “the glass as half full rather than half empty,” Piecyk said. “They’ve earned more investor trust.”

Seeking Alpha says Blackberry To Benefit

  

Summary

  • Apple’s iPhone 6 is about to make the phablet form factor the dominant one for consumers.
  • While Apple’s first iPhone destroyed BlackBerry, this release will catalyze BlackBerry.
  • The BlackBerry Passport could become the dominant business phablet in the marketplace.
    • The BlackBerry Passport could become the dominant business phablet in the marketplace.Apple will have validated for the masses the value of a bigger screen, and BlackBerry will have the biggest screen around. And this time, BlackBerry won’t be competing with Apple for the consumer market. It will be re-entering familiar territory with familiar customers in mind: working professionals for whom productivity is paramount,

Amazon Is Under Attack

Amazon’s strategy of relentless expansion is looking risky as it finds itself fighting fierce battles on all sides.

In the last nine months alone, the company that launched as a book seller has made three forays into hardware, with a TV streaming box, the Fire smartphone, and its Square-killer, Local Register. Amazon also launched a local services marketplace, an unlimited e-book subscription service, Amazon Pantry for grocery delivery (and an accompanying bar-code scanner), its own in-house delivery system for same-day and grocery services, and a music-streaming offering, while also continuing its experimentation with drones and pouring millions into its original video content.

Plus, it owns Zappos, Diapers.com, and IMDB — and that’s just the start.

CEO Jeff Bezos’s strategy has been to forgo profits and endure slim margins while prioritizing expansion and customer experience. Amazon ruthlessly snuffs out competition with low prices and takes a hard line in negotiations with companies that want to be partners. This has led to Amazon taking vastly more ecommerce sales than anyone else — an expected $91 billion in sales this year, more than the next dozen largest e-tailers combined.

But when the company said it expects to lose a whopping $410 million to $810 million in Q3, investors panicked, and the stock tanked more than 10%. Overall this year, it’s down nearly 20%.

Scott Tilghman, from B. Riley & Co., said that although the firm is used to Amazon’s slim profits or even losses, it downgraded its estimates because “we are finding no end to the company’s spending this time around.”

Now, it’s important to note that it’s not like Amazon can’t make money. It’s that it chooses not to make money. As Evans puts it Amazon has someone at the company whose job it is to make sure that net income gets to zero.

Amazon takes nearly every dollar of cash that it generates and pumps it right back into the company, which you can see represented here by the growth in capital expenditures:
Amazon’s willingness to reinvest its money makes it an intimidating company. It’s run like a startup, not a 20 year old mainstream company.

“We won’t invest in a company unless they can tell us why they won’t get steamrolled by Amazon,” Jordan once told Fast Company.

But recently, it feels like something has changed. As Amazon expands into more verticals, its sheer number of competitors has exploded, and they’re attacking Amazon in ways that are both big and small. Amazon remains a strong company, but it suddenly seems at risk of stretching itself too thin, exposing itself to too many competitors.

The startups that could disrupt Amazon

For instance, Andreessen Horowitz just invested $44 million in Instacart, a grocery delivery service. Instacart hires people to drive their own cars to grocery stores to pick up stuff that users order through their smartphone. This is a direct competitor to AmazonFresh, which also delivers groceries, but in fewer markets around the country than Instacart does.

The Instacart example is telling, partly because the company exists almost entirely because of our smartphones and the desire for instant gratification.

Mobile apps are changing shopping (mobile commerce grew three times faster than e-commerce year-over-year overall in Q2). But, until its recent release of the Fire phone, Amazon had done hardly anything to make its mobile experience distinct from its desktop experience. It basically just ported its website into an app. With the Fire phone, Amazon went hard in the opposite direction. Part of the reason why the Fire phone hasn’t done well, is that it feels like the phone exists mainly as a portal to the Amazon ecosystem.

Besides providing a better gateway to instant gratification, many e-commerce apps also offer a more personalized shopping experience. Amazon may be the “everything store,” but it isn’t great at pointing you towards things you weren’t specifically looking for.

As Kevin Roose put it in a recent New York Magazine piece, Amazon has issues with “discovery.” Startups like Spring, Fancy, and One Kings Lane, to name a few, are all beautifying the e-commerce process while giving customers new ways to browse.

 

Lee Hnetinka, founder and CEO of New York City-based startup WunWun thinks his company undercuts Amazon in several different ways. WunWun is a delivery service app that lets customers purchase goods from local stores and then delivers them within an hour for free, and Hnetinka says that operating without warehouses and inventory makes it much more nimble than Amazon.
A WunWun courier on a delivery run.

“We’re also empowering merchants,” Hnetinka told Business Insider “We’re empowering them to compete with Amazon.” Although he says that he doesn’t “wake up everyday thinking about how [WunWun] can kill Amazon,” he’s not afraid of the competition.
The other reason the Instacart story is important is that it only competes with Amazon because Amazon is doing everything now. If Apple is famous for its focus, Amazon should be famous for its lack of focus.

Another thing that makes this this period of competition different than the others is that Amazon itself has trained its newest competitors.

For instance, Flipkart, an India-based e-commerce company built by two Amazon alumni, just raised $1 billion. After they announced their raise, Amazon said it would go spend $2 billion in India.

Then there’s Jet, a soon-to-be-launched e-commerce startup from Marc Lore. Lore knows Amazon’s brutal tactics as well as anyone. Prior to starting Jet, he co-founded Quidsi, which was the parent company of Diapers.com. In 2010, BusinessWeek called Diapers.com “What Amazon Fears Most.”

Diapers.com was shipping hundreds of millions of Diapers annually, making a dent in Amazon’s business. To compete, Amazon went nuclear on Diapers.com, drastically lowering prices forcing Quidsi to sell to Amazon for $540 million.

When he announced his new company, Lore said, “At Jet we will make use of the latest advancements in technology to create a new shopping experience that will empower customers like never before. Jet will bring unprecedented transparency and efficiencies to the overall e-commerce market, and as a result, will transform the customer experience in a way that, until now, has not been possible.”

Lore raised $55 million for his new venture, and although he doesn’t specifically call out Amazon, his ambitions are clearly big.

The giant companies that want to disrupt Amazon
Amazon isn’t under attack from just startups, though. There are big companies with deep pockets ready to challenge Amazon, too.

Chinese e-commerce giant, Alibaba is about to IPO. It’s hoping to raise $21 billion in the biggest IPO in history, giving Alibaba billions in cash to try to crack into the U.S. market.

Then, there’s Google, which has ramped up its inclusion of paid product listings. These listings show products right in Google searches. Amazon-Google is one of the most underreported, but important, rivalries in tech.

Google makes its money when people do commercial searches for products. As Amazon grows in power and ubiquity, consumers are going straight to Amazon.com to do searches for stuff instead of Google. To fight back, Google has tried to improve its shopping results. As these results improve, Amazon is hurt.

 

Will Delaware Give Up Its Status as the #1 Corporate Tax Haven? Still #1 For Trusts .

 reblogged from Tax Haven Guru and commented:

Generally we avoid U.S. as the site for the initial incorporation of any client seeking a ” dutch sandwich ” low tax solution for IP or software or manufacturing tax reduction. It makes no sense to ” red flag ” your companies with an American address regardless of how exact our subsequent dividend routing is to comply with U.S. laws.We do favor Delaware for Trusts 

Delaware – A domestic ‘offshore’ haven

The state of Delaware has long been the corporate friendly haven for both U.S. and world business. It’s now fast becoming a center for the creation of asset protection trusts for Americans and for foreigners

For several decades, U.S. corporations have set up operations in Delaware in order to take advantage of the state’s tax code, friendly business climate and sophisticated legal environment. Increasingly, families who are looking to protect their fortunes from onerous tax burdens and complicated trust law are following corporate America’s lead.

The best news about Deleware is that non-Dupont families don’t have to move there in order to set up a trust. As long as the trustee has a base in Delaware, families can enjoy the financial benefits of the state from anywhere in the US and, in some circumstances, the world.

“Delaware has enacted legislation to attract wealthy rich people and private-wealth banks to set up shop in the state,” says Jack a. Bass , wealth advisor for clients around the globe.

The tax-free status in Delaware make it something of a duty-free zone between New York and Washington. But Mr Bass said the state holds many other attractions for family trusts. Hear are some examples.

A Generation Skipping Trust (GST): This is also called a dynasty trust. This trust allows individuals, while they are alive, to pass part of their estate down to future generations while minimising the tax. In the majority of states, the trusts have a terminus point at which future generations will be taxed. They typically extend 21 years beyond the death of the last trust beneficiary alive when the trust was created. If the youngest beneficiary is 21 and lives to 90, the trust will run 90 years. It’s a great tool for wealthy families but the massive tax bill down the road is a punishment.

A Delaware Dynasty Trust overcomes this issue because the state allows perpetual trusts without an end date. The trusts face no future estate, gift or generation-skipping taxes as long as the assets stay in trust. A JPMorgan report estimated that a $2 million investment in a standard dynaty trust, which is the most a married couple can give and still be exempt from gift tax, would yield $98 million after 90 years. A perpetual Delaware Dynasty trust would yield $266 million, based on projected investment returns.

A Foreign Trust: Foreign trusts are useful tools for citizens of the world who reside outside the U.S. but want to pass on more of their estate to beneficiaries who are either residents or citizens of the U.S. A foreign trust is exempt from gift-estate and GST taxes and can be set up so that, while alive, the individual pays no taxes on it. It is a useful tool made even better with a Delaware-sited foreign trust.

First, it can be a perpetual trust, as with a dynasty trust. Second, Delaware law prevents creditors from taking possession of the assets in the trust, similar to an offshore haven. Third, many countries have adopted anti-tax deferral legislation, and have drawn up “black lists” of countries that are tax havens. Trusts in a tax haven country may be taxable under these rules. But, Delaware foreign trusts are likely to avert anti-tax deferral legislation because the U.S. is unlikely to turn up on such black lists.

Delaware Statutory Trust: Delaware statutory trusts are great tools for individuals who wish to set up a tax-advantaged trust with diverse objectives because they can be designed for multiple participants with different needs. For example, if an individual wanted to use a portion of the trust to provide income for himself, his portion of the trust can have an asset allocation heavy on cash and fixed-income instruments. His grandchildren’s portion of the trust can be directed towards stocks since they will not need the income for many years. As usual, Delaware statutory trusts enjoy all the benefits of the state’s tax laws.

Total Return Trusts: A challenge with wealth management is that income-producing assets have become less fecund, with average dividend yields falling and fixed-income near low yield levels. In 2001, Delaware adopted a statute allowing for total return trusts. These trusts permit a trustee to convert a mandatory pay-out trust to deliver a combination of income and principal. So, if the trust with $50 million has a yield of only 1.5 per cent, the trust can be structured to pay out 4 per cent a year by taking a portion of the principal. Therefore, the beneficiary receives $2 million a year annually instead of $800,000.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.

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If Apple does announce a payments system, it won’t be for the money

The rumor mill has concluded that Apple will announce some sort of payments system at its big event tomorrow.

Some believe it may actually work: Apple has some 800 million credit cards on file, it has the trust of its users (well, for the most part), and it has the cooperation of big payment processors including Visa, MasterCard and American Express.

But what impact will payments have on the company’s revenues?

James Gautrey, a technology and telecoms analyst at Schroders, an asset manager, ran the numbers.
On average, a payment processor takes as “interchange fees” about 2% of any purchase. So for every $100 you spend at your local Best Buy, MasterCard or Visa receives $2, which it shares with other players who are involved in the process, such as anti-fraud firms and banks. According to Gautrey, there can be as many as nine different parties involved in settling a payment.

Considering Apple’s involvement with Visa et al, it isn’t looking to disrupt the system and bypass all the middlemen so much as add itself to chain. Assuming it receives a 0.25% cut of each payment, and that 200 million of its 800 million card holders spend $500/year, that’s an extra 250 million in revenue for Apple, or about 0.1% of its projected revenue for the company 2015 financial year (which starts at the end of this month).
That’s the low end of the projection.

Let’s assume fully half of Apple’s existing customers, or 400 million people, spent $2,000 a year using the new payment system. Let’s go further and assume that Apple receives 0.75% of every transaction—perhaps by displacing some of the many intermediaries. That would still amount to just over 3% of Apple’s revenue. And we’re not even considering what it costs to put this system in place.
In other words, Apple’s presumed payment system is a play to lock customers into its eco-system by offering an innovative new service—one that other companies have struggled with. But it is not—and not meant to be—a money-maker for the company.

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