1) How Mark Zuckerberg Hacked the Valley (Business Week) - Today we're all going to witness the biggest IPO of all time, and that's pretty damn cool. But how did a geeky college drop-out get us here? This article reveals how Zuckerberg transitioned from basement coder to Silicon Valley virtuoso.
2) Facebook Co-Founder Saverin Gives Up U.S. Citizenship Before IPO (Bloomberg) - Look for this non-story to dominate the Facebook IPO news. Saverin bailed on the US last year before the IPO was announced (yes, probably to avoid some taxes) and now he's being raked over the coals for a decision anyone with half a brain would have made. Fuckwit New York Senator Chuck Schumer even introduced the "Ex-Patriot Act" (GMAFB) in response to the move. Yeah, this is the guy we need to be going after - a kid who helped create something that changed the world. No, not all the dickbag bank CEO's who brought the world economy to the brink. (Don't worry Jamie, I'm coming to you in a minute.)
3) Sick of Hearing About Facebook? You’re Not Alone (Time Magazine) - By now you're no doubt experiencing some Facebook fatigue. Fear not, dear reader, the worst is almost over. But there has been a ton of hype (for like a year now). Will all the hype have a negative impact on the IPO aftermarket?
4) JPMorgan’s Trading Loss Is Said to Rise at Least 50% (NY Times) - There's one thing about traders: they are not nice guys when it comes to easy money. When it was revealed that JPM was in a situation they couldn't easily exit, fellow traders smelled the blood in the water and are doing everything in their power to makes things even worse for Dimon and Co.
5) The Hubris of Jamie Dimon (Business Week) - Jamie has gone from Wall Street's fair-haired child to something of a laughingstock on the heels of the London Whale debacle. Is he the least bit penitent? You be the judge.
6) Michael Crimmins: Why the Cops Should be Knocking on Jamie Dimon’s Door Soon (Naked Capitalism) - Now this is a bit of a stretch, but interesting nonetheless. Does the Whale represent a criminal breach of Sarbanes-Oxley regulations? Frankly, I have a hard time believing that Jamie Dimon would be led off in chains before Jon Corzine, but I guess you never know.
7) A Brief History Lesson: How We Ended Glass Steagall (The Big Picture) - How did we get into this whole mess? By the death of a thousand cuts, according to research by Barry Ritholtz. Glass-Steagall didn't go away overnight, it was steadily attacked over decades by the banks and bank lobbyists.
8) Accidentally Released - and Incredibly Embarrassing - Documents Show How Goldman et al Engaged in 'Naked Short Selling' (Rolling Stone) - Doh! Some low-level attorney for Goldman Sachs just filed for unemployment. Documents Goldman had fought months to keep secret - because they exposed the fact that the bank had been naked short selling - were inadvertently released unredacted by a member of the Goldman legal team. Or should I say former member?
9) How To Appeal To Investors: Top VCs Reveal The Anatomy Of A Successful Entrepreneur (TechCrunch) - Ever wonder what it takes to build a start-up that appeals to venture backers? Here's a hint: it takes more than a great idea. This article is surprisingly detailed about how to build something investors want to throw money at. I'm not saying that should be your goal as an entrepreneur, but it doesn't hurt to know this stuff.
10) A Harvard MBA's radical quest to erase his debt (CNN Money) - This is just a great story. Joe Mihalic graduated HBS with $101,000 in student loan debt and went to work for Dell. He lived pretty high on the hog but always made his student loan payments. After paying back $22,000, he still owed over $90,000 and his head exploded. He decided to pay off the balance in just 10 months and chronicle all of his finances (and financial sacrifices) on his anonymous No More Harvard Debt blog. This is a great story and a cautionary tale for those of you considering B-school.
The Video of the Week this week is a BBC special on Facebook which ran earlier this week. As usual, the BBC reportage is fantastic, and you'll probably learn a lot more about Facebook's advertising model than you know right now (I know I did). Plus, the analysis by Josh Brown (@ReformedBroker) is top notch. He really did a nice job. I definitely won't be buying Facebook, but I'm certainly considering advertising my new book on it. Side note for the Harvard kids: if any of you have had Professor Ben Edelman, is he as pedantic in person as he appears in this video? Can't be, right?
That's it for this week, guys. Let me know what you think in the comments and have a fantastic weekend!
I like how you always slide in a mention of your book.
About eddie's book, when will it be released ? We are all impatient !!
10 is truly interesting and well worth taking a moment to watch. Awesome. thanks Eddie.
I'm all for #2. In my way of thinking, if you make money here, you pay taxes here. If you're a citizen, you benefit from the privilages that come with saying "I'm an American citizen", so pay up. Also: THIS is why people not born here can't be president...it doesn't matter so much how talented they are, they have no loyalty beyond a certain point.
As for Jamie Dimon, I'm inclined to agree: it seems that he handpicked a hyper-aggressive trader to manage a "risk portfolio" and then put a thin layer of management between them for plausible deniability. If the sloppy security regarding GS's legal files is any indication, it's just a matter of time before some juicy dirt comes out. JD is an excellent CEO, and I think he should remain in power, but I do think that in the back of his head he was thinking "Fuck you, I'll do whatever the hell I want".
This is ridiculous. Saverin paid an exit tax of 15% of his global assets when he renounced his citizenship. The only way he may have skated on some taxes is that the valuation of Facebook was lower when he paid the 15%. And that whole, "if you make money here you pay taxes here" is utter bullshit. The US is the only developed nation that charges its citizens taxes regardless of where they make their money.
You can't imagine the nightmare it is causing for some US citizens here in Europe. I know of a couple who were born in the States (and therefore have US citizenship) but were raised in Switzerland and have lived there their whole lives. Now they're having to scramble to comply with the tax laws of a country they've never even lived in. What a crock of shit. And if the US was so fucking cool, why do you have to pay to leave?
As for the loyalty of those born outside the US, I put my balls on the line fighting in the Marines and I wasn't born in the US. Another ridiculous statement.
I honestly believe that countries won't even exist a century from now.
FATCA is quite possibly the most arrogant law congress has ever passed. Foreign banks who who don't comply with the U.S. govt. and don't enter into an information sharing agreement face a 30% tax withheld on US-sourced income going to or through their bank. On top of that, every bank that does comply with the U.S. govt.'s demands has to further agree to withhold a 30% tax on transactions involving non-complying foreign banks.
I wonder when foreign banks will stop sourcing funds through any U.S. source.
The key here is to think about why the senators want to levy this tax and prevent similar moves in the future. Is it because they are concerned people like Saverin are reaping benefits provided by Uncle Sam (e.g. legal system, infrastructure, etc.) and not paying for them? Or is it because competition for capital and personal mobility threatens the senators' power?
Answer that and it all becomes clear.
Eddie, Any idea why FB hasn't started trading yet?
I was driving to work today on the 101 and the IPO is all anyone is talking about on the radio. It's an absolute madhouse in Menlo Park/Palo Alto. It continues to crack me up how California is factoring the estimated tax revenue generated off the IPO into its budget. This state is ridiculous...
P.S. I'm buying a single share, so I can tell chicks I own part of Facebook. Fool-proof strategy.
10 @ 2:40
"My name is Barack Obama and I am the guy who got Mark to wear a jacket and tie"
That's reason enough for re-election right there hahaha
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