Facebook sets share price in $100bn flotation
Facebook has priced its shares ahead of one of the most eagerly-anticipated share flotations in recent stock market history.
The social network said on Thursday that it valued shares at $38 (£24) each, and that its shares would begin trading in New York on Friday.
At this price the eight-year-old firm would be worth $104bn (£66bn).
Demand is set to be high; earlier this week Facebook said it would be selling 25% more shares than planned.
But questions remain about the firm's ability to generate profits and take advantage of mobile phone platforms.
There are also concerns that once the company has to answer to shareholders, there may be a greater emphasis on advertising to generate profits.
Limited say
Earlier this week, the company indicated the price would be between $34-$38 a share, with about 421 million shares up for sale.
This would represent one of the highest value share sales, or initial public offerings (IPOs) in US history.
By selling shares at that value, Facebook raised $16bn for itself.
However, the new shareholders will not have much of a say in how the company is run.
The shares on offer are A shares, which carry one vote per share, whereas the current owners' shares are B shares, which carry 10 votes each.
They will control more than 96% of the votes after the public listing, with founder Mark Zuckerberg holding just under 56% of the voting power of the company.
Mr Zuckerberg, who owns about 25% of the company, stands to gain the most from taking Facebook public. Fellow founders Dustin Moskovitz and Eduardo Saverin will also become paper-billionares overnight, as will Napster founder and former employee Sean Parker.
US venture capital firm Accel Partners and Russian internet investment group Digital Sky Technologies also hold significant stakes in Facebook, while Microsoft and U2 frontman Bono also stand to make a huge profit on their investment in the company.
The social networking site has transformed the way in which hundreds of millions of people around the world communicate. It is also transforming the way companies advertise to existing and potential customers
Value of Facebook stakes
- Mark Zuckerberg $19.1bn
- Dustin Moskovitz $5.1bn
- Alisher Usmanov $5bn
- Eduardo Saverin $2.9bn
- Sean Parker $2.5bn
- Peter Thiel $1.06bn
- Sheryl Sandberg $1bn
- Chris Hughes $835m
- Yuri Milner $400m
- Mark Pincus $164m
Source: Bloomberg Billionaires Index
But Facebook's 900 million users helped the company generate just $1bn in profit last year, and there are concerns about its ability to grow profits in the future.
For while it holds a depth of personal information advertisers dream about, Facebook only generates about $5 a year per user.
This has led a number of commentators to question the company's valuation.
"Facebook will need to generate annual revenue of $30bn-$40bn in order to justify the likely valuation of the business," said Victor Basta at Magister Advisors.
"This is a tenfold increase over the revenues that it currently generates. The question is 'where from?'".
The potential revenue from online advertising is huge.
"We know our industry is $1tn worldwide," Martin Sorrell, chief executive of advertising giant WPP, told the BBC.
"We know internet advertising is currently 20% roughly [of the total]. We know people are spending almost a third of their time online in one way or another, so there's a vast opportunity for Facebook."
Spanish banks have credit ratings cut by Moody's
Ratings agency Moody's has cut the credit ratings of 16 Spanish banks, a further blow to a country that is struggling to deal with the bad debts of its banking sector.
It also cut the debt rating on Santander UK, a subsidiary of the Spanish banking giant.
It comes after shares in struggling lender Bankia fell another 14%. They have almost halved in value this month.
Fears about losses at Spanish banks has hit shares across Europe.
The banks include Banco Santander and BBVA, the biggest banks in Spain. Ten of the 17 banks were also put on negative credit watch, meaning that further downgrades are possible.
"The change to Moody's credit rating of Santander UK plc has no impact on our businesses in the UK or our plans for future growth," Andy Smith, a spokesman at Santander said about the downgrade.
"Santander UK plc is an autonomous subsidiary of the Santander Group, with more than 90% of its total assets held in the UK and a eurozone sovereign exposure of less than 1% of assets."
In cutting the ratings, Moody's cited the "adverse operating conditions, characterised by the renewed recession, the ongoing real-estate crisis and persistent high levels of unemployment".
It also said that the Spanish government, due to its borrowing difficulties, has had its ability to provide support to the banks "reduced".
The Spanish government also had to pay higher rates of interest to borrow money on the markets, which leads some to believe it will need a bailout.
Moody's also cut the ratings of four of Spain's regions - Catalonia, Murcia, Andalucia and Extremadura - of whom it said there is only a "low probability that the regional governments will be able to meet the 2012 deficit target".
'Basically normal'
Bankia was forced to deny a report customers had taken 1bn euros ($1.3bn; £800m) out of the bank, which is set to be part-nationalised, in the past week.
Spain's economy minister denied reports of a surge in withdrawals from Bankia in recent days.
"It's not true that there is an exit of deposits at this moment from Bankia," said Fernando Jimenez Latorre.
Later, the bank's chief executive said volumes had been "basically normal".
Bankia, which holds 32bn euros (£25.7bn) in distressed property assets, was partly nationalised this month. On Wednesday, it said it was delaying the release of its first-quarter results.
It has the industry's largest exposure to the property market, which burst spectacularly and has saddled its banks with bad debt.
"Markets are worried about eurozone bank deposit runs and an escalating banking crisis," said VTB Capital economist Neil MacKinnon.
Markets drop on eurozone worries
Concern over the eurozone debt crisis has continued to weigh on financial markets.
The euro fell for the sixth day against the US dollar, to $1.2688, as an interim Greek government was sworn in to steer the debt-ridden country into repeat elections in June.
European and US shares also declined, led by financial stocks.
Shares in Spain's Bankia dropped 15%, which reflects broader fears about the health of the Spanish banking sector.
Shares in French banks like Societe Generale and BNP Paribas dropped more than 3%.
In Germany, Deutsche Bank fell 1.9% and Commerzbank dropped 1.4%. The stock exchange Deutcshe Boerse was down more than 7%.
UK banks also dropped, with Barclays down 3.8% and Royal Bank of Scotland declining 3.7%.
The Spanish government also had to pay sharply higher rates of interest to borrow money on the bond markets, raising investor fears that the worst-case scenario - a bailout - will eventually be needed.
And ratings agency Moody's cut the credit ratings of 16 Spanish banks, a further blow to a country that is struggling to deal with the bad debts of its banking sector.
'Start a fire'
Moodys also downgraded the credit ratings of four of Spain's regions - Catalonia, Murcia, Andalucia and Extremadura - and warned there was only a "low probability that the regional governments will be able to meet the 2012 deficit target".
Greece was also downgraded, to CCC from B-, by rival agency Fitch, which cited political uncertainty over the country's commitment to its last bailout and possible exit of the eurozone.
With Greece facing elections and France under newly-elected President Francois Hollande refusing to sign a pact to force nations to rein in debt, many feel that Europe is in disarray.
In New York, European Commission president Jose-Manuel Barroso told the UN that European Union member states and institutions would "do whatever is necessary" to overcome the crisis.
"We need to stay the course, without being blind to an evolving economic situation," he said. "Fortunately, the rule book allows for adaptability while remaining firmly focused on sustainability and ensuring sound public finances."
Writing in The Scotsman newspaper, Alistair Darling, who was the previous chancellor, said the impact of a Greek exit could be severe.
"A Greek exit could start a fire that would spread all along the Mediterranean as other countries would come under pressure," he wrote. "The repercussions, particularly in the banking sector, could cripple Europe for years to come."
The UK government has said the Treasury has been drawing up contingency plans in the wake of growing concern about the future Greece's membership of the euro.
A Downing Street spokeswoman confirmed the National Security Council has been involved in the plans "for some time".
Disco Queen Donna Summer Dies after Battle with Cancer
Music legend Donna Summer, known by many as the Queen of Disco, has died.
The five-time Grammy Award winner died Thursday at the age of 63 in Florida. Those close to her say she had been battling cancer for some time but had tried to keep the extent of her illness private.
Summer rose to stardom in the 1970's with hits like “Hot Stuff” and “Bad Girls,” from her “Bad Girls album,” as well as “Last Dance,” which helped define the disco era.
She was born as Donna Gaines December 31, 1948 in Boston, Massachusetts to a religious family and much of her early training came from singing in a church choir.
She moved to Europe in the late 1960s, where she was cast in a German production of the musical “Hair,” and even learned to speak fluent German.
Summer returned to the United States and enjoyed popular success, culminating in 1979 with the “Bad Girls” album.
She continued to have hits in the 1980s, including 1983's “She Works hard for the Money.”
Summer married singer and songwriter Bruce Sudano in 1980. The couple had two children.
From Wikipedia:
Donna Summer was born on New Year’s Eve 1948 in the Dorchester neighborhood of Boston, Massachusetts, she was one of seven children raised by devout Christian parents. Influenced by Mahalia Jackson, Summer began singing in the church at a young age. In her teens, she formed several musical groups including one with her sister and a cousin, imitating Motown girl groups such as The Supremes and Martha and the Vandellas in Boston.
In the late 1960s, Summer was influenced by Janis Joplin after listening to her albums as member of Big Brother and the Holding Company, and joined the psychedelic rock group the Crow as lead singer. Beforehand, Summer dropped out of school convinced that music was her way out of Boston, where she had always felt herself to be an outsider, even among her own family who ridiculed her for her voice and her looks. The group was short-lived, as they split upon their arrival in New York. In 1968, Summer auditioned for a role in the Broadway musical, Hair. She lost the part of Sheila to Melba Moore. When the musical moved to Europe, Summer was offered the role. She took it and moved to Germany for several years. While in Germany, where she learned to speak German fluently, she participated in the musicals “Ich Bin Ich, the German version of The Me Nobody Knows,“Godspell and Show Boat. After settling in Munich, she began performing in several ensembles including the Viennese Folk Opera and also sang as a member of the pop group FamilyTree (created by the German music producer Guenter “Yogi” Lauke). She came to the group in 1973 and toured with the group throughout Europe.[citation needed]
She also sang as a studio session singer and in theaters. In 1971, while still using her birth name Donna Gaines, she released her first single, a cover of “Sally Go ‘Round the Roses“, though it was not a hit. In 1972, she married Austrian actor Helmuth Sommer and gave birth to their daughter Mimi Sommer in 1973. Citing marital problems caused by her affair with German artist (and future live-in boyfriend) Peter Mühldorfer, she divorced Helmuth but kept his last name, anglicising it to ‘Summer’. She also worked on an album with keyboardist/producer Veit Marvos in 1972, providing backing vocals on his Ariola records release Nice To See You (where she was credited under the pseudonym Gayn Pierre). Several single releases over the years have included a young Donna performing with the group, even though she often denied ever singing on any of the Marvos releases. It should also be noted that the name ‘Gayn Pierre’ was also used by Donna whilst performing in ‘Godspell’ with Helmuth Sommer during 1972.
John Legend: ‘X Factor’s’ Spears and Lovato ‘Aren’t Really Singers’
John Legend, a judge on ABC’s forthcoming singing competition “Duets,” was asked to comment on the addition of Britney Spears and Demi Lovato to the judging panel of their rival FOX show “The X Factor.”
And the Grammy-winning musician gave an honest answer.
“You know it’s interesting. It should be very interesting. I don’t have much to say,” he told E! News at Entertainment Weekly’s ABC Upfront party. “It’s interesting when people, you know, are judging singing competitions when they aren’t really singers.”
Needless to say, his comments struck a nerve on Twitter. ”Read my mentions today if you want some entertainment served with a side dish of crazy and a sprinkle of racism,” he tweeted.
He followed it up with another tweet which clarified, “I’ve never heard demi’s voice btw. Wasn’t referring to her.” He, however, didn’t say anything about Britney.
Fellow “Duets” judges Robin Thicke and Kelly Clarkson, meanwhile, were more diplomatic when asked about Spears and Lovato.
“Oh come on, everything Britney does, she excels at,” said Thicke. He added, “Demi is a lovely young lady, and I’m sure they’ll do nothing but make the show a lot more fun to watch.”
Clarkson said, “I’m a big fan of both of them. Both of those girls are super sweet. Obviously they are both performers so…I think that show really needs it. I don’t think everybody latched onto that show like they thought they would.”
“Duets” also features Sugarland’s Jennifer Nettles as a judge. Legend was added to the lineup after Lionel Richie bowed out of the show, citing schedule conflicts. It will premiere on May 24 and will follow them searching for two singers each to serve as their duet partners.
Heat look vulnerable, Spurs still sharp
Without Chris Bosh, championship favourites Miami Heat suddenly looked vulnerable as they suffered an upset defeat to the Indiana Pacers, while the West's top seeds San Antonio Spurs look to have hit peak form with a victory over the Los Angeles Clippers in their second-round opener on Tuesday. In Miami, the Heat's 78-75 loss left their Eastern Conference semi-final series tied at 1-1.
Bosh has been ruled out "indefinitely" after picking up an abdominal strain in Game One on Sunday and questions are being asked about how effective the Heat can be without one of their key components.
With the Heat holding a 38-33 lead at halftime, however, there was little indication of the turnaround that was to put last year's runners-up in trouble, as Indiana dominated the third quarter, outscoring Miami 28-14 and grabbing a nine-point advantage heading into the fourth.
With Bosh on the sidelines it was left to LeBron James and Dwyane Wade to carry the Heat. The duo came up with 21 of Miami's 23 fourth-quarter points but James missed two free throws and Wade came up short with Miami three down and less than 10 seconds on the clock.
Miami failed to score in the final two minutes and 41 seconds of the game and their last chance to tie the score ended with Mario Chalmers' three-point effort hit the rim.
NOTHING TO CELEBRATE
James led Miami with 28 points and nine rebounds and Wade put up 24 points and made six rebounds.
David West top-scored for the Pacers with 16 points but was quick to put the victory in context.
"We have nothing to celebrate yet, we have just won one game in the series," he told TNT television.
"I thought we were more aggressive defensively and we were able to maintain our composure, early on we were able to stop them doing a couple of things they like to do and that carried over through the game," said West.
The series moves to Indianapolis for Game Three tonight.
In San Antonio, the Spurs ended their week-long break with a 108-92 rout of the Clippers.
Tim Duncan looked fresh, the 36-year-old recording 26 points and 10 rebounds as the Spurs took advantage of a weary Los Angeles team who just concluded a physical seven-game series against Memphis.
"We just attacked the basket as much as possible and tried to take some of their aggressiveness away," said Duncan, who helped his team win their 15th consecutive game going back to the regular season action.
"It's the playoffs; it's going to be physical. Especially with the series they just got out of."
The Clippers, playing in the second round for the first time since 2006, were still in the picture until a 14-3 run in the third quarter put San Antonio up by 19.
Blake Griffin had 15 points and nine rebounds and looked to have shaken off the effects of a knee injury suffered in the first round. Chris Paul made just three of 13 shots for the Clippers and had six points and 10 assists.
Manu Ginobili added 22 for the Spurs.
(REUTERS)
Thunder takes Game 2 win vs. Lakers
Kevin Durant scored 22 points and rattled in the go-ahead basket on a baseline runner with 18 seconds left, and the Oklahoma City Thunder scored the final nine points to rally for a 77-75 victory over the Los Angeles Lakers in Game 2 of the best-of-seven Western Conference semifinal series on Wednesday night.
Oklahoma City trailed by seven with 2 minutes left before surging back with a series of defensive stops by its stars to take a 2-0 lead.
Game 3 is Friday night in Los Angeles.
Kobe Bryant and Andrew Bynum scored 20 points apiece for the Lakers, who came up empty on their last six possessions after Bynum's hook shot made it 75-68 with 2:09 remaining.
After struggling throughout the second half, the Thunder suddenly came alive after Scott Brooks called timeout after Bynum's basket that gave Los Angeles its largest lead of the game.
James Harden drove for a layup before Durant used his height advantage to reach up and tip away a pass from Bryant, who he was guarding. Durant ran out for a right-handed dunk at the other end before Russell Westbrook forced another turnover by aggressively challenging an outlet pass to Bryant along the sideline.
Harden made the next stop, blocking Bryant's jumper on the next Lakers possession and getting a layup in transition to cut the deficit to one in the final minute.
Bryant couldn't connect again, this time on a 3-pointer, to give the Thunder the ball back with the chance to take the lead and Durant was able to make it happen.
Steve Blake missed a 3-pointer from the right side with about 5 seconds left after Metta World Peace couldn't get the ball to Bryant on the inbounds play. Durant was then fouled with 0.3 seconds left and made his first try before missing the second on purpose -- failing to hit the backboard or rim for a violation.
The Lakers got a desperation try but World Peace's long pass for Bynum was intercepted by Harden.
Westbrook added 15 points for Oklahoma City, which matched its lowest scoring total of the season but still won.
Historically, the loss makes a huge difference. Los Angeles is 29-12 when splitting the first two games of a seven-game series and has lost 17 of 19 when falling into a 2-0 hole. The Lakers' last comeback was in the 2004 West semifinals against San Antonio.
Prior says England confident but wary of Windies
Wicketkeeper Matt Prior has warned England against complacency as they prepare to face embattled West Indies in the opening Test at Lord’s starting tomorrow. England, the World number one-ranked side, are expected to easily roll over the luckless Windies who are ranked seventh, but Prior said it would be dangerous for the hosts to approach the three-Test series lackadaisically.
“This is a very tough series in its own right,” he said.
“I think if you get complacent or take things easy in Test cricket or international sport in general, you get bitten pretty quickly. There’s no room for that in our dressing room.”
He added: “It’s fantastic to be back at Lord’s. It’s always a magical place to come. This first series of the summer will be a tough prospect.”
In the last 12 years, England have dominated the Caribbean side, winning 15 of their last 24 contests. The Windies, in contrast, have won just two.
On the last tour of England, West Indies were completely outplayed, losing both Tests by huge margins.
However, the tourists will be looking to capitalise on England’s recent lack of form. They were crushed 3-0 by Pakistan at the start of the year and then struggled to a 1-1 draw with Sri Lanka, in the series on the Asian subcontinent.
Prior said England were expecting to perform much better in more familiar conditions.
“We had a tricky winter. But we came out on top in Colombo – which was a fantastic effort – and we’re back in our home conditions now. The challenges we faced in the winter – spin on the sub-continent - are less likely here,” he pointed out.
“It was obviously a tough winter. But that win [to level the series in Sri Lanka] was crucial. To come out with that win just set us off on the right road going into the summer, and gave us a lot of confidence.”
He continued: “We have learned lessons, and we are going forward. We are a good team, but we do still have some huge improvements to make.”
Brazil truth commission begins rights abuse inquiries
Brazilian President Dilma Rousseff has inaugurated a truth commission to investigate rights abuses, including those committed during military rule.
The four previous living presidents since democracy was restored in 1985 also attended the ceremony in Brasilia.
The commission will examine the period from 1946 to 1988, but a military-era amnesty means there will be no trials.
There has already been criticism from army officers and victims' relatives of the commission's remit.
Among many in the military there is disquiet with an inquiry they perceive as an ideologically biased attempt at revenge, the BBC's Brazil correspondent Paulo Cabral reports.
Parallel commission
President Rousseff, herself jailed and tortured during the military dictatorship, said on Wednesday that the motive behind the commission was not revenge, hate or the desire to rewrite history.
It was a "celebration of the transparency of truth", she said.
"Brazil deserves the truth, new generations deserve the truth, and - above all - those who lost friends and relatives and who continue to suffer as if they were dying again each day deserve the truth," President Rousseff said, with her voice breaking.
She stressed that the decision to establish the commission was an initiative of the Brazilian state, not government.
For that reason, Ms Rousseff said, she was delighted to be accompanied by her predecessors as president: Jose Sarney, Fernando Collor de Mello, Fernando Henrique Cardoso and Luiz Inacio Lula da Silva.
The UN High Commissioner for Human Rights, Navi Pillay, described the creation of the commission as "a necessary and very hopeful step".
The seven-member commission will have two years to investigate human rights crimes, with the focus being on the military era from 1964 to 1985.
Up to 500 people were killed or disappeared during this time in Brazil - a far lower number than in shorter periods of military rule in neighbouring Argentina and Chile.
But thousands of Brazilians were tortured, exiled or deprived of their political rights.
Supporters of the truth commission argue that it will help Brazil to come to terms with its recent past.
But an amnesty law, passed in 1979 and upheld in 2010 by the Supreme Court, means neither military officials accused of torture nor left-wing guerrillas accused of violence can face prosecution.
For some families of the victims, this means the commission is already limited in what it can achieve, a view rejected by member Paulo Sergio Pinheiro.
"We are not here to punish, that's not the job of any truth commission in the world," Mr Pinheiro told BBC Brasil.
Some members of the military are also unhappy at the prospect of the commission's investigations.
Retired officers have announced that they are setting up a parallel commission to counter any accusations that emerge.
BBC
Swearing-in of New Government Tentatively set for Monday.
The incoming government that is supported by the National Alliance, Democratic Party, and the three independent Members of Parliament Illidge, Richardson, and La Ville might be sworn-in on Monday announced Prime Minister Sarah Wescot Williams on Wednesday.
Wescot Williams said that the screening of the Ministers and incoming Member of Parliament is underway and it is expected that the reports on the screening would be in by the end of this week. She said when the reports are submitted then she will proceed by sending them to the Governor's office where the swearing in will take place. Wescot Williams said following the appointment of the formateurs, the names of the candidates were submitted for screening. Wescot Williams said some of the current Ministers will be re-appointed while the new Ministers will take office immediately after they are sworn-in. She said she does not foresee any problems with the names she submitted, therefore it is likely that the swearing-in will take place on Monday.
The Prime Minister did not divulge any of the names of the candidates that are being screened. However, SMN News learnt that Prime Minister Sarah Wescot Williams, Minister Cornelius de Weever, and Minister Roland Duncan will be re-appointed while William Marlin, Silveria Jacobs, Romeo Pantophlet, and Roland Tuitt will be sworn-in as Ministers and Rudolph Samuel as a Member of Parliament.
SMN News further learnt that Mathias Voges will be reappointed as the Minister of Plenipotentiary while Henrietta Doran York will be sworn in as the deputy Minister of Plenipotentiary.
Source-SMN