Greetings folks and a warm welcome to the 38TH Edition of Friday Finance weekly. I may take a Friday Finance sabbatical for the next two weeks so if you don’t hear from me have a Merry Christmas and a Happy New Year.
Zynga started trading under the ticker symbol (ZNGA) on Friday and its IPO has been interesting to say the least. In August 2011 consultants valued the company at $14B which suggested at $17.20 per share price. The IPO was at $10/share this morning and skyrocketed to $11.50/share before dropping to $9.53/share by the end of the day. Despite the 14.26% one day drop in share price the company was able to raise $1B and is therefore the largest internet IPO since Google in 2004.The company is much stronger than Groupon as its actually profitable with net profits of $30.7M for the first 9 months of 2011 on $829M in sales. With a heavy reliance on Facebook revenues (Zynga generates most of its revenues by creating virtual ecosystems and charging customers to interact in this space); Zynga was able to secure a long-term contract with Facebook until 2015, where Facebook will get 30% of all revenues. In the long-term I believe that Zyngas’ future will include allowing companies to create virtual malls and other online structures within the Zynga worlds. They have already started to move in this direction as Starbucks paid to have a virtual coffee shop on City-Ville. As parents discover that their children are paying $1 every time they milk a virtual cow on Farmville, the business model will definitely have to shift towards providing free services. In addition China is entering the social gaming space and there are no rules on having a virtual “knock off” Starbucks or Gucci store. (Source: CNN Money)
TELUS made an amazing holiday announcement stating they are raising their dividend by 10% in fiscal 2012 which amounts to $2.55 per share. Substantial growth in their Smartphone sales and TV services have increased revenues and their bottom line. There is however some sentiment in the market that Telus is able to have above average profits as competition is lighter in Western Canada as opposed to Eastern Canada. While this is true to a certain extent, TELUS has been very pragmatic and economical in developing its GSM network by partnering with Bell and focusing on selling premium TV services for consumers. Shaw which is dominant on the West Coast has been lagging in innovation and doesn’t have common features such as the ability to control your PVR from a Smartphone. Wireless revenues alone contribute to 53% of TELUS’s income and this is expected to grow by another 5.5% to $5.8B. Overall sales are expected to increase by 6.5% when digital T.V. services are considered. The share price is presently at $51.41 and the market cap is $16.68B. In other news the Koodo Man (also owned by TELUS) has announced plans to increase profits by posing for a swim suit calendar for 2012. (Source: Bloomberg, Financial Post)
This is for pure entertainment, but since it is Holiday Season, I thought I should help you with shopping list. These are the top 5 must have gifts for 2011:
- Pre-Need Cremation Plan – Will cost $1,189 on Amazon and provides you or your loved one with an urn, transportation and cremation. Even Costco can’t beat this deal!
- Fresh whole rabbit – $46 plus $19 for shipping. Tasty bunny meat that according to the seller is “lightly flavored with a nutty aftertaste”.
- Uranium Ore – Pricing was tough to obtain but it comes with a Caution Sign…perhaps this may be bundled with the Pre-Need Cremation Plan kit.
- Wolf Urine – Used to keep away deer from your property. Don’t worry its 100% all-natural, but no comments on what it smells like.
- Milk from Tuscan Cattle – Yes seriously this exists. Comes at a cost of $45 a gallon on Amazon. But for a wicked deal of $10,000 the milk will be hand delivered by a real Tuscan cattle herdsman. I bet we can buy a Tuscan cow for under $10,000.
I would like some of these items under my Christmas tree, so if you are looking for a way to say thank you…anything from the list will do. Except maybe the Uranium Ore. (Source: CNN)
Have a fantastic weekend. Please visit: https://fridayfinance.wordpress.com to sign up. Don’t hesitate to forward this newsletter as you see fit. Many thanks,