Quick Lesson: Equity and Debt are the two ways that a company can get capital (cash). Debt comes with terms like a set maturity time and interest rates… equity, on the other hand, allows people to simply invest in a company and in return own a portion of profits into the future! In general, debt is cheaper than equity, but carries a higher liability and adds risk to the balance sheet.

Many newswires are reporting stories that would lead you to believe that this move is indicative of an upcoming Initial Public Offering (IPO) — in other words, trading with a ticker symbol on the open stock market where anyone can buy/sell their equity. For some examples, see: “Is Facebook’s IPO coming sooner than expected?“; “Will Facebook Succumb To IPO Pressure?“; and ”The Facebook IPO Is Proof That Everything Is Being Reinvented“. To the contrary, I believe that this move is actually one in which Goldman Sachs is behaving as the white knight… bailing Facebook out of the need to go public with their numbers.

Why An IPO Ain’t Comin’!

For Facebook, the thought of being a publicly-traded company runs contrary to the “cool” factor that has made it such a success. The new age of tech startups is a lot different than the prior era where firms couldn’t wait to get themselves public with free access to capital on the open market. There are several disadvantages to being public nowadays, and Facebook is (supposedly) far from a mature company, so the general consensus is better private than public.

Unfortunately, once Facebook has 500 private shareholders, the SEC regulates that all of their financials must be made transparent. For Mark Zuckerberg, this spells trouble because private equity is one of the company’s most sought after forms of compensation. The beauty behind this deal is that Goldman will invest around $1.5 billion into the company… but won’t add more than one shareholder if all goes according to plan. Here’s how it works: 1) Goldman Sachs goes out to its clients and offers the chance to invest in Facebook; 2) Goldman Sachs pools all of the money that it has received interest for; 3) Goldman Sachs invests the collective sum on its investors behalf… but it is only technically counted as ONE investor! Pretty smooth, eh? It is almost like a syndicated loan — a “special purpose vehicle (SPV)” by definition.

To me, this move by Zuckerberg and Facebook is one that says “hey, we need cash… but we really don’t want to go public.” In no way to me does this say “giddy up, lets go public baby!”

So contrary to public belief, I see Goldman Sachs actually stepping in to save Facebook the need to “sell out” by becoming openly traded. There is already a bit of undeserved outrage from Facebook users in groups like “Keep your dirty hands off my FB“, but hey… we’ll see how it works out for the company. Only problem is: how long can Facebook feasibly wait until investor pressures to execute an IPO get the best of them?

Stay bullish.
-Jimvesting.com

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I’ve been working feverishly around the clock to develop a massive and all-inclusive guide to the best stock market picks of 2009, and tonight I have finally completed my work! You can play with internet marketing all that you want, but there is simply no asset pool that will ever match the potential gains of the stock market. Imagine throwing $1,000 into a stock one day, and walking away with twice that the next… this actually happens on a regular basis in the markets… and I feel the time is right.

Considering the insane gains available in the stock market, there is always going to be downside risk. This is NOT an eBook that I have developed myself, I have worked exclusively with 10 professionally-minded mutual fund managers that specialize in every area of the market imaginable to combine only the best ideas and get you started. This work is a compilation of many efforts, and holds true investing power in forecasting what the money makers will be for 2009.

Why The Heck Would I Want to Be In Stocks Now?

Now is the wrong time to be jumping ship, it is the right time to be getting back into stocks. Ask any professional, and they will tell you that investor mindset is always wrong: we want to invest more at the peaks, and abandon ship at the troughs. Human emotion plays a big part in this, and the only way to stay ahead and actually make money is to “be greedy when others are fearful” (Warren Buffett).

Are you interested in stocks? Do you invest in your spare time? Are you managing a portfolio of your own? This publication is for you!

I’ve gathered some of the most in-depth analysis together in a professionally-rendered eBook and put it up for an insane bargain-basement reduced cost. If you signed up for a premium stock service, you would get less information for $100s a month (if you are lucky). It’s fantastic that I can offer this to you guys, as stock ideas are always great to go through and learn from.

But you haven’t heard the best part…

… I’m Giving It Away for FREE!

I decided that rather than charge for this exclusive and professional content, I would let you guys have it for free. Sure, I’ve become a financial adviser of sorts over the past few years of operation. While I cannot give you recommendations, what I can do is offer suggestions and ideas to further your wealth. The market is tough right now, so if you don’t understand the stocks you are buying… you are doomed to fail. Regardless, things are cheap right now and investing at the bottom will make money 90% of the time over the long run.

There is no guarantee of positive return with these stock picks and recommendations, however I can almost assure you that all of the carefully selected picks that appear in this publication are well researched and the investment thesis is clear. At the very least, it can be very interesting to see what possibilities lie out there.

How to Gain Access to the EXCLUSIVE Report

I am releasing this information without financial charge, however I would like to reap the rewards of doing so, in various metrics increases.

On February 6th, 2008, I will put out a blog post with the link to download the publication. However, this post will be password protected.

To get the password, you’ll need to do one of three things:

1. Refer three friends to subscribe to Jimvesting via email, and tell them to comment on this post confirming. I will check.

2. If you have a blog post with more than 50 subscribers, write a post talking about Jimvesting and link to the homepage. If you have a blog with more than 100 subscribers, give this blog a paragraph plug in one of your posts, telling people why they should visit. And if you mention the report, extra brownie points to you!

3. Sign up to Jimvesting’s brand new newsletter, and refer two friends as well. You’ll get great information on how to make more money online, but never any spam… just premium content when you want it, where you want it. Use the form below to do this, and ask your referrals to do the same. Then, tell them to comment on this post to confirm… I will also check this.

Don’t forget to let me know below what you plan on doing, and follow up on it once you are done. Of course, participation isn’t necessary… but you won’t get that secret password until you do. Again, these should be new events… not directing me to an old blog post, or referring a member that has already subscribed to my email feed or newsletter. This is a great opportunity, with a HUGE reward in clear view.

This offer closes February 6th, 2009… so let’s get started!

-Jimvesting

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I’ve packed about all I can do into a short 20-minute presentation on the markets in order to bring you almost completely up to par on where we are, and why. It’s important going forward to understand why things are bad, and where the United States (among others) went wrong with our borrowing habits and over-leveraged recklessness. The bottom line is: if you are at all interested in business, or even if you just work in a line of work that handles a lot of transactions, this is going to be a very important presentation.

The Official Jimvesting 2008 Market Presentation

This is a video-presentation on the markets, and you can download it for yourself in Microsoft PowerPoint format here: DOWNLOAD PRESENTATION. The powerpoint presentation attached can serve as a nice refresher course of everything of note that happened in 2008 that specifically and directly impacted where we are today in the markets. There is certainly a lot of confusion, anxiety and uneasiness surrounding the investing world… and I think that the waters are finally starting to clear.

If you are considering investing, I highly recommend you consider equities over the next few months… as I feel that we are at an attractive long-term investing level. However, it is NEVER a good idea to jump into something without understanding how things function, and how things trade. After all, owning a successful stock in 2009 will not be a function of picking a “good company,” but rather, it will be a function of picking up on a favorable trend. Watching this presentation just might be the excuse you were looking for to get caught up, eh?

I hope that you enjoyed this year’s run-down of the entire year of 2008 in just twenty minutes. It’s definitely a crazy environment, so feel free to post any questions you might have down below in the comment area. If you enjoyed the presentation, please subscribe to my blog to show some support for my efforts. Alternatively, I would love for you to share this post around to your friends, so that we can get as many people “in the know” as possible. Here’s to a profitable 2009… stay BULLISH on the net!

-Jimvesting

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Now that the U.S. Presidential race is down to two candidates, Barack Obama and John McCain, our energy policy has become one of the most pressing issues… even outweighing the economic state and the war in Iraq. For this reason, I feel that it is time to get you all up to par on the truth about crude. These downright foolish ideas to artificially lower prices will never work; I’ll get you “in the know” on why prices are the way they are, and what we can/can’t to do fix it.

Why Are Gas Prices So High?

In short, gas prices are high because of two driving factors: high demand and increased speculation. The energy bubble that existed in the first half of 2008 has since popped, but prices are still pretty high at the pump. This holds true mainly because of a jet lag in the pipeline. Essentially, there are several steps in the oil-production business. You need to explore, find, drill, refine, transport and sell. That’s a lot for a few trips to the grocery store, eh?

There is a rumor floating around that gasoline prices actually bump up faster than they go down. I’m not trying to completely disprove this, but it is a bit ridiculous to think that despite anti-trust policies… all the nations gas stations have some secret agreement to raise prices at the same time at the same rate. Otherwise, if one seller kept prices low, you better believe that they’d get all the business. One thing I will explain further down is that the oil & gas companies are actually losing money and profit margins are dwindling.

How about speculation? While this is debatable, I feel that throughout the first half of the year… investors were gambling excessively on the futures in oil, which will drive the actual price of crude upward. I suppose that the Securities and Exchange Commission (SEC) could have made longs on oil illegal, but other than that there’s just not a lot you can do. Surely, if investors are feeling that demand is soaring while supply is crunching… things are going to get interesting. This isn’t so much anyone’s fault as it is a problem with the way we trade to make money on the open markets. But as you’ll soon find out… the heart of the problem is a bit closer to home.

Who’s At Fault?

Exploration and Production Companies
Obviously, somebody has to do the dirty work to go out and actively find oil and natural gas reserves that we can unlock later for production. Are Exploration and Production (E&P) companies making money? Yes. Are they making excessive amounts? Absolutely not. Let me explain.

One thing that people fail to realize is that these E&P companies deserve to profit, and aren’t making money hand over fist. If you want proof, let’s just look at the profit margins to find out how profitable their ventures are versus other companies:

• EnCana (NYSE: ECA) – 13.16%
• Apache (NYSE: APA) – 33.01%
• Anadarko (NYSE: APC) – 9.64%
  ————————————–
• Microsoft (NYSE: MSFT) – 29.26%
• Intuitive Surgical (NYSE: ISRSG) – 24.68%
• Goldman Sachs (NYSE: GS) – 23.68%

Crude Oil Refiners
You might be thinking that the companies that come in and refine the oil for commercial use would be making big profits… but this couldn’t be further from the truth. In fact, the majority of these companies have been eaten up by their reliance on the spot price of oil. Since all of their business relies on obtaining crude oil from someone else, they have very small guns to flex in the face of the E&P companies.

The oil refiners have some of the smallest margins in the business, and add the least to the bottom line. The crack spread, aka the margins refiners make, is absolutely free falling… as major refiners like Valero Energy (NYSE: VLO) and Tesero (NYSE: TSO) have seen their stocks dumped 50%+ in the face of a broader energy rally.

Gas Stations
Since most Americans aren’t aware of anything but the gas pump, a lot of people assume that this is where their money is going down the drain. In actuality, the gas station business is in one of the worst states as they, like the oil refiners, have almost no control over pricing initiatives. Over 1,000 gasoline stations closed down last year, and many were actually losing money every time you came to the pump in order to stay competitive.

The gas station business is so unprofitable, that major integrated oil companies like Exxon Mobile (NYSE: XOM) and ConocoPhillips (NYSE: COP) are closing thousands of branches a piece… basically cutting and running from the horrible markets where consumers complain despite the fact that station owners no longer make money.

The Government
Not so fast! Sure, a lot of us have figured out that the government has instated a gas tax… but this really doesn’t effect the price you pay at the pump. Why? The current gasoline tax has an indirect effect because of the drilling policies that are in place. What would be a lot more effective (in my opinion) would be to open up all the U.S. territory for drilling. This would discount the futures back to the present and have an immediate impact on the price of gas.

The People
So now we work down to the actual reason gasoline is so high… you. Yes, the United States demands more gas than any other nation in the world, and we just can’t get enough. Once you get down to it, it really is as simple as reducing demand. Clearly, once average gasoline prices hit a high of $4.11, we’ve been under $4 from then on out. This is mainly because Americans started driving less once prices got out of control… and it worked. Reduce demand for the commodity, reduce the price. No one-day protests. No shifty business ideas to “force” companies into cutting rates more. It’s a question of conserving what we have and being less reliant on crude oil.

The Solution

We’ve found the problem haven’t we? Nowhere along the oil & gas production line do we see excessive gains being taken off the table. In fact, it’s been just the opposite! Just take a look at the 1-year stock charts for Exxon Mobile, Chevron or ConocoPhillips! You can say that one of these companies is making $1000 a minute… but when you are the biggest company in the world like Exxon, it’s hard not to. The fact remains that demand and the low crack spread have companies across the board reeling.

Are we doomed then? I don’t think so. Throughout time, our government has found ways to innovate and react to shortages on the market. I truly believe that it is not the government that will solve this, but the free markets and the intuition of the worldwide intellect that is working around the clock on a solution. Maybe it will be the Pickens Plan, with natural gas as a headline alternative, or maybe it will be the flaunted alternative energy sources of solar, wind and clean coal. Perhaps we even find a way to use nuclear technology, the most effective (but dirty) production means, in an innovative way.

In the meantime, we can fix the problem by using alternatives to driving and demanding oil. America alone uses about 1.3 trillion gallons of gas per year. Other countries like India use about 1/20th of that! True, America is a nation that was literally founded on the use of petroleum… and you’d be surprised to realize that the amount used per capita is currently about half of what it was in the 1980s. That being said, prices probably will rise from here… but this isn’t a problem we can’t fix.

-Jimvesting

Disclaimer: Many of these investing ideas brought to you by BullishBankers.com

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I had talked about the deal way back on March 9th in a post about the possible takeover. But I guess things weren’t meant to be, I see this as a win-win-win situation as Microsoft doesn’t throw away money, Yahoo doesn’t get destroyed form the inside out, and MSFT shareholders keep their sanity.

From the Wall Street Journal:
“Microsoft Saturday released a letter from Chief Executive Steve Ballmer to Yahoo CEO Jerry Yang saying that Microsoft had said it was willing to raise its offer to $33 a share for Yahoo, but Yahoo demanded at least $4 per share more.“

So where does Yahoo get off demanding so much money, eh? These guys are the laughing stock of the financial world now because they are demanding an unprecedented amount of money… YHOO stock isn’t worth $20…. let alone almost twice that! The drivers for growth in this company are all gone stale. Google, and heck, even Microsoft are tearing them apart on the internet, and there’s really nothing beyond that for Yahoo.

What was most intriguing was that Ballmer actually upped the bid to Yahoo’s CEO Jerry Yang to $33 per share, which was really not anticipated. A lot of people, myself included, see Ballmer as the kind of guy who will make his demand and never back down… kind of a ruthless conqueror of sorts. The fact that he was able to bend and raise the bid should have been enough for Yahoo to accept. I feel like they are dooming themselves and will never get their stock back to that much value.

Wall Street analysts have estimated that shares of Yahoo would fall to $20-$25 if Microsoft walked… I am thinking they are spot on. I’m not so sure what Yahoo is anticipating as far as movements go in order to reposition themselves as market leaders… but you hear names like Google and Time Warner thrown around quite a lot. We’ll have to see what happens.

Maybe if Microsoft acquired Yahoo, bloggers would have seen some insanely cheap advertising deals in a competition scramble… but hey, I see this as a win. This Microsoft empire shouldn’t be getting that much bigger any time soon, and I don’t think anybody wants them having that added pricing power.

-Jimvesting

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All of this mess started January 31st, when Microsoft announced a bid for Yahoo at $31 a share… a huge premium versus Yahoo’s then $19/share price. Of course, this triggered a sell off of Microsoft (NYSE: MSFT) and a feeding frenzy on Yahoo (NYSE: YHOO) as most mergers typically do. But Yahoo formally rejected this bid, saying that the $31 dollars per share “undervalues” their company. Is this true? I don’t think so! But Yahoo doesn’t seem to care.

Fast forward to today, Yahoo still doesn’t know what it is doing. Everyone should realize by now that the news you hear about “oh Yahoo is trying to team up with AOL and News Corp” or “wow, Yahoo is going to team up with Google to fight Microsoft” is all a load of crap. All they are doing is stalling, Microsoft controls them and everything that they do. I know it would seem to most that this takeover is basically the clash of two titans, but its not. It’s Microsoft, a larger company by FAR, playing the “coiled python” and waiting to move in for the kill. It’s Steve Ballmer, CEO of Microsoft, throwing a tantrum as he realizes that Yahoo is effectively destroying Microsoft’s shareholder value while we wait in limbo for the deal to go through.

Now that we’ve waited so long, there is a lot more to consider. It is looking as though the $31 per share was the correct price, and if we could turn back time now I think the deal goes through. The two-faced problem? GOOGLE! Since January 31st when the deal was announced, shares of Google have dropped off the charts losing about 15% of their value. This not only makes Yahoo’s complaint that $31/share was too little all the weaker, it makes the chances that Ballmer will want to increase their bid to $38-$41 per share weaker! Truth be told, I think that the reason Microsoft wants Yahoo is not to strengthen their business model, but to slow down Google. Yahoo somewhat realizes this, and they don’t want to become a pawn in the Microsoft-Google war. But will they even be able to resist much longer… and is it worth it?

On Microsoft’s side of the coin, we now have three worst-case scenarios:

1. Microsoft walks away from the deal
   Here, Microsoft’s shares take a hit, but then again… they don’t need to waste cash on Yahoo so they are the best off in this case
2. Microsoft acquires Yahoo
   It’s about time. But Microsoft’s share value plummets further because now they are spending a lot of their cash flow on an unsuccessful business
3. The stalling continues…
   Microsoft continues to deteriorate slowly, while Yahoo sits in the balance thinking up more reasons they are worth more then they are

Nice, eh? Shareholders are fed up and getting more and more frustrated by the minute.

Jimvesting’s Prediction: Microsoft eventually increases their bid to about $35. This is less than the originally proposed counter-offer, but appropriate as Yahoo’s peers have fallen off the map over the past month. Our friend Steve Ballmer has a power problem, and losing this bid is not an option to a tech powerhouse that wants to control anything and everything. Once acquired, rather than trying to assimilate them into their business model, Microsoft launches an attack on Google. We’re talking lower online advertisement costs, search engine incentives, basically anything to slow Google… using Yahoo as a loss leader to gain market share. Will this work? Who know.. but increased competition could definitely benefit bloggers

-Jimvesting

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