(ReCode.net) Sweat Equity: Benchmark Takes Stake in Tinder in Exchange for Matt

Sweat Equity: Benchmark Takes Stake in Tinder in Exchange for Matt Cohler Joining Board
In an unusual investment configuration, Silicon Valley venture firm Benchmark has taken an equity stake in popular mobile dating app Tinder, in exchange for one of its partners, Matt Cohler, joining the board.

The Los Angeles-based Tinder is controlled by the Match Group, which in turn is a subsidiary of online conglomerate IAC (which is, of course, run by uber-mogul Barry Diller). Interestingly, sources said that no actual money was invested by Benchmark and IAC continues to hold a massive and controlling stake in Tinder via Match.

Instead, the small stake — the companies declined to give an exact amount — will be traded for the time and expertise of the high-profile VC Cohler. The former LinkedIn and Facebook exec has made investments in a range of successful online companies such as Uber and Twitter.

Cohler has been on the hunt to be involved in Tinder for some time now, he said, fascinated by its viral growth and user engagement. “This has been an app that has taken off in the way a lot of the really successful ones that I have seen in the past have,” he said in an interview. “What’s happening at Tinder is something that is very special.”

Cohler would not give details, but said the structure created for its Tinder involvement lined up incentives for the firm to help grow the startup.

Sean Rad, co-founder and CEO of Tinder, called Cohler a “mentor” and noted that more than cash, Tinder needed experienced advisers to take it to the next level. While he did not want to talk in detail about recent controversies around a now settled sexual harassment lawsuit aimed at Tinder’s now departed marketing head and also his own leadership, Rad did note that the company needed a deeper level of attention to building out the business.

“More than money, we need people who have been there to help us as we grow,” he said. “The end result is that Matt will be helping us grow as big as possible … it’s all about the support.”

In a statement, Sam Yagan, a director of Tinder and the CEO of the Match Group, said: “Matt will complement Sean’s proven product leadership and the expertise in the social and dating categories we already have on the board. I’m confident Benchmark’s involvement will help Tinder achieve its huge growth potential and am excited about continuing to build out the Tinder team.”

FT : Facebook scrutinised over plans to pour money into products


Facebook’s plan to spend next year pouring more money into its new products was greeted with caution by a wary Wall Street, uncertain just how much spending is too much.
Mark Zuckerberg, founder and chief executive, said it may sound “a little ridiculous”, but Facebook is waiting for newly acquired products such as Messenger, WhatsApp and Instagram to reach 1bn users each before beginning to try to generate revenue from them.

Investors may have agreed, wiping over $20bn off the company’s market capitalisation in after-hours trading during Facebook’s third-quarter earnings call when they heard how much that plan might cost.
Facebook forecast costs will rise by 50-70 per cent next year on a non-GAAP basis, or by 55-75 per cent on a GAAP basis. This would far outpace the average analyst forecast for revenue growth of about 35 per cent, although Facebook did not give its own revenue projections.
But Mr Zuckerberg, who has built the main Facebook site and app into a business with 1.35bn users, set out his theory of investment as one that is “to first focus on connecting 1bn people, reaching the full potential before aggressively turning them into new businesses.”
“I can’t think of that many other companies or products that have multiple lines of products that are on track to connect 1bn people,” he added.
Brian Wieser, an analyst at Pivotal Research, cites Google as one such example – another founder-led Silicon Valley company that has used the money made from its core product (in its case, search) to invest prolifically in other areas.
“The closest peer here is Google and that’s not a positive comparison in terms of rapidly increasing expense growth,” he says.
But Mr Wieser says Facebook compares favourably with Google because it is flagging the increased expenditure in advance and seems to have more of a “investment focus” than its rival.
Facebook’s multi-app strategy is centred around the idea that there are many ways to “connect the world”, whereas Google is taking money from its lucrative search advertising business for big bets that range from driverless cars to finding a “cure” for death.
Few argue that Facebook is heading in the wrong direction, but many feel it lacks the tools to assess exactly how much money it needs to invest.
The problem Wall Street generally encounters when trying to value Silicon Valley companies is low visibility about where they are spending their research and development budgets.
It is difficult to predict if Facebook could use existing money to grow, developing, for instance, WhatsApp by reallocating engineers and servers or whether that would require extra resources.
Mr Wieser says few analysts gave the company a “haircut” when it acquired WhatsApp in February in a deal now worth $22bn, in spite of its diluting the share count and Facebook’s statement now that it would be one of the factors prompting accelerated expenditure.
“No company of this size and growth rate is normal. If you are P&G, investors can quibble about the appropriate expense ratios as the business is relatively predictable and you have decades of history to inform what the company will do, and dozens of peer companies,” he says.
The extra costs announced on Tuesday include spending in an attempt to grow this year’s acquisitions of WhatsApp and Oculus VR, the $2bn virtual reality headset maker. The market has already responded favourably, sending shares in Facebook up by almost half so far this year.
WhatsApp’s financials, published for the first time on Tuesday, showed a little revenue and widening losses because of stock-based compensation for employees. But Facebook has emphasised that the app was not bought for its current business model.
Other additional costs will be for hiring more people, investment in infrastructure and the expansion of Facebook’s advertising technology business – which Jan Rezab, chief executive and founder of Socialbakers, a social media marketing company, identifies as an obvious area for development.
Sheryl Sandberg, chief operating officer, says Facebook could use the tools it has created to improve targeted marketing on its site, and the acquisition of the Atlas ad serving and management platform for ads across the web.
“It’s clear that marketers and publishers need better tools for the mobile world,” she says. “This is an industry problem that we believe we are well-placed to solve.”
Mr Rezab says the fact that Facebook now makes two-thirds of its revenue on mobile shows it could play a leading role in advertising technology.
“The industry doesn’t know what it is doing. That is a clear fact,” he says. Facebook “can lead it and own it and solve it”.

>>> Mediobanca to sell stakes in Telecom Italia and RCS by June 2015 (translate

Mediobanca to sell stakes in Telecom Italia and RCS by June 2015 (translated)

Mediobanca, the listed, Italian investment bank, will sell its stakes in Telecom Italia (TI) and listed, Italian publisher RCS by June 2015, Italian-language daily Il Sole 24 Ore reported, citing Mediobanca CEO, Alberto Nagel.

As previously reported, Mediobanca also plans to sell minority stakes in the tyre manufacturer Pirelli, listed Italian holding group Italmobiliare and Gemina, the listed holding that controls the Italian airport operator Aeroporti di Roma.

A previous report noted that Mediobanca hopes to make EUR 1.5bn from its divestment programme, including the sale of a 3% stake in Generali, the listed Italian insurer.


Source Il Sole 24 Ore

>>> Asian Update

Asian Market Update: Japan industrial output recovers; Facebook follows Twitter with steep post-earnings drop

***Economic Data*** - (JP) JAPAN SEPT PRELIMINARY INDUSTRIAL PRODUCTION M/M: 2.7% V 2.2%E (8-month high); Y/Y: +0.6% V -0.1%E - (NZ) NEW ZEALAND OCT ANZ ACTIVITY OUTLOOK: 37.8 V 37.0 PRIOR; ANZ BUSINESS CONFIDENCE: 26.5 (first increase in 8 months) V 13.4 PRIOR - (KR) SOUTH KOREA SEPT CURRENT ACCOUNT BALANCE: $7.6B V $7.2B PRIOR (31st month of surplus)

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 +1.4%, S&P/ASX flat, Kospi +1.1%, Shanghai Composite +0.4%, Hang Seng +0.9%, Dec S&P500 -0.2% at 1,975

***Commodities/Fixed Income*** - Dec gold flat at $1,229, Dec crude oil +0.3% at $81.69/brl - GLD: SPDR Gold Trust ETF daily holdings fall 1.8 tonnes to 743.6 tonnes; Lowest level since Oct 2008 - (US) API PETROLEUM INVENTORIES: CRUDE: +3.2M (4th consecutive build) v +3Me, GASOLINE: -3.7M v -1Me, DISTILLATE: -3.0M v -1.5Me - (JP) BOJ offers to buy ¥350B in 1-3yr JGB, ¥300B in 3-5yr JGB, ¥400B in 5-10yr JGB - (AU) Australia MoF (AOFM) sells A$600M in 2029 Bonds; Avg yield: 3.6260%; Bid-to-cover: 4.85x - (CN) China MoF sells 5-yr govt bonds at average yield of 3.53% - USD/CNY: (CN) PBoC sets yuan mid point at 6.1405 v 6.1421 prior setting (strongest since Oct 15th)

***Market Focal Points/Key Themes/FX*** - Much like Twitter, Facebook beat consensus expectations but saw its shares sink afterhours with a near 10% loss. On the conference call, FB disclosed that Q4 sales would rise +40-47% y/y (implies $3.63-3.81B v $3.74Be), while expenses would rise 50-70%. Investors are skeptical that rich acquisitions such as WhatsApp, financials for which showed little revenue and rising costs, are less prudent if organic growth is to slow.

- Japan Cabinet Office raises its assessment of Industrial Production for the first time after Sept sequential growth rose at the highest rate since January. METI noted production is "see-sawing", also forecasting a marginal 0.1% decline in October followed by a 1% increase in November. Recall earlier this month, the BOJ cut its assessment for Industrial production to "showing some weakness, due in part to inventory adjustment". Separately in Japan, S&P warned the plan to raise its sales tax next year may not be positive for the nation's credit rating if it snuffs out any chance of economic recovery. This could potentially disarm the argument that global investors' trust would be hurt if consumption tax is not lifted again as expressed by Fin Min Aso last week.

- World Bank warned that China growth slowdown could be structural rather than cyclical, but that there is room for stimulus if growth slows sharply. World Bank estimated reform to increase growth by as much as 3.5% over a five year period.

- South Korea Pres Park said the economy remains in crisis even though growth is picking up. A local press reported also noted Q3 credit card spending growth at its highest rate in nearly 2 years at 6.3%.

***Equities*** US markets: - X: Reports Q3 $2.16 adj v $1.17e, R$4.59B v $4.54Be; +10.4% afterhours - TQNT: Reports Q3 $0.28 v $0.24e, R$272M v $261Me; +4.7% afterhours - SWI: Reports Q3 $0.50 v $0.44e, R$112.9M v $111Me; +3.5% afterhours - DLR: Reports FFO Q3 $1.22 v $1.21e, R$412.2M v $407Me; +3.3% afterhours - WES: Reports Q3 $0.60 v $0.56e, R$326.5M v $347Me; to acquire Nuevo Midstream for $1.5B; +1.7% afterhours - AFL: Reports Q3 $1.51 v $1.43e, R$5.74B v $5.72Be; increases dividend, approves increased buyback targets; +1.2% afterhours - WYNN: Reports Q3 $1.95 (adj) v $1.82e, R$1.37B v $1.36Be; +0.9% afterhours - MAR: Reports Q3 $0.65 v $0.62e, R$3.46B v $3.45Be; +0.4% afterhours

- MCK: Reports Q2 $2.79 v $2.74e, R$44.8B v $42.9Be, Technology solutions rev -6% y/y; -0.7% afterhours - EA: Reports Q2 $0.73 v $0.53e, R$1.22B v $1.16Be; -1.2% afterhours - WDC: Reports Q1 $2.10 v $2.04e, R$3.94B v $3.88Be, Guides Q2 $2.00-2.10 v $2.22e, R$3.75-3.85B v $3.91Be - conf call; -1.3% afterhours - OI: Reports Q3 $0.75 adj v $0.73e, R$1.75B v $1.77Be, lowers FY14 adj EPS $2.62-2.72 v $2.70e (prior $2.85-3.05); -1.8% afterhours - PNRA: Reports Q3 $1.46 v $1.42e, R$620M v $621Me, sales growth was offset by higher costs; -2.6% afterhours - GILD: Reports Q3 $1.84 v $1.80e, R$6.04B v $5.88Be, Q3 Sovaldi sales $2.8B v $3.48B q/q; -4.3% afterhours - FB: Reports Q3 $0.43 v $0.40e, R$3.20B v $3.11Be; Guides Q4 Revenue +40-47% y/y (implies $3.63-3.81B v $3.74Be) - conf call; -8.2% afterhours - ORB: The Antares (unmanned) rocket explodes on launch from VA - financial press; -15.5% afterhours

Notable movers by sector: - Consumer Discretionary: Shimano 7309.JP +4.9% (9M results; raises FY14 guidance); Nichirei Corp 2871.JP +3.6% (H1 results; raises FY14/15 guidance); Guangzhou Automobile 2238.HK -3.3% (Q3 results) - Financials: Nomura Holdings 8604.JP +4.4% (H1 results); Ping An Insurance 2318.HK +2.3% (Q3 results) - Materials: Sirius Resources SIR.AU +5.5% (quarterly update); Maanshan Iron & Steel 323.HK +4.2% (Q3 results) - Industrials: Samsung Heavy 010140.KR +7.3% (share repurchase); Okuma Corp 6103.JP -2.5% (H1 results); Minebea 6479.JP +2.5% (raises FY14/15 guidance); Hitachi Construction Machinery 6305.JP +2.6% (H1 results); Honda Motor 7267.JP +0.4% (H1 results); Gem-Year Industrial 601002.CN +10.0%, China Railway Group 601390.CN +8.4% (CSR, CNR merger) - Technology: Omron Corp 6645.JP +7.6% (H1 results) - Utilities: Osaki Electric 6644.JP +3.4% (raises FY14/15 guidance)

>>> US After Hours

After Hours Summary: X +10.4%, MAR +4.1%, INVN -24.5%, FB -9.3%, GILD -3.6%, PNRA -2.8% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: ICAD +10.5%, X +10.4%, ZLTQ +9.4%, EXTR +9.1%, IPHI +5.1%, EGL +4.2%, MAR +4.1%, TQNT +4%, AMC +3.5%, SWI +3.5%, DLR +3.3%, ULTI +3%, MRCY +2.9%, XCO +2.5%, GPRE +2.5%, WES +1.7%, CAP +1.3%, AFL +1.2%, EXP +1.2%, USNA +0.7%, APC +0.6%, KFRC +0.6%, CNL +0.4%, NFX +0.2%, EIX +0.2%, KONA +0.1%, AZPN +0.1%

Companies trading higher in after hours in reaction to news: AKS +4.5% (announced it will increase current spot market base prices for all carbon flat-rolled steel products by a minimum of $20 per ton, effective immediately with new orders), EGL +4.2% (entered into an agreement to acquire TASC for ~$1.1 bln, including the assumption of debt; expected to be significantly accretive to 2016 adjusted EPS; EGL stockholders to receive a special dividend of ~$11.40 per share in cash), ARNA +2.9% (announced positive top-line results of a pilot study to assess the safety of lorcaserin HCl and phentermine HCl), SPF +2.7% (announced a share repurchase program of up to $100 mln of common stock), IDT +2.6% (declared a special dividend of $0.68 per share), SANM +1.9% (announced the start of production for Raytheon missile systems electronic assemblies), LECO +1.7% (Board approved a 26% quarterly dividend increase to $0.29 per share and raised its 2014 share repurchase target 20% to $300 mln), QGEN +1.2% (announced an agreement with Astellas Pharma to develop companion diagnostics)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: INVN -24.5%, KEYW -17.6%, MTSC -14.4%, XOOM -12.6%, FB -9.3%, AMCC -9.2%, SM -8%, GILD -3.6%, PNRA -2.8%, EA -2.8%, VRTX -2.3%, TRUE -2.1%, OI -1.8%, HTS -1.6%, TRN -1.5%, WDC -1.5%, GAIN -1.2%, ESRX -1.2%, FISV -1%, MCK -0.8%, CHMT -0.3%, AJG -0.1%, CRAY -0.1%

Companies trading lower in after hours in reaction to news: ORB -12.7% (co's Cygnus spacecraft exploded on launch), SGYP -6.8% (announced a private offering to sell up to $150 mln principal amount of its convertible senior notes due 2019), TRUE -2.1% (filed for a 1 mln share offering of common stock by selling shareholders; co also provided Q3 guidance), PRU -1.5% (entered into an MoU with Inversiones La Construccion S.A. to acquire ownership stake in Administradora de Fondos de Pensiones Habitat S.A. in Chile between 34-40% for a purchase price of $530-620 mln)

(BFW) Gilead Still Reviewing Proposed Effect of Irish Tax Law Changes

Gilead Still Reviewing Proposed Effect of Irish Tax Law Changes
2014-10-28 20:56:14.380 GMT


By Catherine Larkin
Oct. 28 (Bloomberg) -- Gilead says on 3Q conf. call that
global rev. base and operations in Ireland will give co. options
for potential “structuring alternatives.,” if needed, after
Irish tax law changes.
* NOTE: Oct. 13, Gilead May Have 3%-5% EPS Impact on Irish
Tax-Law Changes: RBC NSN NDEDO46TTDSO<GO>


Link to Company News:GILD US <Equity> CN <GO>

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the editor responsible for this story:
Catherine Larkin at +1-312-443-5968 or
clarkin4@bloomberg.net

>>> US Close Dow+1,12% S&P+1,19% Nasdaq +1,75%

Closing Market Summary: Stocks Rally Ahead of FOMC Policy Directive

The stock market rallied on Tuesday with the S&P 500 climbing 1.2%. Small cap names had an even better showing, sending the Russell 2000 higher by 2.9%.

Equity indices climbed steadily throughout the day with the S&P 500 turning positive for the month of October. The index ended the day with an October gain of 0.6% after being down as much as 5.6% for the month on October 15.

In large part, the sharp rebound off the mid-October low was predicated on the belief that the Federal Reserve will not rush to hike the fed funds rate after asset purchases under the Quantitative Easing program end. To that point, the Federal Open Market Committee is expected to announce its final $15 billion taper tomorrow while the accompanying policy statement will be scrutinized for clues concerning the expected rate path.

All ten sectors finished in the green with yesterday's laggard—energy (+2.3%)—ending in the lead. The sector enjoyed a relief rally with support from BP (BP 42.84, +0.89) after the industry giant reported a bottom-line beat. A modest 0.4% uptick in the price of crude ($81.37/bbl) also factored into the strength, while disappointing earnings from Consol Energy (CNX 35.59, +1.36) and Noble Energy (NBL 58.36, +1.98) did not prevent a sector-wide rally.

Similar to energy, the industrial sector (+1.7%) displayed relative strength throughout the session. Transports and defense stocks underpinned the sector as evidenced by the Dow Jones Transportation Average (+1.5%) and PHLX Defense Index (+1.8%).

Meanwhile, most of the remaining cyclical groups kept pace with the benchmark index while the materials sector (+0.9%) lagged. Elsewhere, the discretionary space (+1.1%) ended just behind the market with solid gains among restaurant stocks masking the weakness in apparel names after Kohl's (KSS 54.66, -3.89) lowered its guidance. The stock fell 6.6% while Coach (COH 34.00, -2.15) lost 6.0% after its bottom-line beat was not enough to signal a turnaround.

In other earnings of note, Twitter (TWTR 43.78, -4.78) slumped 9.8% after worse than expected monthly active user figures overshadowed in-line results. For its part, Twitter's peer, Facebook (FB 80.77, +0.49), ended flat ahead of its quarterly report.

Also of note, countercyclical sectors lagged across the board after showing relative strength yesterday. The telecom services sector (+1.0%) had the best showing while consumer staples (+0.4%), health care (+0.7%), and utilities (+0.7%) struggled to keep up.

Treasuries slumped in the morning and finished near their session lows. The 10-yr yield rose three basis points to 2.29%.

Participation was in-line with recent averages as 779 million shares changed hands at the NYSE floor.

Economic data included Durable Orders, Case-Shiller 20-City Index, and Consumer Confidence:
  • September durable goods orders fell 1.3%, which was worse than the 0.6% increase expected among economists polled
    • The drop followed the prior month's revised decline of 18.3% (from -18.4%) and was accented with a 2.8% decline in machinery orders, a 2.5% decline in computer and electronic product orders, and a 3.7% drop in orders for transportation equipment 
    • Excluding transportation, durable orders decreased 0.2% (consensus 0.5%) to follow the prior month's revised increase of 0.7% (from 0.4%) 
  • The Case-Shiller 20-city Home Price Index for August rose 5.6%, while a 5.5% increase had been expected by the consensus 
    • This followed the previous month's increase of 6.7% 
  • The Conference Board's Consumer Confidence Index jumped to 94.5 in October from an upwardly revised 89.0 (from 86.0), while the consensus expected a reading of 87.2 
    • Consumer confidence is now at its strongest point since October 2007 and has finally recovered from the Great Recession 
    • Confidence generally trends in conjunction with the equity market, unemployment rate, gasoline prices, and media reports. Large swings in equity prices along with dire media reports about Ebola were expected to contain positive excitement from an improving labor market and lower gasoline costs 
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the FOMC policy directive will cross the wires at 14:00 ET.
  • Nasdaq Composite +9.3% YTD 
  • S&P 500 +7.4% YTD 
  • Dow Jones Industrial Average +2.6% YTD 
  • Russell 2000 -1.1% YTD