IPOs just aren’t what they used to be

DFN: OK, IPO’s aren’t as good of a vehicle for creating ‘liquidity’ now a days, what are your alternatives? Slow growth? Selling out to a larger competitor? Bringing in partners? Each has its drawbacks.

IPOs Just Aren’t What They Used To Be
Fred Wilson | Jun. 19, 2010, 7:32 AM

I spent the day yesterday with VCs from other firms. I heard two stories about IPOs that are worth sharing.

One VC told me a story about a failed IPO for one of their portfolio companies a few years ago. He told me the legal and accounting bill they got after the IPO was pulled was $3.5 million. Yup, $3.5 million for an offering that was not successful.

The second story has a happier ending. It was about an IPO of a company that happened recently. The company was able to get public. It has revenues of almost $100 million a year and is profitable. The company raised about $75 million in the offering. And it is now trading at a market cap of around $300 million. That is a lower valuation than the company would be able to get in a late stage private financing in my opinion.

Taken together, these stories tell a sad tale about the IPO market.

First, it is way too expensive to go public. And if you don’t get your offering done, which is not an unusual occurrence, you are left with a huge bill to pay (and no cash to pay it with).

And if you get your offering done, your company will likely be valued lower than it would be valued in a late stage private financing.

I used to think that the IPO was the penultimate exit for a venture backed company. Then in the late 90s, I was involved about a dozen IPOs, sat on some public boards, got sued by ambulance chasers, and saw the vast majority of our IPOs underperform and get abandoned by wall street. Since that experience, I’ve become very wary of the IPO exit.

I believe that the IPO exit is appropriate for only the very best companies, maybe one or two companies per fund, which would be the top 5 or 10 percent of our portfolio. For every other company, I think liquidity offerings followed by an eventual sale transaction is the best outcome. The cost is just too high and the benefits are just too low for most companies these days.

Fred Wilson is a partner at Union Square Ventures. He writes the influential A VC, where this post was originally published.

Read more: http://www.businessinsider.com/ipos-just-arent-what-they-used-to-be-2010-6#ixzz0rXoAiAwv


Investing – “Good Advice”

DFN: Really good column on investing lessons from Michael Mauboussin, Charlie Munger, Marty Whitman, Jesse Livermore and Sir John Templeton. Particularly difficult to sit still and do nothing.

5 Lessons From 5 Smart Investors
By Morgan Housel
April 27, 2010

"And why the hell should I listen to you, some random girl named Morgan Housel?"

A special thanks to the reader who emailed me this fine note (I’m male, by the way). They bring up a great point: There’s a lot of information, and even more ill-informed opinions, sloshing around out there. Choose whom you take advice from wisely.

I remember this problem vividly when I first began learning about investing and economics. It was frustrating beyond belief to take someone at their word, only to later learn they were either certifiably clueless or fringe lunatics.

The best way to circumvent this is to pay special attention to advice given by those who are demonstrably successful at what they do. That’s pretty obvious. And finding these teachers is fairly easy in investing: Annual returns provide a universal yardstick that objectively distinguishes the truly great from the merely good from the average from the bad.

So here are five bits of timeless advice given by five investors who have proven to be among the greats.

1. "A thoughtful investment process contemplates both probability and payoffs and carefully considers where the consensus — as revealed by a price — may be wrong."

Taxes – Stimulus Tax Credit

DFN: Note to self; Turbo Tax gives me the $800 credit, but does it fill out a Schedule M (see below).

Many Filers Confused by Stimulus Tax Credit

by David Kocieniewski
Tuesday, April 13, 2010

provided by

As the deadline approaches for filing tax returns, the process of claiming a tax break created by the stimulus package has proved to be more work than millions of people had bargained for.

The new tax credit, championed by President Obama as a follow-through on his campaign promise to provide broad-based tax relief, affects 95 percent of all Americans by cutting $400 from the total tax bill for individual filers and $800 for married couples.

In an effort to jump-start the sputtering economy by putting the money into people’s pockets as quickly as possible, the government also decided to pay the credit upfront and instructed employers to reduce the amount of federal withholding deducted from workers’ paychecks over the last year.

But what millions of taxpayers did not realize was that to have the credit deducted from the total amount of taxes owed, they are required to complete a new form, Schedule M. For millions of retirees, the procedure also requires an additional step because they have to deduct the tax break, known as the “Making Work Pay” credit, from other tax credits they may have received.

While either of those procedures takes only a few minutes, I.R.S. officials said that the unfamiliarity with the process of claiming the credit had led to errors in more than four million of the 82 million returns processed as of this week. The government expects to receive 60 million more returns by the filing deadline on Thursday, so it is possible that millions of additional returns will also contain similar errors.

The I.R.S. said its examiners would correct those errors, file the Schedule M for the taxpayers who neglected to do so and recalculate the filers’ taxes to reflect the credit. But the sheer volume of errors involving the tax credit has added to the workload of the agency and could result in delays of several weeks or more for taxpayers whose returns were incomplete.

“We’re making sure people get the credits they are entitled to,” said Michelle Eldridge, a spokeswoman for the I.R.S. “But it’s causing delays.”

While mistakes involving the tax credit are by far the most common error tax examiners are encountering this year, I.R.S. officials say that the error rate — less than 6 percent — is not surprising for any new provision in the tax code. The Obama administration also contends that, despite the extra paperwork for taxpayers and the delayed returns, the tax credit succeeded in nudging the economy toward recovery by injecting $65 billion into circulation quickly.

But putting the credit into effect has nonetheless been challenging.

In November, the Treasury Department’s inspector general for tax administration reported that the I.R.S. instructions regarding the credit might have led some employers to reduce withholdings too much. As a result, the audit warned, 15 million or more taxpayers might find that their refunds would be smaller than expected, or they might even owe taxes.

I.R.S. officials say that because of a variety of other tax credits and changes to the code, those problems have not materialized and refunds are actually larger this year than last. But the complications involving taxpayers filing for the Making Work Pay credit have been widespread.

Some filers neglected to claim the credit on line 63 of their 1040 forms or to file the Schedule M. Social Security recipients and federal retirees who received $250 stimulus checks were also required to deduct that amount from their Making Work Pay tax credits, adding to the confusion.

“Even those of us who do it for a living are puzzled by this thing, so people doing their own returns have no idea what to do,” said Ron Lee, an accountant in Davenport, Iowa. “It’s good intentions to get the money out there and reduce taxes. But it creates an accounting headache.”

Amy Brundage, a White House spokeswoman, said the Obama administration had made extensive efforts to alert taxpayers to the new credits. In March, Vice President Joseph R. Biden Jr., Treasury Secretary Timothy F. Geithner and the commissioner of the I.R.S., Douglas H. Shulman, appeared at a White House event to publicize the new tax credits. The Obama administration also placed a tax-saving tool on the White House Web site to help taxpayers understand which credits they could claim.

“Helping the American people understand tax relief they are eligible for is an administration priority,” Ms. Brundage said in a written statement, “and we will continue to work to help the American people navigate this process during these difficult economic times.”

With millions of last-minute filers yet to prepare their returns, I.R.S. officials advised taxpayers to consult with
http://www.irs.gov/, or the telephone help line, at (800) 829-1040, if they need assistance.

“And the No. 1 way to reduce errors and get your refund as quickly as possible is to file electronically,” said Ms. Eldridge of the I.R.S.

“How to make a good investment”

DFN: Do the opposite of making a terrible investment Summary, to make success ‘investments’ focus on companies that have characteristics, the opposite of a terrible investment, ie, they have a good business model; a low valuation; and they’re focused on business.

3 Signs of a Terrible Investment

By Matt Koppenheffer
April 6, 2010

There’s nothing wrong with fixing your focus on trying to find the next Wal-Mart. After all, isn’t that what we’re here for in the first place?

But before you go diving in after that hot new small-cap stock you found, let’s take a moment to remember some of Warren Buffett’s priceless investment advice: "Rule number one: Never lose money. Rule number two: Never forget rule number one."

Maybe we should rename Buffett "Captain Obvious."

But as obvious as Buffett’s advice may seem, it’s an important and often overlooked aspect of investing. So how do we avoid losing money? I’ve found a few great lessons from some of the past decade’s worst investments.

1. Poor business model
In Buffett’s 2007 letter to Berkshire Hathaway shareholders, he described three types of businesses: the great, the good, and the gruesome. He described the "gruesome" type as a business that "grows rapidly, requires significant capital to engender the growth, and then earns little or no money."

Buffett’s prime example of a gruesome business? Airlines. And he’s not alone in thinking this. Robert Crandall, former chairman of American Airlines, once said:

I’ve never invested in any airline. I’m an airline manager. I don’t invest in airlines. And I always said to the employees of American, "This is not an appropriate investment. It’s a great place to work and it’s a great company that does important work. But airlines are not an investment."

Now you might say "Sure, legacy carriers like US Airways (NYSE: LCC) have an ugly history, but what about younger players like JetBlue (Nasdaq: JBLU)?"

Unfortunately, JetBlue is also a pretty poor spokesman for investing in airlines. The stock dropped drastically since its initial public offering, and its cash flow statement is just about as ugly as some of the legacy carriers’.

Over the past five years, the company has taken in roughly $1.3 billion in operating cash flow. Meanwhile, it has spent $4.7 billion on capital expenditures. Not only does this leave nothing behind for shareholders, but it has also forced the company to raise $2.4 billion in net new debt.

Of course, investing large amounts of capital in a business isn’t a bad thing in itself. However, investors need to be sure that there’s a good chance that capital investments will actually translate into healthy shareholder returns.

2. Sky-high valuation
We can take our pick of overvalued stocks when looking back 10 years, but Microsoft (Nasdaq: MSFT) could be a prime example.

Microsoft had a lot going for it back in 2000. The Internet boom was in full swing, making customers absolutely gaga about computer gear and software. And while stodgier companies like IBM (NYSE: IBM) and Apple (Nasdaq: AAPL) (remember, this is the pre-iPod era) were just creeping along, Microsoft was growing like a weed and collecting ridiculously high margins.

And to be sure, the road has continued to be pretty sunny for Microsoft since then. The company’s 2009 earnings per share were more than double what it earned in 2000. And though margins aren’t quite as strong today, the 28% net income margin for 2009 still shows a very profitable company.

However, the price-to-earnings ratio of 78 that Microsoft had at the end of 1999 was simply way too high. Growth and industry dominance couldn’t fight this extreme overvaluation, and Microsoft’s stock is still worth only half as much as it was in late 1999.

As Buffett has said, "It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price." And it’s never a good idea to own even a great company at an absurd price.

3. Loss of focus
It may seem hard to think back to a time when the name American International Group didn’t make you want to start hitting things with a baseball bat, but the company wasn’t always a symbol of corporate idiocy.

AIG had built itself into one of the largest insurers in the world, and indeed one of the largest public companies in the world. Not surprisingly, it achieved this stature by being a great insurer, taking on a variety of lines from commercial property and casualty to individual life.

Perhaps in an effort to try to capture some of the magic that seemed to let firms like Goldman Sachs and Bear Stearns (before it was swallowed by JPMorgan Chase (NYSE: JPM)) print money, AIG allowed its financial-products division to take on a huge amount of risk.

From 2005 to 2007, AIGFP boosted its credit default swap portfolio by 45% — to $562 billion. Though AIGFP accounted for a very small portion of AIG’s overall earnings, the overreaching into the area of ungoverned financial products was enough to bring the company to its knees.

While the recession was no cakewalk for other insurers like MetLife and Allstate (NYSE: ALL), both kept more of a lid on their swap exposure, and neither decided to put a gunslinging capital-markets division out there to try to expand outside their core competencies.

The best of both worlds
Keeping these lessons in mind when evaluating an investment will help you avoid some of the next decade’s worst investments. They may also help you achieve the goal that we started with — finding the next Wal-Mart. After all, Wal-Mart is a company with a great business model and a laser-like focus on its core low-priced-retail strategy, and it has been a fantastic investment for those who bought at a fair price.

The investing team at Motley Fool Hidden Gems focuses all of its time sorting through the world of small-cap stocks — the prime hunting ground for tomorrow’s Wal-Marts. By looking for the very best businesses and recommending them when the price is right, the team has uncovered big winners for subscribers.

If you’d like to check out what the Hidden Gems team is looking at today, you can take a free 30-day trial.

This article was originally published Jan. 4, 2010. It has been updated.

Fool contributor Matt Koppenheffer owns shares of Berkshire Hathaway, but does not own shares of any of the other companies mentioned. Berkshire Hathaway, Microsoft, and Wal-Mart Stores are Motley Fool Inside Value recommendations. Apple and Berkshire Hathaway are Stock Advisor choices. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Berkshire Hathaway. The Fool’s disclosure policy has never once been caught with its pants down. Of course, it doesn’t actually wear pants.

“Overview of Wireless Industry”

DFN: Good overview of the ‘components’ that make up the wireless industry and the major players in each segment.

The Infrastructure Ecosystem
The cornerstone for today’s wireless communications networks
March 1 2010 – 4:30 pm ET | Tracy Ford | RCR Wireless News

Editor’s Note: This article originally appeared in RCR Wireless News’ January Special Edition Wireless Infrastructure: The Engine for Economic Recovery. Look for our March Special Edition, coming soon.

Wireless networks are the cornerstone of the wireless industry. These capital-intensive investments are a key building block to the success story that is the wireless communications industry. Networks are key growth drivers to the nation’s economy as well. CTIA estimates wireless operators collectively spend about $20 billion a year on their networks, which drives the $75.8 billion in revenue generated nationwide on wireless services for the first six months of the year. The industry association also estimates nearly 246,000 base stations are connecting the nation’s wireless networks.

The ecosystem surrounding infrastructure is extensive and includes everything from major telecommunications equipment manufacturers to maintenance grounds keepers at tower sites.

Following is a brief description of the major sub-segments within the wireless infrastructure ecosystem and some of the players that offer products and services in the sector:

Telecom equipment manufacturers/Original equipment manufacturers – These multinational giants build the physical networks using their own equipment and components from a wide range of suppliers. Networks consist of the core and radio access network. Companies in the space include Ericsson, Huawei, Nokia Siemens Networks, Alcatel-Lucent, Motorola, Juniper, Cisco, IBM, Dell, Hewlett-Packard, Fujitsu and ZTE, as well as smaller players including Proxim, Redline, Alvarion, Airvana, Bridgewave and Ciena.

Component suppliers – These companies are a diverse group; some of them offer solutions for certain segments of the network, while others offer products that focus on a specific area. Some of the products they sell are RF components, switches, repeaters, routers, power amplifiers, subsystems, duplexers, antennas and cooling filters. Players in the space include ADC, Commscope/Andrew, Ceragon, Deltanode, Powertel, Rohn, Sabre, Summitek Instruments and Valmont Site Pro 1.

Tower companies – Led by the large tower companies and the carriers themselves, towers are the backbone of the wireless networks. American Tower, Crown Castle International Inc., SBA Communications Corp., Global Tower Partners and TowerCo are the top independent tower firms in this space, but there are hundreds of small and medium-sized tower companies across the country. Besides the traditional outdoor tower sites, distributed antenna networks – that work both indoor and outdoor – are a subsector of this group, as are rooftop towers.

DAS providers – A subset of antenna towers, these distributed antenna systems use a combination of RF and fiber-optic technology to transfer the RF signal in hard-to-site areas, both indoors and outdoors. Players include most of the major tower companies, as well as independent firms like NextG Networks, ExteNet, Mobilitie, NewPath Networks and others.

Service providers – These site acquisition and construction shops manage the actual network buildout for the carriers, working in close contact with the carrier and the sub-contractors. In this space, companies can be one-stop shops or just specialize in certain subsectors of the ecosystem. Indeed, some carriers and infrastructure companies use staffing firms for a variety of positions. Players in the space include BCI Communications, Bechtel, Black & Veatch, Computer Science Corp., General Dynamics, Goodman Networks, KCI Technologies Inc., the Lyle Company, Mann Wireless, MasTec, nsoro, SiteMaster, Smartlink, Tectonic Engineering & Survey Consultants, TEKsystems and TowerSource.

Backhaul providers – Backhaul providers take the signal and route it back to the switching station using fiber Ethernet, microwave and coaxial cable technologies. Players in the space include Redline, Dragonwave, Fujitsu, FiberTower, Level 3 and NEC, as well as local exchange carriers and cable companies.

Cabinets/Enclosures – More than just the physical shelters that house components at the tower site, shelters include climate control systems and power and backup power supplies. Some players in the space include American Products, Accu Air, Adtran, Emerson Network Power, Powerwave and Tessco.

Distributors –These companies help get products out to the field. Some of the companies in this subsector include Hutton, Primus Talley and Tessco.

Telecom Shelters – These shelters house equipment at the site. Some of the companies in this space include – American Products, Fibrebond Corp., Reliant Shelters (a division of mobile Modular Express), Sabre Industries and Tuff Shed.

Tower manufacturers –These companies make the fiberglass and steel structures that house the cell sites. Companies in this space include Caterpillar, Fiberglass Specialties, Fred A. Nudd Corp., FWT Inc., Glen Martin, Rohn, RSI, Sabre, TransAmerican Power Products, Valmont Structures and World Tower Co.

Generators/Power Products – Power is a significant portion of every network and backup power needs are increasingly important during times of crisis, as demonstrated during powerful hurricanes the last few years. Some of the companies that operate in this space include Caterpillar, Cummins Power Products, DC Group, Generac Power Systems Kohler and Jadoo Power.

Lighting – Federal law requires cellular sites to be properly lighted, and it also makes good business sense. Some of the companies in this space include International Tower Lighting, Lighting Flash Technology, an SPX Division, Specialty Tower Lighting, TWR Lighting and Unimar.

Professional services –This group encompasses everything from law firms that represent companies on zoning and land-use laws, as well fixed as site-acquisition and environmental assessment and compliance experts, as well as permitting and utilities coordination experts. Some of the companies in this space include Davis Wright Tremaine, Patton Boggs, Phillips Lytle, Saul Ewing, and Venable, although there are countless businesses that specialize in certain practices and certain geographic regions of the country.

Associations, professional groups — PCIA represents the infrastructure association and coordinates with state wireless association programs, or SWAPS as well as the DAS Forum. In addition, CTIA, which represents carriers at the national level, also comments on tower issues and the like. The Telecommunications Industry Association represents hardware manufacturers, while the Wireless Communications Association connects wireless broadband initiatives. In addition, certain investment banks and venture capitalists also specialize in the wireless infrastructure space. Media Capital Advisors, RBC Daniels and RBC Capital Markets, Raymond James and Co. and Macquairie also watch the wireless ecosystem. Numerous research companies also cover specialized areas of the technology space, including ABI, IDC and Yankee Group, to name a few.

“DAS a better alternative to building out your own network”

DFN: Telco’s find the use of DAS a better alternative to fully building out their own networks, and improving coverage. Generally, it takes 9 months to a year to deploy a DAS network, the telco pays for some of the upfront costs and commits to using the network often built to their own specifications for a 10 – 15 year period.

LTE deployments driving new distributed antenna deployments
by Kevin Fitchard 3/16/2010

As Verizon, Metro and soon AT&T gear up for their LTE launches, DAS vendors and service providers are seeing much more interest in their wares

The advent of long-term evolution (LTE) in the US is spurring a lot of sectors of wireless industry, from device to network infrastructure to application developers. But one relatively minor product sector in wireless is seeing a particularly high upsurge in growth due to 4G deployments: the distributed antenna system (DAS).

DAS deployments divide the capacity of the cell among several lower-power spatially separated antennas, allowing an operator to gerrymander its coverage indoors and around obstacles or to create a much less obtrusive network. DAS has taken a rather low-key role in the US over the years, used mainly as a means of providing spot coverage in large public gathering places such as stadiums, but as Verizon Wireless (NYSE:VZ, NYSE:VOD), MetroPCS (NYSE:PCS) and AT&T (NYSE:T) deploy LTE, DAS is taking on a much more significant role, according to DAS suppliers.

ADC (NYSE:ADC) vice president of product management John Spindler said that Verizon’s deployment of LTE at 700 MHz is relying much more on DAS technologies than its previous network rollouts. LTE is a data-centric technology, in which there is much greater emphasis on indoor coverage than with voice-centric networks, Spindler said.

“We’ve already sold a significant amount of DAS equipment to Verizon at 700 MHz,” Spindler said. “They have to ensure that all of the airports and stadiums are covered from the beginning. … In-building has become a key piece of the networking process rather than just an afterthought.”

While DAS sales were flat for ADC in 2009, Spindler said ADC is anticipated a 20% growth in indoor DAS equipment in 2010, largely fueled by Verizon’s LTE efforts.

DAS integrator NextG Networks sees a similar trend with outdoor DAS systems. Rather than driven specifically by 4G, outdoor DAS deployments are becoming a component of most new network rollouts as carriers find it increasingly difficult to get the zoning approvals and permits to deploy new macro-cells, said Bo Piekarski, NextG vice president of product management and marketing. NextG acts as a carrier’s carrier for distributed cellular deployments, running a network of utility poles and other structures which operators hang their DAS gear and a fiber network along public rights-of-way, which connects those antennas back to remote base stations.

NextG deployed more than 2000 DAS nodes last year, driven primarily by Leap Wireless (NASDAQ:LEAP) and Metro’s deployment of new CDMA networks in the advanced wireless service (AWS) band. DAS equipment supplied by Andrew Corp was the primary access cellular architecture, MetroPCS used in its rollouts in Boston, New York and Philadelphia due to the crowded towers in those dense markets, Piekarski said. NextG has deployed 5000 DAS nodes already and is under contract to deploy another 1500 nodes. Overall Piekarski predict s 25% to 30% growth in NextG’s commercial footprint in 2010, much of it driven by LTE.

Metro will be able to use the same DAS sites at AWS for its 700 MHz LTE network. Meanwhile, NextG is in discussions with both Verizon and AT&T about using DAS to augment their own LTE footprints, Piekarski said.

Fuel Cells

DFN: Alternative energy is of interest and as I’ve said before I use this blog to keep track of articles which have caught my attention.

Fuel Cells in Bloom
Posted: Mar 05, 2010 09:46 AM by Aaron Levitt

Tickers in this Article: SPLS, EBAY, KO, WMT, SO, SI, PLUG, BLDP, FCEL, UTX
A Silicon Valley start up is moving forward with its mission to provide clean and affordable energy to the masses. Bloom Energy recently unveiled new fuel cell technology designed to power commercial office buildings, but envisions residential units, about the size of a bread box in the upcoming decade. Fuel cells have often been seen as the holy grail of alternative energy as they have the potential to provide some of the cleanest power around. Bloom, which has raised more than $400 million from investors, has spent nearly 10 years developing solid oxide fuel cells. This variety of cells, a product of 30 years worth of innovation, is considered the most fuel efficient.

Bloom Boxes
Bloom Energy’s proposed technology allows users to create their own electricity as opposed to buying from their local utility. The real potential for these fuel cells is those emerging markets that do not have traditional energy infrastructure and power systems. Using air and a fuel source, such as natural gas, ethanol or landfill gas, fuel cells cause oxygen ions to interact with the fuel and produce electricity. Since the fuel isn’t burned these cells are nearly two-thirds cleaner than a traditional coal plant. While, I wouldn’t sell my shares of Southern (NYSE: SO), there is quite a bit of potential for the units. And some major corporations are taking notice of that potential. A consortium of companies, including Wal-Mart Stores (NYSE: WMT), Coca-Cola (NYSE: KO) and Staples (NASDAQ: SPLS) have been snapping up the $700,000 commercial sized Bloom boxes to add to their operations. EBay (NASDAQ: EBAY) has been using five Bloom units since July and estimates it has shaved more than $100,000 off its total energy bill so far.

Adding Cells to a Portfolio
While Bloom Energy isn’t currently a public company (although based on its venture capital investors previous history it will be), there are several fuel cell manufacturers that are. As demand for these cells has been increasing, cost, the major issue for all forms of energy, has been steadily decreasing to around 15 cents a kilowatt hour. Looking towards the future, these kinds of devices could find their places in more municipalities, remote off-grid locations and automobiles such as Honda’s (NYSE: HMC) new FCX Clarity. Adding a speculative dose of fuel cells to a portfolio may do it some good.

As a former tech darling during the dotcom days, Fuel Cell Energy (NASDAQ: FCEL) has seen its share price slide from almost $50 to just under $3. The company produces carbonate and solid oxide generators, an older, but similar styled version of the Bloom Energy cells. The company produces large-scale units, and has installing a few on Yale University’s campus. However, the company still loses money on every unit sold.

The Obama administration has hinted at removing incentives and subsidies for hydrogen-based fuel cells as they believe that the technology still has a far ways to go before becoming commercially viable. Both shares of Ballard Power Systems (NASDAQ: BLDP) and Plug Power (NASDAQ: PLUG) have fallen accordingly. However, continued interest from the auto industry and industrial equipment providers still could give the shares a long term boost.
For investors wanting more of a fuel cell "sure thing", both industrial giants Siemens (NYSE:SI) and United Technologies (NYSE:UTX) have large business lines dedicated to commercial fuel cells. Investors gain the safety net of dividends and a diverse product lines to help cushion the blows.

Bottom Line
The Bloom Energy announcements can only be seen as a positive for the fuel cell market. As one the cleanest forms of electrical power available, fuel cells could potential be the panacea need to help cure climate change and our energy addiction. Only time will tell, if the industries efforts pay off. In the mean time, investors who are feeling speculative could place their bets with one the publicly traded companies in the sector. (For more, see Ten Ways To Save Energy And Money.)

Aaron Levitt is an independent investment writer and analyst living in State College, Pennsylvania. His work appears in several high profile publications in both print and on the web. Levitt is an advocate for long term investing with a global framework. You can follow his picks and pans at http://twitter.com/AaronLevitt Print
Filed Under: Energy,Stock Analysis,Stocks
Tickers in this Article: SPLS, EBAY, KO, WMT, SO, SI, PLUG, BLDP, FCEL, UTX
A Silicon Valley start up is moving forward with its mission to provide clean and affordable energy to the masses. Bloom Energy recently unveiled new fuel cell technology designed to power commercial office buildings, but envisions residential units, about the size of a bread box in the upcoming decade. Fuel cells have often been seen as the holy grail of alternative energy as they have the potential to provide some of the cleanest power around. Bloom, which has raised more than $400 million from investors, has spent nearly 10 years developing solid oxide fuel cells. This variety of cells, a product of 30 years worth of innovation, is considered the most fuel efficient.

Distributed Antenna System (DAS)

DFN: Another advantage of DAS, besides to plug specific ‘holes’ and boosting carrier network capacity, is that it puts the risk of the capital investment on the DAS companies and off the carrier, and it minimizes the carrier capital investment. True, the trade off for the carriers, is that they have to be willing to sign a 10-15 years lease on the ‘networks’ the DAS companies put into service on behalf of the carriers. FYI, I work for Nextg Networks.

Distributed antenna systems: From niche to necessity
March 4, 2010 — 9:56am ET | By Phil Goldstein

Over the past few years, distributed antenna systems have quietly emerged as a powerful tool for wireless carriers looking to bolster their coverage and boost their capacity–key concerns in the age of smartphones and 3G.

DAS technologies can be used for indoor locations–mainly to boost signal coverage in large buildings and at stadiums and shopping malls–as well as for outdoor purposes. Essentially, DAS is a collection of small antennas spread over a specific geographic area and connected by fiber back to a central location or power source, usually a base station.

The benefits of DAS are two-fold: The technology allows carriers to fill in coverage gaps and dead spots in their macro network; and, by breaking down the macro cell site into smaller pieces, it helps add much-needed capacity to operators’ networks.

"It’s used to fill in gaps where the big cells may not reach, but going forward it will probably replace a lot of big cells in a lot of situations where they need high capacity," said Allen Nogee, an analyst at In-Stat. "It’s getting to be more about capacity."

A growing market

"Up until the last couple of years, it had been a niche market," said Dave Cutrer, the CEO of NextG, an outdoor DAS provider. "Carriers would use it solve specific problems."

The technology behind DAS is not new, and carriers have been using it for years. But lately, due to subscribers’ skyrocketing mobile data demands, operators have turned to DAS as a much-needed boost to capacity.

Nogee said today there are eight or nine major players in the DAS market, including ADC, NextG, Newpath Networks and larger tower companies such as American Tower and Crown Castle. They’re all trying to meet the needs of carriers that want to get their signal closer to where users actually are, he said.

PCIA’s Connie Durcsak said DAS is primarily used as a surgical solution to enhance coverage in a specific area. But engineering the network to enhance capacity is becoming just as important. "It has really evolved from a deployment need to an engineering need," said Durcsak, who is executive director of the DAS Forum within PCIA, a wireless infrastructure industry trade group.

The DAS market is still nascent, and there are no precise figures on how large it is. Durcsak said PCIA does not keep track of exact figures because it’s difficult to track the differences between indoor and outdoor DAS systems. However, she added that the industry has "probably evolved exponentially."

Cutrer of NextG said the outdoor DAS market is probably a $500 million market. Tony Lefebvre, ADC’s director of product management for outdoor DAS products, said the market is probably between $400 million and $450 million for outdoor DAS.

Lefebvre estimated there are roughly 10,000 outdoor DAS nodes, or site deployments, in the United States. Recently, NextG said it crossed the 5,000 deployment mark. And the market for indoor DAS, or in-building wireless deployments, is even larger. John Spindler, ADC’s vice president of product management, cited a recent ABI Research report predicting 89,000 indoor DAS deployments worldwide this year.

Carrier connection

Shuaib Porjosh, Sprint Nextel’s director of radio frequency engineering, said he thinks more carriers are turning to DAS "just because the solutions are becoming more surgical."

When evaluating a possible DAS deployment, Porjosh said Sprint considers the location’s geography and topography, the size of the area, and whether the company needs to build the system from scratch or can hop onto an existing, neutrally hosted DAS system.

Neutrally hosted DAS systems are analogous to tower sites that support multiple antennas for different carriers. Durcsak said the preponderance of outdoor DAS systems will be neutrally hosted sites. Porjosh said the estimate of 10,000 outdoor DAS nodes sounded accurate, and said Sprint has deployed roughly 1,500 such sites.

Verizon Wireless spokesman Tom Pica said the carrier uses DAS today to serve large customers where they need a better signal–such as arenas and airports. He said that when Verizon launches its LTE network, it will continue to use DAS in that way.

T-Mobile USA declined to comment on its use of DAS and an AT&T Mobility spokeswoman did not respond to requests for comment for this article.

For in-building coverage, Porjosh said Sprint generally leverages its relationship with a landlord to have a DAS system installed. For outdoor DAS systems–as with regular cell towers–carriers must get approval from local municipalities. In-Stat’s Nogee noted carriers have been turning to DAS technologies as a way to overcome strict zoning requirements, since the antennas for outdoor DAS systems can be placed on telephone poles and lamp posts. Lefebvre said they can be hidden in street furniture or placed as a piece of fake cactus.

DAS drawbacks

DAS is more expensive than putting in a regular base station, Nogee said. Cutrer of NextG conceded that installing a DAS system is initially pricey, but argued DAS can be effective if carriers look at total cost of ownership over the life of the contract.

"I really wouldn’t say it’s the preferred solution," said Michael Saperstein, PCIA’s director of government affairs. "It’s very expensive."

Cutrer said NextG can typically install an outdoor DAS system in nine to 12 months, but the timing largely depends on scoring leases from local municipalities.

"If the objectives are such that the economics don’t make it worth it from [a return on investment] standpoint from the carriers’ perspective, they’ll walk away," PCIA’s Durcsak said.

Despite the difficulties, DAS is coming to be viewed as a key element of network deployment for carriers.

"We’re definitely seeing an uptick," Sprint’s Porjosh said. "And I think the more the networks mature, DAS becomes a more and more important tool in the toolbox."

Housing Loans, or the academic and the banker

DFN: Can’t understand what’s so difficult, a person bought a house @$500K, took out a loan at $400K. Lost job, couldn’t pay for house, gets another job that pays less so is still faced with losing house (foreclosure), going through loan mitigation, or short sale. In the case of losing a house, or a short sale, both paths lead to a bank getting substantially less than the $400K loan under current market conditions; in each case the bank has to take a loss on the loan. The loan mitigation process, in general, the bank is unwilling to write off the existing loan in an attempt to forestall a loss. Is it so hard to see, that if in loan mitigation the bank gives the same deal to a current customer as it would in either a foreclosure or a short sale, the bank is no worse off, and potentially better off, if only from a public relations standpoint.

Another way out of this might be for banks to reduce the amount of principal, and take an ‘equity kicker’ in the property. By equity kicker, I mean, take a interest in the property such that should housing prices recover, and the owner decides to sell, then the banks gets a cut of the profit.

A tale of two Das: Citi CEO, academic and mortgages
Wed Feb 24, 2010 2:18pm EST
By Al Yoon

NEW YORK, Feb 24 (Reuters) – Sanjiv Ranjan Das, a professor at California’s Santa Clara University, last fall attacked the problem of “underwater” mortgages often cited as an Achilles’ heel to the U.S. housing market.

He had a special fan: Sanjiv Das, the top executive at CitiMortgage, the nation’s fourth-largest home loan lender and servicer of $723 billion in mortgages.

Coincidental ties extending back to their mid-1980s attendance at the Indian Institute of Management have resulted in meetings of the academic and banking minds over the biggest conundrum of today’s housing market.

The two men took separate paths for 25 years, but are now grappling with the behavior of borrowers faced with job loss, burdensome mortgages and a slump in home values that has caused many mortgages to exceed the value of their properties.

Stark reminders of the connection surfaced as Professor Das in mid-2008 began receiving e-mail messages meant for CitiMortgage’s Das from borrowers, real estate agents and the mayor of East Cleveland, Ohio. Professor Das has fielded dozens of e-mails seeking help, or to express frustrations.

“I started getting these messages, so people were really tracking things,” he said. “Some were angry.”

For Professor Das the connection was fortuitous for his research, which urges bankers to ramp up the controversial practice of forgiving principal in loan modifications. Banks have found such calls hard to swallow because it speeds up losses, and there is widespread disagreement of how to do it fairly or keep borrowers from assuming it could happen in the future.

Professor Das asserts that principal forgiveness of some kind is the “optimal” loan modification. Even so — after meeting with CitiMortgage’s Das last fall, and with other bankers and regulators — further study is needed, he said.

“The problem is a lot bigger than what I wrote about,” he said. “All the major banks are trying their best to help homeowners out as much as they can, but it’s just too much. They are swamped.”

Underwater loans became a by-product of the housing crisis as falling prices erased already thin layers of equity many Americans held in their homes. Accounts of underwater borrowers walking away from their homes, even if they have jobs, have set off fears that such “strategic defaults” would overwhelm lender efforts to curb foreclosures by only lowering payments.

More than 11.3 million, or 24 percent, of residential properties with mortgages had negative equity at the end of 2009, according to FirstAmerican CoreLogic.

But lenders still resist calls to cut principal. At CitiMortgage, interest rate reductions and term extensions remain the preferred ways to reach affordability, its CEO said.

“I like the way he’s framed his thinking, however, there’s more work to be done to take into account moral hazard and fairness, which are extremely hard to quantify,” Das said.

The two men may now collaborate on research to identify which borrowers are at risk of default due to income loss and those who might not pay only because of eroded net worth. To determine what is “income shock” or “wealth shock” will result in better loan modifications, Professor Das said. (Editing by Leslie Adler)

IP Telephone and VoIP explained

DFN: IP Telephony was just over the horizon when I left SBC (2002); good article explaining IP and VoIP.

IP Knowledge is A Must in Telecommunication Operators These Days
Wednesday, February 24, 2010

Yup, IP knowledge is a must in telecommunication operators these days because almost all of the hardware use Internet protocol (IP). It is true – i experienced it by my self. It is true that some of telecommunication service already used IP since beginning such as data service, Intelligent Network (IN), Value Added Service (VAS) and Short Message Service Center (SMSC) – but not for voice service as core service of telecommunication operators around the world. But now the voice service is not in exception from IP anymore. You may think that this IP only use as support system of voice service but i must disappoint you – the IP already become the core of voice service in many operators.

As you may already aware that VoIP technology already introduction in this century as emerging of IP and voice service. This VoIP already provided so many voice service in around the world – especially for long distance and international voice service. There are also some VoIP service that give by free such as yahoo messenger and gtalk voice service – and do not forget about the old and most known cheap VoIP service – skype. There are so many worldwide company that able to save their telecommunication expenses because of these VoIP service. And the companies also can make their own VoIP network as long as they have internet connection to each their world wide office.

OK, You may think that all of these VoIP things do not make IP Knowledge become a must in Telecommunication operators. Yup, you are right. VoIP is a different telecommunication service if compare with old traditional voice telecommunication service . The old traditional telecommunication service which use switch technology is still become the biggest business for telecommunication service even VoIP already use world wide. It is because many people experience the bad quality from VoIP and also that VoIP service do not able service mobile user. Both of it is the biggest factor why that the old traditional switch base voice service still in this world.

And after this – you may become sure that I was wrong when said IP Knowledge is a must in telecommunication operators, right? If you think like that, you will be disappoint again soon. It is because I true that IP Knowledge is a must in telecommunication operators these days. As I said in previous paragraph, it is true that the traditional switch base voice service is still liked by users which make VoIP which is the IP voice service still do not able to replace it. So we can leave about that VoIP things and now we look what currently happen in traditional switch base voice service. If you in telecommunication operators in this two years, you should aware that almost all of the telecommunication hardware already use IP in it – and that also for traditional switch base voice service.

All of traditional switch base voice service hardware already use IP in it – even the SS7 already used over the IP. Therefore, BTS, BSC, and MSC which the core of switch base voice service also already use IP on it. It is because IP technology give the more flexible feature and also give a great saving for hardware resources. I already see some of IP Base MSC and it is really tiny if compare with the switch base MSC. It will make the companies save many resources such as place, power consumption, and others. This IP technology also make that all voice service hardware able to remote and monitor easily. And also the the traditional voice service will be easy to integrate with VoIP service so telecommunication users surly will enjoy all of flexibility trough voice service.

And the consequence of IP using in traditional voice service is that telecommunication operator guy should have IP knowledge. It is a must so all the service can run smoothly and each issue will be handle in short time. And as you know that the old traditional switch base voice service have big different with IP base technology so telecommunication guys need to learn it again from beginning. It is need hard work for telecommunication operators guys to cope up with this evolution of voice service but it is worthy because will bring telecommunication companies to next step. So, if you want to have career as telecommunication guys – especially for voice service engineer – you should learn about IP from now on because IP Knowledge surely a must in telecommunication operator these days



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