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Opening Bell: 10.25.07

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Facebook’s Stratospheric Earnings Multiple (Deal Journal)
So yeah, as you knows, Mr. Softy paid $240 million for a mere sliver of Facebook, giving the company a $15 billion valuation. This is the valuation that everyone has been talking about... but it still sort of hits you in the gut when it's actually announced. Deal Journal puts it into some perspective: "The Redmond, Washington-based company’s $240 million investment in Facebook values the social-networking Web site at 500 times its estimated 2007 earnings of $30 million, based on figures from this Wall Street Journal article. That’s right, unlike past meteoric technology risers, the three-year-old company is actually profitable. Facebook’s valuation also equates to 100 times its $150 million of annual revenue. To put a valuation like that into perspective, if you slapped it on General Electric, the industrial conglomerate would have a market cap of $11 trillion, just $1 trillion short of the total U.S. GDP." Granted, such analysis doesn't offer too much, other than to say that a $15 billion valuation is, er, lofty, to say the least.
Intel to pay $250 million to Transmeta to settle patent lawsuits (San Jose Mercury News)
Then again, if you had to pay $240 million for a slice in Facebook, or $250 million to pay off a patent lawsuit, we'd probably take the former. You would too, no?
PetroChina Threatens To Unseat Exxon Mobil (Forbes)
It's almost surprising this hasn't happened already... PetroChina is getting closer to assuming the #1 spot for the world's largest oil company. The US-listed company is getting set to sell shares in Shanghai, and if there's anyone more crazy about China stocks than the US, it's the Chinese. Of course, it's not so much about valuation there as much as it is supply and demand (ok, technically it's the same here, but you know what we're saying).
Progress in California Fires (WSJ)
Unfortunately for the California economy, some measures have worked in containing the big fire. Guess that means limited insurance payments and stimulus for the region's beleaguered housing segment. If only the regional economy had some other means of profiting from a big deadweight loss... oh wait.

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Glaxo plans job cuts as profit falls 5.8 percent (IHT)
Don't worry Wall St., there are layoffs in other industries too. You're not alone. GlaxoSmithKline has sacking 5.8 percent of its workers, as its Avandia diabetes drug faces troubles? Think fast: what drugs aren't either facing a)lawsuits b) generic competition c)allegations of inefficacy?
Reports Suggest Broader Losses From Mortgages (NYT)
Our favorite phrases of all time are typically a long the lines of "we expect losses to hit $100 million, though they're likely to higher". You hear it a lot, with things like losses, catastrophe damages, lives lost in the war, crude prices, earnings, etc. Anyway, it seems safe to predict that any current loss estimates will likely spiral even higher. The latest is that total mortgage-related losses could hit $400 billion, although even then they could be looking to narrow. Meanwhile, a $5 billion writedown here, $7 billion there, pretty soon you're talking about real money.
China Says Economy Grew 11.5% (NYT)
....Aaaaand once again, no signs of a cooling in the Chinese economy. Turns out that modest increases in reserve requirements aren't having much of an intended effect... not surprising at all, really. At this point, you have to figure that the technocrats in charge are of two camps. There's probably the side that's totally freaking out right now, worried that if the bubble is pricked there are going to be mass riots and they're all going to get hanged in the middle of the square. That camp has emergency plans to get out of the country and decamp to Namibia. Meanwhile, the other half isn't thinking like that at all. They're living high off the land, enjoying every last minute of the boom. And if it all bursts, they'll deal with that then.
NYC tries again to get calories on menus (AP)
Looks like the public health fascists are at it again. Not content with taking transfats off the menu, they now want calorie listings on everything. The original plan had been struck down by a judge, but never doubt the ingenuity of those looking to regulate public lifestyle's. They now say it's been reworded to abide by, you know, the constitution.
Minimum-Tax Fix May Cost Buyout Firms, Hedge Funds $48 Billion (Bloomberg)
Couple stories this morning about the Dems getting ancy about taxation. That is to say, they're in no mood to wait until the election to push the tax issue. They're starting now, even if it potentially costs them the next election. So yeah, House Ways & Means Committee Chairman Charlie Rangel is looking to add mondo taxes, particularly to the likes of hedge and PE funds, though that would help pay for a curb on the AMT. Another way to deal with this issues -- and this is just a modest suggestion from a blogger -- would be to eliminate the AMT... and then curb spending. Just a thought.