Tag Archives: Business/Finance

Indian solar panel industry being forced to used US components for cheaper loans

Here is proof of something I had complained about earlier.

The US has been using the fund to promote its own solar manufacturing. The US Exim Bank and the OPIC have been offering low-interest loans to Indian solar project developers on the mandatory condition that they buy the equipment, solar panels and cells from US companies. This has distorted the market completely in favour of US companies.

 

 

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Technology IPOs – Who is to to blame for the hype?

Facebook‘s IPO hype vaporised within a few hours of exposure to reality.

Of course, many self-proclaimed experts will be crowing that they correctly predicted this bubble. “Why, look at LinkedIn! Look at Groupon! We knew Facebook was going to go flat,” they will say. These experts conveniently ignore the fact that it is they and their brethren who drive the hype. The founders and management boards of these companies share some of the blame, true. But it is the investors, the bankers and the marketing machine that drives the hype. And blog authors with no comprehension or love for technology, but with a head for marketing and data analytics spread the hype with talk of valuations, monetization strategies and acquisition plans.

I wouldn’t go so far as to say technology has no value (come on, you expect me to trash talk technology?) or no cost but in itself, this sector is not to blame. Yes, it needs money; for which an IPO is very useful. It is the usual suspects – investment firms, bankers, non-technology bloggers and their ilk – who poison the well.

Without the hype, an IPO will raise only enough money to meet the real needs of the IPO. It will not make instant billionaires, or even millionaires. A non-hyped IPO should escape the clutches of predatory investors who want nothing more than to pump up the stock, make a killing and get away from the scene.  This will also protect the company from returns-oriented shareholders who push for aggressive quarterly profits over progressive long-term returns. Such aggression often forces the company to take decisions that seem good in the short-term but impact the company negatively in the long-term. Of course, the vultures on Wall Street never allow that to happen.

I would say this is not a technology bubble, but an investment bubble. Let the blame fall where it is due – on the banks and investment firms. Wall Street has not learnt its lessons. May be, it does not want to. Those who deal with technology every day – those who build it, use it and nurture it – know its true value.

 

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Saverin flees the US, saves TAX!

There is an update in this post, dated May 23, 2012.

Is there anything more pathetic than this news?

Saverin has a net worth of 2 billion USD. The Facebook IPO will increase that by 3 billion USD, if he is very lucky.

In a nation going to the dogs, even the top dogs are fleeing. The motive, however, is not survival, but greed. This is symptomatic of the malaise that affects the 1%. Increasingly, it is clear that the rich will do anything to stay rich and become more rich – in this case, renounce citizenship of the country whose laws made them rich just to avoid tax liabilities. How much would those taxes dent his net worth? And how much would his future worth increase because he had “a little more to play with” now? How much is enough?

And not just the rich, but mega-corporations too. At least the mega-corps have a stated aim of maximizing shareholder returns. Helping them are the off-shore financial centres and tax havens. These places have no other economic activity worth the name.

Update : Okay, here‘s another take on Saverin’s action, courtesy of an Anonymous Coward on Slashdot.

He did give up his citizenship for tax reasons, but not the tax reasons everyone thinks. He cannot and will not escape any taxes on money he made from the IPO, he earned those shares when he was a US citizen and will pay full taxes on them. He renounced his citizenship because he hasn’t lived in the US in 4 years and was tired of paying taxes to the US for money he was making working in Singapore, which isn’t that unreasonable.

 

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