Christopher's Business Blog

The popular messaging app that allows people to send pictures for a set number of seconds was recently offered a 3 billion dollar buyout from Facebook. However, the CEO Evan Speigel rejected the offer from Mark Zuckerburg and Facebook because he believes his company may even be worth more. Even a chinese firm has valued FB at around 4 billion. So how can a company that makes no revenue be worth so much money? Many investors are skeptical of companies such as snapchat because they have short life spans and they have no income to make money from. Twitter faced many of the same issues, however they were able to integrate advertisements to create revenue. Something that may not be as simple for Snapchat.

Snapchat faces many problems but gaining new users has not been one. Snapchat sees as many photo uploads as FB and more than instagram and flickr together. The fact is Snapchat’s user base is extremely big and shows no signs of slowing down, which may account for one of the reasons why it is valued at so much despite only being started a little over year ago. It will be interesting to see what Snapchat plans on doing now that it has rejected such a large offer from Facebook. Will the company be able to grow and expand even more or will it slowly die out and depreciate? 

Sources:

http://www.businessinsider.com/snapchats-valuation-if-for-real-2013-11

Introducing the newest low cost rent a car, Cars 2 Go offers rental cars at an extremely affordable price. Instead of charging people by the day or the week, Cars 2 Go offers the consumer a vehicle with gas and insurance included for the low price of 38¢ a minute. The great thing is if you’re visiting a city you can pick one up in the morning drive around and then leave it parked in another Cars 2 Go designated parking area. This is great because if you go out drinking with friends or into vancouver and you don’t want to drive home for whatever reason you can just find a spot in the city and drop the car off their.
They introduced a new way to rent a car that has been extremely successful in urban areas such as Vancouver and Toronto. They have proved that their business model works and can be profitable. By having a fleet of smart cars they enable themselves to keep their costs down. They rely on economies of scale to buy smart cars, that are very fuel efficient and don’t require a lot of gas.

Cars to go aims to:

• “Alleviate congestion – The average car goes unused for more than 22 hours a day.  But with car2go’s point-to-point, on-demand model of car-sharing, our cars are used multiple times per day.
• Reduce emissions – The car2go network is comprised of smart fortwo cars, which are among the most fuel-efficient non-hybrids in America.
• Maintain Quality of Life – People who live in car2go cities have access to use a car whenever they want or need a car, without having to pay premium prices for parking, fuel, maintenance and insurance.”

Sources:

car2go: Get to Know the Mysterious White Cars Parked All Over Denver

http://www.Car2go.com/

Both tech giants have announced the launch of a new gaming system this fall and as usual it will be a battle to see who can sell more consoles come Christmas time. Microsoft will be introducing the Xbox One which will retail for 500$ while Sony’s Ps4 will retail for 400$. This battle is going to be a close one, who do you think will come out on top?

For the first time Xbox is trying to diversify itself. It will still be trying to attract the average 18-25 year old gamer, however Microsoft is working to attract a broader target audience in order to sell its product. It aims to attract a yonger crowd with its all new and improved kinect integration. Xbox claims to have a gaming console that is… well not only for gamers. It provides a unique experience to anyone using the system. It has partnered up with companies such as Netflix and LastFM in order to bring the user an all in one experience.

On the other hand Sony and their all new Ps4 will be sticking to a mostly gaming audience. It has already been established that several famous gaming series will have better graphics on the Ps4. Besides better graphics there is also the cost. Sony has realized that their target market is not the rich but rather students and teenagers. By offering a gaming console that is superior in gaming quality at a lower price is certain to attract hardcore gamers.

It will be interesting to see which system is able to maintain their current customer base while expanding to new target markets. In my opinion, the Ps4 will do much better than the Xbox One. I have always been an Xbox fan, however the cost for the experience that you’re receiving just doesn’t quite add up to Sony and the Ps4. Either way, there will be a lot of happy children this winter!

sources:

http://www.independent.co.uk/life-style/gadgets-and-tech/news/ps4-vs-xbox-one-release-dates-prices-hardware-and-games–we-compare-the-lot-8937831.html

http://www.techradar.com/news/gaming/consoles/ps4-vs-xbox-720-which-is-better-1127315

Xbox One v. Ps4

Boeing 777x

The orders just keep on rolling in at Dubai’s air show. It’s no surprise that Boeing and Airbus are leading the pack with around 141.5 Billion USD in sales in just the first day of the air show. The largest clients of the air show so far have been the “Gulf three”. They are made up of the 3 of the biggest airline companies in the world based out of the middle east. They include Etihad, Emirates and Qatar airlines. They have “struck fear” into the competitors says CNN’s Richard Quest. During a time when most airlines are cutting back on the amount of aircraft they have in their fleets in order to reduce costs, these three giant airline companies are looking to lead the airline industry.

Boeing has received a whopping number of orders since the air show has begun especially from the “Gulf Three”. Emirate Airlines bought a whooping 150 Boeing 777x planes. This increase helped raise Boeing’s stock over $5.00 in the last few days. The air show came at a good time for boeing especially since many military contracts are not being renewed due to spending cuts by the U.S government. These contracts over the past few days will ensure the Boeing operates up through 2020 when they expect the 777 line of jets to be ready for commercial use.

Boeing has seen promising growth in the Middle east over the past few years. They now own 40% of the middle eastern market. Airbus on the other hand holds closer to 60% of the market because they realized the potential in the Middle Eastern market while Boeing did not. It will be interesting if Boeing begins to overtake Airbus because they are at a competitive advantage.
Sources:

http://www.france24.com/en/20131116-boeing-holds-nearly-40-percent-middle-east-market

http://edition.cnn.com/2013/11/17/business/dubai-airshow-emirates-airbus-quest/

http://www.boston.com/news/world/middle-east/2013/11/17/abu-dhabi-etihad-adds-boeing-planes/WST9df8yEUyENYnBL5NKmJ/story.html

A debate that has been going on for many many years may finally begin to come to a close. A new poll showing that more that 50% of Americans support the legalization of Cannabis for medical and recreational use. A whooping 93% of people on the Economist believe that the legalization of Cannabis would be beneficial. As the truth about Cannabis comes out in medical journals more and more people are becoming to open to the idea of legalization. Even the United States has decided not to intervene in the the two states that have already legalized Cannabis for recreational use, Colorado and Washington.

In addition to support from the general American population there are also many economic effects the potential new market would create. For instance in the United States alone the market is estimated to be anywhere from 10 billion to 120 billion USD. This could create a new economic opportunity for the government because they will be able to control the amount imported and exported from the country (if any). Also the Government will be able to impose a tax rate on Cannabis very much like the one on cigarettes and alcohol. It will also be a substitute for cigarettes, meaning that there will be competition within companies. Over time this will benefit the consumer because it will lead to lower prices for the good.

There are several stocks at the moment that would grow a considerable amount if Cannabis were to become legal. They are Cannabis Science (CBIS), Terra Tech Corp (TRTC) and MediSwipe Inc. (MWIP). All of these companies focus on the Cannabis industry. (CBIS) creates medical marijuana products for clients in Colorado and California and have a market cap of 32 million USD. There is great potential in this market not only for the consumer but also for producers and even the government. Not only that but it would eliminate one of the largest black markets in the world and create revenue for the country instead. So why haven’t we legalized cannabis yet?

Sources:

http://www.economist.com/debate/debates/overview/261

http://www.mainstreet.com/article/money/investing/marijuana-stocks-invest-stockpick-whiz-kid?page=2

http://www.theguardian.com/society/2013/sep/15/legal-cannabis-market-worth

Starting Tuesday October 8th a new 100 USD bill will be going into circulation. This marks the the latest change for US currency. Why would the United States go through all the trouble of making amendments to the current bill? The answer is simple, the US 100’s are and some of the most  counterfeited bills in the world. There are so many of them in circulation that many Canadian establishments do not accept them at their stores.

In the United States the Republican and democratic parties were unable to stop the looming government shutdown. The initial partial shutdown sent the stocks soaring in the downward direction. The two parties have been unable to come to a resolution for raising the  borrowing limit of the United States. So what does that mean for investors? According to The Guardian stocks began to tumble before the shutdown was put in place. As signs of progress have emerged from congress stocks have continued to plummet by more than 5.4% in only in the last 5 trading days This also means that if the government can’t come to a deal soon then they could potentially miss a debt payment then the value of the U.S dollar would plummet. In addition, US interest rates would sky rocket as economic stability is no longer present. All economic recover could be halted and if an agreement is not reached within an extended time period  there could potentially be huge affects on not only U.S economies but also global markets. The government shutdown is also affecting the highly anticipated September job report.

Citation:

http://www.theguardian.com/business/2013/oct/03/stock-markets-tumble-government-shutdown

One of the few Canadian companies to make Forbes ”The world’s most ethical companies”. Curious as to why they made the list? According to Encana’s website they provide a dynamic workplace with the promise of flexibility and innovation. After further investigating on the site I came upon their corporate responsibility report. I found that in the past three years they have donated 45,431,807 for community involvement. They donated to different sectors including environment, education, community life, family and community wellness, and sports and recreation. In addition to the community donations, Ecana has invested 35,550,000 towards an environmental innovation fund. This has resulted in a reduction in the amount of natural gas that is spilled every year.

When it comes to the employees Encana has identified several areas of common priority. They include, maintain a comprehensive approach to water management, Continually improve our culture of safety at work, on the road and at home and Develop the skills and leaders to support our operations now and in the long term. Encana, is a corporation that has received high praise from multiple sources about their business ethics. Time and time again they have proved that they provide a work environment that attract many applicants. More information about Encana can be found at their website

http://www.encana.com/careers/ .

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