From fortune.com

Vanessa Borowicz posted an article on her blog about Yahoo’s rumored interest in purchasing Snapchat. According to her article, Yahoo is valuing Snapchat at $10 billion. Personally, I have a hard time understanding how a company that has never made a single dollar in revenue could possibly be worth so much money. But this is not the first time a social media company has received an astronomical valuation. Facebook bought Instagram two years ago for $1 billion, and WhatsApp earlier this year for $19 billion.

As we talked about in class, it is nearly impossible to determine the value of a company until it changes ownership. This is due to intangible assets such as company image and brand power. Is this why Snapchat is worth so much? It must be part of it, but I think there is something else to consider. With over 700 million messages sent through Snapchat every day ^[1], potential revenue for this company is enormous. If they ever do decide to advertise, considering the number of eyeballs they receive every single day, $10 billion starts to look a little more realistic.

I believe this must be the reason for this incredibly high valuation. Yahoo does not want Snapchat for its image, they want it for its client base. Owning Snapchat would give them access to a new demographic, and the ability to reach over 700 million people every day.

[1] http://money.cnn.com/2014/08/01/technology/social/snapchat-10-billion/

From grandvillemed.com

Keegan Taberner wrote an article on his blog about how the Ebola outbreak is affecting stock prices of medical research companies working towards a cure. Not surprisingly, these company’s shares have increased in value. In his article, Keegan predicts that prices will continue to rise “as investors look to make a quick dollar, or even, help fund the company that cures Ebola.” While the first reason seems more likely, the second is still viable for someone pure of heart. Or is it? Will these companies actually be able to spend more on research now that their stock value is higher? On one hand, the stocks that owners own are now more valuable, so they appear to be richer and perhaps more willing to invest additional resources towards finding a cure. However, since they have not actually sold any stocks, there has been zero cash flow into these companies. This is a perfect example the difference between primary and secondary markets. Since stocks for these companies are currently being traded on the secondary market, all transactions are occurring investor to investor and not between the company and investors. The only way the increased value of these companies could lead to an increase in cash flow would be if the owners decided to dilute their ownership and sell more stocks on the primary market. For now, although this misconception may help investors sleep better at night, their contributions are not being used to find a cure.

From CFact.org

The word “Enbridge” is not a popular one in British Columbia. The Albertan oil company is attempting to build a pipeline that will transport oil through BC to the Burrard Inlet in Vancouver. The decision to move forward with this project was made by the Canadian government earlier this year, and has since sparked outrage in the province.

Barring an oil spill, this decision will likely have little effect on most British Columbians. However, there is one demographic that will surely be affected: the aboriginal people of BC. The Canadian government has failed this group numerous times throughout history, and unfortunately this pipeline is a continuation of that trend. Gordon Hoekstra recently published an article in the Vancouver Sun outlining some concerns of the Nak’azdli people regarding the pipeline. At the top of their list, the environmental danger it poses to sockeye salmon and the Nechako sturgeon.

As a British Columbian, the battle between the people of BC and the government seems a little ironic, as they don’t seem to be listening to the people they have sworn to serve. But this example is a little more complicated than that, and there are many external factors at play. First and foremost, market forces. Believe it or not, Canadians need oil, and so does the rest of the world. Second, macroeconomic forces. Canada is one of the largest exporters of oil in the world, and we rely heavily on the revenue it generates for us. Third, BC is only one province. Most other provinces, especially Alberta, are in favor of this pipeline.

Although the government’s decision is an unpopular one in BC, and it poses a direct threat to aboriginal land, understand that this decision was not made lightly, and cannot have been an easy one to make.