Wilson Zhu's Blog

On November 8, 2013, Twitter debuted on the NYSE and shot up to a closing price of $44.90 for the day. Now for the good part: the IPO was priced at $26 per share. Do the math and you will find that anyone who invested in the IPO experienced a lofty 73% rise in value of their shares. Yet, with any exorbitant growth in such a short period, questions and concerns over whether Twitter is overvalued exist.

Even though Twitter’s stock price is similar to Facebook’s, its net worth is nowhere close to Facebook’s, due to its lesser amount of shares outstanding. With that being said, its IPO was much more successful than Facebook. In the article, Matt Nesto of Yahoo Finance primarily discusses how the IPO’s launch in a more suitable environment were critical to the company’s public debut. These factors included the stock market sailing along with year highs and how debuting on the NYSE benefited Twitter. Even with this, I am skeptical that Twitter is worth its current valuation. To me, the price is currently propped up by investor confidence. The company has already mentioned that even though revenues have been increasing, it is not profiting. If I were to invest in a company, I would be concerned with this statement as I expect a company to profit when it can utilize millions of users as ad revenue and as a source of trends.

Original article: Yahoo Finance

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[1] Yahoo Finance

This week there has been tremendous buzz about Bitcoins surpassing the $500 value per unit. In case you are not familiar with Bitcoins, they are essentially a decentralized online currency. Over the past year Bitcoins have sky-rocketed from approximately $25 in value to $500. [1] I could not definitively tell you why Bitcoins are experiencing such amazing growth, but I can see reasons why it is growing. For one, it is a currency that is extremely challenging to trace to a real-life person. While this can be seen as a safety precaution for online shopping, it has also opened up a market for the online distribution of illegal drugs via a black-market site called The Silk Road. Despite the hype, I have reason to believe that it is a stretch from becoming a currency.

As far as I am concerned, the limitations for Bitcoins are currently far too great. Rarely do online retailers accept them as a form of payment and more importantly, practical purchases such as food, clothing, and rent cannot be purchased via Bitcoin. Instead it requires the owner to convert their Bitcoins into currency so they are able to purchase the above items. To me, they seem more like a commodity than a currency. They have no innate value, but because there is enough demand for them, prices soar and people “hop onto the bandwagon”. This is the very definition of a “bubble” and by that very nature, they eventually burst.

Original article: Seeking Alpha

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[1] Bitcoin Charts

Remaining relevant. One of the hardest things to accomplish in the fast-paced world of business. Karan Girotra and Serguei Netessine of the Harvard Business Review write about how Amazon continuously audits its business model in order to make necessary changes and keep up with the industry.

Amazon questions its operations and any plans for expansion it may have. It essentially became its own harshest critic and has proved to be successful because of its ability to face what may be unpleasant truths. It seems basic, but that is the beauty of it. When I read this article, I was surprised at how it appears that many companies probably do not do this enough. As you might may have guessed, the first company that came to my mind was Blackberry. Applying what I gained from this article, Blackberry’s inability to face the fact that its products were soon becoming irrelevant caused the company’s growth to stagnate and allowed for Google and Apple to walk on the company. Blackberry is not the only example of this however. When Microsoft released its MP3 player, Zune, in an attempt to compete with Apple’s famed iPod, it failed. But even then, Microsoft realized it was a failed campaign and discontinued the Zune. The lesson to be learned for business owners is that maintaining a business does not just involve expansion, but it entails criticizing your own operations in order to better your company.

Original article: Harvard Business Review

In the past, not many people would have thought that you could now tap your phone at the scanner of your supermarket in order to pay for groceries. Technology has come very far in an attempt to make everyday life more convenient and entrepreneur, Kanishk Parashar, wants to change how you pay for purchases again with Coin.

My friend, Colin Lam, believes that even though there are concerns, Coin will still be a success. I have to disagree with his opinion. It is an ambitious idea, to combine all your credit cards into one that syncs with your smartphone, but I ultimately believe there are several kinks in security and compatibility that need to be worked out. If I were an owner of Coin, my primary concern would be fraud. After all, because Coin transmits its information via Bluetooth, there is a possibility of thieves stealing that data without you knowing it. And because of this risk, as Visa or Mastercard, I would be less inclined to offer any protection to the consumer if they are a victim of fraud because there is no physical registration of the card during the time of transaction. Lastly, if I were completely reliant on Coin as a payment source and my smartphone ran out of battery (a common occurrence), I would essentially be left with no ability to pay for items. Coin has a great concept, but until it works out these (along with other) issues, I cannot see it being widely-used.

The talk of the town in the technology world has undoubtedly been the fight between two gaming titans, Sony and Microsoft. With the holiday season approaching, many wish lists are sure to have the PS4 or Xbox One on them.

My friend Alex Lee gave his thoughts about how the PS4 would sell a greater volume than the Xbox One due to the fact that it would be retailing at $100 cheaper. However, from experience, I do not believe this is necessarily an accurate statement. Both Sony and Microsoft have their own cult followings and primarily due to exclusive gaming titles, they are sure to attract different audiences. They have created points of difference almost solely based on which game titles will be available on each console. In particular, the “Uncharted” and “Halo” franchises have gained Sony and Microsoft (respectively) numerous fans as they are recognized to be the greatest series of games for each console. Of course, both companies will be partnering with game developers to ensure that these titles remain exclusive in order to attract fans to purchase their product. With both consoles targeting the same market segment, it will be interesting to see how Sony and Microsoft will advertise their product in order to reach the most amount of consumers possible. No doubt, Microsoft has lofty expectations to live up to as Sony has sold 1 million consoles on launch day alone. [1]

[1] Reuters

Recent changes to the Youtube comments system have had users up in arms. From 400,000 Reddit users spamming the Google’s product forums to another 150,000 people signing a petition on Change.org, users obviously want to see these changes revoked. [1][2] However, Google’s track record shows that they tend to move forward with their revisions. Things are looking relatively grim for protesters as Google has yet to respond to their outrage.

Logically, this move would hurt Google more than it would benefit them. After all, businesses like Google rely on a user traffic in order to generate ad revenue from companies. By alienating the user base, Google is detracting from its service and losing traffic. However, I believe that this is largely theoretical. For example, when Facebook first implemented its “Timeline” format for the site, there was an equally (if not larger) backlash. The situation panned out fine for Facebook as the voices died down. Google is well aware that Youtube has such a massive database of videos that users cannot replace the site with any others. This lack of substitutes is exactly why Google is able to push the boundaries so far and in the end, is able to get away with it.

Original article: Bloomberg

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[1] Change.org
[2] Google product forums