altlanticinternationalpartnership
Lightbank, the seed fund created by Eric Lefkofsky and Brad Keywell, is investing $1.5 million in Benzinga.com, a Michigan-based real-time financial news site with trading tips, as well as aggregated content from other sites such as TheStreet.com and WSJ.com, parent site of this blog.
“We like the proposition of an actionable trading information network, and we like the entrepreneurs behind Benzinga,” said Lightbank partner Paul Lee, who joined the fund earlier this year. “We think there has to be a certain brand connotation with these kinds of sites and we see that in Benzinga’s founder.”
Mr. Lee is referring to Jason Raznick, president and co-founder of Benzinga.com, a former associate at Fortress Investment Group and financial news writer who says he bootstrapped his way through the first five months of Benzinga.com.
The site, which launched in early 2010, offers mostly free financial news content as well as a variety of subcription products targeted at traders. Mr. Raznick says the site sees between two and three million page views a month and that the company is already cash flow positive, with the bulk of its revenue coming from advertising.
“I think our site is different from other sites because we’re not saying, go do this in the market, or go buy that stock. We’re offering analysis and saying, if you believe this, here are some ways to do it,” Mr. Raznick says. He says he plans to continue to grow the company, which currently has between 20 and 25 employees, and that future build-outs may include more video products on the Web site.
For Lightbank, the investment is a pivot from the seed fund’s focus on daily deals and social media management start-ups. In the past, the fund has invested in companies like Betterfly.com, a site for listing and finding professional services; Sprout Social (see coverage here), which lets clients access a single dashboard to retrieve data from their company’s Twitter, Facebook, and LinkedIn accounts; and most recently, Gtrot, which mines users’ social networks like Facebook and Foursquare to help them make plans while traveling.
The Lightbank fund, which Lefkofsky and Keywell formed in the spring of 2010 following the wild success of daily deals site Groupon, has committed to invest $100 million over 10 years. Partner Mr. Lee says the group has invested in 18 start-ups to date.
Monday, June 13, 2011
Atlantic International Partnership Headlines:Groupon Founders Turn To Financial News With Benzinga Investment
http://altlanticinternationalpartnership.net/2011/06/atlantic-international-partnership-headlinesgroupon-founders-turn-to-financial-news-with-benzinga-investment/
Lightbank, the seed fund created by Eric Lefkofsky and Brad Keywell, is investing $1.5 million in Benzinga.com, a Michigan-based real-time financial news site with trading tips, as well as aggregated content from other sites such as TheStreet.com and WSJ.com, parent site of this blog.
“We like the proposition of an actionable trading information network, and we like the entrepreneurs behind Benzinga,” said Lightbank partner Paul Lee, who joined the fund earlier this year. “We think there has to be a certain brand connotation with these kinds of sites and we see that in Benzinga’s founder.”
Mr. Lee is referring to Jason Raznick, president and co-founder of Benzinga.com, a former associate at Fortress Investment Group and financial news writer who says he bootstrapped his way through the first five months of Benzinga.com.
The site, which launched in early 2010, offers mostly free financial news content as well as a variety of subcription products targeted at traders. Mr. Raznick says the site sees between two and three million page views a month and that the company is already cash flow positive, with the bulk of its revenue coming from advertising.
“I think our site is different from other sites because we’re not saying, go do this in the market, or go buy that stock. We’re offering analysis and saying, if you believe this, here are some ways to do it,” Mr. Raznick says. He says he plans to continue to grow the company, which currently has between 20 and 25 employees, and that future build-outs may include more video products on the Web site.
For Lightbank, the investment is a pivot from the seed fund’s focus on daily deals and social media management start-ups. In the past, the fund has invested in companies like Betterfly.com, a site for listing and finding professional services; Sprout Social (see coverage here), which lets clients access a single dashboard to retrieve data from their company’s Twitter, Facebook, and LinkedIn accounts; and most recently, Gtrot, which mines users’ social networks like Facebook and Foursquare to help them make plans while traveling.
The Lightbank fund, which Lefkofsky and Keywell formed in the spring of 2010 following the wild success of daily deals site Groupon, has committed to invest $100 million over 10 years. Partner Mr. Lee says the group has invested in 18 start-ups to date.
Lightbank, the seed fund created by Eric Lefkofsky and Brad Keywell, is investing $1.5 million in Benzinga.com, a Michigan-based real-time financial news site with trading tips, as well as aggregated content from other sites such as TheStreet.com and WSJ.com, parent site of this blog.
“We like the proposition of an actionable trading information network, and we like the entrepreneurs behind Benzinga,” said Lightbank partner Paul Lee, who joined the fund earlier this year. “We think there has to be a certain brand connotation with these kinds of sites and we see that in Benzinga’s founder.”
Mr. Lee is referring to Jason Raznick, president and co-founder of Benzinga.com, a former associate at Fortress Investment Group and financial news writer who says he bootstrapped his way through the first five months of Benzinga.com.
The site, which launched in early 2010, offers mostly free financial news content as well as a variety of subcription products targeted at traders. Mr. Raznick says the site sees between two and three million page views a month and that the company is already cash flow positive, with the bulk of its revenue coming from advertising.
“I think our site is different from other sites because we’re not saying, go do this in the market, or go buy that stock. We’re offering analysis and saying, if you believe this, here are some ways to do it,” Mr. Raznick says. He says he plans to continue to grow the company, which currently has between 20 and 25 employees, and that future build-outs may include more video products on the Web site.
For Lightbank, the investment is a pivot from the seed fund’s focus on daily deals and social media management start-ups. In the past, the fund has invested in companies like Betterfly.com, a site for listing and finding professional services; Sprout Social (see coverage here), which lets clients access a single dashboard to retrieve data from their company’s Twitter, Facebook, and LinkedIn accounts; and most recently, Gtrot, which mines users’ social networks like Facebook and Foursquare to help them make plans while traveling.
The Lightbank fund, which Lefkofsky and Keywell formed in the spring of 2010 following the wild success of daily deals site Groupon, has committed to invest $100 million over 10 years. Partner Mr. Lee says the group has invested in 18 start-ups to date.
Altlantic International Partnership Headlines:What LinkedIn means for Facebook IPO
http://altlanticinternationalpartnership.net/2011/05/altlantic-international-partnership-headlineswhat-linkedin-means-for-facebook-ipo/
NEW YORK (CNNMoney) — LinkedIn’s IPO was a hit Thursday, thanks to pent-up demand for shares in tech startups.
The other “big four” buzziest private companies — Facebook, Twitter, Groupon and Zynga — are keeping watch as they prepare their own public debuts.
LinkedIn shares opened at $83 each in its first day of trade, a whopping 84% above its initial offering price of $45 a share. Soon they crept up to $90. Then $105. Shares ultimately reached a high above $122 before closing near $94.
That values LinkedIn (LNKD) at about $9 billion — an eye-popping number that has implications beyond a single company.
“LinkedIn’s performance suggests there is going to be massive excitement around the likes of Facebook, which is even bigger,” said Max Wolff, senior analyst at GreenCrest Capital, a firm that tracks private companies.
“If you’re dying of thirst, you’ll accept iced tea even if you really want lemonade,” Wolff said. “It’s a perfect storm of fury, frustration, excitement and delay.”
In fact, the other big four companies “have far more sex appeal than LinkedIn right now,” said Debra Aho Williamson, principal social media analyst at eMarketer.
“The best thing about LinkedIn’s model is that they were patient about going public. The others are hot right now, but most of them are much newer,” she added.
When will the “big four” pull the trigger? Facebook hasn’t shown much interest in going public, though it said in January that it will begin filing public financial statements by April 2012. That’s likely to coincide with an IPO.
Twitter is in no rush to go public. Dick Costolo, now the company’s CEO, said at a conference last year that an IPO is “way out.”
Zynga has been a huge success thanks to FarmVille, FishVille and many other -Ville games on Facebook. But founder Mark Pincus has said he fears that going public and veering off his plan will bring “death by a thousand compromises.”
What those four companies lack, however, is multiple revenue streams. LinkedIn books money from job postings, premium subscriptions and advertising.
“The other four have only one thing going for them,” said Williams, the eMarketer analyst. “Facebook is ads. For Zynga it’s payments on virtual goods. And if your single revenue stream dries up, you’re in trouble.”
Facebook is valued at about $70 billion on SecondMarket, said Wedbush Securities analyst Lou Kerner, but he’s unsure of the other three valuations as no publicly available trades have occurred recently.
But according to some reports, Zynga and Twitter may each be valued at more than $7 billion, while some have suggested Groupon may be seeking a $25 billion valuation in an IPO.
SecondMarket doesn’t disclose pricing or implied valuation for the private companies traded in its exchange, but it released details on LinkedIn after its public debut.
LinkedIn shares began trading on SecondMarket in April 2010, and it ended the month at $14.50 a share. By March 2011, shares were at $35 each — less than half of LinkedIn’s closing price Thursday. A rep for SecondMarket said LinkedIn was its third most frequently traded stock.
SecondMarket said in a statement that the LinkedIn debut was a “much-needed boost for the IPO market.”
But it noted that the IPO “underscores the point that even for an exciting, innovative company like LinkedIn, it can take nearly a decade before the time is right to go public.”
That’s likely because Wall Street doesn’t want to get burned again.
Emerging from the dot-com bust’s shadow: The burst of the tech bubble drove a wedge between Wall Street and tech startups in the early 2000s, and Wolff said some investors may be trying to cash in on these companies after waiting too long.
“A lot of investors feel burned by tech,” Wolff said. “Now, the people who are late to the startup investment party are pushing their way in.”
But because Wall Street has been so wary of techs, investors now find themselves without much data and research on the startup sector.
“You’re guessing the unknown growth trajectory of a new business model,” Wolff said. “It’s the equivalent of counting beads in a jar with black tape over it.”
NEW YORK (CNNMoney) — LinkedIn’s IPO was a hit Thursday, thanks to pent-up demand for shares in tech startups.
The other “big four” buzziest private companies — Facebook, Twitter, Groupon and Zynga — are keeping watch as they prepare their own public debuts.
LinkedIn shares opened at $83 each in its first day of trade, a whopping 84% above its initial offering price of $45 a share. Soon they crept up to $90. Then $105. Shares ultimately reached a high above $122 before closing near $94.
That values LinkedIn (LNKD) at about $9 billion — an eye-popping number that has implications beyond a single company.
“LinkedIn’s performance suggests there is going to be massive excitement around the likes of Facebook, which is even bigger,” said Max Wolff, senior analyst at GreenCrest Capital, a firm that tracks private companies.
LinkedIn more than doubles in IPO
LinkedIn is a strong company in its own right, Wolff noted, with three revenue streams and a 2010 profit of $15 million — but that’s not enough to explain Thursday’s wild ride. Instead, it’s about displaced demand for access to tech startups, particularly in the social media space.“If you’re dying of thirst, you’ll accept iced tea even if you really want lemonade,” Wolff said. “It’s a perfect storm of fury, frustration, excitement and delay.”
In fact, the other big four companies “have far more sex appeal than LinkedIn right now,” said Debra Aho Williamson, principal social media analyst at eMarketer.
“The best thing about LinkedIn’s model is that they were patient about going public. The others are hot right now, but most of them are much newer,” she added.
When will the “big four” pull the trigger? Facebook hasn’t shown much interest in going public, though it said in January that it will begin filing public financial statements by April 2012. That’s likely to coincide with an IPO.
0:00 / 5:07 LinkedIn IPO sets stage for Facebook
Second-buzziest behind Facebook is Groupon, which made waves by rejecting a Google (GOOG, Fortune 500) buyout offer rumored to have topped $6 billion. CEO Andrew Mason is reportedly shopping an IPO around the big banks, so Groupon may be the next to make its debut.Twitter is in no rush to go public. Dick Costolo, now the company’s CEO, said at a conference last year that an IPO is “way out.”
Zynga has been a huge success thanks to FarmVille, FishVille and many other -Ville games on Facebook. But founder Mark Pincus has said he fears that going public and veering off his plan will bring “death by a thousand compromises.”
What those four companies lack, however, is multiple revenue streams. LinkedIn books money from job postings, premium subscriptions and advertising.
“The other four have only one thing going for them,” said Williams, the eMarketer analyst. “Facebook is ads. For Zynga it’s payments on virtual goods. And if your single revenue stream dries up, you’re in trouble.”
Video: LinkedIn’s road to Wall Street
The secondary market effect: Still, investors eagerly await those big four IPOs. And in the meantime they’re actively trading shares on exchanges like SecondMarket, which booked $115.4 million in private-stock trades last quarter.Facebook is valued at about $70 billion on SecondMarket, said Wedbush Securities analyst Lou Kerner, but he’s unsure of the other three valuations as no publicly available trades have occurred recently.
But according to some reports, Zynga and Twitter may each be valued at more than $7 billion, while some have suggested Groupon may be seeking a $25 billion valuation in an IPO.
SecondMarket doesn’t disclose pricing or implied valuation for the private companies traded in its exchange, but it released details on LinkedIn after its public debut.
LinkedIn shares began trading on SecondMarket in April 2010, and it ended the month at $14.50 a share. By March 2011, shares were at $35 each — less than half of LinkedIn’s closing price Thursday. A rep for SecondMarket said LinkedIn was its third most frequently traded stock.
SecondMarket said in a statement that the LinkedIn debut was a “much-needed boost for the IPO market.”
But it noted that the IPO “underscores the point that even for an exciting, innovative company like LinkedIn, it can take nearly a decade before the time is right to go public.”
That’s likely because Wall Street doesn’t want to get burned again.
Emerging from the dot-com bust’s shadow: The burst of the tech bubble drove a wedge between Wall Street and tech startups in the early 2000s, and Wolff said some investors may be trying to cash in on these companies after waiting too long.
“A lot of investors feel burned by tech,” Wolff said. “Now, the people who are late to the startup investment party are pushing their way in.”
But because Wall Street has been so wary of techs, investors now find themselves without much data and research on the startup sector.
“You’re guessing the unknown growth trajectory of a new business model,” Wolff said. “It’s the equivalent of counting beads in a jar with black tape over it.”
Atlantic International Partnership Review: Is Japan Heading for Yet another ‘Lost Decade’?
http://www.your-story.org/atlantic-international-partnership-review-is-japan-heading-for-yet-another-%E2%80%98lost-decade%E2%80%99-245296/
It absolutely was supposed to become just an additional earthquake, only it registered a scale of 9.0 – and triggered a devastating tsunami.
March 11, 2011 would unquestionably not be forgotten at any time soon by the Japanese men and women since the northern piece on the technologically-advanced nation was thrown into distress. Tsunami waves as higher as ten meters hit the coast and washed absent anything it passed inside of a frightening pace. Aftershocks of smaller sized scales would keep on shaking them for the following number of days.
Obviously, the entire globe was left dumbstruck.
And as in case the earthquake/tsunami combo wasn’t plenty of, a further dilemma sets in: a nuclear plant’s received an issue. Like an overnight sensation, Fukushima grew to become a family name, albeit for every one of the wrong motives.
Now, just after weeks of hanging on the harmony, lots of are worried what would turn out to be of Japan afterwards. Particularly of curiosity would be the foreseeable future state of their economic climate.
Shareholders of Tokyo Electric Power Company (TEPCO), in addition to from getting affiliated which has a technology-gone-bad label, just might be drained through the great clean-up fees and liabilities the Fukushima power plant brought (with claims amounting to eleven trillion yen when the crisis dragged on for two a long time).
Definitely lots of firms are already hit difficult by the catastrophe, and all of them are struggling to help keep afloat. The issue is, Japanese organizations look to possess this debt-rejection syndrome – no one would like to borrow income. But when they’re going to stay in the market, they are going to have to get started on throughout again and get funding somewhere. With Japanese firms wary of borrowing income, the financial state could possibly make a turn for the grim state; willingness to borrow funds is important to help propel progress.
Government agencies are already offering out proposals to begin the reconstruction ball rolling. According to lawmakers, 20 trillion yen reconstruction package is required, whilst the harm is twice as what the 1995 Kobe earthquake introduced. Some suggested boosting tax so they can fund all of the rebuilding. Division in the government system (also going through vital response with regards to the nuclear ability plant circumstances) may possibly make this an even complicated move for Japan.
The Financial institution of Japan offered a stimulus to improve the marketplace but with Japan’s history littered with stimulus package failure, it can be uncertain if they’ll welcome this.
Industry experts approximated it is going to consider a number of many years for Japan to rebuild all that harm – but arguably lengthier to make folks forget all the horror it introduced. And with an approximated 16-25 trillion yen in harm, it is no shock that investors are avoiding the Japanese market place. And rightly so – harm of this scale was under no circumstances noticed given that WWII.
Results may well stretch much more than a national scale for Japan can be a big know-how manufacturing hub. Parts of preferred gadgets are created in Japan, and all those firms, if not halting productions, are cutting back on operating hrs because of the energy shortage. Carmakers also pushed back again their strategies and delayed creation.
A further blow for the Japanese financial system is inside export market place. Now, just about everyone’s wary with the ‘Made in Japan’ label as radiation paranoia gripped the globe. Some nations refused entry of food items from Japan but people are even now worried that devices will also be tainted with radiation.
Atlantic International Partnership Review – For your past two decades, Japan’s financial system seemed to be stuck inside a deadlock. Public credit card debt grew to twice the quantity of their Gross Domestic Product (GDP). Politics is on an impasse also; where by the prime minister’s seat adjusted quite a few instances just final 12 months. Add to people the longtime issue of an aging population so you get the image of how complete their fingers will need to be.
The specific situation while in the nuclear strength plant appears to be to get handled appropriately, and hopefully will prevent churning out radiation while in the days and months to arrive. But right up until then, practically everything that may be coming from Japan (even persons!) will be beneath scrutiny.
The worst-case situation for Japan is once the troubles while in the nuclear strength plant drag on, resulting to another ‘lost decade’.
Here at AIP we appreciate that each and every individual investor is a uniquely complex person. It’s our belief in this that has led us develop a widely recognised innovative investment philosophy. At AIP we believe that our methodology can significantly increase the success of our private clients investments.
It absolutely was supposed to become just an additional earthquake, only it registered a scale of 9.0 – and triggered a devastating tsunami.
March 11, 2011 would unquestionably not be forgotten at any time soon by the Japanese men and women since the northern piece on the technologically-advanced nation was thrown into distress. Tsunami waves as higher as ten meters hit the coast and washed absent anything it passed inside of a frightening pace. Aftershocks of smaller sized scales would keep on shaking them for the following number of days.
Obviously, the entire globe was left dumbstruck.
And as in case the earthquake/tsunami combo wasn’t plenty of, a further dilemma sets in: a nuclear plant’s received an issue. Like an overnight sensation, Fukushima grew to become a family name, albeit for every one of the wrong motives.
Now, just after weeks of hanging on the harmony, lots of are worried what would turn out to be of Japan afterwards. Particularly of curiosity would be the foreseeable future state of their economic climate.
Shareholders of Tokyo Electric Power Company (TEPCO), in addition to from getting affiliated which has a technology-gone-bad label, just might be drained through the great clean-up fees and liabilities the Fukushima power plant brought (with claims amounting to eleven trillion yen when the crisis dragged on for two a long time).
Definitely lots of firms are already hit difficult by the catastrophe, and all of them are struggling to help keep afloat. The issue is, Japanese organizations look to possess this debt-rejection syndrome – no one would like to borrow income. But when they’re going to stay in the market, they are going to have to get started on throughout again and get funding somewhere. With Japanese firms wary of borrowing income, the financial state could possibly make a turn for the grim state; willingness to borrow funds is important to help propel progress.
Government agencies are already offering out proposals to begin the reconstruction ball rolling. According to lawmakers, 20 trillion yen reconstruction package is required, whilst the harm is twice as what the 1995 Kobe earthquake introduced. Some suggested boosting tax so they can fund all of the rebuilding. Division in the government system (also going through vital response with regards to the nuclear ability plant circumstances) may possibly make this an even complicated move for Japan.
The Financial institution of Japan offered a stimulus to improve the marketplace but with Japan’s history littered with stimulus package failure, it can be uncertain if they’ll welcome this.
Industry experts approximated it is going to consider a number of many years for Japan to rebuild all that harm – but arguably lengthier to make folks forget all the horror it introduced. And with an approximated 16-25 trillion yen in harm, it is no shock that investors are avoiding the Japanese market place. And rightly so – harm of this scale was under no circumstances noticed given that WWII.
Results may well stretch much more than a national scale for Japan can be a big know-how manufacturing hub. Parts of preferred gadgets are created in Japan, and all those firms, if not halting productions, are cutting back on operating hrs because of the energy shortage. Carmakers also pushed back again their strategies and delayed creation.
A further blow for the Japanese financial system is inside export market place. Now, just about everyone’s wary with the ‘Made in Japan’ label as radiation paranoia gripped the globe. Some nations refused entry of food items from Japan but people are even now worried that devices will also be tainted with radiation.
Atlantic International Partnership Review – For your past two decades, Japan’s financial system seemed to be stuck inside a deadlock. Public credit card debt grew to twice the quantity of their Gross Domestic Product (GDP). Politics is on an impasse also; where by the prime minister’s seat adjusted quite a few instances just final 12 months. Add to people the longtime issue of an aging population so you get the image of how complete their fingers will need to be.
The specific situation while in the nuclear strength plant appears to be to get handled appropriately, and hopefully will prevent churning out radiation while in the days and months to arrive. But right up until then, practically everything that may be coming from Japan (even persons!) will be beneath scrutiny.
The worst-case situation for Japan is once the troubles while in the nuclear strength plant drag on, resulting to another ‘lost decade’.
Here at AIP we appreciate that each and every individual investor is a uniquely complex person. It’s our belief in this that has led us develop a widely recognised innovative investment philosophy. At AIP we believe that our methodology can significantly increase the success of our private clients investments.
Atlantic International Partnership Headlines: 2 Emerging-Market Mining Stocks to Buy
http://altlantic-internationalpartnership.com/2011/05/atlantic-international-partnership-headlines-2-emerging-market-mining-stocks-to-buy/
NEW YORK (InvestorPlace) — I was asked recently for a good reason why Southern Copper Corp.(SCCO_) was underperforming not just the price of copper, but also other huge copper mines like Freeport-McMoRan(FCX_).
The company-specific news flow certainly didn’t suggest that it should be massively trailing Freeport, especially since Southern had better reserves than Freeport. There were violent protests over a mine in Peru that resulted in a delay after the company had already invested serious money, but that wasn’t unusual. This happens in mining all the time, and it should have been mostly priced into the stock some time ago.
And then I saw the recent election results and I immediately understood — it was Peru itself.
The leftist candidate for Peru’s presidency, Ollanta Humala, won the biggest number of votes in the April 10 election and was leading the polls for the June 5 presidential runoff election. This is similar to what we saw in the 2006 election, as companies with huge exposure to Peru underperformed significantly.
Then, Humala campaigned “wearing red T-shirts and expressing admiration for Venezuelan socialist leader Hugo Chavez. This year, he’s donning business suits and vowing to expand ties with investor-favorite Brazil,” according to Bloomberg. The former army officer’s abrupt about-face has helped put him in first place in polls, and the outcome of the likely runoff is currently too close to call.
Related Article: Why Obama is doomed to be a one-term president
While investors want to see Peru go the direction of Brazil, a Latin American success story, there is fear that the country may go the way of Venezuela and Bolivia, which have been governed with a remarkable lack of pragmatism.
So investors are wary — and with good reason — that Humala may enter office wearing a suit, but he may still have those red shirts from 2006 in his closet.
If mining royalties rise and the state increases control of the country’s gas reserves, there is about $42 billion worth of foreign investment in the mining industry earmarked over the next 10 years that is at risk.
Related Article: 5 stocks for $150 oil
We have seen this recurring problem in many emerging markets where the (primarily leftist) governments are worried that greedy foreign multinationals will plunder their natural resources, not realizing that without foreign investment they don’t have the huge amounts of money or expertise necessary to develop the deposits. Metals and oil deposits in the ground are worth very little if they stay in the ground.
NEW YORK (InvestorPlace) — I was asked recently for a good reason why Southern Copper Corp.(SCCO_) was underperforming not just the price of copper, but also other huge copper mines like Freeport-McMoRan(FCX_).
The company-specific news flow certainly didn’t suggest that it should be massively trailing Freeport, especially since Southern had better reserves than Freeport. There were violent protests over a mine in Peru that resulted in a delay after the company had already invested serious money, but that wasn’t unusual. This happens in mining all the time, and it should have been mostly priced into the stock some time ago.
And then I saw the recent election results and I immediately understood — it was Peru itself.
The leftist candidate for Peru’s presidency, Ollanta Humala, won the biggest number of votes in the April 10 election and was leading the polls for the June 5 presidential runoff election. This is similar to what we saw in the 2006 election, as companies with huge exposure to Peru underperformed significantly.
Then, Humala campaigned “wearing red T-shirts and expressing admiration for Venezuelan socialist leader Hugo Chavez. This year, he’s donning business suits and vowing to expand ties with investor-favorite Brazil,” according to Bloomberg. The former army officer’s abrupt about-face has helped put him in first place in polls, and the outcome of the likely runoff is currently too close to call.
While investors want to see Peru go the direction of Brazil, a Latin American success story, there is fear that the country may go the way of Venezuela and Bolivia, which have been governed with a remarkable lack of pragmatism.
So investors are wary — and with good reason — that Humala may enter office wearing a suit, but he may still have those red shirts from 2006 in his closet.
If mining royalties rise and the state increases control of the country’s gas reserves, there is about $42 billion worth of foreign investment in the mining industry earmarked over the next 10 years that is at risk.
We have seen this recurring problem in many emerging markets where the (primarily leftist) governments are worried that greedy foreign multinationals will plunder their natural resources, not realizing that without foreign investment they don’t have the huge amounts of money or expertise necessary to develop the deposits. Metals and oil deposits in the ground are worth very little if they stay in the ground.
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