The Financial Focus[1]:

Through the executive power bestowed upon him, President Obama raised the minimum wage to $10.10 per hour from its original $7.25 for federal contract employees last Wednesday, February 12^th. The new wage is to be in effect January 1, 2015.

What all does this new minimum wage law entail? As of yet, the law does not extend to the federal contract employees who manufacture goods, nor to the general working public. CNN stated,  “[the new minimum wage law] will apply to contracts and subcontracts that provide the federal government with concessions, services and construction.”

President Obama plans to raise the wage to $10.10 for all U.S. workers before the end of 2014. For the tipped workers who reserve federal contracts, the minimum base per hour is currently $2.13, but Obama raised that base to $4.90 with a 95 cent increase per year until it reaches the 70 percent mark of the new minimum wage. Another side note pertaining to tipped workers: if the tips earned do not equal $10.10 per hour, the federal contractor must pay the difference.

The law has seen mixed reviews after its recent passing. The supporters defend that higher minimum wages create a boost in employee moral shown through higher attendance and productivity levels. The skeptics see the increase in wage as a driving force towards unemployment or an increase in the overall cost of goods.

Entrepreneur of the Week[2]: Gary Vaynerchuk

Background:

– Russian born in 1975 (38 years old)

– Grew up in Edison, New Jersey

– Wine Connoisseur

– Social Media Genius

– Author

– Speaker

– Angel Investor

Accomplishments:

– At seven years old he ran and managed 7 lemonade stands

– Turned his family owned liquor store into an e-commerce hit by creating WineLibrary.com. Grew the business from $3 million to $45 million

– Founder of Wine Library TV to share his expertise and love for wine through webcasts

– In 2009: Created VaynerMedia – a social media consulting agency that helps grow Fortune 500 companies (including GE and PepsiCo.) and many other companies to gain an edge on digital branding and social media branding through micro content and other ways of social marketing.

– Author of two New York Times Bestsellers: Jab, Jab, Jab, Right Hook: How to Tell Your Story in a Noisy Social World and Crush It!: Why NOW is the Time to Cash In on Your Passion. Author of The Thank you Economy

– Angel invested in over 58 companies (Including: Twitter)

– Has 15 acquisitions (including: Tumblr)

-Net Worth Estimate: $10 million dollars

Why Gary Vaynerchuk is the Entrepreneur of the Week:

Gary Vaynerchuk is this week’s Entrepreneur of the Week due to his sense of drive and the transformation of the social media marketing world at his hands. Gary is not a billionaire or the stereotypical man with a remarkable story. But what he did do remarkably is alter the way companies use marketing through social media and e-commerce. He brought multiple platforms of social marketing through VaynerMedia that are in effect today, and he continues to be innovative. He doesn’t have a photographic memory, but what he does have is the ability to see and satisfy needs. His normalcy is relatable on all levels. Vaynerchuk’s entrepreneurial spirit is what drove him to success in his early lemonade stand days and will continue to be his catalyst in innovation and adaption for new markets that lie ahead.

Wall Street’s Watch: (Week of February 10, 2014 – February 14, 2014)

Hot: Time Warner Cable Inc.** (TWC)

        Thursday’s monopolistic merger of Comcast Corporation and Time Warner Cable Incorporated caused Time Warner Cable’s stock value to increase nearly eleven points from Wednesday’s closing price and a 4,210,700 upsurge in volume[3]. The merger included the acquirement of Time Warner Cable for an equity trade valued at $45.2 Billion (yes, with a B)[4]. Will the merger sustain the stockholder’s recent gain of confidence or will the worry of the public cause a bearish movement?

Cold:  LinkedIn Corporation** (LNKD)

        LinkedIn, the social media titan of the corporate world, has seen a high of $223.45 this month, but has been on the decline since. The corporation burdened a 37.32 drop in stock value this week alone. Why has this titan lost its warmth recently? LinkedIn released its quarter four earnings with three drawbacks that caused its stock value to lose its stockholders’ confidence: the year-to-year revenue growth decline, the slowing of member growth, and the recent 15 percent share sell-off. With a current value of $186.13, will stockholders bullishly take advantage of this sale or continue to drive the price even lower?

Bold: Illumina Inc.** (ILMN)

Illumina is a Silicon Valley born company that has a central mission of deciphering your genetic code and creates probabilities of acquiring specific diseases by interpreting each individual letter of your genome sequence. The best part about Illumina is that it is not only a life-changing company; it is a life-changing stock. Since the start of 2014, Illumina’s stock value has grown nearly 54 points. This time last year Illumina was trading at $48.79 per share, and it is currently trading at $164.33 per share. It has a P/E ratio (Profit / Earnings Ratio) of 182.59 and an EPS (Earnings per Share) of 0.90. The company is currently expanding into China, and recently has created a growth program for genome-sequencing based companies. Illumina is the writer’s bold pick for this week’s Wall Street’s Watch due to the financial analysis and the promising future the company holds. Could we see Illumina crack the $200 per share mark by the end of its next quarter or will its market price be drawn closer to its one year target estimate price of $153.47?

The Financial Focus:

On the 19^th of this month, Facebook’s Mark Zuckerberg made the announcement that the popular messaging app, WhatsApp, would be joining the Facebook team. Jan Koum and Brian Acton, the founders of WhatsApp, agreed to have the company mirror the role of Instagram as a separate entity of Facebook.

WhatsApp is the global leading messaging app with roughly 450 million users a month [1] and an estimated 50 billion messages sent per day [2]. What does an acquirement of this magnitude go for on the open market? Apparently, $12 billion in Facebook stock, $4 billion in cash, and $3 billion in restricted stock over the next four years, totaling the deal to a whopping $19 billion [3].

The $19 billion dollar price tag is not the only jaw-dropping statistic of this buyout. For starters, WhatsApp has 55 employees and its $19 billion dollar buyout means each individual employee is worth barely under $350 million dollars*. Of the recent pricy buyouts (Instagram for $1 billion, Nokia for $7.2 billion, Motorola for $12.5 billion, Tumblr for $1.1 billion, and Skype for $8.5 billion), WhatsApp’s buyout exceeds the steepest one by $6.5 billion [4]. To put $19 billion dollars into perspective, WhatsApp is worth more than the following companies: Ralph Lauren, Best Buy, The Gap, Southwest Airlines, Under Armour, Marriot International, Monster Beverage, Xerox, and Chipotle [3].  The buyout is larger than any of Google’s, Apple’s, or Microsoft’s buyouts, and the company is only five years old [3].

So, is WhatsApp’s bang worth its buck? Well, there is one factor that indicates future growth. The app doesn’t use traditional revenue seeking techniques through ads; instead, they charge a 99 cent fee per year after the first year free [1]. This would explain the exponential growth WhatsApp has encountered over the last five years [3]. The cheap strategy attracts more users than any other social media company, including its new owner.

Zuckerberg plans to finalize the acquisition by the end of 2015 [3]. As they say, it is not official until it is Facebook official.

Sources

[1] Wall Street Journal – wsj.com

[2] We Are Social – wearesocial.net

[3] Forbes – forbes.com

[4] Gizmodo.com

Entrepreneur of the Week: Dietrich Mateschitz

Background [1]:

-Born: May 20, 1944 (69 years old)

-Residence: Salzburg, Austria

-Education: Vienna University, B.S. in Business and Economics (took 10 years to complete program)

-Net Worth: $7.1 Billion (as of March 2013)

-Wealthiest person in Austria

-Marketing Mastermind

-Extreme Sports Loyalist

-Visionary

Accomplishments [2]:

1) Creator of the popular energy drink, Red Bull: He transformed the beverage industry by creating the energy drink industry in 1987. He co-created the product with his friend Chaleo Yoovidha, originally naming it “Krating Daeng.” Red Bull was created to cure his constant jet lag resulting from frequent business trips. He excelled in the early years of Red Bull by the image he created and the lure of his famous “Gives You Wings” slogan. The marketing style that proved successful at Unilever was used to recreate a lifestyle through exciting events, crossing over of industries, and simple cartoon commercials, which promoted the popular energy drink.

2) As Red Bull began to grow, Dietrich took control by exploiting his target crowd to the ones who needed high energy the mos – extreme sport athletes. The trend started by the creation of the Dolomiteenmann, which is the extreme sport version of a marathon. As he continued to shape the image of Red Bull, Dietrich decided to sponsor Motorsports athletes in the late 1980s. He expanded to sponsoring international athletes in 1994.  Currently, Red Bull’s extreme athletes are involved in Grand Prix Racing, Cliff Diving, Kiteboarding, Free Fall, Soapbox Racing, Down Hill Extreme Racing, Crashed Ice Events, X-Fighting, Air Racing, BMX Elevation, Rally Car Racing, Red Bull BC, Flugtag, and, Mateschitz’s favorite, Golf. He also backed the Supersonic Jump, which is a 39 km jump above the Earth from Space (record-breaking).

3) He transformed the music industry by creating the Red Bull Music Academy, the Red Bull Studio, and Red Bull Records.

4) Owner of the Hangar-7 in Salzburg that holds “The Flying Bulls,” which is a set of rare, Red Bull-owned planes.

5) Owner of an Austria Ice Hockey Team, the Red Bulls.

6) Owner of the Professional Soccer Teams FC Red Bulls in Austria and the New York Red Bulls.

7) Owns the Laucala Island of Fiji where he started a luxury resort.

Why Dietrich Mateschitz is Entrepreneur of the Week:

Dietrich Mateschitz saw a personal need that wasn’t being fulfilled and had the confidence to fulfill it himself. He used his energetic passion and marketing skills to transform over six industries, including the creation of the energy drink industry. His entrepreneurial determination and the development of Red Bull, sugar free preferred, has earned him this week’s Entrepreneur of the Week.

Sources

[1] Forbes – Forbes.com

[2] Red Bull Gmbh – redbull.com

Wall Street’s Watch:

Hot: Forest Laboratories Inc. (FRX)

Actavis plc, made the announcement on Presidents’ Day that it would be acquiring Forest Laboratories Inc. for $25 billion in cash and stock. The confidence of the market flooded Forest Laboratories’ stock value when it reopened Tuesday morning at $92.80 per share. The $21.41 per share increase from Friday’s $71.39 closing price displayed the stockholder’s concurrence. The Actavis acquirement was influenced by the voice of the billionaire investor, Carl Icahn, as he believed the merger would create a pharmaceutical giant. Since the acquirement, Forest Labs’ is up $5.42 per share. With a recent Credit Suisse downgrade to “Neutral” from “Outperform,” can Forest Labs’ go against the critics and rise in value or will Credit Suisse’s demotion drive its stock value south to its one year target estimate of $79.65?

Cold: Groupon Inc. (GRPN)

After Thursday’s closing price of $10.28 per share, Groupon opened at $8.74 per share Friday morning when its quarterly earnings were reported and has continued to fall since (currently trading at $7.78 per share). Analysts estimated that EPS was $0.06 per share, but this was failed to be met and is expected to be adjusted between -$0.04 and -$0.02 per share. The company stated that its recent acquirement of Ticket Monster for $260 million threw off analysts’ expectations, along with its higher-than-normal marketing expenses. Groupon did surprisingly beat expected revenue by nearly $50 million. As disappointing as Groupon’s EPS was to its stockholders, the expected revenue increase and acquirement of Ticket Monster question analysts with bullish hope. Is Groupon’s current value a correct reaction to earnings that will lead to further bearish market movements? Or is Groupon currently a Black Friday sale looking to spike?

Bold: Chelsea Therapeutics International Ltd. (CHTP)

After nearly a three year struggle, Chelsea Therapeutics International finally received FDA approval of the drug, Northera. The drug treats patients who suffer from symptomatic neurogenic orthostatic hypotension, and it is the first drug to treat this medical condition. The company’s market value has bounced back and forth between its high of just over $8.00 a share to its low of $0.79 a share, showing little promise of significant growth. This was all before the newly FDA approved Northera. Northera is Chelsea Therapeutics’ first notable drug, and may be the start to a significant increase in its stockholders’ confidence. The Wednesday morning release alone caused Chelsea Therapeutics’ market value to open $1.61 higher than Tuesday’s closing price. The game-changing FDA approval and the current price of Chelsea Therapeutics (currently $5.96 a share) create a perfect combination for serious financial gain. Have your six dollars go further than an M-T-O at Sheetz, and buy a share of Chelsea Therapeutics.

Source: Yahoo – finance.yahoo.com

The Financial Focus

Friday morning in Tokyo, Mt. Gox announced nearly 750,000 cliental Bitcoin, along with 100,000 corporate Bitcoin – worth an estimated $470 million – had been lost due to fraudulence. The announcement also included the company’s filing for bankruptcy protection and top-level management changes. The loss accounted for roughly seven percent of the global Bitcoin total of an estimated 21 million. Although the victims of this incident claim Mt. Gox and its CEO are guilty of multiple counts of fraud, there is nearly no action required to be taken by government authority as the virtual currency was unregulated, leaving the Mt. Gox victims empty-handed. Charles Shrem, the Bitcoin capitalist who was arrested in late January for money-laundering, speculated Mt. Gox still holds over 90,000 Bitcoin of the reported 100,000 missing corporate Bitcoin, which has raised further investigation [1, 2].

As reported by Forbes, the company released the plan of action for the future of Mt. Gox which includes closing shop until April 1, 2014, at the earliest. A few changes are alleged to occur during the closing, such as Mt. Gox plans to drop the “Mt.” and just go by Gox, release account history to victims, have a new platform with a new brand, supply new services, and create a new business model [1, 2].

Here’s a summarized version of Bitcoin history and how Mt. Gox is involved in the Bitcoin world:

As assumed creation in 2007 by an unidentified Satoshi Nakamoto of Japan, Bitcoin is an online currency that is backed by nothing but faith.  Bitcoin is managed by an outside authority, much different from other global currencies regulated by government bodies. As many consumers are skeptical of virtual payment systems having access to their personal information, Bitcoin was created to remove that worry as there is no tie to personal information with the currency. Although Bitcoin is traceable, many have taken advantage of the virtual currency. For example, Silk Road, otherwise known as the illegal drug version of eBay, was a hotbed for Bitcoin usage until it was shut down by the FBI in late 2013. Many online retailers and businesses have accepted Bitcoin in the past, such as Overstock, Tesla, Zynga and eBay. Mt. Gox was born in July of 2010 to be the exchange of Bitcoin and also provided a reliable Bitcoin index. Bitcoin has gone through its rollercoaster timeline, with peaked values worth over $1,200 per Bitcoin [1, 2]. This Bitcoin era is commonly known as an investment bubble that is soon to pop and drop drastically, once investors find its true value. Any hot commodity or financial security has seen its fair share of bubbling and dates back to the first bubble, known as the 17^th Century Tulip Craze [3].

Sources:

[1] Wall Street Journal

[2] Forbes

[3] A Random Walk Down Wall Street, Author: Burton Makiel

Entrepreneur of the Week: The Winklevoss Brothers (Cameron and Tyler)

Background:

Identical twins Cameron and Tyler Winklevoss have done everything as a partnership since day one. They were born in Southampton, New York, August of 1981, and raised in Greenwich, Connecticut. They taught each other HTML computer programming at the age of 13, and in their teens, they formed a company that was geared toward creating websites for outside businesses. In high school, they founded the crew team, and both earned enrollment into Harvard University the fall of 2000 [2].

While at Harvard, they were members of the crew team, the Porcellian Club and the Hasty Pudding Club. What brings fame to their name is the co-founding of the social media site, HarvardConnection, which was later renamed to ConnectU, and later developed solely by Mark Zuckerberg to create Facebook. The Social Network portrays the birth of Facebook, along with the Winklevoss twins in a true-story motion picture. They are also known as, “The guys who had their social media website idea stolen from by Mark Zuckerberg.” Beyond internet entrepreneurship, the brothers competed as American rowers in the 2008 Beijing Olympics. In 2010, the brothers spent time overseas studying at Oxford University’s Graduate Business School. After their honorable educations at Harvard University and Oxford University, the brothers created multiple start-up companies involving technology, consulting services and venture capitalism [2].

Most recently, the brothers dabbled into Bitcoin. They filed for registry of an ETF called the Winklevoss Bitcoin Trust in 2013, invested $1.5 million into BitInstant, and in February of 2014, the twins launched the Winkdex. The Winkdex is a weighted-average index of the top three Bitcoin exchanges based on the volume traded daily [1].

Why the Winklevoss brothers are the Entrepreneurs of the Week

Whether it is a seminar, a biography, a public podcast or a documentary, any successful entrepreneur will tell you about a risky decision or set of decisions they made that led to a large payoff or a long lesson. With the current state of the Bitcoin Bubble, the Bitcoin developments created by Winklevoss brothers are considered their risky moment among writers and critics. Not only are they risk-takers, but they are resilient. After the disappointment the brothers faced with their controversy at Harvard University, they became resilient by moving into other markets from the settlement payoff, and later they became venture capitalists for companies that resembled the youth of their college idea. The best part about the Winklevoss entrepreneur adventure is the brotherhood bond they had throughout the process. They show that synergy is greater than singularity. The Winklevoss Brothers are the Entrepreneurs of the Week due to their recent risky investing behavior, their contagious Olympic spirit and the strong partnership that is destined for future entrepreneurial success.

Sources:

[1] Forbes

[2] Facebook

Wall Street’s Watch: (February 23, 2014 – March 1, 2014)

Hot: InterMune Inc. (ITMN)

Tuesday the 25^th, InterMune publicized positive phase III results of its drug, pirfenidone. Pirfenidone, a drug concerned with idiopathic pulmonary fibrosis (IPF) patients showed lung improvement and a slowing in the progression of IPF in the patients. Tuesday’s disclosure alone caused a $23.84 rise in market value from Monday’s $13.96 closing price per share to Tuesday’s $37.80 closing price per share. InterMune slowed down after a Credit Suisse downgrade from Outperform to Neutral, finishing the week at Friday’s closing price of $30.04 per share. Even with the mild slump, InterMune still realized a gain in value of over 100%. InterMune also released it would be filing for FDA approval in its third quarter. Will InterMune’s positive results continue and lead the company to a golden ticket of FDA approval [1, 2, 3]?

Cold: Green Mountain Coffee Roasters, Inc. (GMCR)

Green Mountain Coffee Roasters, owner of Keurig and a recent partner of Coco-Cola, was on Wall Street’s Watch’s hot list for most of February leading up to the twentieth, but since then, the company has experienced a slight cooling in price. This week alone, the company has experienced an $11.71 per share decrease. News of Green Mountain Coffee Roasters’ cold drink competitor, SodaStream, beating its quarterly earnings Wednesday caused a slight bull movement in SodaStream investors and a slight bull movement in Green Mountain Coffee Roasters investors. Market analysts have also portrayed Green Mountain Coffee Roasters to be overvalued. With that being said, will the recent cooling of Green Mountain Coffee Roasters be the start to a landslide in market value? Or is this movement just the beginning of a bear trap looking to spike for future values [1, 2, 3]?

Bold: Tesla Motors, Inc. (TSLA)

Tesla Motors couldn’t keep itself from the press this week. Tuesday, stocks rose 14% after Morgan Stanley initiated the one year targeted price of Tesla Motors to be $320.00 per share (3). Wednesday, Tesla announces the plan to build a $5 billion “green” factory to manufacture lithium-ion batteries for Tesla automobiles and to be powered by multiple alternative energy sources, like SolarCity (Elon Musk’s Solar  energy company) [3]. Friday’s closing price held Tesla Motors at $244.79 [1]. This stock may be out of a college kid’s budget, but for established investors, this stock does hold potential short-term gain. The growth of the company, the success in the industry, and the groundbreaking capabilities of emerging technology will all play a role in holding the confidence of the market for long-term investing. The critics view Tesla as a bubble, but if innovation continues in their automobile technology, $244.79 could be the lowest it will be five years from now. As Tesla continues to be a 50-50 split between bullish and bearish investors, what side are you on? By the start of next August, do you see Tesla’s August 1^st market price above or below the current $244.79 per share [1, 2, 3]?

Sources:

[1] Yahoo

[2] The Street

[3] Motley Fool