Breaking Down Spotify’s Potential Non-IPO: Why Would the Company Roll the Dice on a Direct Listing?

April 10, 2017

On Thursday, the Wall Street Journal reported that Spotify — long rumored to be planning an IPO in the next year — might remix its plans. Instead, the report claimed the world’s largest streaming service would go public with a direct listing, rather than an Initial Public Offering, an option that is much more common for smaller companies that don’t expect a big publicity splash when entering the market, and one that is exceedingly rare for a company that, well, makes a big splash with just about every move it makes.

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Why Spotify Might Skip the Traditional IPO Process and Go Public Via a ‘Direct Listing’

April 6, 2017

If Spotify’s interest in a direct listing is genuine, it would also demonstrate that the Swedish company isn’t in need of the kind of cash that is typically raised by issuing new shares and selling them via an IPO, said Santosh Rao, an analyst at Manhattan Venture Partners, a venture capital firm. “It does show that they might not need the money because they wouldn’t be issuing new shares,” Rao said in a phone interview. “But if you want real movement in the stock, if you want the stock to find its value, you have to go through the traditional bidding process.”

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This New Snapchat Feature Could Be the Boost Snap Inc. Needs

April 6, 2017

Snap Inc. has launched a new search function in its Snapchat app to help users more easily discover photo and video stories. This change moves Snap closer to becoming a major online video hub, and is likely to help the company increase advertising revenue and grow its user base.

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Why Spotify Might Need to Steal a Page From Netflix’s Blockbuster Script

March 29, 2017

When asked about his relationship with major media conglomerates, Netflix CEO Reed Hastings often says that competition is good for the industry. Yet while Spotify may want to reach profitability, it first has to reach a position of strength relative to its largest rivals, argues Santosh Rao, who heads up research at Manhattan Venture Partners, the venture capital firm. “Spotify could be profitable even now, even with this structure, but they are spending a lot on marketing and other services to try to expand their offerings,” Rao said in an interview.

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MuleSoft Shares Rocket Almost 40% in Stock Market Debut

March 20, 2017

MuleSoft (MULE) , the second tech unicorn to go public this year after Snap (SNAP) , had an extremely auspicious start on Friday, opening trading at $25.02 a share and closing at $23.75 per share, just about 40% higher than its initial offering price of $17. “The ‘IPO pop’ is in line with my expectations. Given the proliferation of applications within enterprises and MuleSoft’s offering that helps to connect them and work with them, we believe MuleSoft sits in the sweet spot of spending,” said Santosh Rao, head of research at Manhattan Venture Partners.

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Airbnb’s CEO Plans to Disrupt More Than Just the Hotel Industry

March 20, 2017

Indeed, under the leadership of Chesky, Adweek’s Digital Executive of the Year, Airbnb has grown at a rapid clip. Last year, the company became profitable for the first time and now has a total valuation of around $31 billion. Santosh Rao, a research analyst at Manhattan Venture Partners, credits Chesky as one of the “pioneers” bringing the sharing economy into the mainstream.

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Will Snap IPO Keep Snapchat Hot As User Growth Slows, Facebook Lurks?

March 17, 2017

Snapchat’s slowing user growth in the face of growing competition from dominant social network Facebook (FB) and its Instagram mobile service. “Snap is a good company, but you need to take a lesson from Twitter (TWTR),” Santosh Rao, research analyst at New York’s Manhattan Venture Partners, told IBD.

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Mulesoft May Be a Better Barometer of the IPO Market Than Snap

March 14, 2017

Santosh Rao, head of research at Manhattan Venture Partners, believes that MuleSoft will get the benefit of the doubt given its robust top-line growth, declining losses and a strong roster of customers.

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Samsung Beats Apple to the Mobile Payment Punch in India

March 8, 2017

Samsung’s partnership with India’s largest mobile wallet player Paytm is also likely to serve as a big push for the South Korean tech giant’s entrance into the Indian digital payment market. “The timing of the launch is very good given the ‘shock’ to the cash economy following demonetization. It is much easier to get people to download and use the Samsung Pay feature,” said Santosh Rao, head of research at Manhattan Venture Research. “India’s digital payments market is expected to reach $500 billion by 2020 on the back of 1.2 billion mobile subscribers, which makes it a compelling opportunity to tap into.”

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Alibaba Takes Controlling Stake in Indian E-Commerce Player Paytm

March 3, 2017

Alibaba.com Singapore E-Commerce, one of Alibaba’s 40 significant subsidiaries and consolidated entities, gained another 36.3% stake in Paytm E-Commerce, adding to the 40% stake it already holds with Ant Financial Services Group, Alibaba’s finance arm. “It is a very logical and strategic investment and a deeper commitment in this space. Alibaba’s strategy is to expand its footprint and minimize its country risk. China is still its core market but it has slowed,” said Santosh Rao, head of research at Manhattan Venture Research.

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Snapchat’s Parent Snap Just Raised More Than All Tech IPOs in 2016… Combined

March 3, 2017

Investors and analysts believe that Snap could not have chosen a better time to come to the market. The U.S. tech IPO market declined to its lowest level in a decade in 2016, registering only 16 public offerings for total proceeds of $1.8 billion, a far cry from the $8.4 billion recorded in 2015, according to PwC. “I think this is a great time for IPOs, there is a window that’s opened up, there’s animal spirits back in the market, there’s a risk-on environment right now,” said Santosh Rao, head of research at Manhattan Venture Research.

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Should Millennials buy Snapchat stock?

March 2, 2017

So should young investors take a gamble with Snapchat? It might be wise to wait and see how the stock does instead of buying it on the first day. Some investors think Snap’s valuation is too high. “The biggest problem you have with the old investment adage of ‘buy what you know’ is that the private markets have become much more efficient at valuing companies. [And] in cases like Snap, overvaluing companies,” said Jared Carmel, managing partner with Manhattan Venture Partners, a firm that focuses on private companies. Carmel added that “Millennials have proven to be fickle.”

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The complete bearish case against investing in Snapchat’s massive IPO

February 28, 2017

Santosh Rao, head of research at Manhattan Venture Research, echoes that sentiment. “In terms of corporate governance, I don’t like it. It’s too much power in one hand,” Rao says. He also acknowledges that companies like Facebook and Google are shifting in this direction and argues that allows the firms to remain focused on their long-term strategy. “These company founders are trying to keep control. To some extent, I don’t have a problem with that. In the case of Facebook, [Mark] Zuckerberg kept all the control and made a lot of the decisions on his own; 
it helps them make acquisitions faster, to move faster without giving up too much control. It helps growth companies pivot to new things and acquire new companies. So in that sense, it’s good. They are still in the innovative phase in their companies, in the evolution. 
I have no problem with that as long as they deliver.”

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Uber’s sex harassment scandal deepens

February 24, 2017

Uber is valued at nearly $70 billion, and its IPO — if and when it ever comes — is being eagerly awaited by both Wall Street and Silicon Valley. Experts said the latest revelations are unlikely to derail Uber in the long term, thanks to its massive popularity and market share, despite occasional consumer backlashes.

“I think Uber will be fine in the end,” Santosh Rao, head of research at Manhattan Venture Partners, told MarketWatch’s Caitlin Huston.

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More stories of Uber’s out-of-control workplace culture emerge

February 23, 2017

More stories of sexism, harassment and debauchery at Uber Technologies Inc. emerged Wednesday, in a New York Times report detailing the company’s aggressive corporate atmosphere. “I think Uber will be fine in the end,” Santosh Rao, head of research at Manhattan Venture Partners, told MarketWatch’s Caitlin Huston.

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Uber harassment scandal will hurt, but not in same way as #DeleteUber campaign

February 23, 2017

Uber is facing another crisis, but experts say the impact on the ride-hailing service will be different than the recent campaign to delete the company’s app. Even as rivals offer similar services, Uber has first-mover advantage with consumers and is so ubiquitous that it is hard to hinder its growth, said Santosh Rao, head of research at Manhattan Venture Partners. “I think Uber will be fine in the end,” Rao said.

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Airbnb buys Montreal-based Luxury Retreats to bolster high-end vacation offerings

February 16, 2017

“I like this acquisition. I think it makes sense and it’s logical” for Airbnb, said Santosh Rao, a technology specialist and head of research at New York-based merchant bank Manhattan Venture Partners. “Airbnb is just getting into the luxury side. It’s just very nascent. So I think they’re just buying growth in that category.”

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Airbnb reportedly in talks to acquire luxury rental startup

February 10, 2017

Santosh Rao, an analyst with Manhattan Venture Partners, told the Financial Times that Luxury Retreat has estimated annual bookings of $150 million, compared to Airbnb’s $3 billion in bookings. Rao added that the deal would be positive for both margins and revenue because of the higher margins in luxury accommodation.

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Airbnb poised to buy exclusive vacation villas specialist

February 10, 2017

Airbnb’s yearly bookings are around $3bn, while Luxury Retreat’s bookings are about $150m, according to estimates from Santosh Rao, an analyst at Manhattan Venture Partners. Airbnb has raised more than $3bn from investors who recently valued the company at $30bn; its backers include Peter Thiel’s Founders Fund, Greylock Partners, Andreessen Horowitz and Tiger Global.

Mr Rao expects that the deal will be accretive to Airbnb’s margins as well as to its revenue. “The margins for high-end [accommodation] always end up being higher,” he said. Based on his calculations, Airbnb broke even in 2016 based on earnings before interest, tax, depreciation and amortization.

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Tesla to Become the Latest American Company to Target India’s Monstrous Growth

February 8, 2017

Santosh Rao, Head of Research at Manhattan Venture Partners, believes that Tesla’s push into India makes strategic sense. “The market opportunity is too compelling to ignore,” said Rao. “India has a growing middle class with rising disposable income. The manufacturing cost will also be relatively lower.”

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Facebook Inc (NASDAQ:FB) Joins Hands with Google (GOOGL) on Flagging Fake Articles; SC IPO on Cards

February 6, 2017

There is more to come in social media arena as the initial-public-offering filing by Snap Inc. has spurred plenty of attention, as one of the biggest technology IPOs in years and an offering that could worth the firm at almost $25 billion. Due to its social messaging app, Snapchat, and huge valuation, the firm (SNAP), has gained comparisons to the IPOs of Facebook and Twitter.

And in its road show, Snap declared that it was the next Facebook, not Twitter, as per reported by the Wall Street Journal, but following it disclosed huge net losses, investors and experts are not so confident. “It is alarming, as people got blazed with Twitter,” Santosh Rao stated, head of research at Manhattan Venture Partners.

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IPO Market Fires Up 4 New Offerings This Week

February 6, 2017

The big IPO news last week was Snap Inc.’s initial filing for an IPO of some $3 billion at a market value of $18.3 billion according to a note from Manhattan Venture Research. The company said it estimates 2017 sales of around $1 billion and is hoping for a valuation nearer $25 billion. It’s early days yet on this one.

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Snapchat Owner Snap Smacked On $25 Billion Valuation Target

February 6, 2017

A report by Manhattan Venture Partners noted that Snap has a highly coveted user base but loyalty is a major concern. Snap’s users are predominantly in the highly coveted 18-34 age group, but current trends drawn from the S-1 prospectus suggest enthusiasm is currently waning.

“The company’s mobile native and visual format is appealing to a user base that is young and on the move, and tired of the filtered viral feeds of most online sites,” wrote Manhattan Ventures analyst Santosh Rao, in a research report on Snap. “The biggest challenge for Snap is to maintain its differentiated appeal, broaden the platform to other ‘sticky’ services and features, and keep refining its monetization engines. More important, it has to show a clear path to operating profitability following a honeymoon of 2 or 3 quarters which it will enjoy as a public company.”

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How Snap stacks up against Facebook and Twitter

February 6, 2017

The initial-public-offering filing by Snap Inc. has generated a lot of attention, as one of the largest technology IPOs in years and an offering that could value the company at up to $25 billion.

Because of its social messaging app, Snapchat, and large valuation, the company SNAP, +0.00% has drawn comparisons to the IPOs of Facebook and Twitter. And during its road show, Snap reportedly said it was the next Facebook, not Twitter, according to the Wall Street Journal, but after it revealed large net losses, investors and analysts are not so sure. “It is concerning, because people got burned with Twitter,” said Santosh Rao, head of research at Manhattan Venture Partners.

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Athletes and entertainers to get easier access to shares of hot start-ups shortly before IPOs

February 1, 2017

A Los Angeles financial adviser who says he works with sports stars, hip-hop and other celebrities has teamed with an investment firm to help clients get stakes in giant start-ups destined for blockbuster initial public offerings.

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Tapping Nas’ former fund manager, Manhattan Venture Partners launches MVP All-Star fund

January 31, 2017

A former fund manager at QueensBridge Venture Partners, the venture capital firm made famous by the hip-hop legend Nas, has joined boutique merchant bank Manhattan Venture Partners.

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How Facebook is taking on the responsibilities of a news organization

December 19, 2016

On today’s show, we’ll talk about Facebook‘s fight against fake news articles; reports that Japan has overtaken China as the biggest holder of U.S. debt; and one organization’s effort to get consumers to buy real Christmas trees.

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Airbnb trying to get along with regulators ahead of IPO

December 13, 2016

Analysts who follow Airbnb aren’t so sure. “Revenue will be affected — you can’t get around that,” said Santosh Rao, head of research at Manhattan Venture Partners. But Rao says that while the exact regulatory concessions that Airbnb would make have been unclear, it was obvious to anyone that the company’s game of putting off accepting new rules couldn’t last forever. The events of the past week don’t change how he values the company. “I factored that in,” he said. “It’s not going to be a straight walk.”

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Mutual Funds Sell Airbnb, DocuSign Shares

December 12, 2016

DocuSign shares traded higher about a year ago, said Jared Carmel, managing partner at secondary markets firm Manhattan Venture Partners, in part because the company was reluctant to approve secondary stock sales that were below roughly $16 per share. The company has since loosened those restrictions, allowing trades to happen at lower prices, which has made it easier for employees to cash out some of their stock holdings, Mr. Carmel said. DocuSign did not respond to requests for comment.

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Airbnb Turns the Volume Down on Its Fights With Regulators Everywhere

December 8, 2016

Santosh Rao comments in “Airbnb Turns the Volume Down on Its Fights With Regulators Everywhere”. Airbnb has always operated under a cloud of legal uncertainty as it battled city governments over how to regulate its network of short-term rental properties. The company has been kicking it into high gear to clear the situation up in recent days. On Wednesday, it released a report laying out its approach to local regulations, trying to capitalize on a weeklong stretch in which it agreed to enforce limits on rentals in London and Amsterdam, dropped a lawsuit against New York City, and praised new rules in New Orleans as a potential nationwide model.

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Snapping up Snap Ahead of IPO Proves Tough

December 1, 2016

Jared Carmel, managing partner at Manhattan Venture Partners, another firm that works with investors in secondary private tech shares, said he has spoken to buyers, mostly hedge funds and so-called “family offices” that represent groups of wealthy individuals, which currently want to invest around $200 million in Snap. But he hasn’t been able to find shares to buy.

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Snapchat’s parent company reportedly files for IPO

November 16, 2016

There are multiple reports that Snap, Inc., the company that owns the messaging app Snapchat, is getting ready to go public. The company reportedly expects to be valued at up to $25 billion, and its IPO could serve to test the waters for other big tech companies that have been relying solely on venture funding.

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Facebook performs well, but hints at a slowdown next year

November 3, 2016

Despite stellar growth, Facebook shares dropped 7 percent in after-hours trading as some investors realized there will someday be a limit to how fast Facebook can grow. The company is on pace to reach $27 billion in revenue this year, with third-quarter profits nearly tripling to $2.38 billion.  Monthly users grew by 16 percent to 1.79 billion — much of it international. But Facebook warned that next year it would reach a limit on how many ads it could place in people’s feeds. Many analysts fully expect a slowdown in growth in 2017.

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Snapchat Hoping Its Debut Can Help End a Cold Snap for Tech IPOs

October 18, 2016

Snap‘s appointment of a new CFO last year, Drew Vollero, was a signal that the company was likely starting to think about a market debut, Santosh Rao, head of research at Manhattan Venture Partners, said.

“The way these guys are ramping up revenue is amazing,” Rao added, explaining that Snap has developed a following among a fickle, yet desirable, age group of between 18 to 34.

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There’s Big Volatility Ahead for This Sector: Goldman Sachs

September 23, 2016

Wolff, of Manhattan Venture Partners, said the volatility index is not telling the whole story at this point.

“Certainly, the volatility suggests a very calm, still situation, when the election and the general public debates suggest the opposite,” he said Friday.

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Meet the next wave of workers that are taking over your office

August 31, 2016

This year, we found that 41 percent of Gen Z survey respondents said that a corporate office is their top work preference, compared to only 28 percent in 2014. “I have always been motivated by those working around me which influences and encourages me to push myself,” says David James, a venture capital equity sales rep at Manhattan Venture Partners and Gen Z member.

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Post BREXIT boom or bust?

August 24, 2016

Ameera talks to Manhattan Venture Partner’s Max Wolff about why Apple is having a hard time breaking into India, the world’s third largest smartphone market. Plus, in the Big Deal, Ed Harrison breaks down the latest data on the UK’s economy post Brexit and whether he thinks a recession is in the cards.

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Analysts Break Down Largest Homebuilder ETF, on CNBC

August 23, 2016

S&P Global equity chief investment officer Erin Gibbs, and Manhattan Venture Partners chief economist Maxx Wolff joined Tuesday afternoon’s ‘Power Lunch’ to discuss the SPDR S&P Homebuilders ETF(XHB).

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Is passive investing really ‘worse than Marxism’?

August 23, 2016

What does the rise of passive investing mean for the market? Max Wolff of Manhattan Venture Partners and Erin Gibbs of S&P Global discuss with Brian Sullivan.

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Japan showing signs of strain

August 16, 2016

New statistics show Japan’s economy nearly stalled in Q2, reveals Ameera David. RT’s Anastasia Churkina reports on the delay of an official Brexit. Bianca Facchinei looks at where Google Fiber went wrong. RT’s Marina Portnaya reports on how much Olympians make for bringing home medals. Ameera sits down with Max Wolff, chief economist at Manhattan Venture Partners, to talk about Apple. And in the Big Deal, Ameera and RT’s Ashlee Banks discuss the growing threat of data breaches at hotels.

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Google video chat app joins the battle for your homescreen

August 16, 2016

It comes as video and text messaging apps, like Google’s new Allo and Duo, increasingly play the role of the one-stop shop that was once the job of the operating system, Wolff told CNBC’s “Closing Bell” on Tuesday. Google originally announced the app at its developer conference earlier this year, where the artificially intelligent connections between the new apps was the highlight of the event.

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Has Uber maxed out on private financing?

August 2, 2016

“Uber China hit its max,” said Max Wolff, chief economist at Manhattan Venture Partners, which swaps cash for stock with shareholders in closely held firms. “Uber China went out for a higher valuation and couldn’t get it and then sold [to Didi] for its last valuation at $7 billion. That implies some substantive head winds.”

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Pro: Microsoft-LinkedIn Merger Is A ‘Win-Win Proposition’

June 14, 2016

“However, Santosh Rao of Manhattan Venture Partners thinks the acquisition is a “win-win proposition” for both companies. Speaking as a guest on CNBC Tuesday morning, the professional researcher explained why he likes the deal.”

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Bubble warning: High valuations and late-stage rounds tell of coming trouble

April 12, 2015

“We see the rage around messaging apps and delivery services as emblematic of valuations way out on the skinniest of skinny branches. Ironically, the last great bubble ended with frothy excitement about an army of delivery services. Then again, that was back in the dark ages before smartphone apps dispatched drones.”

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