• Tag Archives Silicon Valley
  • How Insane Home Prices in Silicon Valley & San Francisco Trip up Jobs Growth

    Bay Area housing affordability nightmare hits home, so to speak.
    What happens in a large urban market when a young couple with a household income that is far above median cannot afford to buy even a modest home? What happens to that local economy? That’s what everyone wants to know, because this is precisely the fate San Francisco, Silicon Valley, and surrounding Bay Area counties are contemplating.
    The Housing Affordability Index (HAI), released by the California Association of Realtors (CAR), has some bad news for these people – and possibly for the trends in the local economy and the housing market.
    The median price – 50% cost more, 50% cost less – in San Francisco of a single-family house hit $1.45 million in Q2, according to CAR. This does not include condos, whose prices are somewhat less deadly. It puts San Francisco in second place in the Bay Area, behind San Mateo County, which comprises the northern part of Silicon Valley. Santa Clara County, in fourth place, comprises the southern part of Silicon Valley. In third place is Marin County, just north of the Golden Gate Bridge:

    This post was published at Wolf Street on Aug 14, 2017.

  • Fun on Friday: Can You Have Your Gold and Eat It Too?

    How about some gold!
    Yes. You can have your gold and eat it too.
    A new Japanese restaurant in Los Altos, Calif., will serve you a steak covered in gold flecks.
    Hiroshi caters to Silicon Valley elite. The restaurant only accommodates eight diners per night. The tab generally runs between $500 and $600 per person, according to Business Insider. Hiroshi occupies a nondescript building. A sign simply states ‘open by appointment only.’ It has no windows, no menus, and just a single table.
    But you can eat gold with your steak. So there is that.
    ‘The gold is more for show,’ Hiroshi general manager Kevin Biggerstaff told Business Insider. ‘It doesn’t really have any flavor.’
    When I first saw this article, I thought it was unusual. The only golden flake food I’ve ever seen are potato chips. (You might not get that if you’re not from the south. Trust me, Golden Flake chips are a big thing.) But apparently eating real gold is a thing.

    This post was published at Schiffgold on AUGUST 4, 2017.

  • Facebook Employee Lives Out Of Car, Can’t Afford Housing

    Google employees aren’t the only tech workers struggling to afford Silicon Valley rents. One (alleged) Facebook employee recently confessed to a local TV station that she cannot afford the Bay Area’s $2,000 a month rents, forcing her to live out of her car. Unique Parsha, the employee in question, opened up about her situation to local Fox affiliate KTVU, hoping to start ‘a real dialogue about the high cost of living in the Silicon Valley’ (although as readers will quickly realize, there is a very real chance that either KTVU, or everyone else has been part of an elaborate trolling scheme).
    ‘Parsha’s nickname is “Pinky”- she has pink hair, a pink car, and even a pink dog. But she says, things aren’t always as rosy as they appear.
    Parsha says, “I tell people all the time, stop looking at what somebody got and what you see on the outside”.
    On the outside, Parsha is a model Facebook worker, who runs a non-profit in her spare time. But she’s been living out of her car since April.’

    This post was published at Zero Hedge on Jul 29, 2017.

  • These Job Trends in Silicon Valley, San Francisco Bay Area Will Hit Real Estate, the Economy, Municipal Budgets & Hype

    An ugly red flag for all of California goes up. The labor force in California fell by 19,900 in June from May on a seasonally adjusted basis, the second month in a row of declines. Nonfarm employment fell by 21,300. When was the last time when the labor force and employment fell in that period? 2009.
    The California Employment Development Department also reported on Friday that year-over-year, the labor force still rose by 52,600 and employment by 198,000. That looks like a lot, but it was the smallest increase for any year-over-year period since August 2011.
    This is an early red flag. But it still looks pretty good compared to what is transpiring in the San Francisco Bay Area. By some measures, there are nine counties in the Bay Area. We’ll look at the six counties that are part of the tech-jobs machine of San Francisco and Silicon Valley.
    In San Francisco, nonfarm employment dropped to 542,100 jobs in June. This is the number of people working in San Francisco regardless of where they live, including the many who commute from other areas. This was down 5,100 from the employment peak in December and the lowest since June 2016.

    This post was published at Wolf Street on Jul 22, 2017.

  • Another Former $2-Billion Startup Gets Rolled Up

    Investors who bought the hype are left holding the bag.
    Ad-buying software company Rocket Fuel – ‘a predictive marketing platform,’ it calls itself – announced on Tuesday that it was acquired for $2.60 a share. Including the assumption of debt, it makes for a deal value of $145 million. Down from $2 billion at its peak one month after the IPO.
    The Silicon Valley startup went public in September 2013 at $29 a share. Its shares soared 93% on their first day, closing at $56.10. A month later, shares hit $66.43, which gave the company its peak market value of about $2 billion.
    This was the period when ‘ad tech’ was the latest Silicon Valley fad that sucked billions of dollars out of investors’ pockets – much like ‘fin tech’ these days. Not much later, reality began to set in and shares headed south. The company lost money relentlessly. In 2015, the layoffs started. The whole sector crashed to reality. Today, after the buyout offer, its shares trade at $2.64, or 91% below the IPO price, and 96% below their peak.
    Rocket Fuel is being acquired by Sizmek Inc., a previously public company once known as Digital Generation that itself was acquired in August last year by private equity firm Vector Capital for $122 million. Over the past two years, Sizmek has been busy acquiring ad tech firms, and now with Vector Capital’s backing, it adds another one. This is turning into a rollup.

    This post was published at Wolf Street on Jul 19, 2017.

  • Mark Zuckerberg Finally Figured Out Why Trump Won; Hint: It Wasn’t Russia

    Mark Zuckerberg, the 30-something billionaire founder of Facebook, hasn’t lived a ‘normal’ life…at least not at any point in the recent past. He grew up in a suburb of New York City and now hobnobs with the elites of Silicon Valley, at least when he’s not enjoying that massive chunk of Kauai that he recently purchased for his own private use.
    So what do you do when you’ve become completely disconnected from the ‘foreign’ world that all of middle America calls ‘reality’ and have no idea why you just got massively blindsided by a national election that you thought was a foregone conclusion? Well, you take a trip to Williston, North Dakota.
    As Zuckerberg apparently learned for the first time while visiting oil workers in a tiny North Dakota town, there are entire industries that exist outside of Silicon Valley…industries that provide great wages and support thousands of American families. And, as it turns out, those people are sick and tired of having their jobs threatened by their own government and being demonized by Hollywood liberals for their efforts to provide economical access to energy.

    This post was published at Zero Hedge on Jul 13, 2017.

  • Silicon Valley’s ‘Death by Overfunding’: Next Unicorn Collapses

    When the ocean of hype turns toxic.
    San Francisco-based Jawbone was a unicorn whose valuation peaked at $3.2 billion in 2014. Past tense because the maker of fitness trackers and other gadgets began quietly liquidating last month. And it’s being sued by vendors that claim they’re owed money, according to Reuters. Yet, Jawbone had raised nearly $900 million in equity and debt capital. And it blew this money.
    Jawbone’s liquidation was first reported by The Information on July 6 and confirmed on Monday by Reuters. It’s the second largest failure of a venture-backed startup in terms of money raised, behind the bankruptcy in 2011 of solar-panel maker Solyndra.
    Top venture capital firms – including Sequoia, Andreessen Horowitz, Khosla Ventures, and Kleiner Perkins – had invested in Jawbone. In September 2014, it raised $147 million at a valuation of $3.2 billion. In February 2015, it raised $400 million in debt, of which $300 million from BlackRock. By November 2015, with prospects curdling, it laid off 15% of its workforce.
    In January 2016, when VC firms refused to throw more money at it, Jawbone’s president Sameer Samat, who’d arrived from Google seven months earlier, went back to Google, and in the same breath, the Kuwait Investment Authority led a $165-million Hail Mary investment in the company.

    This post was published at Wolf Street by Wolf Richter ‘ Jul 11, 2017.

  • Is This Wealthy San Fran Suburb Really On The Brink Of Bankruptcy Or Is It A Scam To Raise Taxes

    When you think about municipal bankruptcies, your mind likely conjures images of a decrepit Detroit littered with abandoned auto plants and burned down houses or the rapidly deteriorating city of Chicago with it’s gang wars and neighborhoods that look and feel more like an Iraqi battlefield than a U. S. suburb.
    What you likely don’t think about is an ultra-posh suburb of San Francisco where the median home will run you over $1 million. But according to Bloomberg, the wealthy Northern California city of Moraga could be the next Cali domino to fall.
    ‘We just don’t have enough revenue to take us through the future for many more years before we would really be in some of the situations other cities are, where they’re laying off mass numbers of employees or declaring bankruptcy,’ town manager Robert Priebe said in an interview. In Moraga, where the council discussed establishing a poet laureate position before approving the fiscal distress declaration, lowering headcount isn’t the first priority. The town’s $8.5 million budget this year authorizes about 36 full-time workers. Members instead opted to reduce services such as park maintenance in the community about 20 miles east of San Francisco.
    ‘We’re not willing to hurt the public first,” Priebe said. “We’re not going to lay off half of our employees and have the quality of life of all of our citizens really be impacted.’
    Moraga, where the median family income is $169,000 a year, illustrates an irony for some at the center of Silicon Valley’s latest economic boom. While real estate prices have surged due to the latest tech bubble, the local tax collections haven’t necessarily followed the same trajectory because of Proposition 13, the 1978 ballot measure that keeps homeowners’ tax bills from rising by more than inflation or 2% a year.

    This post was published at Zero Hedge on Jul 7, 2017.

  • Silicon Valley Begins to Crack Visibly

    Chilling photos of for-lease signs lining the Great America Parkway There are parts of Silicon Valley where commercial real estate is still hanging on, and there are parts where it has let go.
    In Santa Clara, it has let go. Overall availability of office space in Santa Clara was nearly 19% in the first quarter, according to Savills Studley, up from 14% a year ago. Only two other areas in Silicon Valley – Milpitas and North San Jose – show greater availability at respectively 23% and a harrowing 30%.
    The availability problem becomes very real along the Great America Parkway, between Highway 237 and Highway 101. It’s near Levi’s Stadium. Nearby, Yahoo owned 49 acres of land that it acquired in 2006 and on which it had planned to build its new headquarters. It tore down the buildings on it and got the project approved for 3 million square feet of office space. It scuttled these plans in 2014 and turned the land into a parking lot for Levi’s Stadium. In April 2016, Yahoo sold the property for $250 million to LeEco, a Chinese company that had surged out of nowhere.
    LeEco was going to get into nearly everything, including electric cars in the US. It was going to build its global headquarters on it and hire 12,000 people. Then came reality. Earlier this year, LeEco in turn scuttled those plans and pulled back from the US, claiming that it had run into a cash crunch. It has since been trying to sell the property. There will be a buyer eventually, as always, but maybe not at $250 million.

    This post was published at Wolf Street on Jul 2, 2017.

  • Morgan Stanley Builds Mortgage App To Try And Stay Relevant As Fintech Booms

    It’s no secret that Wall Street lives in constant fear of Silicon Valley. Bank CEOs probably wake up in a cold sweat after imagining that their clients have handed their money to some new startup that’s found a way to disrupt a financial service like, say, wealth management.
    To try and fend off the robo-advisers and other fintech companies trying to wrest every bit of market share away from the big banks, Morgan Stanley is launching its own suite of apps, meant to win over younger clients who prefer digital products. On Tuesday, the bank announced its latest offering: its very own digital mortgage application tool.
    Here’s Reuters:
    Morgan Stanley is developing a new digital mortgage application tool in a bid to get more of its existing clients to turn to it for home loans, its wealth management technology head said on Tuesday.

    This post was published at Zero Hedge on Jun 15, 2017.

  • Which Companies Have The Highest Revenue Per Employee?

    For many companies, the biggest cost is talent. This is especially true of Silicon Valley, where companies sell clicks and digital goods that do not have any material cost. So which companies’ workforces are able to generate the most revenue?
    We decided to analyze every company in the Standard & Poor’s 500 Index to see which ones had the highest and lowest revenues per employee. The Standard & Poor’s 500 Index (S&P 500′) includes the 500 largest American companies listed on the NYSE or NASDAQ. In 2016, S&P 500 companies generated $11 trillion in combined revenue and employed more than 25 million people worldwide.
    We found that Energy companies have the highest average Revenue per Employee, while Industrials and Consumer Discretionaries perform worst on this metric.
    Technology companies performed at the lower end of the range on Revenue per Employee; part of the reason for this however, is other companies in spaces like Energy and Healthcare have large non-employee costs that Technology companies do not have.

    This post was published at Zero Hedge on May 30, 2017.

  • Seeds, Unicorns, and the Value of Venture Capital

    Silicon Valley is a mystery to most people. So is technology in general, for that matter.
    We like our gadgets, but we don’t really understand where they originate. We like tech stocks as long as they go up.
    It doesn’t occur to us that when a tech stock goes public and millions of starry-eyed mainstream investors scramble to buy shares in the IPO, the ‘smart money,’ aka the early investors, are already cashing out and moving on.
    This week, I’m at our Strategic Investment Conference, so instead of current news, I have a movie review for you. As you’ll see below, it’s a good peek into early-stage venture investing and has some lessons we can all apply.
    First, a reminder: You can follow the conference action on our SIC Live Blog. We’ll be updating it frequently with session recaps, photos, and videos. Check out the agenda for speakers and times.
    Now, on with the show.
    Red Carpet
    Back in March, I went to the South by Southwest Conference in Austin, part of which is a film festival. Many aspiring filmmakers premiere their creations at SXSW. I’ve never paid much attention, but this year, I noticed one that looked economically interesting.
    Seed is a documentary by producer Andrew Wonder. The subject is AngelHack, a competition where teams of would-be tech entrepreneurs compete for venture capital funding. Here’s the official synopsis.
    Seed follows three start-ups from around the world as they descend on San Francisco for AngelHack’s Silicon Valley Week. For three intense days they’ll hone their pitches, tell their story, and face humiliation at the hands of mentors just to get the chance to present their start-up to a panel of judges who could change their lives… or destroy their dreams.

    This post was published at Mauldin Economics on MAY 23, 2017.

  • Silicon Valley ‘Tech-Slaves’ Forced To Live In Their Cars

    Faced with some of the most expensive rental housing in the nation, some Bay Area residents are feeling priced out and are seeking low-cost alternatives.
    As the Nasdaq soars to record highs on the back of Silicon Valley’s hub of computer and technology companies, some people are even turning to cars, vans and RVs for housing…

    This post was published at Zero Hedge on May 6, 2017.

  • It’s Turning Into A Very Interesting Week

    Authored by Mark St. Cyr,
    Back in days of yore (circa January 2017) I dared make the assertion that all that was ‘unicorn infatuation’ in the Valley was much more akin to ‘the old gray mare ain’t what it used to be.’
    In the article ‘Is 2017 The Year Silicon Valley Experiences The Dark Side Of ‘It’s Different This Time?’’ I posed the following. To wit:
    ‘Here’s the equation I believe will not only send shock waves, but will bring down many a valuation edifice within ‘The Valley’ in 2017. And here it is: ‘First: The Fed. And Second: Rate hikes.
    Two very short sentences containing nothing more than two words each but their implications could have exponentially explosive results. For what they portend is that ‘It’s different this time’ may indeed be exactly that.
    What I hoped you may have noticed during this discussion is the one thing myself and very few others pointed out would happen if the hypothesis we’ve been articulating over the last few years was correct. That hypothesis has always been ‘Without the Fed. pumping in unlimited funds via the QE programs, and a ‘death-grip’ to the zero bound (aka ZIRP) the first ones to show how much of a facade these ‘markets’ where would be seen directly in the ‘tech’ space.’

    This post was published at Zero Hedge on May 4, 2017.

  • Former Facebook Exec: “They’re Lying Through Their Teeth”

    Authored by Antonio Garcia-Martinez (former Facebook product manager), author of Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, originally posted at The Guardian,
    For two years I was charged with turning Facebook data into money, by any legal means. If you browse the internet or buy items in physical stores, and then see ads related to those purchases on Facebook, blame me. I helped create the first versions of that, way back in 2012.
    The ethics of Facebook’s micro-targeted advertising was thrust into the spotlight this week by a report out of Australia. The article, based on a leaked presentation, said that Facebook was able to identify teenagers at their most vulnerable, including when they feel ‘insecure’, ‘worthless’, ‘defeated’ and ‘stressed’.
    Facebook claimed the report was misleading, assuring the public that the company does not ‘offer tools to target people based on their emotional state’. If the intention of Facebook’s public relations spin is to give the impression that such targeting is not even possible on their platform, I’m here to tell you I believe they’re lying through their teeth.

    This post was published at Zero Hedge on May 2, 2017.

  • Does The Reality Of “It’s Different This Time” Get Tested This Week?

    If you were one of the myriad analysts, next-in-rotation fund managers, tech commentators, et al paraded across the financial/business media over this past week – you had a good week. The narrative of ‘earnings beats’ together with the so-called ‘relief rally’ emanating via the French elections helped propel the argument.
    However, if one (once again) peered passed the headlines of Non-GAAP reporting alchemy that would make Issac Newton envious one could clearly see that all was not ‘gold.’
    Both Amazon, and Alphabet (aka Google) beat handily, and yet, a few questions emerged via my reasoning. First:
    Has Google Ad revenue benefited from an increasing advertising pie? Or, are we seeing the first hints of rotation from platform to platform as advertisers dump one for another in a desperate attempt to obtain some form of return for their social or digital ad dollars?
    It’s possible it could be the latter, and if so it spells ‘it’s different this time’ just like it has before. i.e., circa early 2000.
    The reasoning for this is simple: Twitter.
    As I have stated on more occasions than I can count, the one company to watch for clues into what is the entire ‘tech’ or ‘Silicon Valley’ health of the ‘ads for eyeballs’ model is Twitter. And this once songbird of everything that was/is ‘The Valley’ did something that is the anathema of what is presumed to be the ‘holy of holies’ metric for the entire genre. To wit:
    It reported a surge in ‘ad engagement.’ They increased their monthly active users to 328 million, up 7 million beating expectations. And this resulted in a first ever 8% LOSS of advertising revenue.

    This post was published at Zero Hedge on May 2, 2017.

  • No Roads Needed: Google-Backed Flying Cars For Sale By End Of 2017

    Ever wanted to ride a flying drone? Well, if you’ve got the money, you might get the chance to by the end of the year.
    ABC News reported Monday that a Google-backed Silicon Valley startup has just completed testing on an ‘octocopter’ that’s all-electric, can seat one person, and fly up to 15 feet in the air.
    The company, Kitty Hawk, says all the necessary legal steps have been taken, and the Kitty Hawk Flyer – designed only for use over water – is just about ready for production. The company says it will begin selling the Flyer this year.
    ‘You don’t need a pilot’s license, and you’ll learn to fly in minutes,’ the company said in a statement, adding that the machine is ‘safe, tested and legal to operate in the United States in uncongested areas.’

    This post was published at Zero Hedge on Apr 27, 2017.

  • This bubble finally burst. Which one’s next?

    Like so many other high-flying Silicon Valley startups, Clinkle was supposed to ‘make the world a better place’.
    Founded in 2011 by a guy barely out of his teens, the company picked up early buzz after proclaiming they would disrupt mobile payments. Or something.
    Silicon Valley venture capital firms were apparently so impressed with the idea that they showered the company with an unprecedented level of cash.
    (Given that investing in an early stage company is high-risk, investors might provide a few hundred thousand dollars in funding, at most. Clinkle raised $25 million.)
    The company went on to burn through just about every penny of its investors’ capital.
    There were even photos that surfaced of the 21-year old CEO literally setting bricks of cash on fire.
    At the end of the farce, Clinkle never actually managed to build its supposedly ‘world-changing’ product, and the website is now all but defunct.
    This is rapidly becoming a familiar story in Silicon Valley.

    This post was published at Sovereign Man on April 26, 2017.

  • The Economy Is Imploding At A Faster Pace & You Need To Be Prepared – Episode 1248a

    The following video was published by X22Report on Apr 6, 2017
    Initial jobless claims magically surge. The real estate market is falling apart, reality and manipulated stats are going there separate way. Venture Capitalist in San Fran and Silicon Valley are drying up and office space is empty. 50% of Americans don’t have $500 in their account. NY Fed ready to bring down the economy. SocGen says the Feds actions are going to have the opposite effect. Everytime the Fed mentions overvalued the stock market comes down.