May 12 - Jeffrey Goldfarb and Richard Beales discuss an alternative way of looking at the potential Apple/Beats deal and high tech valuations – through the eyes of venture capitalist Marc Andreessen.
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There's a lot of buzz on Friday about apple potentially buying beats the headphones maker in streaming service. There's a lot of hype about a new hip hop billionaire what it means for Carlyle would make you're making a lot of money. But there's another way to look at this which is through the eyes of marketing Dreessen who is sort of a new. And Dreessen comics really about totally tech deals work it is talk us through Slobodan -- venture capitalists in Silicon Valley founder of -- under Aventis and -- that. The firm -- -- Netscape -- candidate. Guys took a lot recently about valuations he doesn't subscribe that in -- and you take bubble. I mean he wouldn't in a way as well as buying companies as businesses selling them saying he -- higher prices -- -- -- -- -- is -- when we get into this conversation -- little -- But he did they make some points that that resonated away and hit his one that relates to Applebee's which is this idea that. You know you can go away value a company like beets or a target like. You know as the look at his face because -- -- -- and look we're gonna put they're. Future cash flows on a certain multiple discount -- -- value kind of insane went traditional valuation saying forget that at least in some cases because. Let's say apple accumulate apple buys beats the impact that apple can. Can have them make -- has on its business is followed things these -- militants that. That it is that if apple with the way he uses that tactical can attach -- business to its own. Apple -- -- huge sell sold 264. Million devices of one sort or another and it's slow fulfilled their high end devices that are much like Apple's products that essentially there may be one intend people -- isn't. Clinton had until we have whatever it is an important already by this from the Apple -- but if if it's sort of built in the package. The value beads could be disarming totally different and much loves I think you would calculate just looking -- -- so let's say in what another BC Europe. Public market invest it would be I mean the problem of this I guess is it's not. On -- revenue synergies which we -- premieres at least take a very skeptical I do -- it's pretty much a revenue synergy -- like model exactly so what killing -- another you you get Colson and he's right sometimes you save -- because we tend to view those as. You know if people really think they can do as we try to keep it on and off the event that you can cut costs that I've has shown history showed that you could get those things are easier to do what problems. More deserving of skepticism when he -- say well those companies put them together will be able to sell more products right and that's exactly what this is we intend to -- -- as revenue synergies and that's exactly what this thesis is that. You can create revenue -- now it's a little bit -- BC will sometimes it'll happen. But it's one of those things -- one in 101 in twenty above the rest. Is still gonna -- what roadways so it doesn't deserve full value it's really the point all right well we'll keep an eye on how injuries economics works for other tech deals as well and we'll be back with more breaking -- tomorrow.
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