Thursday, April 23, 2009

Should Lenovo buy IBM PCD?

Business school is interesting to me since there are always a lot of role-play opportunities. In the role play, we can be senior managers, outrageous employees, bankers, board members and so on. This week, my fellow classmates and me are bankers helping Lenovo bidding for IBM's PCD division during the synthesis seminar, one of the newly created classes in our class.

It's interesting to look back at the deal again, and debate among ourselves on whether Lenovo should buy the PCD division from IBM. There are definitely a lot of downside and risks in doing that. However, I can sense the excitement of Lenovo managers when they first thought about the deal. such a great opportunity to expand to the global market. From our analysis though, the risk is also pretty high. Even IBM can't make it profitable, and how can Lenovo do that considering the cost saving will be very limited. Is there any other good target needing less money than 2 billion plus? Sure, there are, though not glorious.

Financial Times made the M&A the front page on Thursday, talking about M&A market are coming back. However, how many of them will work? A perfect business model for me will be to grow organically step by step, and that's the way to build a long-term business. Oracle may be too rich to keep the $7.1 billion in its pocket, but is Sun a good choice? and how much synergy can it bring?

It's a crazy world now, and I believe cash is King, always.

Sunday, April 12, 2009

Is it a good time to start a company?

For some reason, I missed this post in my Google reader thread. But the comment is still up-to-date in my opinion. Enjoy.

To summarize, it is a good time to start a company if you can get funded. ha, quite a chicken and egg topic.

Saturday, April 11, 2009

Lucrative secondary market

Today, we talked about liquidity in the asset allocation class. A very famous professor, a veteran investor too, said that the reason that LP now want more liquidity is that they want to buy the cheap assets in the secondary market. A lot of people got caught in putting more weight on private equity and now has to offer at a huge discount.

Maybe a good time to start a distress debt investment vehicle?

Wednesday, April 08, 2009

Start a company in the valley or in China?

My friend Marc raised an interesting question a few days ago: start a company in the Valley or China? I personally have been struggling with this question for a long time. So here is my two cents. would love to hear the feedback.

Start a company in the Valley:

1. Good weather(save a lot of time)
2. Lots of investors
3. Lots of start-up peers
4. Lots of bright engineers inspired by the dream
5. Good life style(all super outdoor, good to your health)
6. Good food(Chinese food:))
7. Good Stanford alumni network(good for me)

Start a company in China
1. Cheap operational cost
2. big and potential market
3. Bright engineers but hard to be inspired by the dream
4. Good food
5. lack of entrepreneur with successful track record
6. Familiarity of the market and culture(that's just for me)
7. Decent family time(that's for me, too)