ted – Pertinent Observations

NED Talks – First Edition

Back in 2009, the TED conference was held in Mysore. If there can exist TED Talks, I reasoned, there is no reason why we cannot have NED talks. And as is my wont, I had shot off a blog post in April 2009, announcing that the first NED Talks would happen in October 2009. Some of the points I had made in that blog post are interesting – I had said that it would be a day long (or even weekend long event), speakers would be “mango people”, and that talks would be uploaded on Youtube. I had no clue what would happen at the NED Talks.

Much happened though between April 2009, when I wrote that blog post, and October 2009, when the first edition of the talks were to happened. I moved jobs. I moved cities. My mother died. Life changed way too much for me to be bothered about NED Talks any more. And so I did what came naturally to me – put NED!

On several occasions in the last five years I’ve thought of “finally organising” the NED Talks, but they never came to fruition for a multitude of reasons, the most important of them being NED itself! I would think I would organise it, start thinking about how I would organise it, and then get confused, and then get into doubt, and thus, postpone! I went through several cycles of this until last month.

It was a day before the wife was to return to Bangalore for her winter holidays, and she suggested that we do the talks while she is in town. She was in luck that I was prepared to listen to her that day. And the idea took root. A guest list was quickly prepared. One guest was quickly signed up and with his help we froze what seemed like a convenient date. And by the end of the day, the first set of invites had been sent out!

The inaugural edition of the NED Talks took place last night, at our residence in Bangalore. There were a total of thirteen speakers, each of whom spoke for five minutes each. Both from our pertinent observations, and from the feedback we received from attendees, I think the event was a grand success. Like they say in Page 3 party reports, “everybody had a good time”.

The format was designed so as to be conducive to NED. One of the big barriers to hosting an event is to arrange for a venue. So we decided to do it in our own home. We didn’t want audience to put NED during the talks, so each speaker was allotted five minutes (though by my accounts most exceeded that limit). Getting professional video was NED-inducing, so we set up a DSLR on a tripod. Food came from the nearby Upahara Darshini and Gayathri Stores. Wine from Venus Wine Stores, also very nearby. The whole thing was set up such that there was no way for us to put NED.

And no one put NED. The talks were all excellent, and thought-provoking. Though none of them were “ideas that can change the world” as TED promises, they were all interesting. So we had a demonstration on different kind of knives, and an exposition on the enduring appeal of late 80s-early 90s Bollywood music – whose musical qualities leave much to be desired. Someone spoke about the importance of being shallow, and someone else on what makes someone interesting. There was a demonstration on the engineering behind consumption of certain herbal products! Thirteen speeches. All very well received.

This being the first edition there were the usual glitches. I had taken upon myself the quadruple role of emcee, DJ, photographer and videographer, which meant that the latter three didn’t receive much attention. So soft background music which was supposed to be played during talks were never played. Some talks were not captured on video at all, while others were only partially recorded (so we will only be putting up a montage of the talks on youtube rather than individual videos). The same camera was being used for taking both photos and videos, which meant not many photos were taken!

Post the event one NED-inducing activity is to make a montage of the videos. We’ve put enthu and done the first part which is cutting up interesting sections from different videos. Now we have the job of stitching them together. Hopefully we’ll upload pretty soon!

Nevertheless the wife and I are extremely kicked that we managed to pull this off. That the much-awaited NED talks finally happened. And now that they’ve happened, we hope to have them on a regular basis. Given that they’ll continue to happen in our drawing room, they’ll remain invite-only events, though.

Jai to NED!

IPOs Revisited

I’ve commented earlier on this blog about investment bankers shafting companies that want to raise money from the market, by pricing the IPO too low. While a large share price appreciation on the day of listing might be “successful” from the point of view of the IPO investors, it’s anything but that from the point of view of the issuing companies.

The IPO pricing issue is in the news again now, with LinkedIn listing at close to 100% appreciation of its IPO price. The IPO was sold to investors at $45 a share, and within minutes of listing it was trading at close to $90. I haven’t really followed the trajectory of the stock after that, but assume it’s still closer to $90 than to $45.

Unlike in the Makemytrip case (maybe that got ignored since it’s an Indian company and not many commentators know about it), the LinkedIn IPO has got a lot of footage among both the mainstream media and the blogosphere. There have been views on both sides – that the i-banks shafted LinkedIn, and that this appreciation is only part of the price discovery mechanism, so it’s fair.

One of my favourite financial commentators Felix Salmon has written a rather large piece on this, in which he quotes some of the other prominent commentators also. After giving a summary of all the views, Salmon says that LinkedIn investors haven’t really lost out too much due to the way the IPO has been priced (I’ve reproduced a quote here but I’d encourage you to go read Salmon’s article in full):

But the fact is that if I own 1% of LinkedIn, and I just saw the company getting valued on the stock market at a valuation of $9 billion or so, then I’m just ecstatic that my stake is worth $90 million, and that I haven’t sold any shares below that level. The main interest that I have in an IPO like this is as a price-discovery mechanism, rather than as a cash-raising mechanism. As TED says, LinkedIn has no particular need for any cash at all, let alone $300 million; if it had an extra $200 million in the bank, earning some fraction of 1% per annum, that wouldn’t increase the value of my stake by any measurable amount, because it wouldn’t affect the share price at all.

Now, let us look at this in another way. Currently Salmon seems to be looking at it from the point of view of the client going up to the bank and saying “I want to sell 100,000 shares in my company. Sell it at the best price you can”. Intuitively, this is not how things are supposed to work. At least, if the client is sensible, he would rather go the bank and say “I want to raise 5 million dollars. Raise it by diluting my current shareholders by as little as possible”.

Now you can see why the existing shareholders can be shafted. Suppose I owned one share of LinkedIn, out of a total 100 shares outstanding. Suppose I wanted to raise 9000 rupees. The banker valued the current value at $4500, and thus priced the IPO at $45 a share, thus making me end up with 1/300 of the company.

However, in hindsight, we know that the broad market values the company at $90 a share, implying that before the IPO the company was worth $9000. If the banker had realized this, he would have sold only 100 fresh shares of the company, rather than 200. The balance sheet would have looked exactly the same as it does now, with the difference that I would have owned 1/200 of the company then, rather than 1/300 now!

1/200 and 1/300 seem like small numbers without much difference, but if you understand that the total value of LinkedIn is $9 billion (approx) and if you think about pre-IPO shareholders who held much larger stakes, you know who has been shafted.

I’m not passing a comment here on whether the bankers were devious or incompetent, but I guess in terms of clients wanting to give them future business, both are enough grounds for disqualification.

Introducing: NED Talks

I suppose a number of you have heard of TED Talks (ted.com). You might have seen it in the news recently, for it is going to come to Mysore sometime later this year. TED talks are available online (on the ted website), and are in general extremely informative and entertaining.

When TED can have talks, can NED be far behind? So I, along with Kodhi, hereby invite you to the first of the series of NED talks. The beauty of NED talks is that nothing is known yet. So far we’ve been putting NED to figure out what we are going to have as part of those talks. However, wee are confident that we won’t put NED to organize the talks themselves.

So here are a few salient features. You might notice that nothing is concrete yet, heck nothing is even the steel framework yet. I request you to add your own concrete to this, and put in your ideas.

The first of the series of NED talks is likely to be held in Bangalore in October 2009. I have picked the date randomly, and is subject to change.
The first of the series will be a day-long event. However, if registrations exceed our expectations, the event might last a whole weekend.
We have no clue what is going to be there as part of these talks. We know that it is going to be a bunch of mango people (aam junta for the uninitiated) who will be talking, but we dont’ know what they are going to be talking about. We don’t even know who are the people who are going to be talking, though I’m sure I’m going to be one of them.
If you have any bright ideas as to what we can do at the NED talks, please let us know.
NED is not rich enough to put talks on its own website, hence the videos will be put up on youtube. However, we cannot promise the same quality that the TED videos.
Please note that NED talks are only loosely inspired by TED talks, and has nothing to do with the latter. I also wish to clarify that NED talks are not a spoof of TED talks.
At the risk of repeating myself – if you have any bright ideas as to what can be done at the NED talks, plis to be cantributing.
Oh and at the risk of repeating myself again – we are really serious about organizxing the NED talks. And we promise that we won’t put NED for NED talks.