How the Money Flows
When the Internet was young, I too was young.
But there was a time in my childhood when I had no access to go online so I had to either play video games or watch TV.
For better or worse, I would stumble upon the CNBC channel at the closing bell (U.S. time) and inevitably I got exposed to Jim Cramer.
Over the years, Cramer has built his public reputation as a stock picker due, in part, to his show’s popularity where he achieves various degrees of volume pitches while aggressively pressing an assortment of buttons.
So, after college, where I may or may not have learned about economics, one of my first investing books was Cramer’s Confessions of a Street Addict:
“I couldn’t believe the sheer number of people who were coming online to talk and trade stocks every day. People seemed to get hooked on it. The Web seemed like the natural medium for me to communicate with others about my views — faster, simpler, and better.
At the beginning of 1996, I realized that no matter how exciting hedge fund management was, I was in early on what I thought could be an explosive idea: an online newspaper that reported and commented on stocks in real time. Why not give real-time news and analysis for a fee right through the Net?”
Because it was more of an autobiographical life account than “Hey, buy this stock right now!” I always had a good review of it
One chapter that I always recall was Cramer’s time founding his dot-com TheStreet.com and being overwhelmed by Wall Street’s crazy valuation when it finally went to IPO.
Since so many of his family and friends were shareholders, Cramer did as best he could to encourage them to sell the overvalued shares, which is fair to say may not have been practiced by founders of other tech startups.
If you look at TheStreet ($TST) on Google Finance, you will see its share price back in 1999 was over $450 per share.
Today, shares traded slightly north of $6 per share.
As one of the final relics of the dot-com boom and bust era, the company has agreed to sell its final stake for $16.5 million:
“It is doubtful whether Cramer, the high-profile anchor of CNBC’s ‘Mad Money,’ will stay with the firm under the deal. He’s been pulling in a hefty pay package in the $3 million-a-year range, a painful bite for a financial site that has struggled to find its footing in the viciously competitive market for business news.
Cramer gave notice of termination of his employment agreement earlier this week and now has 30 days in which to either walk or come to a new agreement.
The Maven is headed by digital entrepreneur Jim Heckman, a founder of Scout and a former top executive at Yahoo. It is primarily a digital distribution and tech platform that is used by 270 small to mid-size brands including History, Maxim, Yoga Journal, Ski magazine, and others that combined reach about 100 million consumers.
Heckman said The Street is expected to form the core of a financial vertical.”
Million, not billion.
And I still can’t figure out what the acquirer, The Maven, is or does.
In a week where Mary Meeker published her annual Internet Trends report where she gets everyone to read the same 300+ slides, it’s clear that the online world of investing is a couple of eras evolved past TheStreet.com:
I guess it’s time to be a kid again and play (or watch) more video games as Andreessen Horowitz may be suggesting:
“Stadiums packed to a capacity filled with screaming fans. Global audiences in the hundreds of millions. A multibillion-dollar economy. College scholarships for the top players. Talent agents. Professional teams with dedicated scouts. Beloved celebrities. Doping scandals. Are we talking about professional sports? Well, of a sort. We’re talking esports.
Esports is a global phenomenon with audiences comparable to or larger than those for traditional sports franchises. For example, more people watched last year’s League of Legends finals than watched MLB’s World Series, the NBA Finals or the NHL Finals.
After a16z Deal Analyst Bennett Carroccio walks you through the ‘up to the right’ charts, Frank Chen talks with a16z General Partner Andrew Chen and Deal Partner D’Arcy Coolican about what’s going on: why it’s happening now, how dramatically it’s shaped our culture, how the money flows, what the investing opportunities are, and what they are looking for in startups.”
After all, the 1990s were better than whatever today is.
As Confucius said, “We have two lives, and the second begins when we realize we only have one.”
