Spark Capital an Early Twitter Investor, Raises $450M For Fourth Fund

“Boston-based VC firm Spark Capital is announcing its fourth fund this evening, raising $450 million for the firm’s biggest investment fund to date. Spark, who raised $360 million for its last fund, now has $1.4 billion under management. Partner Bijan Sabet tells us this fund was oversubscribed.

Founded in 2005 by Todd Dagres, Santo Politi and Paul Conway, Spark Capital invests across a broad group of areas in technology, including advertising and monetization, commerce and services, cloud and infrastructure, social, mobile and content. The portfolio includes Twitter, Tumblr, Foursquare, and OMGPOP (sold to Zynga). Most of the firm’s investments are early stage, but the range varies from $250,000 in seed funding or $25,000,000 in late-stage financing.

In 2005, Spark raised $260 million initially, and then for its second fund, raised $360 million in 2008.

Why the bigger fund this time around? Sabet explains that a larger fund gives the firm more flexibility in not only investing at the early stage but also putting in money at later stages, if necessary. “We like supporting companies throughout their life,” he says. “We want to support our companies properly.”

Sabet adds that the firm is spending more time with and investing in more companies in New York and San Francisco, and additional money gives the firm the flexibility for additional investments in new startups. He adds that 75 percent of the firm’s investments are for early-stage rounds….”

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Prior: 393k, Market Expects 381k, Actual 437k

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“Apple was issued a couple of interesting new patents today (spotted by AppleInsider), including one that could make an iPhone aware of changes in a user’s situation, and alter phone settings accordingly. That would make for a mobile phone that might be able to automatically switch to silent mode when in a movie theatre, for instance, or which could wake from sleep upon being pulled out of a pocket.

The patent was originally designed to apply to iPod devices way back in the days of the click wheel controller, but it has been amended to account for wireless mobile devices like the iPhone. The whole point of the invention is to limit GUI requirements for certain functions, and to instead use a device’s sensors, combined with a “situational awareness module” to trigger changes to things like audio settings, music playback and more.

It’s a tech that sounds like it could easily go wrong; you obviously wouldn’t want your iPhone screen locking when a set of conditions are met that, while similar to another situation, actually isn’t the same one. But you can also see the advantages: Already, Siri can be set to activate when you bring the iPhone to your head. Imagine if other functions, like composing an email, could be auto-triggered via similar functions, like gripping the phone with two hands horizontally as if to begin typing. And an auto-lock function when you slide your phone into a pocket would actually add a lot of convenience in the aggregate, even if it seems like a small thing at first.

Another patent issued to Apple today by the USPTO describes a way for iPhones to share their location data with secondary, external devices, or vice versa. The system could be used in tandem with a standalone GPS module to help your Wi-Fi-only iPod touch become a fully functional navigation device when you get into a car, for instance. But the more interesting potential behind this patent lies in how it might be applied to an iWatch….”

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If you agree please see a doctor….

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Watch The Clam

“Saks Inc.’s SKS +0.91% fiscal fourth-quarter earnings fell 45% due to higher expenses, even as revenue increased.

The luxury retailer previously warned it expected flat same-store sales and gross margin for the period, saying sales trends were soft for the first two weeks of November in the aftermath of superstorm Sandy.

Sandy affected about 55% of its total company store revenue base. Due to the storm and its severe flooding and power outages, 11 of the 45 Saks Fifth Avenue stores were closed from one to seven days, including the New York flagship, which was closed for two days.

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“As expected, the New York City flagship store sales lagged the company-wide performance for the quarter, due in part to the impact of Hurricane Sandy,” Chief Executive Stephen I. Sadove said.

Mr. Sadove said he expects the external environment to remain somewhat volatile. “There are several macro factors, such as higher tax rates on the more affluent and the unknown resolution of pending fiscal matters that could create additional uncertainty, particularly in the first half of the year,” he said….”

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“When United Parcel Service Inc. UPS +0.28% said last month that it was taking a noncash charge of $3 billion tied to its pension plan, the package-delivery giant blamed what might seem like an unrelated event: the downgrade last summer of several big banks by Moody’s Investors Service.

But the connection between the two incidents illustrates the complexities of calculating pension liabilities—and how little power companies have in keeping them under control.

During the current earnings season, companies including UPS, Boeing Co.,BA +0.96% Ford Motor Co. F +0.82% and Goodyear Tire & Rubber Co. GT -0.38%have disclosed yawning pension-fund deficits, even though they have plowed billions of dollars into their plans and strong stock markets have boosted their investment returns.

Across America’s business landscape, the gap between the amount that companies expect to owe retirees and what they have on hand to pay them was an estimated $347 billion at the end of 2012. That is better than the $386 billion gap recorded at the end of 2011, but the two years represent the worst deficits ever, according to J.P. Morgan Asset Management.

The firm estimates that companies now hold only $81 of every $100 promised to pensioners.

In general, everything happening on the liability side of the pension equation is working against companies. A big source of the problem: persistently low interest rates, set largely by the Federal Reserve….”

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“A federal judge on Monday ordered formerGoldman Sachs Group director Rajat Gupta to reimburse $6.22 million to the bank to help cover its legal expenses related to his criminal insider trading case.

Goldman had sought to recover $6.91 million from Gupta, and U.S. District Judge Jed Rakoff said the bank had proved it was entitled to 90 percent of what it requested.

Gupta is appealing his June 15, 2012 conviction and two-year prison term for leaking boardroom secrets to Raj Rajaratnam, the hedge-fund manager at the center of a multi-year U.S. government crackdown on insider trading.

Goldman had sought to recover the fees it had paid its law firm Sullivan & Cromwell in connection with the case and related matters, citing the federal Mandatory Victims Restitution Act, which requires restitution in some fraud cases.

Gupta had opposed making restitution but Rakoff, who presided over his criminal trial, said nearly all of what Goldman sought was a “necessary, direct, and foreseeable result of the investigation and prosecution of Gupta’s offense of conviction and thus well within the statute’s coverage.”

Rakoff said Goldman could also recover legal costs linked to a related U.S. Securities and Exchange Commission civil case against Gupta, and to the criminal case against Rajaratnam.

But Goldman did not deserve all it sought, the judge said…..”

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Some analysts have been warning for years about the shitty loans being issued in the auto industry. Even more worrisome is that these loans have been neatly tucked away into SIVs…

“More Americans fell behind on their auto loan payments in the last three months of 2012, a time of the year when some borrowers’ financial obligations temporarily take a backseat to spending on holiday shopping.

Beyond the seasonal increase, the late-payment rate on auto loans declined on an annual basis and remained near the lowest point in more than a decade, credit reporting agency TransUnion said Tuesday.

The trend comes amid a strong market for cars and trucks. Many Americans are moving to replace older vehicles after holding back on purchases for several years following the last recession….”

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“JPMorgan Chase became the latest Wall Street firm to scale back in an uncertain economy, announcing plans Tuesday to save $1 billion through various costs cuts and about 4,000 job reductions.

The bank, struggling to emerge from the shadow of a trading scandal known as the “London Whale” affair that dealt the firm ts biggest ever trading loss, also issued a stark warning about the rising costs of regulation.

A frequent critic of efforts to increase oversight on Wall Street, JPMorgan said that new red tape could cost up to 10 percent of market revenues. However, the financial services giant cautioned that the effects of the Volker Rule won’t be seen for at least two to three years. JPMorgan also said it plans to add 200 more branches by 2014.

The bank stated it would reduce headcount in its mortgage banking unit by between 13,000 to 15,000 by the end of 2014. Most of these employees are considered contractual and hourly workers, and not full-time, the bank said.

“The biggest challenges we face are from regulatory issues,” said Marianne Lake, JPMorgan’s CFO, speaking at CNBC’s Global CFO Council. She added that the planned cuts would be driven by savings in its mortgage unit, during a period when the U.S. housing sector has shown fairly steady improvement from the post- 2008 meltdown.

JPMorgan’s cost-saving efforts come at a time when its key rivals are also moving to adjust to a volatile global economy. Goldman Sachs is reportedly preparing a round of job cuts; meanwhile, beleaguered financial behemothCitigroupannounced its own massive restructuring plans last year…..”

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“Paying for your child’s education is a laudable goal, but may not be realistic for some parents who could wind up jeopardizing their own financial future in order to help put their sons and daughters through college.

Parents who are saving for college frequently raid retirement funds — or plan to do so — to pay their child’s skyrocketing tuition bills, according to a new study released today from the nation’s largest student loan provider Sallie Mae. More parents are currently saving for their retirement than for their children’s education, but these families often plan to draw from retirement savings to help cover the costs of college, especially as other goals — from building up a “rainy day” fund to increasing general savings — take priority. “The economy is putting pressure on families in terms of whether they’re saving, how much they’re saving and where they’re saving,” said Sarah Ducich, senior vice president for public policy at Sallie Mae.

The report “How America Saves For College” surveyed more than 1,600 parents with children ages 18 or younger and found half of parents said they were focused on college savings, while 60 percent were focused on saving for retirement. But if they have to choose, parents are opting to boost their retirement savings — 42 percent of parents who are not saving for college said they are saving for retirement.

The good news: More than three-quarters of those parents surveyed who are saving for college are also focused on saving for retirement.

The bad news: Many of those families who say they are saving for college also admit that they are doing so through their retirement fund. One-third intend to use these savings for college. The other two-thirds say that they would use their retirement savings to pay for college, only if necessary….”

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yoy up 6.8%..

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Contagion ?

“Citi’s currency guru Steven Englander weighs in on what we just saw in Italy.

This is the first European election in which voters didn’t do the right thing. Instead they gave surprising support to politicians who reject austerity and, in some cases, the euro. This could become a major problem if it proves contagious….”

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“Morgan Stanley is out with a simple note titled: Closing EUR longs.

That translates to English as: Dump your euros.

In the wake of the Italian election, Ian Stannard, head of Morgan Stanley’s European FX Strategy, says to use any rebounds in the euro as a chance to sell.

…the surprising Italian election results, which have increased the political uncertainty in Italy, will have broader implications for the EUR and currency markets generally, in our view. Hence, we would now look to use any EURUSD rebounds over the coming days into the 1.3150 area to close this long position, and await clarification/stabilisation of the political picture in Italy before re-entering bullish EUR strategies.

So what specifically is the issue?

Stannard puts it nicely. Essentially what’s kept Europe so calm over the last several months has been the ECB’s OMT program…”

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“WASHINGTON (AP) — Chairman Ben Bernanke will be pressed to clarify the Federal Reserve’s approach to the still-sluggish U.S. economy when he testifies to Congress this week.

Bernanke will give his semiannual report to the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

Lawmakers will likely question the chairman about the future of the Fed’s bond buying program, his view of the economy and his concerns about the budget impasse between Congress and the Obama administration.

Here are some issues Bernanke will likely face and his possible responses…”

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“(Reuters) – Goldman Sachs Group Inc will begin its annual job cutting process as early as this week, sources familiar with the matter said on Monday, with its equities-trading business bracing for bigger cuts than fixed-income trading.

The bank usually culls out the weakest 5 percent of its employees around now. But the cuts will likely be deeper in some businesses, particularly equities trading, where volumes and earnings are weak. The number of shares traded on major U.S. exchanges so far this year is down 7.2 percent.

Fixed-income trading at Goldman, which took big hits last year but has had better volumes this year, will likely see cuts of less than 5 percent, the sources said.

In totality, cuts across the company will be roughly in line with Goldman’s typical 5 percent culling and are not part of a bigger cost-cutting plan, one source said.

“As market activity has picked up in certain areas, we remain focused on prudently managing expenses and allocating resources to ensure we are best able to meet our clients’ needs and generate good returns for our shareholders,” said Goldman spokesman David Wells, who declined to comment on layoffs.

The cuts underscore how even as Wall Street shows some signs of recovering, banks are looking to thin their ranks to boost profitability.

Morgan Stanley, Bank of America Corp, Citigroup Inc, and UBS AG, have been cutting staff for the past few years, after revenue has been under pressure in multiple businesses. Regulations, meanwhile, are increasing banks’ costs….”

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“ATLANTA (AP) — Home Depot’s fiscal fourth-quarter net income surged 32 percent, beating expectations with help from strong U.S. sales and an extra week of shopping.

The nation’s biggest home improvement retailer also said Tuesday that it will buy back $17 billion of its common stock and boosted its quarterly dividend by 34 percent.

Its shares rose 98 cents, or 1.5 percent, to $64.90 in premarket trading.

For the period ended Feb. 3, Home Depot Inc. earned $1.02 billion, or 68 cents per share. That compares with $774 million, or 50 cents per share, a year ago. Analysts polled by FactSet expected 64 cents per share.

The chain said that the extra week in the current quarter increased its earnings by about 7 cents per share.

Revenue climbed 14 percent to $18.25 billion from $16.01 billion, beating Wall Street’s estimate of $17.72 billion.

The extra week added approximately $1.2 billion to the current quarter’s revenue.

“We ended the year with a strong performance as our business benefited from a continued recovery in the housing market coupled with sales related to repairs in the areas impacted by Hurricane Sandy,” Chairman and CEO Frank Blake said in a statement.

Revenue at stores open at least a year, a key indicator of a retailer’s health, increased 7 percent. In the U.S., the figure climbed 7.1 percent. The extra week is not included in these results.

This metric excludes results from stores recently opened or closed…”

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