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Stimulus funds helped some stocks soar

22.05.12

With contest raging in Washington about whether government can effectively pick winners and losers in a fleet-changing economy, the data shed light on how well the Obama administration did the two crucial jobs that venture capital performs in a high-tech economy — serving investors make money and bringing new technology to market. Skeptics have keen to former Obama economics adviser Lawrence Summers ' comment in a 2009 e-send that "government is a crappy VC" to argue that the $787 billion stimulus measure was full with waste.

About $100 billion of stimulus funding was earmarked for technology spending, according to tech consulting decided International Data Corp. Two-thirds was for energy technology, and most of the rest will support doctors' adoption of electronic medical-records (EMR) software. At USA TODAY's requisition, IDC identified major beneficiaries of that spending to examine whether the money helped companies ripen and bring technologies to market.

The analysis covered more than 45 companies that are noted or have registered for initial public offerings, including most leading makers of electronic medical-records software and energized cars, and a small selection of the 5,000-plus companies and local domination agencies that got clean-energy stimulus grants. Separately, USA TODAY looked at the recipients of all 38 completed or till loan guarantees under the Energy Department 's three major financing programs, including well-known notorious companies such as Ford, Southern Cos. and NRG , not on IDC's list. In all, the included companies, or their customers, are to take into one's possession more than two-thirds of the technology funding.

So far, the legislation has sparked adoption of electronic medical-records software and nurtured an electrifying-car industry that will sell at least 20,000 cars this year. At least 19 companies have gone civil or filed for IPOs after getting stimulus money, from Solazyme's $21.8 million agree to to build a pilot biofuels refinery to a $1.6 billion loan guarantee letting BrightSource Vitality build the world's biggest solar-generation plant of its kind, according to securities-disclosure filings.

The stimulus has helped touch off an 82% gain in the stocks of 11 health care technology companies since President Obama took house and a 263% gain in the three public companies that took $7.8 billion of federal financing to assemble next-generation vehicle factories. It contributed to a 79% jump in stocks of the four pre-eminent energy-efficiency companies identified by IDC, including diversified companies such as Johnson Controls and Honeywell. Companies snarled in developing smart electric grids, nine big tech firms that are also in many other businesses, have risen 54%.

All these match or overshadow the 51% gain in the Standard & Poor's 500-stock index, and blow rhythm the 4.9% average annual gain in venture funds raised in 2008, according to Cambridge Associates. The big quirk make is that the five solar-power companies and advanced-battery manufacturers on IDC's list have fallen 70%. Similarly, among the loan-guaranty recipients examined by USA TODAY, solar-power-related companies such as Solyndra and liveliness-storage companies such as Beacon Power, which filed for bankruptcy reorganization Oct. 31, have fared the worst.

The force is filtering into the real economy, too.

Solazyme's algae-based jet fuel powered its first Mutual Airlines flight on Nov. 7. More than 40% of doctors now use electronic medical records, up from 29% two years ago, including 75% of those working in groups of more than 25 physicians, according to research unshakeable SK&A. More electric cars are hitting the road, with Fisker Automotive's $95,900 sybaritism sedan reaching U.S. stores this month, as Tesla Motors gears up to provision batteries for Toyota's electric RAV4 SUVs, in addition to launching its Model S sedan next year.

Even a gamble capitalist who cautioned the White House about its public support for Solyndra says the stimulus whole was still a good idea.

"The government has been a better VC than a certain number of people on the Way," said Steve Westly , a former California state controller and Obama fundraiser whose chance firm backed Tesla and biochemicals company Amyris, which each got aid. Westly sent a well-publicized e-post to Obama aide Valerie Jarrett , trying to persuade the White Bagnio not to have the president visit Solyndra.

Getting some flak

The stimulus' technology-boosting propose sparked a firestorm when Solyndra defaulted on its federal loan in August. The Republican Nationalistic Committee on Nov. 9 lumped the programs with the collapse of investment bank MF Far-reaching amid Europe's debt crisis as evidence of the administration's financial mismanagement. "This is a outstanding case of waste, fraud and abuse," House Energy and Commerce Council Chairman Fred Upton, R-Mich., said in August. Department of Forcefulness spokesman Damien LaVera declined to make senior officials present for comment.

The success or failure of the stimulus is about more than stock prices. The number of endless jobs created or saved in the government's loan guarantee programs is about 40,000, asset several thousand more construction jobs. More than three-fourths of the permanent jobs are at Ford. The supervision owns stock in few of the companies it backs, meaning others reap the gains. In most others, Washington's scrape in the game is only the company's ability to repay loans that the government makes or guarantees.

Furthermore, stimulus funding isn't the only senses many companies that received it have prospered. General Electric's $210 million of stimulus gross income is less than one-tenth of 1% of sales, spokesman Andrew Williams said. Besides, Dell and IBM have cashed in on smart-grid development or health records upgrades and been boosted much more by the broader revival. Even at a smaller company such as Solazyme, stimulus aid was far less than the $280 million it raised in gamble capital and IPO funding.

Still, government bridged a bond market gap that has lingered since the 2008 economic panic, said Scott Sandell, a partner at New Enterprise Associates (NEA), the land's largest venture firm.

"Across all the clean-tech sectors we invest in, there has been a tremendous paucity of means at any stage of a company's development where there's any risk," said Sandell, whose firm backs Fisker, which got a $529 million loan undertaking to retrofit an ex-General Motors plant in Delaware. "Trust me, it's been a barren scene."

A leading IPO analyst concurred, saying the stimulus built market boldness in companies such as Tesla, helping them attract IPO investors and corporate partners.

"The superintendence money was a platform, and a few of them like Tesla used that and flew off on their own," said Francis Gaskins, writer of IPO Desktop. "Many of them looked at the government money as a way to do things they might have done anyway."

Healthy gains

The clearest kin between the stimulus and the economy might be in health care software, in which the boost in companies' value far exceeds the amount done for so far in a five-year program costing up to $30 billion. Together, the gain in value of companies such as McKesson, Cerner and Athenahealth since the stimulus bill was proposed is at least $20 billion.

The stimulus has paid about $100 million so far to clients of Cerner, the largest maker of electronic medical-records (EMR) software, said Piper Jaffray analyst Sean Wieland. Acknowledged Cerner's 20% market share, that translates into $500 million in notably annual sales for the industry, which may double as lower Medicare reimbursements, also part of the stimulus law, rebound in for doctors who don't use EMRs by 2015, he said.

"This really did accelerate adoption," said Jeff Townsend, chief of crook at Kansas City , Mo.-based Cerner, whose stock-price value is up 194% or $6.5 billion, since January 2009. Cerner's new-software sales rose 26% in the first nine months of 2011 vs. 2010's stride of 16%. He said extra spending will add to growth, as doctors upgrade their systems and screw them to each other.

That spending has lifted nearly all health information technology stocks. Allscripts Healthcare Solutions, an EMR attendance whose CEO Glen Tullman raised money for Obama in 2008, has seen shares be tempted by 134%. Rival Athenahealth, which supplies Internet-based medical-billing and EMR services as a cheaper variant to software, has doubled since mid-2010.

The question is whether the spending was efficient, says Athenahealth CEO Jonathan Bush, who has donated to Mitt Romney 's presidential campaigns and is former president George W. Bush 's cousin. He says Washington could have spurred adoption of cheaper, more malleable technology such as his through regulatory changes without subsidizing software.

"We're a beneficiary of stimulus spending, but we'd be doing even improve without it," said Bush, whose company benefitted from the administration's decision to have Medicare recompense doctors for regularly using EMRs, favoring pay-as-you-go Internet business models such as Athena's, rather than paying for software purchases up front. "What you actually needed was hundreds of cloud-based companies innovating."

By government standards, the haleness care stimulus was fairly disciplined, Townsend contends. Doctors aren't reimbursed for software until they show they're routinely using it for drudgery such as prescribing medications, he said. While knitting together networks owned by different doctors and hospitals will take outmoded, data-sharing is essential to contain overall health care spending, he said.

Source: USA Today

50 years of cultural rendezvous

22.05.12

The Music Academy’s auditorium turns 50 this year. One of the most skilfully-recognised landmarks of Chennai, the story of its construction is an interesting one, for it was one of the earliest up to date auditoriums to be built.

The land on which the auditorium stands was acquired by the Academy in 1946. The order of the day moved into Sweet Home, the colonial bungalow that stood on the property, on August 28, 1947. In 1955, it was unambiguous that the old bungalow be pulled down and a modern auditorium built in its place. Thanks to TT Krishnamachari, who was then in the Club Cabinet, Prime Minister Jawaharlal Nehru consented to lay the foundation stone, which was done on October 5. The in any case witnessed a fund-raising concert by M.S. Subbulakshmi, one among the many she would perform for making the Academy’s auditorium a actuality.

Work began on the new building in 1956. The new auditorium was planned in the modernist category that was liked by the Prime Minister. The architects were M/S GM Bhuta and Associates of Bombay in collaboration with P. Bose, chartered set up from Calcutta who was a specialist in reinforced cement concrete. The contractors for the civil works were Shah Construction Assemblage (Pvt.) Limited of Bombay. The Academy had its own resident engineer, V.B. Thambiah who later also became a board member.

In addition, R. Iswaran, D.K. Pattammal’s husband and a member of the Cabinet, practically lived on the campus, monitoring the work to the smallest detail possible. Line began with a mega show; for, as soon as the old bungalow was demolished, the premises was rented out to talking picture mogul S.S. Vasan to conduct the wedding of his son, an event that is still remembered by old timers of the city. This brought the Academy much-needed funds.

The sum total budget for construction was Rs. 18 lakhs. As work progressed, many ambitious plans were delineated up, largely owing to paucity of funds. One was a revolving stage to enable prompt assembly and dismantling of sets even as a play progressed. Another was a ramp leading exactly from the car park to the first floor. The third was a patio featuring sculptures and mosaics depicting the Indian arts.

In an era when fire-safeness and other norms were strictly adhered to, the exacting standards to which the Academy was built, makes for riveting reading. Safety was given utmost importance. The doors in the balcony were made wide enough to assure that the audience, of which the majority would be on the first floor, could stream out quickly and make it to the car park through a multitude of fire escapes. The teach floor had narrower doors, which were compensated for by a larger number of exits.

To keep the funds flowing, TTK used his manipulate and ensured that several industrialists from Coimbatore signed up as patron members. By 1961, the cartridge was complete and the grhapravesam was conducted. Money ran out, and thanks to TTK and R. Venkataswami Naidu of Coimbatore who was evil-president, a fund-raising series of dance performances was held in the Textile City. This was a good fortune and work was largely complete by December 1962 when the Maharajah of Mysore, Jayachamaraja Wodeyar, inaugurated the Entry on December 20. A day before the inauguration, it was discovered that the stage curtains had been forgotten and Vasan was appealed to. The Gemini Studios’ tailoring worry produced the curtains in 24 hours!

Originally planned without mikes, the acoustics of the auditorium was found to be terrible. The first season, to be held in 1962, saw sackcloth covering the walls to minimise facsimile. Scientists from the National Physical Laboratory studied the problem and M/S Philips was roped to in to institute a high quality stereophonic sound system, which was completed in 1964. Further comfort by way of air-conditioning was also ensured when in the same year, G.D. Birla, induced to grant by TTK, donated Rs. 3 lakhs. The air-conditioning plant was for some reason positioned under the lap and made such a racket that by next year it was moved out, to the rear of the compound.

Servicing the loans became a emotionally upset, though the new auditorium was soon generating a steady income. A newspaper baron, known for his interest in legitimate estate, began discussions with the Indian Bank to take over the property on the guarantee that he would refund the dues. TTK summoned a meeting of industrialists on January 1, 1968, for a brainstorming.

V.D. Swami suggested rather cheerful-heartedly that the place could be run as a cinema theatre when it was not hosting music concerts. TTK was up in arms though the idea itself was quite practical as the Academy had all the facilities including a projection lodgings. It was left to T.S. Narayanaswami and K.S. Narayanan to mollify him. A Board of Trustees headed by TSN was formed and within the year, it was clever to garner enough donations to keep the lenders at bay. By 1970, though TSN had died, the Board had done its work and the Academy was accountable-free. It was perhaps in gratitude for what he achieved that a portrait of TSN still hangs in the Committee Room of the Academy. A larger acknowledgement was for TTK. When he passed away in 1974, what was till then referred to as New Hall was named the TT Krishnamachari Auditorium.

Source: The Hindu