Jack Ma says his life has gotten much worse since last year’s IPO made him the richest man in China. “If I had another life,” he told the Economic Club of New York yesterday, “I would keep my company private.”
That’s a sentiment he shares with most of his American counterparts. Our survey of Fortune 500 CEOs this year found that 84% of them agreed with the statement: “It would be easier to manage my company if it were a private company.”
One reason for that may be that if you are a private company, you get to make up numbers. The Wall Street Journal reports this morning that many startups are wooing investors by touting things like “bookings,” “billings” and “annual recurring revenues” that bear little relation to actual revenues under generally accepted accounting principles. The Journal compared sales figures and projections made by 50 tech companies when they were private with financial results reported post-IPO for the same period, and found a $760 million gap.
Maybe that’s why they’re called unicorns. Enjoy the day.
• Spotify valuation tops $8 billion
Music-streaming service Spotify secured a $115 million investment from Swedish phone company TeliaSonera, at a valuation that is twice what it was worth when it raised money at the end of 2013. The move to raise more funds comes as the battle for music listeners intensifies, with Apple this week officially confirming it will debut an updated competing streaming offering. Bloomberg
• China rejected from stock indexes
China badly wants the nation’s stocks to be included in the indexes followed by global investors. It keeps running into some great walls. The country this week was rejected by MSCI, which said Chinese regulators hadn’t don’t enough to open their market to foreigners. It has faced other roadblocks from big fund managers like Fidelity and Vanguard who say China hasn’t passed enough reforms for access. Fortune
• Fed’s ceasefire may soon end
The Federal Reserve has enjoyed a long period of public harmony for the past four years. That could come to an end next week. The Fed hasn’t gone more than two meetings in a row without a dissenting vote since the first four meetings of 2011. But with the Fed poised to face critical decisions in the coming months regarding a potential increase in the benchmark federal funds rate, consensus may be hard to maintain. WSJ
• Tech industry’s unusual language
Run rate. Billings. Bookings. These are the terms that tech startups use to tout revenue figures that some argue are inflated, though it is perfectly legal and doesn’t violate securities rules because the companies haven’t sold shares in an initial public offering. Many tech startup executives say these nontraditional figures better show how their firms lure customers and beat competitors, but skeptics say the it is inflating valuations. WSJ (subscription required)
Around the Water Cooler
• What’s next for Apple CarPlay
What Fortune found interesting about Apple’s CarPlay, which will only start to roll out in 2016 model vehicles, is not the fact that the system is going wireless but that it will support apps by auto makers. But the hitch? Users won’t be able to control the car’s features without leaving Apple’s connectivity platform. A big question remains: will car companies go for it? Fortune
• American Apparel sets $1 billion goal
The controversial apparel retailer has outlined plans to tone down sexual innuendo in advertisements and improve its operational management with plans to boost annual revenue from around $600 million today to $1 billion. It also plans to reduce the variety of items it sells by 30% . Fortune
• Tesla to go vegan?
A pair of shareholders at Tesla’s annual meeting urged the auto maker to stop using animal-sourced materials for interior components, such as leather seats. The board stood against such proposals, though an animal-rights group later asked CEO Elon Musk is it could help the company find vegan alternatives. Musk’s response? “We’ll look into it.” Bloomberg
• Apple’s typographical change
After two years as Apple’s typographical identity, the gadgets maker is replacing Helvetica Neue with San Francisco as the default font for new operating systems that are debuting this fall. San Francisco is the first in-house typeface the company has designed in more than 20 years. And it was likely designed to help legibility on the Apple Watch. Wired