Killer Infographic: Twitter vs. Facebook IPO by the numbers

Facebook makes more than $472,000 a day while Twitter loses $71,000 a day. Here’s a closer look at the numbers behind Twitter (TWTR) and Facebook’s (FB) IPOs.

Here’s a look at the math behind Twitter (TWTR) and Facebook’s (FB) IPOs:

Feel free to share this graphic anywhere and everywhere. Here are the same numbers in text:

Twitter vs. Facebook Day 1 stock price appreciation:

  • Twitter: +72.6%
  • Facebook: +0.6%

Twitter vs. Facebook current market capitalization:

  • Facebook: $115 billion
  • Twitter: $22.6 billion

Twitter vs. Facebook total number of active users:

  • Facebook: 1.19 billion
  • Twitter: 232 million

Twitter vs. Facebook value per user (per Forbes):

  • Twitter: $110
  • Facebook: $98

Twitter vs. Facebook Q3 2013 Revenue:

  • Twitter: $168 million
  • Facebook: $2.016 billion

Twitter vs. Facebook Q3 Net income:

  • Facebook: $425 million
  • Twitter: -$64 million

That means Facebook makes more than $472,000 a day while Twitter loses $71,000 a day!

The Top 12 Best Biotech Stocks of 2013 and 2014

Biotech stocks can be unpredictable, but there are few that seem to have the consistency and growth to be worth the investment. Here’s my take on the top 12 Biotech Stocks on the market to date.

Biotech stocks can be unpredictable, but there are few that seem to have the consistency and growth to be worth the investment. Recent acquisitions, new products, and increased competition have every biotech company fighting to stay on top. Here are what we view as the top 12 Biotech Stocks:

Gilead Sciences, Inc. (NASDAQ:GILD)

Gilead Sciences is a research-based bio-pharmaceutical company that discovers, develops, manufacturers, and commercializes various prescription drugs. Their primary areas of pharmaceuticals include human immunodeficiency virus (HIV), AIDS, cardiovascular, metabolic and respiratory conditions, as well as liver diseases like hepatitis B and C. Gilead Sciences has operations in Asia, Europe, and North America and their product line includes AmBisome, Atripla, Cayston, Truvada, Viread, Eviplera, Emtriva, Hepsera, Letairis, Ranexa, Rapiscan, Macugen, Tamiflu, and Vistide. In January 2012, the Company acquired Pharmasset, Inc. and on February 8, 2013, its subsidiary, acquired YM BioSciences Inc. YTD: +63%

Amgen, Inc. (NASDAQ:AMGN)

Amgen creates, manufactures, and delivers innovative human therapeutics for a variety of uses. When it started in 1980, Amgen was one of the first biotech companies to develop safer and more effective medications using the latest technology. Amgen provided their investors with sizable gains last year, but a repeat performance this year is not as likely. Their first-quarter revenue fell short of their forecasts, but it is important to keep in mind that this is the first time in the last eleven quarters that Amgen failed to reach expected targets. YTD: +23%

Novo Nordisk (NYSE:NVO)

Novo Nordisk is a global healthcare company with more than 90 years of experience. The company focuses on new treatment for diabetes, as well as bio-pharmaceuticals and therapeutics for disorders associated with haemostasis, inflammation, and pancreatic cancer. They also manufacture protein delivery devices and systems for diabetes patients. Novo Nordisk joined forces with collaborating partners, CAT, CP Kelco, Novozymes, DONG Energy, the Danish Technical University (DTU) and the University of Copenhagen in February with the common goal of reducing energy consumption and the amount of raw materials used in biotechnological production. Novo Nordisk increased operating profit by 18% in the first quarter of 2013. YTD: +1.4%

AbbVie Inc. (NYSE:ABBV)

AbbVie is a research-based pharmaceuticals company that discovers, develops, and markets advanced therapies for a variety of common diseases like Parkinson’s disease, thyroid disease, kidney disease, Crohn’s disease, and human immunodeficiency virus (HIV). AbbVie’s extensive array of products includes Lupron, HUMIRA, Simdax, Vicodin, and Zemplar. So far, AbbVie biotech stock has experienced slow, but steady growth. However, this biotech stock has high-potential for significant growth in 2013. Last October, the company initiated a comprehensive Phase III program for hepatitis C virus genotype one that is sure to increase revenue. AbbVie and Alvine Pharmaceuticals (a leader in celiac disease therapeutics development) also announced they have entered into a global collaboration to develop a new oral treatment for patients with celiac disease. YTD: +28%

AstraZeneca (NYSE:AZN)

AstraZeneca focuses on six primary areas of therapeutics; cardiovascular, neuroscience, gastrointestinal, oncology, respiratory, and infectious. They create, manufacture, and distribute over 50 different prescription products including Brilinta, Diprivan, Nexium, Sensorcaine, Xylocaine, and Zomig nasal spray. AstraZeneca experienced a big boost at the end of the last quarter for 2012 when the demand for the new heart drug Brilinta skyrocketed from $38 million to $51 million. Their revenue and stock recently dropped in the first quarter of 2013, but the right acquisition could quickly turn things around. YTD: +6.9%

Celgene Corporation (NASDAQ:CELG)

Celgene is a global bio-pharmaceutical company focused on the discovery, development, and distribution of products used for the treatment of various immune and inflammatory disorders, as well as several types of cancers. The products they distribute include Arbaxane, Pomalyst, Istodax, Thalomid, Revlimid, and Vidaza. They generate $5.5 billion in revenue. Celgene released data from its ongoing Phase III trial of Apremilast earlier this year, which shows the drug successfully reduces psoriatic arthritis symptoms by up to 20% compared to the placebo. This should continue the upward trend of Celgene’s biotech stock. YTD: +73%

Biogen Idec Inc. (NASDAQ:BIIB)

Biogen Idec offers various treatments for different cancers, autoimmune-inflammatory diseases, and multiple sclerosis. Their pharmaceutical products include Avonex, Fumaderm, Rituxan, and Tysabri. Biogen’s biotech stock has quickly risen 34% from its February $155.40 flat-base buy point and has experienced consistent growth in their EPS (earnings per share) for the past eight years. Their success is estimated to continue with more than 20% gains for 2013 and again in 2014. YTD: +54%

Takeda Pharmaceutical Company Limited (TYO:4502)

Takeda Pharmaceuticals manages the research and development of products to treat patients who suffer from cardiovascular disease, diabetes, prostate cancer, and gastroenterology. Their product line includes Actos, Amitiza, Benet, Enbrel, Prevacid, and Uloric. Takeda recently announced that it would be acquiring Inviragen (a bio-pharmaceutical company specializing in vaccines for infectious diseases). Many investors feel this will drive the stock upwards since it strengthens their position and aligns them with a world-class leader in the fight against dengue. Dengue is a serious mosquito-borne illness that threatens the lives of nearly half the world’s population. YTD: +21%

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA)

Teva Pharmaceutical is the largest generic drug manufacturer in the world and specializes in medications to treat respiratory disorders, central nervous system diseases like Parkinson, chronic lymphocytic leukemia, and pain relievers for muscle spasms in musculoskeletal conditions. The company’s biggest-selling drug is Copaxone for multiple sclerosis, which is expected to face extensive competition from a recently launched alternative from Biogen Idec. Teva is also due to launch a new product line later this year which includes a generic version of Amgen anti-infection drug Neupogen. YTD: +10%

Allergan, Inc. (NYSE:AGN)

Allergen is a healthcare company that discovers, develops, and commercializes various medical devices, biologics, over-the-counter consumer products, and a diverse range of pharmaceuticals. One of their most well-known products is Botox, but they are also providers of the increasingly popular adjustable gastric banding system, LAP-BAND. Allergen’s other products include Restasis, Tazorac, and the Refresh brand of artificial tears. Allergan’s growth has been recently started to slow down. Allergen however is a relatively stable biotech stock. YTD: -1.4%

Valeant Pharmaceuticals International Inc. (NYSE:VRX)

Valeant Pharmaceuticals handles the development and marketing of medications used in the fields of dermatology, neurology, and infectious diseases. In March of 2012, Valeant acquired a 19.9% minority equity investment in Pele Nova Biotecnologia S.A and in April of this year, they acquired the entire share capital of Obagi Medical Products Inc. These are both strong signs that this is a company focused on growth and expansion. Their revenue also rose significantly this year and is almost at $1.04 billion. YTD: +52%

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Regeneron is a bio-pharmaceutical company that invents, develops, manufactures, and distributes medicines for the treatment of several different serious disorders. They produce Eylea for neovascular macular degeneration, Arcalyst injections for Cryopyrin-Associated Periodic Syndromes (CAPS), and Zaltrap for metastatic colorectal cancer. Eylea, in particular, has been a factor in their positive gains. The company has been on a consistent upswing, reporting total revenues of $440 million compared to the $232 million generated during the corresponding quarter of 2012. YTD: +56%

ETFs explained in pictures

The world’s simplest and most straight-foward explanation of ETFs.

Here’s the world’s simplest and most straight-foward explanation of ETFs:

Ready to start trading ETFs? Check out my post on the Top 10 best gold and silver ETF funds.


Top 10 new investing books for 2011

Here are 10 new investment books that should help you prepare for the coming economic turmoil, whether it be deflation, 10 percent inflation or a complete re-structuring of the global financial system.

If you’ve been reading my blog for any length of time, you should have a sense that I’m worried about the direction of our economy, as well as the world economy. I’m not a complete pessimist, though. If you’re willing and able to put work into protecting the capital you’ve accumulated, you should be able to whether the coming economic storm.

To do that, though, you’re going to need a lot more than a stock brokerage account. You’re going to need to get educated about what’s going on behind the scenes in the business world and at the Fed. Here are 10 new investment books that should help you do that:


1) Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown.
The new and updated second edition to Aftershock, the authors have expanded the book with forecasts for 2012 as well as an in-depth break-down of the current economy. They focus heavily on inflation, which they predict will rise to 10 percent in two to three years.


2) (**Preorder Only**) The Great Crash Ahead: Strategies for a World Turned Upside Down.
Famed financial newsletter writer Harry S. Dent, Jr. argues that we’re due for another major economic meltdown sometime between 2012 and 2014. Dent has a contrarian view arguing that deflation, not inflation, will capsize us next. His reasoning? Aging baby boomers are going to start cashing in their chips. That fact coupled with staggering public and private debt will cause the economy to cave in on itself.


3) George Lindsay and the Art of Technical Analysis: Trading Systems of a Market Master.
Perhaps one of the most gifted financial prognosticators ever born, George Lindsay’s techniques live on through the newsletters he left behind. Ed Carlson takes Linday’s ideas and translates them into visual charts and easy-to-understand language so you can start using technical analysis on your own before you buy and sell stocks.


4) The Era of Uncertainty: Global Investment Strategies for Inflation, Deflation, and the Middle Ground.
For the first time in years, the macro-economic picture is going to out-weigh picking individual stocks. It’s not just a question of a where a particular company’s headed, it’s a question of how the global financial system is re-shaping itself. The authors delve into several different scenarios for how the economic mess will play out in the years to come.


5) Understanding China’s Economic Indicators: Translating the Data into Investment Opportunities.
We all know about CPI, jobless claims, inflation rates and unemployment in the U.S., but increasingly, it’s China’s economy that’s setting the tone for the rest of the world. This book looks at 35 key economic indicators that can give us clues about where the economy in the People’s Republic is heading. And it comes from a reputable source: Tom Orlik, a China correspondent for The Wall Street Journal.


6) Trading Tools and Tactics.
Fundamental analysis is a great way to destroy your portfolio, according to technical trader Greg Capra. Here, he lays out the insights behind all those mystifying terms you’ve never really understood: candlesticks, shooting the gap, retracements and more. It’s a book designed for daytraders, not the buy-and-hold crowd.


7) The End of Growth: Adapting to Our New Economic Reality.
You can give up on the idea that our economy is going to recover. According to Richard Heinberg, this period of high unemployment, falling home prices and stagnant or negative growth is the new normal. We could only forestall the energy, economic, environmental and social problems plaguing us for so long. It’s time now for us to start looking at ways to fix them.


8) Extreme Money: Masters of the Universe and the Cult of Risk.
A cutting look at how the global financial system really works. Satyajit Das draws on 30 years of experience in high finance giving us a look at the housing crisis came about, how hedge funds make money and how a handful of banks and insiders control the bulk of the cash in the largest economy in the world.


9) (**Kindle Book**) Rupert Murdoch, The Master Mogul of Fleet Street: 20 Tales from the Pages of Vanity Fair.
Let’s just forget that he bought MySpace. It’s hard to argue that Rupert Murdoch isn’t a financial genius (just take a look at this gigantic Wikipeda page that lists all of News Corporation’s holdings). Still, there’s always been the sense that Murdoch’s a wolf in sheep’s clothing (and the current phone hacking scandal just drives the last nail in the coffin). This Kindle book takes a fine-toothed comb over Murdoch’s career through a series of Vanity Fair articles.


10) Endgame: The End of the Debt Supercycle and How It Changes Everything.According to Endgame’s authors, we’re at the end of a six-decade debt binge, and now we’re due to pay the piper. That means debt restructuring and austerity measures are probably on their way in the U.S. and throughout Europe. Our entire economy, tax structure, benefits system and personal habits are due to change – whether we want them to or not.


Upcoming Release

1) Steve Jobs: A Biography.
OK. This isn’t actually a book on investing, but I’m stoked to read it anyway. No matter how often we complain about Apple products, it’s hard to deny Steve Jobs is a genius. He turned Apple into a household word in the 1990s, left to reinvigorate Pixar, then returned to the crumbled corporate husk that was Apple and repositioned it as a money-minting machine with the iPod, iPhone and iPad. Brilliant.



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What will happen when QE2 ends in June?

With QE2 scheduled to end in a mere three months, no one’s entirely sure how the dollar and the stock market will respond, but there’s lots of evidence that it won’t be good.

A darkening cloud seems to be forming over the financial markets. With QE2 scheduled to end in a mere three months, no one’s entirely sure how the dollar and the stock market will respond, but I’m willing to bet it won’t be good.

QE2 continues to inject an average of $4.4 billion dollars every business day into the U.S. economy, according to Chris Martenson at GoldSeek. That enormous chunk of change has been wending its way into stocks, commodities and bonds.

And now, a series of well-timed media appearances by Fed governors across the country appears to be signaling to the market that the party’s due to end. The Philly Fed’s Charles Plosser is calling for interest rate hikes, James Bullard of St. Louis suggests that strong U.S. economic data could let the Fed wrap up QE2 early and New York’s William C. Dudley sees no reason why the program should continue after it ends in June.

The sheer scale of QE2 should be an indication of how deep our boots have sunk into the muck. Since the start of the Great Recession in 2008, Martenson points out that the monetary base has grown by some 300 percent. And yet, the unemployment rate is still hovering at 9.2 percent – a level we haven’t seen for 28 years.

The Fed has artificially propped up the markets and Martenson argues there’s going to be a whole lot of misery when the music stops in June – particularly since the crisis in Japan leaves few buyers for U.S. treasuries moving forward.

“If the Fed terminates QE on schedule, then I think a tsunami metaphor is apt,” Martenson writes. “First, all of the liquidity will drain out of the bay, leaving countries, governments, and institutions to flop about in the mud. Then the Fed will panic and resume the liquidity flood, feeding the wave that will rush back in to destroy the lives and portfolios of those who positioned their wealth in harm’s way.”

Not everyone agrees, though. James Dailey, chief investment officer of TEAM Financial Managers, tells TheStreet that he’s confident the Fed will raise rates slowly – probably even too slowly, and that should keep upward price pressure on stocks, commodities and precious metals.

“Even if we see tightening, that is no reason to not own commodities,” he added. “Central banks will be behind the curve. You can get corrections based on it being overbought now but the fundamentals are intact. Unless there is a global recession or one or more central banks find religion and develop a Volckeresque appetite for monetary tightening, we see negative real yields.”

An informal survey of experts as CNNMoney found that all but one money manager thought the end of QE2 would have a negative effect on stocks. The economy’s expansion, they argue, should buoy stocks even without the flood of easy money entering the markets.

I’m not so sure. There isn’t a whole lot of data to draw from, but we do know that Japan’s quantitative easing experiments 10 years ago typically led to market sell-offs when they ended. The same thing happened here when QE1 was halted. CNNMoney’s own chart illustrates the market sell-off that eventually led to QE2:

The experts might be telling us to put more faith in the strength of the recovery, but I’m just not convinced the recovery is ready to stand on its own. All we’ve got to go on is past experience. And I’ll take that over the educated guesses of the experts. Expect me to be in cash in June, watching from the sidelines and hoping that QE3 is just around the corner.



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The secret to investing in stocks for beginners

Investing isn’t about uncovering the next Apple or Microsoft, it’s about finding companies that are going to produce ever-larger amounts of money without dramatically increasing their costs.

We’ve all heard that markets are driven by fear and greed. Those two emotions are what cause the wild intraday swings in stock prices, and they’re what makes learning to invest so difficult. We all want large and immediate gains. If we could all get them, though, none of us would have jobs. We’d trade stocks for a few years and retire to a cozy island in the Caribbean.

To invest successfully, you’ve got to banish the idea that you can predict where the markets are going from day to day. One of my favorite quotes from Warren Buffett – the CEO of Berkshire Hathaway Inc. (NYSE:BRK.A) and the so-called Oracle of Omaha – came when he was asked how long he likes to hold onto specific stocks. His one-word answer? “Forever.”

If you’re looking to get rich quickly, you’d be better served by going to the horse track or riverboat; not the NASDAQ or NYSE. But, if you’re emotionally able and willing to let your investment plans play out over months or years, you can and probably will make money in the stock market – even if you’re starting out with a relatively small chunk of change.

Here’s a simple secret beginning investors can use to make money on stocks: you’ve got a profound advantage over giant hedge funds, professional money managers and corporations. The relatively small size of your portfolio gives you access to stocks that the big fish just aren’t able to invest in.

“It’s a huge structural advantage not to have a lot of money,” Buffett said in 1999. “I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that. But you can’t compound $100 million or $1 billion at anything remotely like that rate.”

See, investors with lots of capital at their disposal just can’t meaningfully invest in small-cap, high-growth companies. They have too much capital to put to work. The small caps you have access to today might end up in the portfolios of the big fish investors a decade from now, and that’s where you stand to make mountains of cash.

Jim Fink at InvestingDaily boils Buffet’s ideas down to three requirements to earn 50 percent returns every year:

1) Your portfolio must have less than $1 million. Just about all of us (unfortunately) fall into this camp.

2) You must buy small cap stocks “before they grow up.” Fink defines small cap stocks as companies with market caps of $3 billion or less.

3) Pick companies with high returns and low spending requirements. “The best businesses by far for owners continue to be those that have high returns on capital and that require little incremental investment to grow,” Buffett wrote in 2009. For Fink, that means finding companies that generate at least $5 in cash flow for every $1 they spend.

Remember, investing isn’t about uncovering the next Apple Inc. (NASDAQ:AAPL) or Microsoft Corporation (NASDAQ:MSFT). It about finding companies that are going to reliably produce ever-larger amounts of money without dramatically increasing their costs. Find those stocks, and you’ll do just fine.



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A Sina Weibo IPO could be in the works as China’s Twitter moves to

China’s popular Twitter-like site Weibo may have taken a step closer to an IPO yesterday by unmooring itself from with the launch of

China’s popular Twitter-like site Weibo may have taken a step closer to an IPO yesterday by unmooring itself from No longer will users have to click or type their way to Instead, they can type in to access the microblogging site instantly, according to Penn Olson.

Back in February, I wrote a post titled Will we ever see a SINA Weibo IPO? I speculated then that SINA Corporation (NASDAQ:SINA) would be silly to spin off its fastest-growing business. I may have jumped the gun.

All systems seem to be pointing to a Weibo IPO sooner rather than later. First, there was a thinly-sourced report in March from China’s 21st Century Business Herald that claimed Sina was in talks with several investment banks as it mulled a Weibo IPO.

Now, there’s a move to separate the microblogging site from by giving it its own domain. Perhaps it’s just a matter of time before we get our hands on an official S-1 filing.

For now, users will be able to use AND Eventually the two sites will be merged, and traffic going to will get re-directed to The re-branding should help raise public consciousness for Weibo in China and abroad.

“We have successfully built Sina microblog Weibo into the largest and most influential social media platform in China, with user base increasing by more than 25 times in 2010,” Sina’s CEO Charles Chao said after the company’s Q4 earnings report last month.

The total number of Weibo users doubled to 100 million in the four months leading up to the report, and Sina’s in the process of deploying an advertising and a virtual goods marketplace on Weibo. While the microblogging service is yet to generate any revenue, analysts still believe Weibo could be valued at $3 billion or more.

And judging by the success of several recent tech IPOs out of China (including YOKU, DANG and QIHU), a Weibo IPO has the potential to turn into a public spectacle – especially if the site could beat Twitter, LinkedIn and Facebook onto stock exchanges.



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How does the BATS exchange work?

Instead of buying shares on the NYSE or NASDAQ, retail-level investors may soon be placing orders on BATS as well, provided their brokers offer access to the exchange.

A tiny tech and trading start-up, BATS Global Markets, piqued the curiosity of investors after announcing that it will soon file as a primary U.S. market. The move, which BATS hopes will allow it to start listing stocks in the fourth quarter, would pit the Kansas City-based stock exchange against the two largest stocks exchanges in the world in the NYSE and NASDAQ.

What does the move mean for investors? Instead of buying shares on the NYSE or NASDAQ, retail-level investors may soon be placing orders on BATS as well – provided their brokers offer access to the exchange.

“The key for this to be successful will be to be able to attract a key company to list,” Josef Schuster, founder of Chicago-based IPO investment firm IPOX Schuster LLC, tells Reuters. Schuster speculates that doing an IPO and listing BATS shares on the BATS exchange itself could be a way of doing that.

Alternatively, attracting a sought-after tech company like a Zynga or a Groupon to list with BATS might do the trick. As it stands, BATS is already the third-largest exchange in the world by volume. That’s largely thanks to the exchanges’ emphasis on speed.

When BATS went live in January of 2006, most trading platforms executed trades in one to 30 milliseconds. BATS executed trades in one to three milliseconds. Today, BATS executes 80 percent of all its trades in 250 microseconds (.25 millliseconds). Contrast that with the NYSE, which executes trades in 650-950 microseconds.

BATS’ emphasis on speed has attracted business from “hedge funds and other trading operations” that engage in high-frequency trading, Newsweek reports. Should the company land a few big fish to list, it could very well grow from there and challenge the supremacy of the NYSE and NASDAQ.



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Are rollover IRA contributions tax deductible?

The name “Rollover IRA” simply refers to the fact that your IRA account was established from funds that were originally in a qualified plan such as a 401k, 403b, or lump sum pension. For tax purposes moving forward, the account is treated like a Traditional IRA.

Yes. A Rollover IRA functions exactly like a traditional IRA. The name “Rollover IRA” simply refers to the fact that your IRA account was established from funds that were originally in a qualified plan such as a 401k, 403b, or lump sum pension. When I left my corporate job in 2007, I no longer had the option of participating in a company-sponsored 401K. Rather, than leave my funds in my pre-existing 401K, I rolled them into a Rollover IRA, so that I could pick and choose the stocks I invested in.

By rolling those funds from a 401K into a IRA, I did not have to pay taxes on the “distribution” from my 401K. In essence I was simply moving cash from one tax-protected account to another. Had I elected instead to take a cash distribution from my 401K and let it sit in my bank account for more than two months, then used that cash to establish an IRA, I would have been subject to tax penalties for withdrawing funds from my 401K early.

It took me a lot of Web surfing to find out that after the initial funds had been moved from my 401K to my Rollover IRA, I was, in effect, using a Traditional IRA (more info at The name’s different, but the tax benefits are the same. I can contribute up to $5,000 a year (or $6,000 a year once I hit 50 years old) to my Rollover IRA and write off those contributions – thereby lowering my taxable income. Lower taxes = great news!



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Is China’s Qihoo IPO a buy? (Ticker:QIHU)

Qihoo 360 has its fingers in a lot of pots and that adds up to a steady income stream. Here are some key facts and figures you need to consider before investing in Qihoo 360 (NYSE:QIHU).

The Chinese anti-virus software-maker Qihoo 360 Technology Co. Ltd. is expected to begin trading on Wednesday under the ticker QIHU on the NYSE. The Web security company makes an assorted suite of anti-virus software, the most popular of which is “360 Safe Guard,” which had 301 million monthly active users as of January, according to the company’s F-1 Filing.

Why buy Qihoo 360 shares? Anti-virus + browsers + online games = Big Business.

Qihoo 360 has its fingers in a lot of pots and that adds up to a steady income stream. In 2010, the company booked net income of $8.5 million on $57.7 million in sales. Qihoo pulls in that cash from a number of sources. Chief among them? Paid anti-virus software. In addition to “360 Safe Guard,” the company offers “360 Anti-Virus,” “360 Mobile Safe,” “360 Online Shopping Bodyguard” and more.

There’s a lot more to Qihoo 360, though. The company also makes China’s second most popular Web browser: 360 Safe Browser, which claims 172 million monthly active users and a user penetration rate of 44.1 percent. Safe Browser’s biggest competition is Microsoft Corporation’s (NASDAQ:MSFT) Internet Explorer.

Some 98 million of those 172 million monthly active users of Safe Browser access Qihoo 360’s “Personal Start-up Page,” which acts as a content portal and gives Qihoo a platform to promote its other services, including an open gaming and e-commerce platform that’s set up to let developers build and distribute online games and shopping services. Game developers are among Qihoo’s heaviest advertisers, often paying the company to promote new games or inking rev-share agreements with the company.

All this adds up to Qihoo claiming to be China’s third-largest Internet company with more than 300 million monthly active users. That’s a great base to promote products and it lead to year-over-year revenue growth of 79 percent in 2010, according to the Wall Street Journal.

Bigger and better things. Qihoo 360 plans to use funds from its IPO to research and develop new products. The company will also consider strategic acquisitions that could boost its marketshare in China. One of the most appealing aspects of Qihoo 360, though, is its aggressive expansion into the mobile realm. If mobile anti-virus software becomes a standard paid download for Web users in China, Qihoo could accumulate piles of yuan as the mobile market in China is set to explode.

“Users are also increasingly conducting Internet activities through mobile devices, including mobile-banking, mobile-commerce, mobile-gaming and mobile social networking, among others,” Qihoo 360 writes in the company’s F-1 Filing. “According to iResearch, the number of mobile Internet users in China increased from 17 million in 2006 to 303 million in 2010, representing a CAGR of 105.3%, and is expected to grow further to reach 658 million by the end of 2013.”

658 million mobile users. Think about that number. It’s more than twice the population of the United States.

Bumps in the road: Still, for all the positives, there’s a big unknown in Qihoo 360’s future as the company’s embroiled in a legal dispute with Tencent Holdings Ltd. (HKG:0700). Tencent, which develops China’s leading instant messaging software QQ, started bundling its own anti-virus software, QQ Doctor, with downloads of its instant messaging platform. To run QQ Doctor, users have to uninstall Qihoo 360 software. Both companies have since launched smear campaigns targeting one another as they struggle to maintain market share, according to a Wikipedia page (360 v. Tencent) that details the dispute.

No matter what the ultimate outcome of the case, Qihoo 360 is forging ahead with its IPO. The company plans to sell 12.1 million American depositary shares at $10.50-$12.50 a pop. Every two ADSs will represent three Class A ordinary shares. It’ll be interesting to see how investors respond. I, for one, wouldn’t want to take on Tencent head-to-head, but in China’s cut-throat online market, competition is the name of the game. To the victor go the advertising dollars.



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