Lou Kerner has dabbled in real estate, worked as a cable and satellite analyst at Goldman Sachs, and headed numerous companies, including two domain companies: The .tv Corp. and WildSites. Yet Kerner has seemingly found the role he was born to play as the self-described “first social media analyst on Wall Street.”
He’s attracted quite an audience. Kerner has been quoted as an expert on social media valuations in the mainstream press, including the New York Times, the Boston Globe, and the L.A. Times, no fewer than 120 times so far this year. He’s also cited regularly in online properties such as Business Insider and has appeared on television numerous times. In fact, Bloomberg may give him his own weekly show.
“I’m building the Lou Kerner brand,” Kerner told me last week during a call from the New York office of Wedbush Securities, an L.A.-based investment bank and brokerage where he works. “I mean no disrespect to Wedbush, but at the end of the day, we’re all going to be @loukerner, or @whoeveryouare.”
Kerner says he wants his brand to stand for “Lou Kerner helps people.” And he takes burnishing it seriously – sometimes through outlandish pronouncements. For example, after the actor Charlie Sheen took to Twitter two weeks ago, garnering more than 3 million Twitter followers in 72 hours, Kerner drew a parallel between Sheen and corporations in one of his reports, saying Sheen was proof that corporations could also quickly build an engaged audience on the platform.
Kerner also used Sheen to talk up Twitter’s valuation. He told the New York Times, “At this point, the floor of Twitter’s valuation should be $10 billion. If they sell, they should get a premium to that.”
Kerner is himself very focused on Twitter as a promotional tool, telling me about several tweets that “two guys who work for me” sent out on his behalf earlier in the day.
“You’ve got to sell it [to draw followers],” he told me. “In the next hour, I’m going to tweet this incredibly sick video of the tsunami.” Kerner later retweeted a video link from the Gawker Media site Gizmodo, adding, in uppercased mock horror: “HOLY CRAP! This Is the Scariest First-Person Video of the Japan Tsunami Yet http://gizmo.do/dEwicf.”
Kerner, who has more than 21,000 Twitter followers, typically starts his tweets with “HILARIOUS,” “GREAT,” and “WOW!” It’s fair to say he’s obsessed with the notion of social influence, telling a CNN reporter recently that the higher one’s social influence, “the better your life is,” and mentioning during our chat that he hoped his tweets would “increase [his] Klout score” (referring to the San Francisco-based startup that measures people’s social reach online).
The remark may not have been completely off-handed. As Kerner told me soon after, he’s an investor in Klout, having joined the seed funding of the company in July 2009 through “a friend at Goldman who became a VC.” (Klout has gone on to raise $10 million, including from Kleiner Perkins and Greycroft Partners.)
Kerner also owns Facebook shares, a detail that is almost never disclosed in the numerous media outlets that regularly feature Kerner’s bullish Facebook valuation projections, including a January piece in the New York Times that pointed out that Kerner thinks Facebook could be worth as much as $200 billion by 2015. That month, he also told CNN that Facebook is on its way to becoming the “largest Internet company the world has ever seen.”
Kerner has had a long relationship with Facebook. In 2009, when Facebook’s valuation was widely considered to be less than $10 billion, Kerner said he “went around to hedge fund guys and tried to raise $100 million [to invest in secondary shares of Facebook] and was generally laughed at.” Kerner says that because no one really “got it,” he wound up authoring a highly bullish report in March 2010 that pegged Facebook’s value at $50 billion, even while it was still trading at a $9 billion valuation on platforms like Sharespost. Then, he says, he bought himself some shares. Wedbush offered him a job soon after, he says.
Kerner points out that he discloses his Facebook stake in his research. (In his most recent report on social media, his disclaimer appeared on page 22 of the 25-page report.) “With regards to the media,” he says, “I answer all inquiries regarding my ownership interests.”
In the fast-changing, somewhat unchartered territory that Kerner finds himself, that may be enough. Former SEC attorney Robert Heim says that under normal FINRA rules, analysts who appear on TV or are featured in other media “have to disclose whether they own any of the stocks they are commenting on. It is the analyst — and not the TV station — that is responsible for making sure the appropriate disclosures are made.”
But Heim also says that as with so much in today’s market, little is clear. “Most rules that restrict analysts from purchasing pre-IPO shares are tied to the concept that the company will go public,” he says. “With Facebook and other private companies, there isn’t an IPO that’s imminent, so it’s not clear how FINRA rules apply.”
Will the shares make Kerner rich? If he’s right about the company they will.
Earlier this year, as the news leaked that Goldman Sachs was investing in Facebook at a $50 billion valuation, Kerner told an astonished BBC personality that, “We believe if the shares were public today, they’d trade in excess of $100 billion.”
“A hundred billion!” said the show host.
“That’s right,” said Kerner.