BLPA’s Rearview Mirror: Earnings and IPOs for the Week Ending May 25th, 2014

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a Granite State Penguin

With Memorial Day Weekend, summer unofficially starts.  And in New Hampshire it can’t come soon enough.  Already, we’re seeing garage sale signs pepper the neighborhood and For Sale signs grace houses.

We’re tempted to attend a friend’s birthday bash in Connecticut, but for the drive through the Sturbridge Tolls on the return leg.  Guaranteed to be a one to two hour wait, due to all the summer-starved throngs returning from having dusted off their summer cottage.

On the New Hampshire front, the lilacs are in full bloom.  Even our late blooming plants are beginning to catch up, and our one lilac bush is showing signs of flowering. This Memorial Day Weekend, one of my swim team-mates is installing a pool in her backyard.  For the uninitiated, there are two kinds of pools:  one for swimming, which is 25 yards or 50 meters long, or one for water play and placid viewing.  Karin is installing a Play Pool.  We are eager with anticipation for the pool to be completed and have volunteered to flip the burgers.

Pursuant to Memorial Day tradition, we did stop by the outdoor farm stand and pick up some oregano plants, and by Benson’s to pick up some flowering plants to fill one of the corners in our mailbox garden square.  While there, we opportunistically picked up a penguin (our swim team mascot) lawn ornament.  What New Hampshire lawn would be complete without a penguin?

Earnings & The Market

Hip-hip-hooray!  For the first time the S&P500 closed above 1900, specifically, 1900.53.  This confirms my own personal viewpoint on market timing.  Forgetaboutit.  No one can predict the future, so don’t even try.  You might be right once or twice, and then give it back the third time.  Black swans come in all sizes, colors and species, as illogical as that sounds.

We did have a mini-bear market in the Russell 2000 Small Cap, where the index crossed over the 10 percent line, before going back up.  We currently have low volatility and low margin debt.

An uninspiring earnings season is over, with earnings up 2.0 percent vs. the year ago’s 8.5 percent.  And then we  have all the color on the international front.  The U.S. is accusing Chinese army military personnel of espionage on American companies.  Is any one surprised?  The Ukraine is still a concern, and Greece’s financial health is improving.  Mexico’s Citibank, on the other hand, continues to be a bearer of bad news.

IPOs

(4 transactions)

Click on the Company Name for the S-1 filing and the Company Symbol for the stock chart.

Semiconductor

SunEdison Semiconductor (SEMI:  Nasdaq), a supplier of silicon wafers to the semiconductor industry, sold 7.2m shares at $13 per share raising 93.6m at $524m valuation.  The stock closed the week at $15.55 per share.

Internet Retailing

Truecar (TRUE:  Nasdaq) sold 7.8m shares at $9 per share raising $70m at a valuation of $639m.   Truecar‘s aim is to transform the consumer’s auto buying experience.  Truecar has established an intelligent, data-driven online platform, operating with a common technology infrastructure, powered by proprietary data and analytics.  The stock closed the week at $9.22 per share.

China

JD.com (JD:  Nasdaq) sold 93.7m shares at $19 per share, raising $1.8b at $52b valuation.  The original range was $16 to $18 per share.  The stock closed the week at $20.03 per share.

We are the largest online direct sales company in China in terms of transaction volume in 2013, with a market share in China of 46.5%, according to iResearch, a third-party market research firm. Our gross merchandise volume, or GMV, increased from RMB32.7 billion in 2011 to RMB73.3 billion in 2012 and RMB125.5 billion (US$20.7 billion) in 2013. [company prospectus]

Jumei International (JMEI:  Nasdaq), China’s largest online retailer of beauty products, sold 11.1m shares at $22 per share raising $244m at a valuation of $3.12b.  The stock closed the week at $22.80 per share.

Mergers & Acquisitions

(8 transactions)

Click on the highlighted text for more deal information.

Electronics

Nashua, NH-based Aeroflex, a supplier of test and measurement equipment and microelectronic solutions is being acquired by Cobham for $1.46b.

Materials

Kerneos, which offers high quality and innovative specialty products of calcium aluminate binders, is being acquired by Astorg Partners for 610mm EUR.

Security

Automated security incident response company, NetCitadel, is being acquired by Proofpoint, a leading provider of security as a service, for $24m.

 

LetMobile, which extends security from the mobile device itself to the content and applications, is being acquired by LANDesk Software.

Media

PrecisionDemand, a TV ad-targeting company, is being acquired by AOL for $20m.

Artificial Intelligence

Cognea, which is an artificial intelligence platform to give a human-level brain to virtual agents, is being acquired by IBM.

3D Imaging

Bubbli acquired by Dropbox.  Bubbli is able to incorporate some interesting 3D technology into 2D views, and has a mobile app.  At one point, BLP Advisors had been working with a similar type of company, 3D Vision, out of the Philippines.  Definitely interesting, engaging technology.

Software

Enterprise friendly device (BYOD) manager, Divide is being acquired by Google.

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That’s it for now.  Later with the Private Placements.

All the best,

Margaret Johns

Founder, BlueLake Partners, LLC

 

SiVal_LogoJan Robertson

SiVal Advisors, LLC

 

 

 

 

Bic Stevens

Stevens Capital Advisors

 

Chartworth2Susan Woods and Vlad Harris

Chartworth, LLC