BLPA’s Rearview Mirror: for the Period Ending May 15th, 2014

BLPAs Rearview Mirror

Market News, Earnings and IPOs for the Period Ending May 15th, 2014

Source:  flickrhivemind.net
Source: flickrhivemind.net

It’s finally beginning to feel like spring, with the flowers blooming, dandelions sprouting and temperatures in the 70’s and 80’s. The tulips and daffodils are blooming concurrently rather than sequentially, thanks to our long, overextended winter. We’re eagerly waiting to see which of our rose bushes survived the winter, and which will be replaced.

I have decided to tempt fate, and move my turtlenecks and corduroys to summer storage, and bring forth the short sleeve shirts, skirts and dresses.

BLPA News:

Bic Stevens of BLP Advisors and Stevens Capital Advisors, raised $1.5m for eCurv, Inc. from a significant strategic investor (to be named later).

eCurv’s has introduced a new, patented technology that measurably reduces electric utility charges for commercial customers. eCurv’s technology enhances power grid reliability, minimizing the need for dirty peaking power plants, and enabling the intelligent integration of renewable energy resources. eCurv’s technology, when implemented as the standard power management solution, will establish the first logical migration path forward towards a true Digital Power Network.

The Markets[1]

The markets have not been kind to tech stocks this week. Well, they haven’t been particularly kind to anyone, best I can tell. Also, just finished reading Flash Boys by Michael Lewis. If that doesn’t make you a skeptic, I don’t know what will. The gist of it is that the big boys like Citadel, GETCO and DE Shaw; while they would claim to be “good guys”and help reduce market volatility. Michael Lewis would call them high tech thieves. They physically position themselves in near proximity to an exchange, have sophisticated strategies for learning what people want to trade, and then front run them. After reading this book, you won’t trust anyone on Wall Street, including the Nasdaq, NYSE and SEC. Lewis makes a convincing case that everyone is getting rich on your retirement savings, including the SEC personnel who jump ship from the SEC to peddle their influence for the HFT (high frequency trading) firms to make their fortunes. Pretty sobering stuff.

While the broad averages are 2.2 percent higher from where we started the year, social and internet are swooning. Death to momentum stocks. Though Cisco, that tech behemoth, is still looking good. Profit came in at $0.51 per share, ahead of the $0.48 per share forecast by analysts.

AT&T is still in the hunt to buy DirecTV, as we reported last week.

IPOs[2]

(5 IPO’s)

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

Software

Zendesk (Zen: NYSE) sold 11.1m shares at $9 per share to raise $100m at a valuation of $702m. The stock closed today at $13.43 per share. Zendesk is a customer service platform offered as Software-as-a Service.

We empower organizations to better answer customers’ questions, and to solve their problems through the channels that people use every day when seeking help, such as email, chat, voice, social media, and websites. Our platform also helps people find answers on their own through knowledge bases and communities, capitalizing on the increasing customer preference for self-service. Our customer engagement capabilities allow organizations to proactively serve their customers, reaching out to those who may need help and soliciting feedback about their experience. The openness of our customer service platform makes it easy for organizations to integrate with their other applications. Our platform consolidates the data from customer interactions and provides organizations with powerful analytics and performance benchmarking.[3]

Medical and Biotech

Alder BioPharmaceuticals (ALDR: Nasdaq) sold 8 million shares at $10 per share, raising $80m at a valuation of $291m. The stock closed trading today at $10.06 per share. Alder BioPharm:

We are a clinical-stage biopharmaceutical company that discovers, develops and seeks to commercialize therapeutic antibodies with the potential to meaningfully transform current treatment paradigms. We have developed a proprietary antibody platform designed to select antibodies that have the potential to maximize efficacy as well as speed of onset and durability of therapeutic response. In addition, we believe our ability to efficiently manufacture antibodies using our yeast-based manufacturing technology, MabXpress, allows us to target diseases that traditionally have not been addressed by antibodies. We believe the clinical data obtained in our development program for ALD403, our wholly-owned clinical asset, exhibits the potential of this product candidate to transform the way physicians treat migraine prevention. [4]

K2M Group (KTWO: Nasdaq) sold 8.8m shares at $15 per share, raising $132m at a valuation of $556m. K2M is a medical device company that focuses on complex spine products:

Our products consist of implants, disposables and instruments which are marketed and sold primarily to hospitals for use by spine surgeons. During our 10 year history, we have commercialized 57 product lines that are used in complex spine surgery, MIS and degenerative procedures, enabling us to favorably compete in the $10.0 billion global spinal surgery market. Of our 57 commercialized product lines, our MESA technology or products that incorporate MESA have accounted for approximately 39%, 37% and 35% of our revenue for the years ended December 31, 2011, 2012 and 2013, respectively. While the quality, safety and efficacy of our marketed products are not yet supported by long-term clinical data, we believe many of our products provide several benefits, including:

     •simplified surgical techniques;
     •less invasive access to implant sites;
     •enhanced capabilities to manipulate and correct the spinal column;
     •lower profile spinal implant technology; and
     •improved clinical outcomes.[5]

The stock closed today at $15.08 per share.

China

Chinese travel tour operator, Tuniu (TOUR: Nasdaq), sold 8 million shares at $9.0 per share to raise $72m at a valuation of $1.16b. The stock closed today at $10.39 per share.

Cheetah Mobile (CMCM: Nasdaq) sold 12 million shares at $14 per share, raising $168m at a valuation of $1.9b. The stock closed today at $10.03 per share. Concurrent with the offering, Cheetah issued and sold to “Kingsoft Corporation Limited, Xiaomi Ventures Limited and Baidu Holdings Limited US$10 million, US$20 million and US$20 million of our Class A ordinary shares, respectively, at a price per share equal to the initial public offering price.[6]” Cheetah mobile states:

Our mission is to make the internet and mobile experience speedier, simpler and safer for users worldwide. To achieve this mission, we have developed a platform that offers mission critical applications for our users and global content distribution channels for our business partners, both of which are powered by our proprietary cloud-based data analytics engines.

For our users, our diversified suite of mission critical applications optimizes internet and mobile system performance and provides real time protection against known and unknown security threats. We had 362.0 million monthly active users for all of our applications in March 2014. Our mobile applications attracted 222.5 million monthly active users in March 2014. Our applications have been installed on 502.1 million mobile devices as of March 31, 2014.[7]

Our next issue will cover recent Private Placements..

All the best,

Margaret Johns

Founder & Chairman

Affiliates:

SiVal_Logo

Jan Robertson

SiVal Advisors, LLC

 

 

 

 

Bic Stevens

Stevens Capital Advisors

 

Chartworth2Susan Woods and Vlad Harris

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Margaret Johns is the Founder and Chairman of BlueLake Partners, a boutique M&A investment bank based in the Greater Boston Area.  Prior to founding BlueLake she was an employee founder and Managing Director at Needham & Company where she worked in Corporate Finance in New York City and headed up its Boston office.  She now lives in Londonderry, New Hampshire with her husband, 16 year old step-daughter and three pugs.  When she’s not working with clients, FINRA or writing blogs she competes on the Granite State Penguins Masters Swim Team, skis, rides her bike or is out walking her pugs.

Content researched, edited and reviewed on a best efforts basis.

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We make no claim to being comprehensive in our review, as the contents are companies and topics we, ourselves, find of interest.

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This newsletter is currently being proofed by Dave Henshaw, which is much appreciated. Dave is my USMS swimming lane mate, and Granite State Penguin team-mate. He is retired from MIT, where he used to produce and proof their annual financial report. Exactly what we need.

[1] WSJ Moneybeat May 12 – 15, 2014

[2] Source: Renaissance Capital, SEC documents, Yahoo Finance. Nasdaq website

[3] Company S-1

[4] Company S-1

[5] Company S-1

[6] Company S-1

[7] Company S-1