BLP’s Answer to What’s Happenin’? WiR October 14th

What’s Happenin’?  WiR October 14th

Moving towards the end of Fall Colors
Moving towards the end of Fall Colors

The morning temperatures are dropping into the 40’s, and the leaves are beginning to fall in earnest.  While the day temperatures remain in the 60’s, it’s only a matter of time.  One month, maybe two, and we’ll see snow.

This week there were a plethora of earnings, and most were positive. The drama in Washington, D.C. made it a very emotional and troubling week

Earnings were by and large very positive, which should keep the market indices sailing North.  The Forward Looks were a bit more guarded.

Again, Mobile, Security, the Cloud dominated the private placements and M&A activity.

Earnings:

athenahealth  (ATHN:  Nasdaq)  hit a home run, beating estimates by six cents to come in at $0.21.  Revenues grew 43 percent to $151.5m.  For the uninitiated, athenahealth is a cloud-based solution/platform for Physician Practice Management, Electronic Health Records, and Patient Communications.  Another rocket ship.

Chipotle Mexican Grill  (CMG:  NYSE) earnings increased to $83.4m from $72.3m.  Revenue is nearly a billion dollars, at $827m, up 17 percent.  Such a simple product, such meteoric growth.  To its credit, the company is looking  to stop using any genetically modified products.

eBay  (EBAY:  Nasdaq).  eBay says things slowed down towards the end of the third quarter, and they see that trend continuing on into the fourth quarter.  Revenue was $3.9b for the quarter and earnings of $0.64.  While the Company beat expectation, they put a damper on the party by saying the fourth quarter “ain’t looking so great.”

Google (GOOG:  Nasdaq) stock joined the $1,000 Club.  The stock continues to be a juggernaut, which was priced, on the IPO, at $85 per share.  Google came in at $14.98b in revenue and $10.47 per share.  While the cost per click is falling, a fact-of-life of a maturing product, the number of clicks in increasing.  Meanwhile, this is a company that just keeps on performing.

Intel (INTC:  Nasdaq) was a mixed bag:  Third Quarter earnings modestly beat expectations at $2.95b and $0.58—the same as a year ago.  However the 14 nanometer Broadwell chip is delayed, and revenues were flat YOY at $13.48b.

NetScout (NTCT:  Nasdaq) which helps monitor software applications on networks beat expectations at $76.5m and earnings doubled to $5.0m, double that of a year ago.  Operating margins increased three points to 17 percent

SanDisk (SNDK:  Nasdaq) Earnings of $1.51 per share handily beat estimates of $1.22 per share.  Revenues were $1.63b.  SanDisk designs, develops, manufactures and markets a huge variety of flash memory products.  The Company is in the right place at the right time.  Flash memory, and the products it enables, is where its at in hardware.

Stryker’s (SYK:  NYSE) net income plunged 70 percent to $10dm due to product recalls.  As you may recollect, Stryker had a number of product recalls, including hip replacement parts.  Ouch.

Ultratech  (UTEK: Nasdaq) displayed the volatility for which the semiconductor equipment industry is so famous.  Quarterly net revenue fell by more than 50 percent to $29.7m, with a loss of $7.8m or $0.28 per share.  This is truly an industry where one must make hay when the sun shines.

Verizon (VZ:  NYSE) earnings were up 40 percent, increasing to $2.23b from $1.59b YOY.  Subscribership increased 927,000 vs. 1.54m a year earlier.  VZ should take note from Professor Christensen, where he would say that with numbers like this, the Company is ripe for intermediation.  Take a look at T-Mobile and its all-you-can-eat pricing.  I’m eager to test the service, if I can borrow a smartphone from someone for a few months.  My hesitancy in switching is giving up my all-you-can-eat VZ data plan.  There’s no going back if T-Mobile’s coverage is unacceptable.  While the coverage map looks good, testing is believing.

Yahoo! (YHOO:  Nasdaq)  Revenue was basically flat from year to year at $1.081b vs. $1.089b.  Non-GAAP earnings o f $173m were down 27 percent YOY  The bright spot was mobile, where the users count was up to 390m from 300m 1Q13.

IPOs*

Veeva Systems, (VEEV:  Nasdaq) which makes cloud-based  business solutions software for the life sciences industry sold 13m shares at $20 per share to raise $260m at a $2.44b valuation, or roughly 10x 2013 forecast revenues .  The stock has since doubled and closed at $44.39.  Monday was a bull market, for sure.

Germany-based voxeljet, AG (VJET:  Nasdaq) sold 6.5m shares at $13.00 per share, raising $84.5m.  The Company designs, manufactures and markets high speed, large format 3-D printers.  After pricing at the low end of the range, voxeljet’s stock more than doubled and closed the week at $28.80 per share.

Mergers & Acquisitions

Spirogen, which focuses on antibody-drug conjugate technology with the potential to directly target cancer tumors, was acquired by AstraZeneca for $440m

Israeli-based Onavo, a mobile analytics startup, was  acquired by Facebook for $150m

Totem OneLove Group, which owns the Stereosonic Festivals, was acquired by SFX Entertainment for $75m.  SFX Entertainment was last week’s IPO.

Optimal—url www.optimalsocial.com — which specializes in enabling its clients to optimize paid advertising on Facebook, Twitter and LinkedIn, was acquired by Boston-based Brand Networks, which offers social media marketing products to consumer focused companies, for $35m

San Diego based Vet Therapeutics, which has a proprietary antibody-based biologics platform, was acquired by Boston-based Aratana Therapeutics for $30m

CoreMatrix Systems, a services revenue consulting firm, was acquired by Perficient, an IT consulting firm, for $22m

There was no pricing information for the following IPO’s.  This means that 1) either both companies were private or 2) the price was less than 10 percent of the purchasing company’s net worth.

Antenna Software, a mobile application development platform, was acquired by Pegasystems

Bread, a url shortner (with the url https://bre.ad) that allows users to design and then target advertisements to readers who click on their links, was acquired by Yahoo!

Desktone, which offers the “desktop-as-a-service” or DaaS, was acquired by VMware

Hackermeter, which is a type of rating system for “coder job hunters” through clever testing methodology, was acquired by Pinterest

Hosting company, Media Temple, was acquired by GoDaddy

Hotel review website, Oyster.com, was acquired by Newton-based TripAdvisor

Private Placements

New Zealand-based Xero, an online accounting system, raises $150m.  Since I’m a somewhat disgruntled QuickBooks and Quicken user, I went online to check out Xero.  I couldn’t figure out their pricing without actually enrolling, so I put Xero in the “tomorrow’s business” category.  A friend who lives three blocks from their headquarters tells me that the place is somewhat lively, complete with a slide between the first and second floors.

VoxMedia, an online publisher of SB Nation (sports), The Verge (claims to be at the intersection of tech, science, art and culture) and Polygon (for adult gamers), raised $34m.

LogiAnalytics.com, a tool IT professionals use to create business intelligence apps, raised $28m

Druva, which markets inSync data protection and governance, that looks like it backs up every layer of the enterprise, raised a $25m Series C.

Refinery29, a NYC-based women’s lifestyle website, raised $20m Series C.   It took me a while to get a hang of the web-site, but it’s basically a beauty and style click-through-the-slides type of website.  They do pick engaging topics.

SundaySky, creator of SmartVideo, which claims to engage the customer throughout their lifecycle, raised a $20m Series C.  Another one that requires more down-to-earth verbiage in its business description.

CounterTack, which offers the “first and only” in-progress cyber attack detection intelligence and response solutions, raised a $12m Series B.

EcoFactor, which allows utilities to provision customers with inexpensive internet enabled thermostats, raised $10m

Washington, D.C based MapBox, is a map platform company which tailors the map delivery in the mobile website, raised $10m

NginX,, accelerates content and pplications delivery, improves security and facilitates availability and scalability for busy websites,, raised $10m.

Nomi, which claims to be a real-time marketing optimization platform(?) for the physical world says that it bridges online and offline retail, raised $10m.  Guess you have to see it to understand it.

Thinking Phone Networks, which offers a cloud-based “united communications” platform raised a $10m Series C round.

Have a great week, and enjoy the weather and the leaves.

Margaret Johns

Founder & Chairman 

*  Certain IPO information from Renaissance Capital, in addition to the SEC anad numerous business publications.

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

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