Rearview Mirror: Looking back at the Markets and IPOs for the Week Ending May 4th, 2014

 

photoThe Kentucky Derby is past and Cinco de Mayo approaches, all big, screaming signs that spring is due. It rains when it is supposed to be sunny, and is sunny when it is supposed to rain. New Hampshire is beginning to see buds on the trees. Yes, the green leaves are about to emerge. And yes, our first daffodil has blossomed.

The Markets[1]

The good news this week was the jobs reports. They were expecting unemployment to edge down to 6.6 percent from 6.7 percent. Instead, 280,000 jobs were created, and the unemployment rate edged down to 6.3 percent.

Steven Russolillo of the Wall Street Journals Moneybeat blog seems to be very concerned that we have had three years without a 10 percent market drop. It’s almost as though he wants to bring it on to get it over with. We’ve come close folks, but haven’t made it to the big 10.0.

LinkedIn’s (LNKD: NYSE) reported a 46 percent revenue increase to $473.2m, but reported a loss of $13.2m.The stock dropped two percent. Their big geographic expansion was to launch with “Simplified Chinese”otherwise known as Mandarin characters post-1950.

Twitter (TWTR: NYSE) doubled quarterly revenue on a 50 percent increase in revenue and a 25 percent increase in users. The quarterly loss was $132m, or $0.23 per share, and the stock swooned down 10 percent. Gotta meet your “expectations.”Advertising revenue increased 125 percent to $226m, of which 80 percent was mobile. International revenue totaled $70m, an increase of 183 percent YOY.

Panera Bread (PNRA: Nasdaq) was a mixed bag with profit and revenue beating expectations, but lowering 2014 forecast. Revenue was $605m, up 8 percent, and net income was $42.4m, a 12 percent decline at $1.55 per share, $0.03 above expectations.

Other companies reporting were Expedia, Yelp, Exxon Mobil, Chevron, AMC, and Coach.

M&A activity includes AstraZeneca’s rejection of Pfizer’s $106b bid and AT&T’s contemplation of a bid for DirecTV. Really? Just when Aereo is disintermediating the cable and satellite companies, AT&T comes in to make a bid?

On the non-IPO front are cloud and storage companies, including Box and Zendesk. The recent swoon of Workday, Veeva Systems and ServiceNOW, all down 30 to 46 percent, is giving investors pause.

IPOs[2]

(3 IPO’s)

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

Financial

1997 Apollo spin-out, Ares Management (ARES: NYSE), a Los Angeles-based private equity and debt investing firm sold 11.4m shares at $19 per share raising $217m at a valuation of $1.5b. The stock closed the week at $18.60 per share. Antony Ressler, a former Drexal Burnahm executive is the founder, and the Abu Dhabi Investment Authority is the largest shareholder.

Fast Food

Papa Murphys (FRSH: Nasdaq) sold 5.8m shares at $11 per share raising $64m at a valuation of $187m. The stock closed the week at $11.05 per share. Papa Murphy’s is a high growth franchisor and operator that operates the largest Take “N”Bake pizza chain in the United States. The Company sells unbaked pizzas that the consumer bakes at home.

Pharma

SCYNEXIS (SCYX: Nasdaq) sold 6.2m shares at $10 per share, raising $62m at a valuation of $187m. The stock closed the week at $9 per share.

 

SCYNEXIS is a pharmaceutical company committed to the discovery, development and commercialization of novel anti-infectives to address significant unmet therapeutic needs. We are developing our lead product candidate, SCY-078, as a novel oral and intravenous (IV) drug for the treatment of serious and life-threatening invasive fungal infections in humans. SCY-078 has been shown to be effective in vitro and in vivo in animal studies against a broad range of Candida and Aspergillus fungal species, including drug resistant strains. [3]

That’s it for now. I’m off to week two of my Python class in Cambridge at Akamai’s headquarters. Julian Eden is an impressive teacher, with a motley crew of students, which includes myself. Please send me any comments or feedback.

All the best,

 Margaret Johns

Founder & Chairman

 

Affiliates:

SiVal_Logo

Jan Robertson

SiVal Advisors, LLC

 

 

 

 

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 Morning Moneybeat April 28 – May 2 , 2014

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

[3] Company S-1