The Week of August 5, 2013 in Review: Earnings Reports, IPO’s, M&A and Private Placements

Earnings Reports

pricelinePriceline.com (PCLN:  Nasdaq) separated itself from the pack this week, increasing profits by 24% to $437m, with revenues of $1.68b, up 27%.  Priceline.com is now pushing $1,000 per share.  The improving travel environment also lifted Orbitz Worldwide Inc., with revenue up 12% to 225.8.  Expedia seems to be the company and stock left behind.

 

 

 

GrouponGroupon (GRPN:  Nasdaq) stunned investors by reporting positive revenue growth.  Sales rose to $609m, with a $7.57m loss.  North American sales grew 45%, though sales in the ROW fell 24%.  Its share price is now trading just over $10, which is half it’s 2011 $20 IPO price.

 

 

 

tesla sTesla (TSLA:  Nasdaq) announced non-GAAP profitability of 20 cents per share, and the stock is trading at $153 per share, up 350 percent year-to-date.  With this run up, the shorts are finally being forced to hoist the white flag.  The Company went public in 2010 at $17 per share. This quarter, the revenues were $405m, up from 26.6m a year ago.  The GAAP loss was $30m, down from $106m.  Me, I have my eyes on the Model S, base price $62,400 with a $7,500 tax credit.  I’m in, when one can drive across the U.S. to Taos, NM swapping out batteries along the way.  Oh, I also want to be able to motor around New Mexico and Colorado, with the ability to refuel.

The Golden Boy of LBO firms, the Carlyle Group (CG:  Nasdaq), announced disappointing results.  The long and the short of it is that they are having some difficulty finding new opportunities to replace those that have been liquidated.

fossil.comAnd, verily, the consumer is not dead!  Fossil (FOSL:  Nasdaq) announced earnings up 18% and sales that grew 15% to $547million.  The word is that the wrist watch is not dead, in spite of the prevalent use of the smart phone as a time piece.  Fear not, it appears that the watch has some function as a piece of jewelry.  While my 16-year old stepdaughter cannot be bothered to wear a watch, I must have twenty watches of all makes and prices.

 

 

IPO’s of the Week[1]

This was a great IPO week, with four out of the five IPO’s noted here, ending the week with gains from the IPO price.

Company Ticker IPO Price ($) Today’s Price ($)
Cvent CVT 21.00 32.45
MiX Telematics MIXT 16.00 18.12
Fox Factory FOXF 15.00 18.50
Intrexon XON 16.00 29.09
YuMe YUME 9.00 8.97

Cvent is the events management provider that we all use to attend conferences and other functions.  MiX Telematics is a SaaS provider of fleet management solutions.  Fox Factory, based in Scotts Valley, California, manufactures suspension systems—particularly for mountain bikes, ATVs and other vehicles.  Who would have known?

Intrexon, in Blacksburg, Virginia plays in the “synthetic biology” field, whereby living cells become molecular factories.   This the third big win for its founder, Randal Kirk, who has a $1.5b holding in this company.  How much do you think they paid for their url:  www.dna.com?

M&A of Interest

Yahoo! did not let us down this week, and continued its acquisition streak, acquiring Rockmelt for $65m.  According to the company, Rockmelt “helps you discover the best of the internet” but I couldn’t figure out exactly what that was.

Another M&A stalwart, AOL, acquired adap.tv for $405million.  Adap.tv buys and sells TV/video advertising.

Finally Newsweek, owned by The Daily Beat, was acquired by IBT Media.  IBT Media, publisher of International Businesss Times, is based in New York and is an “online news company” that I had never heard of.

Private Placements

Defense.net , which specializes in protecting enterprises from Denial of Service attacks, raised $9.5 million.  Barrett Lyon, the founder of Defense.net rose to notoriety by working with several casinos outing some Russian hackers, who were later convicted, of attempting to blackmail the organizations.

LP Amina, an engineering consulting firm, based in Charlotte North Carolina, that focuses on utilities, raised $15m in a Series C round. LP Amina is focused on emissions and efficiency.   One of the investors is Qiming Ventures, a firm that invests in Chinese companies.

500px a photo sharing site based in Toronto raised $8.8m, bringing the total to 10.8 million

SOASTA, which develops a testing platform for mobile and web apps, and is focused on the “cloud,” raised a $30m Series E round.

SetPoint Medical, which is developing treatments for debilitating inflammatory diseases, such as arthritis and crohns, raised $27m.  Glaxo and Covidien were among the investors.

Finally, TandemLaunch Technologies, based in Quebec, raised $10m Canadian.  It “sources, accelerates and commercializes” early-stage technologies from leading universities for its corporate partners.  Being born in Ottawa, I have a special affinity for Canadian companies.

Also of Interest

Snowden should not assume that he has found safety.  Years ago a U.S. fugitive that was allegedly a double agent, fled to Russia from New Mexico.  A few years later, he was mysteriously found dead in his state provided domicile.  If Snowden has the ability to flee to South America, he would be wise to do so with all deliberate speed.

Margaret S.C. Johns

Founder, BlueLake

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This newsletter does not purport, in any sense, to be comprehensive.  Rather, it contains news that we, at BLP, find of interest.



[1] Certain information sourced from Renaissance Capital