Today - Monday, March 10, 2014
10:02 AM| Comment!
- Alcatel-Lucent (ALU +0.8%) has been upgraded to Outperform by BMO.
- InterActiveCorp (IACI +1.2%) has been upgraded to Outperform by Cowen.
- DuPont Fabros (DFT -2.3%) has been cut to Hold by Jefferies following its Yahoo disclosure.
- Veeco (VECO +8.2%) has been upgraded to Buy by UBS.
- Evolving Systems (EVOL +3.1%) has been upgraded to Buy by B. Riley.
- A weekend column titled "Beware 3-D Printing!" questions industry valuations, and suggests 3D Systems (DDD -4.2% premarket) could drop 80%.
- The column highlights Whitney Tilson's critique of 3D Systems and the company's recent warning, argues 3D printing/additive manufacturing "remains slow and cumbersome," and notes the presence of rivals such as printing services firm Shapeways and leading metal printer maker EOS.
- Barron's suggests software vendors Autodesk (ADSK) and Dassault (DASTY) are a better way to play the trend (ed: 3D printing use cases account for only a fraction of each company's sales), and notes the former's efforts to automate design work by leveraging real-life info. "The goal is for a designer to input a function, letting the computer dictate the most efficient design."
- SSYS -3.1%. XONE -3.3%. VJET -1.7%.
- Marathon Patent Group (MARA) files a patent infringement lawsuit against five media companies through one it its subsidiaries.
- Hulu, Spotify, Amazon , Netflix, and Verizon have all been named in the broad patent dispute.
- A SA interview with Markman Advisors last month broke down the investment opportunities presented by some of the patent litigation firms including Marathon.
8:40 AM| Comment!
- Google (GOOG) plans to soon release a software developer kit for applications for wearable-computing devices as the company looks to repeat its Android success in a different area of gadgetry.
- Speaking at the South by Southwest Interactive conference in Austin, Texas, which runs from March 7-16, Google senior VP Sundar Pichai said the company hopes developers will build apps for more than just smartwatches, including even for a jacket with sensors.
- Pichai also said that Google has sold over 1M Chromecast products for streaming video from a mobile device to a TV.
- IBM (IBM) CEO Ginni Rometty tells it like it is, acknowledging in a letter to investors that the company "did not meet our expectations."
- IBM will continue to alter its focus to cloud services and data analytics while modifying its hardware products. "While we continue to remix to higher value, we must also address those parts of the business that are holding us back," said Rometty.
- Declining demand for hardware and soft sales in growth markets have hit revenue for almost two years, prompting IBM to offload assets and reduce staff.
- French conglomerate Bouygues (BOUYY) has agreed to sell part of its network and wireless spectrum to smaller French competitor Iliad for up to €1.8B ($2.5B) if Bouygues succeeds in its efforts to merge its mobile phone unit with Vivendi (VIVHY, VIVEF) subsidiary SFR.
- The asset sale would be part of Bouygues' attempts to assuage antitrust concerns in France about the cellular deal.
- Bouygues faces competition for SFR from Amsterdam-listed Altice, which doesn't face the same antitrust hurdles as Bouygues.
- Grupo Corporativo ONO's owners are moving forward with plans for an IPO, the WSJ reports, and are due to meet with analysts and candidates for independent directors today and tomorrow.
- The WSJ's article contrasts with a Reuters report on Friday which said that Vodafone (VOD) has agreed to a deal to acquire the Spanish cable operator.
- ONO's shareholders are due to hold an annual meeting on Thursday, when they could approve the IPO, which would effectively end any takeover talks.
- There's no word on the value of the IPO, although ONO's investors would reportedly want above €7B in any M&A.
- Liberty Global (LBTYA) has also been eying ONO.
Sunday, March 9, 2014
- Lyft, the developer of a ride-sharing mobile app, has raised $80M in a Series D fundraising round, with reports saying that the company was given a pre-money valuation of $700M.
- Andreessen Horowitz was one of the investors.
- The company is looking to bring in another $70M as part of the round.
- Lyft competes with Uber, which raised $250M at a $3.5B valuation last summer.
- Wayfair has raised $157M in a Series B round led by one-time Twitter investor T.Rowe Price, the online home-furnishings site has said. TripAdvisor CFO Julie Bradley also participated in the fundraising.
- Wayfair's valuation was $2B, Bloomberg reports. The company's sales jumped 55% last year to $915M.
- Wayfair has already reportedly started talks with banks about underwriting an IPO.
- Previously (PR)
- Mexico's Federal Telecommunications Institute (IFT) has ordered America Movil (AMX) and Grupo Televisa (TV) to share their infrastructure with rivals as part of an attempt to increase competition in the country's telecom and broadcasting markets respectively.
- The IFT will also regulate Telefonica's prices, and it will force Televisa to publish its advertising prices and stop pressuring advertisers to purchase space on its billboards, cable TV and magazines.
- In addition, IFT has called for bidders for two national broadcast-television networks.
- The upside for America Movil is that once it has complied with the IFT's demands, the regulator may allow the company to start offering TV services.
Friday, March 7, 2014
- Citing "slowing consumer purchases" amid high penetration rates in mature markets, IDC now forecasts tablet shipments will grow 19.4% in 2014 (to 260.9M units), down from a prior estimate of 22% (271M units).
- Tablet growth steadily slowed in 2014: Shipments rose an estimated 142% in Q1, but just 28% in Q4. IDC puts full-year growth at 52%.
- Two silver linings for high-end/enterprise leader Apple (AAPL - 33.8% Q4 share): 1) ASPs are only expected to drop 3.6% in 2014, after falling 14.6% in 2013, as more consumers embrace "higher-end devices." 2) Commercial buyers are expected to account for 14% of shipments, up from 11% in 2013.
- IDC also thinks Windows (MSFT) tablets, struggling to gain a strong consumer foothold, will take over a quarter of the commercial segment thanks to rising convertible adoption.
- The revised forecast still puts tablet sales within striking distance of eclipsing PC sales: IDC expects PC shipments to drop 6% this year to 295.9M. Smartphone shipments are expected to grow 19% to 1.2B.
- Major tablet OEMs (besides Apple): SSNLF, LNVGY, AKCPF
- After falling 3.5% Y/Y in Q3, external disk storage system sales rose 2.4% in Q4, says IDC. The growth came even though sales of the servers that interact with these systems fell an estimated 4.4%.
- Total disk storage sales, which include storage subsystems found within servers, rose 1.3% in Q4 after dropping 5.6% in Q3. IDC attributes the turnaround to "traditional year-end budget flushes, improved economic sentiment, and a strong desire to address long-standing storage infrastructure inefficiencies."
- Market leader EMC, which posted strong Q4 numbers to go with light guidance, saw its external disk share rise 220 bps Y/Y to 32.9%, and its total disk share rise 200 bps to 25.8%. The gains largely came at the expense of restructuring IBM, whose shares respectively fell 190 bps and 200 bps to 13% and 14%.
- H-P's (HPQ) external disk share rose 30 bps to 9.6%, and its total disk share 40 bps to 16.3%. NetApp (NTAP), which delivered nearly in-line revenue and soft guidance last month, saw its external share fall 10 bps to 11.5%, and its total share stay flat at 9%. Private Dell's total share fell 140 bps to 9.9%.
- Hard drive/assembly suppliers: STX, WDC, HTCH
- Verizon (VZ) has signed off on a buyback program good for repurchasing up to 100M shares through Feb. 28, 2017. The program, arriving two weeks after the Vodafone/Verizon Wireless deal officially closed, is in theory good for repurchasing nearly 2.5% of outstanding shares.
- However, CFO Fran Shammo stated last month he doesn't expect Verizon to buy back any shares for at least 2-3 years, as it works to pay off the $60B+ in debt it took on to help finance the Vodafone deal.
- Verizon has largely refrained from buybacks in recent years, keeping its options open as it made giant Verizon Wireless dividend payments to Vodafone. The carrier repurchased only 3.5M shares through a 100M-share, three-year program that expired last month.
- Having already launched a wealth management platform for Chinese depositors, Baidu (BIDU -1.4%) is now heading a partnership that's applying for a private banking license. "Of the businesses the Internet will topple they naturally include finance," declares CEO Robin Li.
- Baidu, Alibaba, and Tencent have all launched wealth management products, hoping to cross-sell consumers in a country with sky-high savings rates on investment vehicles that deliver much higher returns than those provided by state-owned banks.
- Alibaba's (ABABA) Yu'e Bao platform has been especially successful, attracting 81M users who have collectively deposited nearly RMB500B ($81B).
- The efforts haven't come without a backlash from incumbents: Three state-owned banks halted interbank deposit transactions with fund manager Tianhong Asset Management after Alibaba applied to buy 51% of the firm for $193M.
- But Premier Li Keqiang, who has pushed for a slew of financial reforms, says he supports the "healthy development" of Internet banking services.
- Palo Alto Networks (PANW +10.9%) is within striking distance of its post-IPO high of $79.99 after a mistrial was declared for rival Juniper's (JNPR -0.6%) infringement suit against the company. The judge presiding over the suit has instructed lawyers from both parties to meet to determine their next moves.
- FBR calls the decision a big "sigh of relief" for Palo Alto investors. Ahead of the mistrial announcement, Citi was already arguing the odds of a settlement had grown, given a judge's ruling that no second trial covering indirect infringement would occur.
- Citi even thinks a cross-selling deal between Palo and Juniper is possible, given Juniper's recent struggles in the branch office firewall market.
- Palo Alto's official statement