Seeking Alpha
  • Saturday, February 28, 2015

  • 3:51 PM
    • TechCrunch reports home/apartment rental platform Airbnb is in the process of raising funds at a $20B valuation - 2x what it was valued at in a $450M round last April. The company is "believed to be in the process of raising a war chest of close to $1 billion - with about half of that secured." Fidelity has been mentioned as a potential investor.
    • Airbnb has 1M+ listings, operates in 34K cities within 190 countries, and has handled 30M booking nights over its history. The company has become a thorn in the side of top vacation home rentals platform HomeAway (NASDAQ:AWAY), though HomeAway (often used to rent secondary homes) has argued its listings are more complementary to Airbnb's (often used to rent primary homes) than competitive.
    • There hasn't been any shortage lately of private tech companies that have reportedly sought or obtained $10B+ valuations. The list includes Snapchat, Pinterest, Palantir, and Uber.
    • Previously: Gurley argues fear of missing out leading private valuations to soar
    • Previously: HomeAway sues San Francisco over "Airbnb law"
  • 3:33 PM
    • Plenty of chipmakers and related IP providers have unveiled new products this week in tandem with the industry's ISSCC conference, and in advance of the Mobile World Congress (runs from Monday-Thursday).
    • ARM (NASDAQ:ARMH) has furthered its embedded/IoT push by launching IFC (short for Intelligent Flexible Cloud), a hardware/software framework for creating intelligent, reliable networks of Web-connected, ARM-powered devices.
    • IFC includes networking protocols for ARM-based processors, as well as support for software-defined networking (SDN - the offloading of network management to software-based controllers) and network functions virtualization (NFV - allows commodity hardware to be turned into a networking appliance). It complements ARM's mbed IoT platform for embedded/wearable devices.
    • ARM server CPU vendors Cavium, Marvell, and AppliedMicro support IFC, as does network processor vendor EZchip's (NASDAQ:EZCH) Tilera unit, which just unveiled a new line of processors (the TILE-Mx family) that supports up to 100 64-bit ARM cores and 200Gbps of throughput; it begins sampling in 2H16. Benchmark is upbeat about the TILE-Mx line's potential.
    • Broadcom (NASDAQ:BRCM) has launched: 1) A smartwatch platform featuring an app processor with 2G/3G modem support, a Wi-Fi/Bluetooth combo chip, a GPS SoC with an integrated sensor hub, an NFC radio, and a wireless charging IC. 2) An SoC for virtual (software-based) broadband customer premise equipment. 3) Two SoCs for wireless backhaul hardware that are declared to be the first to support 5Gbps of throughput.
    • NXP (NASDAQ:NXPI) has launched: 1) Embedded microcontrollers with advanced security features meant to protect against theft/cloning. Targeted products include smart meter hubs, home/factory automation devices, and aftermarket auto hardware; SemiAccurate likes what it sees. 2) An RF transceiver that enables fully wireless earbud headphones (no wires between earbuds).
    • Xilinx (NASDAQ:XLNX) has refreshed its UltraScale+ FPGA and programmable SoC lines with chips made using TSMC's next-gen 16nm FinFET+ (3D transistor) process. The chips improve performance/power draw via SRAM integration and new interconnect optimizations, begin shipping in Q4, and aim to keep Xilinx competitive on the high-end as Altera launches FPGAs using Intel's 14nm process.
    • IDT (NASDAQ:IDTI), an early leader in the wireless charging IC market, has rolled out new charging transmitter and receiver ICs that can respectively handle 15W and 10W of power. The transmitter contains a low-power ARM Cortex-M0 CPU core, and is contained within a tiny 5mm x 5mm package.
  • Friday, February 27, 2015

  • 8:17 PM
    | 1 Comment
  • 7:31 PM
    • Wind Telecomunicazioni -- the Italian unit of Russian telecom VimpelCom (NASDAQ:VIP) -- may be selling its wireless towers to Spain's Abertis Infraestructuras (OTCPK:ABRTY) as soon as the coming week.
    • The companies are talking about 6,000 towers that Wind values at as much as €700M ($786M), though other observers peg the value even higher, at €800M ($914M).
    • An additional 1,700 towers under discussion could easily boost the deal to that latter figure or even to €900M ($1B).
    • Abertis -- chiefly in toll-road management -- is reportedly considering transferring the towers into a unit to be listed on the Madrid exchange, in order to get more cash to shareholders.
    • The Spanish firm is winning the deal over competition from American Tower (NYSE:AMT), Mediaset's (OTCPK:MDIUY) EI Towers and a coalition of investment fund F2i SGR and Providence Equity Partners.
    • Shares of VimpelCom closed the day up 4.8%; they tracked lower in after-hours trading, -1.5%.
  • 6:42 PM
    • With shares having gone into earnings just $0.29 away from a 52-week high of $23.44, investors weren't in a forgiving mood towards Pegasystems (NASDAQ:PEGA) regarding its Q4 revenue miss, nor its guidance for 2015 revenue of $653M and EPS of $0.78 (below a consensus of $680.2M and $0.94).
    • On its CC (transcript), the app development software vendor suggested near-term profits will be affected by major R&D and sales/marketing investments. It also mentioned more services work is being handled by partners.
    • License/cloud backlog rose 5% Y/Y in Q4 to $364.5M. License revenue rose 21% to $77.4M, maintenance revenue grew 8% to $48.7M, and services revenue fell 4% to $42.8M.
    • Shares fell 14.5% in regular trading to $19.79.
    • Q4 results, PR
    | Comment!
  • 6:37 PM
    • Fresh off their vote for re-regulation of Internet transmissions, the five FCC commissioners will be spending mid-March on Capitol Hill answering to the GOP Congress.
    • The House Energy and Commerce Committee is holding its hearing March 19, a day after the members are scheduled with the Senate Commerce Committee.
    • The chairmen of the two committees, Greg Walden and John Thune, are backing a bill that would reverse the FCC's Title II reclassification (treating Internet providers more like utilities) and substantively narrow its approach to ensuring net neutrality.
    • Following the 3-2 vote, major carriers indicated their strategy would be twofold: Lawsuits (CMCSA, T, VZ, CHTR worried about "years" of litigation); and legislative action to undo the move, with a cooperative congress apparently ready to act.
    • Other related stocks: CVC, TWC, CTL, FTR, ELNK, DISH, DTV, CCOI
  • 6:21 PM
    • Dropbox and Vodafone (NASDAQ:VOD) have made a deal to bring Dropbox's file storage to the wireless carrier's customers -- a key market for Dropbox, who get 70% of its users and about half its revenue outside the U.S.
    • With more than 440M subscribers as of year-end, Vodafone can provide a boost to Dropbox, which currently sports more than 300M users. Eventually, the carrier's Android phones will come pre-installed with Dropbox. For its part, aside from any payment considerations, Vodafone can offer its users 25 free GB of storage.
    • Terms of the deal were undisclosed, though Dropbox's Marc Leibowitz says it's not just a "pay for play."
    • The rollout is scheduled to happen for most Vodafone customers by the end of 2015.
    • Vodafone Q4 earnings
    | 1 Comment
  • 6:10 PM
    • Qualcomm (NASDAQ:QCOM) states its latest small cell base station chipsets (the FSM99xx family) and a new mobile device RF transceiver (the WTR3950) support 4G usage over the unlicensed 5GHz. band (currently used for Wi-Fi).
    • Though they can't act as a full replacement for mobile networks using licensed spectrum in lower frequency bands (both due to range and capacity limitations), 5GHz. 4G networks, referred to by Qualcomm as LTE-U, could help relieve congestion and act as a longer-range Wi-Fi alternative in high-traffic/density environments such as train stations, malls, and stadiums.
    • Qualcomm adds it has successfully carried out tests "prove co-existence between multiple LTE-U and Wi-Fi access points in ... unlicensed spectrum under extreme load conditions." Phones supporting LTE-U are expected in 1H16.
    • Separately, Qualcomm has led a $50M funding round for 3D Robotics, North America's biggest personal drone maker; 3D's drones will use Qualcomm's Snapdragon processors going forward. The funding comes a couple weeks after the FAA proposed commercial drone rules.
    | Comment!
  • 5:23 PM
    • In addition to beating Q4 estimates, Procera (NASDAQ:PKT) has guided for 15% 2015 revenue growth, well above a 4.8% consensus. Deutsche responded to the numbers by upgrading to Hold.
    • The deep packet inspection hardware vendor added 13 new service provider customers in Q4, up from just 3 in seasonally weaker Q3 and down from 27 a year ago. 7 of the new customers were wireline carriers, 5 mobile carriers, and one a cable provider. Expansion orders were received from 50 existing service provider clients.
    • EMEA made up 56% of revenue, the Americas 28%, Asia-Pac 16%. Mobile customers accounted for 56% of product revenue.
    • Gross margin fell to 58.7% from 65.6% a year ago, and operating expenses rose 15% to $13.4M.
    • With activists still circling, Procera ended Q4 with over $102M in cash/short-term investments (equal to 54% of its current market cap). TheDeal reported last month Procera has hired advisors to explore a potential sale.
    • Q4 results, PR
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  • 5:23 PM
    • Comcast (NASDAQ:CMCSA) is in talks to buy ad-tech firm Visible World, The Wall Street Journal is reporting -- a move that could give the omnivorous cable giant a foothold in the growing data-driven targeted ad market.
    • The talks aren't advanced, though, and could end up in more of a partnership. Even so, the discussions are a sign of the times in a TV industry that has been slower to adopt ad technology more common in the digital world.
    • One strength the ad-tech firm boasts is in its ability to quickly customize TV commercials based on very small demographic or geographic divisions.
    • Other cablecos are clients of Visible World, so it's not clear whether they would continue supplying space to a Comcast-owned firm.
    • Any price under discussion is unknown. Comcast wrapped a $320M purchase of FreeWheel last year, picking up ESPN, Fox, Amazon and its own NBCUniversal as clients.
    • Visible World has raised $33M from investors so far.
    | Comment!
  • 4:59 PM
    • With shares up 35% in February going into earnings, a big FQ4 beat, above-consensus FQ1/FY16 guidance, and a flood of target hikes and bullish sell-side notes weren't enough to keep Splunk (NASDAQ:SPLK) from selling off.
    • Credit Suisse's Philip Winslow is quite pleased billings rose 47.3% Y/Y in FQ4 (up from 42.4% a year ago), cloud software customers grew 90% Q/Q, and $1M+ and $100K+ deals respectively rose to 39 and 429 from 21 and 289 a year ago. He adds high quota attainment and a 38% Y/Y increase in sales heads "reinforces our belief that upside exists to both guidance and consensus estimates."
    • Summit Research's Srini Nandury: "We are increasingly confident Splunk is becoming a platform for unstructured data, akin to Oracle/MS-SQL server platforms, and the rise of Splunk reminds us of the rise of Oracle as a broad platform ... While there are several competitors such as Sumo Logic, Loggly, etc., we believe none of have the use cases and platform functionality as that of Splunk."
    • CLSA's Ed Maguire: "New unlimited enterprise pricing should further ease customer adoption even as recurring licenses represented 45% of bookings. With 9,000 customers and at least 70% of quarterly bookings coming from the base, there’s more runway to capture an ever increasing [total addressable market]."
    • Those less positive are mostly worried about valuation. Needham and BMO (neutral ratings) each observe Splunk has an enterprise value that's equal to ~11x their respective FY16 sales forecasts.
    | Comment!
  • 4:45 PM
    • Verizon (NYSE:VZ) has joined peers, including AT&T (NYSE:T) and T-Mobile (NYSE:TMUS), in complaining to the FCC that Dish Network (NASDAQ:DISH) distorted the results of the FCC's AWS-3 wireless spectrum auction with its bidding tactics.
    • Verizon ran its own analysis of the data and concluded close coordination between Dish and its designated entities ((DEs)) that Verizon says created a false sense of demand and drove the price above market value.
    • For its part, Dish has been on the record about disclosing and gaining approval for its actions ahead of the auction, though the resulting total bids came in over even the high estimates.
    • Major players have been jockeying for position with the FCC ahead of a likely even more important low-band auction next year.
    • More on the FCC auction
    • Previously: AT&T: Dish's auction approach skewed results, needs restriction (Feb. 20 2015)
    • Previously: T-Mobile's Legere calls for spectrum-auction rule changes (Feb. 18 2015)
  • 4:31 PM
    • Reuters reports EMC has opted against spinning off its 80% VMware (NYSE:VMW) stake. EMC dipped slightly before the close on the report, but still finished up 0.4%. VMware finished up 1.3%.
    • As it is, expectations for a spinoff occurring in the near-term have been low, particularly after EMC reached a truce with activist Elliott Management (has been pushing for a VMware spinoff) last month. The truce resulted in Elliott agreeing to standstill provisions through September, in exchange for EMC adding two Elliott-backed directors.
    • Likely making EMC hesitant to go through with a spinoff: VMware, in spite of the headwinds faced by its server virtualization ops, is still easily outgrowing EMC's core storage hardware/software ops. VMware posted 16% Y/Y revenue growth in 2014, while EMC's Information Infrastructure reporting segment only saw 2% growth.
    • EMC, for its part, often defends keeping its VMware stake by trumpeting product synergies between the companies.
  • 4:02 PM
    • ROVI spiked higher shortly before the close on a report it's seeking to hire a strategic advisor amid pressure from activists.
    • Shares previously had more moderate gains following the pricing of the company's $300M convertible offering.
    | Comment!
  • 3:30 PM
    • Wireless operator NTELOS Holdings (NASDAQ:NTLS) is down 5.5% after Wells Fargo downgraded to Market Perform, from Outperform.
    • Shares gained 3.2% on Thursday after the company announced Q4 revenues that gained 5% as it realigns its operations from eastern Virginia to the western half of the state and West Virginia.
    • While the move is taking root, it still cuts the carrier's subscriber base from about 500K to around 250K.
    • The move today has wiped out almost all the gains NTELOS has seen since the Dec. 2 move to get out of eastern Virginia.
    | 1 Comment
  • 3:04 PM
    • Another day, another big move in Sprint (S +7.1%) -- up higher today, on the revelation that CEO Marcelo Claure bought 5M shares on the open market.
    • At an average price of $4.92, the transaction cost about $25M.
    • The stock has seen some volatile days in the wake of its earnings report a few weeks ago.
    • Shares have lost 41% over the past 12 months, but are up 23.1% YTD.
  • 2:59 PM
    • Today's notable tech gainers include IP licensing firm VirnetX (VHC +8.1%), ultracapacitor maker Maxwell (MXWL +4.7%), local services marketplace Angie's List (ANGI +5.9%), voice processor developer Audience (ADNC +5.4%), Ethernet/Wi-Fi hardware maker Extreme Networks (EXTR +3.5%), Chinese polysilicon vendor Daqo (DQ +8.3%), Chinese mobile game published Sky-mobi (MOBI +9.8%), professional video hardware/software maker Avid (AVID +5.2%), and optical component vendors NeoPhotonics (NPTN +11%) and Oclaro (OCLR +5.2%).
    • Notable decliners include cloud HR/financials software leader Workday (WDAY -3.5%), cloud IT service desk software leader ServiceNow (NOW -3.7%), industrial laser maker IPG Photonics (IPGP -3.1%), FPGA/mobile sensor hub maker QuickLogic (QUIK -4.5%), and NAND controller/4G transceiver vendor Silicon Motion (SIMO -4%). The Nasdaq is down 0.5%.
    • Initially up post-earnings, Workday is now down 9% since beating FQ4 revenue estimates and offering in-line FY16 revenue guidance on Wednesday afternoon. Heavily-shorted VirnetX is up 33% since announcing on Feb. 18 the USPTO had denied five Apple patent review petitions. Maxwell (also heavily shorted) is up 17% since an insider buy was disclosed a week ago. Sky-mobi is up 20% since Rosenblatt Securities provided bullish coverage yesterday.
    • Previously covered: Chinese Web/mobile stocks, SanDisk, Autobytel, DigitalGlobe, GoPro, Immersion, MoSys, Resonant, Infoblox, Aruba, UniPixel, Autodesk, Universal Display, TubeMogul, Nimble Storage
    | Comment!
  • 2:45 PM
    • Intelsat (NYSE:I) is down 1.5% today as Credit Suisse downgrades shares to Underperform, from Neutral, and cuts its price target to $11, from $21. Intelsat is currently trading at $12.64.
    • On Wednesday, Jefferies cut its price target for Intelsat to $12.50 from $17.50. The firm maintained its hold rating.
    • The satellite company traded off on Monday as well after downgrades by Nomura and BofA.
    • Shares have lost 27% over the past 10 days since reporting earnings.
    • Previously: Intelsat swings to profit for 2014 (Feb. 18 2015)
    | 1 Comment
  • 2:31 PM
    • Though it beat FQ4 estimates, Mentor Graphics (MENT -4.5%) is guiding for FY16 (ends Jan. '16) revenue of $1.282B and EPS of $1.85, below a consensus of $1.31B and $1.90. FQ1 guidance is for revenue of $260M and EPS of $0.18 vs. a consensus of $276.3M and $0.18.
    • On the CC (transcript), Mentor stated its FY16 guidance "includes no emulation [software] revenue from our historically largest emulation customer." The EDA software vendor also mentioned it has launched a "voluntary retirement program" for North American workers; ~10% of the North American workforce is eligible.
    • On the bright side, bookings rose 30% Y/Y in FQ4 to a new record, fueled by 100%+ growth in design-to-silicon (chip design) product bookings. Automotive bookings (boosted by the XSe acquisition) were also a strong point.
    • System/software revenue rose 10% Y/Y to $323.3M, and service/support revenue 8% to $115.7M. Operating expenses (non-GAAP) rose 9% to $234.1M.
    • FQ4 results, PR
    | Comment!
  • 2:04 PM
    • Many Chinese Internet and mobile names are selling off as the yuan falls to its lowest levels against the dollar since Oct. 2012, thanks to the dollar's broader strength against foreign currencies and ongoing worries China's economy is cooling off. The exchange rate is currently at 6.27.
    • A weaker yuan affects the top and bottom lines of Chinese firms, as reported in dollars. It also increases financing costs (should Chinese companies seek to raise capital overseas), and is triggering fears of capital outflows that could lead the yuan to sell off further.
    • Notable decliners include YY (YY -5.2%), Vipshop (VIPS -4.1%), SouFun (SFUN -2.1%), Leju (LEJU -3.8%), Bitauto (BITA -3.7%), Autohome (ATHM -3.6%), Sungy Mobile (GOMO -4.2%), Momo (MOMO -6.6%), NetEase (NTES -4.9%), Ctrip (CTRP -2.3%), Qunar (QUNR -3.1%), iDreamSky (DSKY -3.7%), Jumei (JMEI -3.3%), Changyou (CYOU -3.3%), and (WBAI -4.8%). was downgraded to Hold by Deutsche today in response to recent provincial license suspensions.
    • A few of the aforementioned names also sold off on Wednesday. Forward P/E and P/S multiples for the group are far lower than they were 12 months ago.
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