Today - Tuesday, June 30, 2015
- Viggle (NASDAQ:VGGL) has closed its $4.2M stock sale -- 2.05M shares to Wolverine Asset Management.
- Ladenburg Thalmann was sole bookrunner on the deal. Viggle CEO Robert Sillerman is also involved with Wolverine Flagship on a go-private offer for his company SFX Entertainment.
- Viggle shares closed down 3.3% today.
- Mexico will act to allow "last mile" access to the América Móvil-owned Telmex network to competitors, Reuters reports, in yet another move by the country to spur competition.
- Telmex -- part of Carlos Slim's telecom empire -- has a huge fixed-line infrastructure connecting to Mexico's end users. Details of the arrangement are unknown but will shake up consumer access, as América Móvil (NYSE:AMX) operates about 70% of the country's telephone lines, fixed and wireless.
- The country has been acting to decentralize the sector with tough new regulations, spurring moves like AMX's plan to spin off its towers into a separately traded company, Telesites; and influencing heavy investment by AT&T (NYSE:T) in the country.
- Previously: Bloomberg: AT&T working to rent towers from América Móvil spinoff (Jun. 12 2015)
- Amazon (AMZN +1.1%) has begun selling physical goods on its Mexican site (Amazon.com.mx), and has also set up a local marketplace and fulfillment services for 3rd-party sellers. Until now, the company only sold e-books through its Mexican ops.
- Mexico has 120M people, and had a GDP of $1.3T. Unreliable shipping and a lack of credit have slowed e-commerce adoption in the country. Amazon is looking to address those issues by enabling order pickups at hundreds of locations, and by providing a slew of different payment options (including, shortly, monthly payments). It's also providing free shipping on orders above 599 pesos ($38) that are fulfilled by the company.
- Separately, Amazon says AWS will launch an Indian data center infrastructure in 2016 to better service local clients, which already number in the thousands, and address data sovereignty concerns. AWS currently offers services via data centers in the U.S., Europe, China, Japan, and Brazil, among other places.
- Yesterday: Amazon plans to offer business loans in Europe, China, India, Canada
- Elliptic Technologies provides cryptography cores and middleware, security protocol accelerators/processors, security IP modules, and other security-related IP for chipmakers and electronics firms. Synopsys (SNPS +1.5%) is buying the company for an undisclosed sum.
- Synopsys states Elliptic's offerings will complement its DesignWare chip IP portfolio. The deal follows the acquisition of Codenomicon, a Finnish provider of software tools that help developers uncover/fix security issues.
- Fresno, CA's police department has placed an order for 300 Taser (NASDAQ:TASR) Axon body cameras, along with a 5-year subscription to the company's Evidence.com video storage/file-access service. The order was placed and shipped in Q2.
- Dallas, Louisville, and London have also recently placed large Axon orders. Taser is up over 3x from a July 2014 low of $10.46, hit before the Ferguson unrest led interest in law enforcement body cameras to surge.
- Baidu (BIDU +0.1%) plans to spend RMB20B ($3.22B) over the next 3 years in growing its online-to-offline (O2O) service offerings, including its Nuomi group-buying/daily deals platform. CEO Robin Li: "Right now Baidu has over fifty billion [yuan] in cash on its books ... We're going to take 20 billion of that and do Nuomi right."
- In addition to Nuomi, Baidu's O2O efforts cover services such as food delivery and movie ticket bookings; it has also taken a stake in Uber. The Chinese search giant is counting its huge mobile user and local advertiser bases to give it an edge. Alibaba has also shown a strong interest in O2O services.
- The spending commitment comes shortly after Baidu priced a $1.25B debt offering.
- See also: O2O Can Be Baidu's Next Growth Driver
- China's going-private wave came to online games publisher KongZhong (NASDAQ:KZ) as Chairman/CEO Leilei Wang proposed buying the rest of the company for $8.56/ADS -- about a 20% premium over 30-day average ADS price -- but that might still be too low, argues SA contributor China Stock Research.
- Its trailing PE multiple, about 17.8x, trails Chinese peers like Feiyu (24.2x) and Ourgame (over 30x), and with a light asset structure, the company has robust cash flow (AOCF of $0.87/year per ADS).
- On the other hand, sliding Chinese markets could give some buyout backers cold feet, even with solid backers like KongZhong has, says Doug Young.
- IDG's behind management's offer, but the KongZhong deal may be the last of this wave of going private for U.S.-listed China companies until investors get a better handle on the China market's stability, he says.
- KongZhong picked up 4.7% on Monday, and is down 0.7% today, to $7.34. The bidding consortium held about 25% of the company prior to the offer, according to the fiscal 2014 annual report.
- VMware (VMW +0.1%) and reseller partner Carahsoft are paying $75.5M to settle a government suit (originally filed in 2010, on behalf of the GSA) accusing the company of "inaccurate pricing, inaccurate disclosures, and incomplete information about sales of VMware products to non-governmental customers," and of charging more than it did private companies for the same services.
- The prosecuting law firm calls the payout "one of the five largest recoveries against a technology company in the history of the False Claims Act." A VMware spokesperson: "VMware believes that its commercial sales practice disclosures to the GSA were accurate and denies that it violated the False Claims Act. The Company nevertheless elected to settle this lawsuit rather than engage in protracted litigation with one of its important customers – the federal government."
- The settlement comes a few months after the Pentagon cancelled a $1.6B software license contract with VMware following protests from rivals.
- Vodacom (OTC:VODAF) has gotten a provisional OK from South Africa's antitrust regulator to buy Neotel, an Internet service provider, from Tata for 7B rand (about $576M).
- Vodacom will need to invest 10B rand more into the company within five years, and pledge not to cut jobs or provide mobile service through Neotel spectrum for two years.
- The deal's passed muster with the country's telecom regulator, and now the competition tribunal is the last hurdle.
- Earlier, the government delayed word on the outcome of a stake in Vodacom that it's selling in order to bail out its power utility.
- Previously: South Africa's Vodacom stake sale still in progress as deadline arrives (Jun. 30 2015)
- Previously: Bloomberg: South Africa close to selling $2.3B stake in Vodacom (Jun. 23 2015)
- Previously: Vodacom's Neotel purchase finally gets regulator OK (Jun. 15 2015)
- Previously: Vodafone reportedly has chance to up Vodacom stake (Oct. 16 2014)
- After a few months of talks, Vivendi (OTCPK:VIVHY -1.8%) has wrapped its acquisition of YouTube rival Dailymotion, buying an 80% stake in the video site from Orange (ORAN -1.5%) for €217M (about $242M).
- Vivendi says it's aligned with the core of its digital strategy, allowing for "joint development, together with the Universal Music Group and Canal+ Group teams, of original and distinctive content and formats."
- Previously: Orange enters exclusive talks with Vivendi over Dailymotion stake (Apr. 07 2015)
- Previously: Vivendi offering €250M for Dailymotion (Apr. 06 2015)
- By a 2-1 vote, a federal appeals court has upheld a 2013 decision finding Apple (AAPL +0.6%) liable for conspiring with publishers to fix e-book prices. (the full ruling - .pdf).
- Apple is now set to pay $450M - $400M to e-book consumers, $50M to lawyers - through a settlement originally announced last year. The settlement was contingent on the appeal being rejected; if Apple had won, the company would only be paying $70M. The WSJ notes the penalty is equal to less than 3% of Apple's FQ1 (December quarter) profit.
- Separately, Apple Music, unveiled on June 8 at WWDC, has gone live with the release of iOS 8.4 (contains a revamped Music app), and so has the free/DJ-hosted Beats 1 global radio station. As previously announced, Apple is providing a free 3-month trial period for its music service, after which it charges $9.99/month to individuals and $14.99/month for family plans covering up to 6 people. An Android app arrives in the fall.
- Sonus (NASDAQ:SONS) has amended a credit agreement formed a year ago with Bank of America. The revised agreement features a $15M credit facility maturing June 30, 2016. It also stipulates Sonus maintain a cash balance of at least $85M, and quarterly revenue of at least $50M. The company is expected by the Street to have Q2 revenue of $54.1M, and Q3 revenue of $65.1M. (8-K filing)
- After opening slightly higher, shares have steadily sold off. 1.08M shares have changed hands vs. a 3-month daily average of 1.23M. The VoIP infrastructure hardware/software provider had $84M in cash/short-term investments at the end of Q1, and just $750K in debt.
- Local marketer and yellow-pages firm Dex Media (NASDAQ:DXM) was a key nanocap loser yesterday, slipping 12.5%, and today it's down 7.2%, giving up gains of the past two weeks.
- The stock hit its 52-week low of $0.57 on June 16, but doubled from there over the next week.
- Short percentage of float had increased in early June, to 57.6% from the 56% at May's end.
- SolarCity (SCTY -1.3%) is selling solar bonds maturing in July 2016, 2018, 2020, 2025, and 2030, and carrying interest rates ranging from 1.6%-5.45%. (8-K filing)
- SolarCity began offering solar bonds to the general public last October. The minimum purchase requirement has been $1K.
- The top U.S. solar installer ended Q1 with $576M in cash/short-term investments, $479M in long-term debt, $100M in solar bonds, $312M in solar asset-backed notes, and $796M in convertible debt. Shares have joined those of other solar names in adding to the Monday losses seen amid a steep market selloff.
- The NY Post reports NCR (NCR +0.2%) has "pushed back the binding bidding deadline for the company by more than two weeks, from July 8 to July 26."
- The paper reported last week would-be P-E suitors were "balking" at NCR's $36/share asking price. Shares are currently at $30.16, below where they traded before Reuters reported on June 16 Blackstone and Carlyle were making a joint bid.
- Piper's Michael Olson reports checks for online travel trends through May point to a strong Q2 for the industry.
- Priceline (PCLN +2.8%), Expedia (EXPE +2%), Travelzoo (TZOO +3%), HomeAway (AWAY +1.6%), and TripAdvisor (TRIP +0.9%) are outperforming to varying degrees amid a 0.5% gain for the Nasdaq. Aside from Expedia, the group has been pressured by a mixture of forex and company-specific concerns. Piper has a neutral rating on Expedia due to valuation concerns, and Overweight ratings on Priceline, TripAdvisor, and HomeAway.
- Separately, Expedia has named worldwide engineering SVP Aman Bhutani the president of the Brand Expedia Group, which covers Expedia.com, Travelocity, Wotif, and Expedia's JV with AirAsia - CEO Dara Khosrowshahi has been handling the job for over 3 years. GeekWire notes Bhutani has a strong reputation within the company for making data-driven tech decisions and experimenting with product changes.
- Previously: Deutsche downgrades Priceline, cites Airbnb
- Previously: Macquarie: HomeAway is cheap if Airbnb is worth $24B
- Telstra (OTCPK:TLSYY) -- through its 2014 acquisition, video platform unit Ooyala -- is buying U.K. firm Nativ to boost cloud-based distribution.
- It's the second Ooyala deal in the past nine months, after the fall acquisition of ad-tech provider Videoplaza.
- It'll help speed a plan to create a personalized TV and video platform company addressing the production side.
- Telstra bought Ooyala last August for $270M.
- Cable and wireless firms are on the (legal) clock, as a D.C. appeals court is setting an expedited schedule for them to provide briefs on the set of challenges to FCC net neutrality rules.
- Firms will need to provide their opening briefs (20,000 words or fewer) by July 30, meaning final briefs will be due Oct. 13, and oral argument could begin by year's end.
- The disputes now are largely around Title II reclassification (Internet access as a utility) and interconnection, rather than bans on blocking/throttling or paid prioritization.
- Represented/related companies: VZ, TMUS, S, CMCSA, CHTR, TWC, CVC, CTL, FTR, CCOI, DISH, DTV
- As happened 11 days ago, Twitter (NYSE:TWTR) is up strongly on vague M&A rumors with no official source.
- Volume is moderate: 7.2M shares thus far vs. a 3-month daily average of 22.2M. The Nasdaq is up 0.5%.
- Some analyst commentary: 1) Canaccord's Michael Graham estimates Twitter's Google search integration deal could initially yield ~3.5M additional visitors, and 40M+ over time. 2) SunTrust's Bob Peck, who downgraded to Neutral shortly before Twitter plunged in response to its Q1 results and Q2/2015 guidance, is worried about growing brain drain. He notes that in addition to M&A chief Rishi Garg, several other prominent execs have left in recent months, often to take jobs at other companies.
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