Today - Tuesday, March 31, 2015
- ETSY's $14-$16 IPO price range translates into a $1.55B-$1.78B valuation range. At the midpoint, that's equal to 8.5x 2014 sales. Given recent growth, the forward P/S multiple could be 6-7x. (prospectus)
- With Etsy selling 13.3M new shares through the IPO, the company's gross proceeds stand to total $186M-$213M. Existing holders are initially selling 3.3M shares, and could sell another 2.5M if a greenshoe option is picked up.
- Accel Partners and other entities associated with VC Jim Breyer are selling 1.53M shares, thus lowering their stake to 25% from 30%. Union Square Ventures affiliates are selling 861K shares (cutting their stake to 12.6% from 15.2%), Index Ventures affiliates are selling 724K (cutting their stake to 12.8% from 15.6%). and Acton Capital affiliates are selling 222K (cutting their stake to 3.3% from 3.9%).
- Prior Etsy coverage
- Crossroads' (NASDAQ:CRDS) new StrongBox 3.0 NAS storage appliance is able to automatically write data to two different tape libraries; the company argues the solution, said to work with all major 3rd-party libraries, eliminates "the problems associated with manually shipping duplicate tapes for off-site copies," and allows multiple copies of LTFS tape media to be automatically provided in separately locations.
- Crossroads also declares StrongBox 3.0 to be the "first and only solution that provides both file and object storage with LTFS tape." It begins shipping in April.
- Shares rose to $2.54 in regular trading. Crossroads is coming off a January quarter where its product revenue fell 30% Y/Y to $862K, thanks to declining OEM sales for the company's SPHiNX virtual tape/backup system.
- Online craft marketplace Etsy (Pending:ETSY) will kick off its IPO roadshow tomorrow as it files to sells 16.67M shares (13.33M shares with 3.33M additional coming from selling stockholders) and expects a range of $14-$16/share.
- At the top end of that range, the firm would raise almost $267M.
- While Etsy was previously valued at nearly $700M, its revenue numbers suggest a current valuation that may be north of $1B.
- Previously: Etsy files for IPO, reports strong revenue growth (Mar. 04 2015)
- Previously: Bloomberg: Etsy working with banks on IPO (Jan. 13 2015)
- Ad-tech firm Rubicon Project (NYSE:RUBI) says it will acquire "intent marketing" technology provider Chango for about $122M, mostly stock.
- The firm says that deal will let it expand its premium offerings with keyword, contextual targeting and retargeting budgets and give it access to an additional $35B of intent marketing spend.
- It also will accelerate Rubicon's Buyer Cloud business, "advancing our technology roadmap and team build-out by more than one year," says Rubicon CEO Frank Addante.
- Chango processes 1T pageviews/month and billions of search events from leading search engines.
- Rubicon Project reaffirmed its Q1 outlook and set a conference call to discuss the Chango acquisition for 5 p.m. ET today.
- Rubicon shares are up 1% after hours.
- Polycom (NASDAQ:PLCM) will pay a $750K civil penalty to the SEC to settle a probe regarding personal expenses billed to the company by ex-CEO Andrew M. Miller. (8-K filing)
- Miller himself might not be getting off so easily: The SEC has levied seven charges against him over the alleged use of nearly $200K in Polycom funds for personal use, including trips to luxury resorts with his girlfriend. Miller resigned in 2013 following a board investigation into his expense submissions.
- Charter Communications (NASDAQ:CHTR) is up 6.2% and has touched a record-high $199 in the wake of its deal to acquire Bright House Networks, which would make it the country's No. 2 cable operator (Charter is now No. 4; Bright House is No. 6).
- The deal's dependent on Comcast's (NASDAQ:CMCSA) successful pursuit of Time Warner Cable (NYSE:TWC) -- Charter's own bid for TWC fell apart, and Charter could step back in if Comcast's plan falters -- and if Comcast takes such a clear lead, Charter may not stop at Bright House in trying to catch up.
- Mediacom, CableOne and Suddenlink could be the next targets. "I think it is inevitable most of the rest of the cable industry not owned by Comcast is sold to Charter," Pivotal Research Group analyst Jeff Wlodarczak tells Reuters.
- As for John Malone, his Liberty Broadband (NASDAQ:LBRDA) -- Charter's biggest shareholder -- has agreed to purchase $700M of shares in the Charter/Bright House combo, in transactions that would leave it with voting power of about 25%.
- Charter bonds picked up on the news as well.
- Only a handful of tech companies are posting outsized gains or losses amid a 0.6% drop for the Nasdaq.
- Notable gainers include three Chinese firms: CDN owner ChinaCache (CCIH +18.8%), online classifieds provider 58.com (WUBA +7.1%), and online retailer LightInTheBox (LITB +5.9%). Others include hybrid storage array upstart Nimble Storage (NMBL +4.7%), distributed power system/software provider PowerSecure (POWR +5.8%), and 3D measurement/imaging hardware provider FARO Technologies (FARO +4%).
- Notable decliners include supercomputer maker Cray (CRAY -4.1%), data management software vendor Varonis (VRNS -3.9%), and local services marketplace Angie's List (ANGI -5.6%).
- ChinaCache is up 34% since posting Q4 results on Thursday afternoon. 58.com is up 14% from Wednesday's close. Nimble is a day removed from putting to rest a fraud/trade secret dispute with rival NetApp. Angie's List is down 7% over the last two days, following the launch of Amazon's Home Services platform.
- Oppenheimer's Holden Lewis recently called FARO his top pick, citing the growth potential of its laser scanner line. Today, FARO announced a new software product for Autodesk's Revit building information modeling software.
- Previously covered: Infinera, Elephant Talk, Dangdang, CyberArk, Zagg, MaxPoint, Spherix, 2U, SouFun/E-House/Leju
- Up strongly yesterday in the wake of a Shanghai rally sparked by PBOC remarks suggesting further monetary easing is on tap, SouFun (SFUN -5.4%), E-House (EJ -6.6%), and Leju (LEJU -5.1%) have reversed course today. Shanghai was down 1% overnight, and the Nasdaq is currently down 0.5%.
- In addition to hinting at monetary easing, Beijing has announced fresh moves to bolster a sluggish housing market. The minimum down payment required for second-home purchases has been cut to 40% - it was at 50%-60% in most cities, and 70% in Beijing and Shanghai - and sellers who have owned their homes for at least two years are now exempt from capital gains tax (the requirement was previously 5 years).
- Compass Point's Michael Tarkan (Buy) has hiked his 2U (TWOU +4.6%) target by $6 to $29 following talks with management.
- Tarkan is pleased with recent news flow, which includes a new deal with Yale, partnerships with Google and Goldman, a deal extension and the removal of exclusivity provisions with UNC, and a new program (called Scaffold) to deepen ties with school partners. "[W]e believe management continues to build a substantial moat around the company with its top-tier portfolio of schools, strong student outcomes, wide-ranging servicing capabilities, and new expansion into campus-based operations."
- The cloud online education software provider is up 11% over the last two days, and has surged to new post-IPO highs.
- In addition to beating Q4 estimates, Dangdang (NYSE:DANG) is guiding for Q1 revenue of RMB2.2B ($354.8M), +28% Y/Y and above a $353.5M consensus. Marketplace GMV is expected to rise 49% to RMB1.77B ($285.8M).
- Active customers +10% Y/Y in Q4 to 9.8M; new customers +20% to 3.7M. Total orders +13% to 20.4M, with mobile accounting for 31%. Media revenue +21.8% to $234.5M; general merchandise +41.7% to $154.7M; Other revenue -9.7% to $14.5M. Marketplace GMV +61.2% to $362.2M.
- Thanks to a mix shift towards general merchandise sales, gross margin fell to 17.1% from 17.6% in Q4 2013. Fulfillment spend fell to 8.8% of revenue from 9.4%, and G&A to 1.7% from 0.6% (depressed last year by VAT refunds). Tech/content spend rose to 2.6% of revenue from 2%, and marketing to 4.8% from 4.2%.
- With Dangdang having gone into earnings down nearly 50% from a 52-week high of $16.42, expectations were fairly low.
- Q4 results, PR
- Google's (GOOG -0.1%) Chromebit, launching this summer in partnership with Asus (OTC:ASUUY) for "less than $100," allows any TV or monitor with an HDMI port to be turned into a Chrome OS PC by plugging in a flash drive-like stick. It arrives two years after Google launched its $35 Chromecast HDMI streaming stick.
- Also unveiled: 1) $149 Chromebooks from China's Haier and Hisense; the notebooks are respectively sold by Amazon and Wal-mart, feature 11.6" displays and quad-core ARM CPUs from China's Rockchip, and are declared to provide all-day battery life. 2) Asus' Chromebook Flip, a $249 all-metal touchscreen notebook; it arrives later this spring.
- IDC estimates Chrome OS, whose success has been the matter of much debate, accounted for 3.5% of 2014 global PC shipments and 29.9% of U.S. education market shipments.
- Separately, Google has launched new app install ad options for Android developers looking to promote their apps. Ads can now appear on the Google Display Network (supported by 2M publisher sites), and support for in-app ads has been expanded to include video ads.
- Google already shows app install ads in mobile search results, as well as through its AdMob unit's display ad network and (more recently) within Google Play. Facebook, which still leads the market, recently announced it had driven over 1M downloads through its app install ads.
- Hong Kong Television (NASDAQ:HKTV) has soared 28.3% in U.S. trading on news that its executive chairman, Wai-Kay "Ricky" Wong, is buying a controlling stake in his nearly bankrupt rival Asia Television.
- Media reports have mainland China businessmen Wong Ching and Wong Ben-Koon selling their stakes to Ricky Wong; the two controlled 52% of ATV.
- The financial details are undisclosed and regulators would need to clear the deal; the Executive Council is holding a special meeting tomorrow to discuss it.
- But the government "would rather renew ATV's licence than let it die," says political scientist James Sung Lap-kung.
- Spherix (NASDAQ:SPEX) filed its 2014 10-K after the close yesterday afternoon.
- Shares are down 12% over the last two days. Yesterday morning, Spherix announced the trial date for its suit against Verizon had been pushed back from May 18 to August 10.
- Spherix soared 11 days ago after receiving a favorable claim construction order for its suits against VTech and Uniden.
- SunEdison's (SUNE +0.3%) TerraForm Power (TERP +1.2%) YieldCo has taken control of 168MW of solar plants from its parent company in Q1. The plants were on TerraForm's 3.4GW project call right list, and are being paid for with existing funds. 153MW of the capacity is in the U.K.
- TerraForm is paying $110M in cash and assuming $177M in project debt. It expects the plants to deliver $17M in 2015 cash for distribution (CAFD), and $24M in annualized unlevered CAFD. The expected unlevered cash-on-cash return is expected to be above 8%. The company is reiterating guidance for 2015 CAFD of $214M and dividends of $1.30/share.
- SunEdison had a solar project backlog of 2.6GW at the end of 2014, and a solar pipeline of 5.1GW. TerraForm had a 1.51GW operating portfolio at the end of January.
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