Feeds:
Posts
Comments

Archive for the ‘boic’ Category

Article from NYTimes.

Japanese companies have made a string of deals in the United States this year, but the pact announced on Monday is one for the record books.

The agreement by SoftBank to take control of Sprint Nextel is the biggest deal by a Japanese company in the United States since at least 1980, according to Thomson Reuters, which values the deal at $23.3 billion.

That far exceeds the next-largest deal, the $9.8 billion stake that NTT DoCoMo, SoftBank’s rival, took in AT&T Wireless in 2000.

The SoftBank deal is also worth more than some recent takeovers, including Takeda Pharmaceutical’s 2008 purchase of Millennium Pharmaceuticals for $8.1 billion. It also tops the $7.8 billion agreement the Mitsubishi UFJ Financial Group struck with Morgan Stanley in the depths of the financial crisis in 2008, according to Thomson Reuters data.

It also ranks as the biggest foreign deal involving an investment in an American company so far this year, according to Thomson Reuters.

The deal on Monday is a welcome development for the financial advisers involved, in a year starved for deal activity.

The agreement has lifted Citigroup, an adviser to Sprint, to sixth from seventh place in the Thomson Reuters global league table this year. Sprint’s other advisers, UBS and Rothschild, each moved up one spot as well.

One of SoftBank’s advisers, the Raine Group, entered this year’s league table in 30th place after the deal. (The deal is the group’s biggest, according to Thomson Reuters.) The Mizuho Financial Group, another SoftBank adviser, rose to 17th place from 22nd.

For American consumers, SoftBank is set to be the latest Japanese company to make its mark on daily life in this country.

In 1989, the Mitsubishi Estate Company made headlines with a deal to buy a 51 percent stake in the Rockefeller Group in New York. (The stake eventually grew to 100 percent, after Rockefeller went through bankruptcy.)

Craig Moffett, an analyst with Sanford C. Bernstein, drew a comparison to that deal last week, when Sprint confirmed it was in talks with SoftBank.

“This is tantamount to Japanese buyers buying Rockefeller Center,” he said.

The year 1989 was also when the Japanese electronics giant Sony took a foothold in Hollywood. Its roughly $4.7 billion purchase of Columbia Pictures Entertainment was a blockbuster at the time.

SoftBank’s shares fell 5.3 percent in Tokyo on Monday, with investors concerned over the company’s ability to turn around the ailing Sprint.

Read more here.

Read Full Post »

Article from NYTimes.

By clinching a deal to buy MetroPCS, T-Mobile USA is aiming not only to survive but also to turn up the pressure on its larger rival, Sprint Nextel.

The merger, formally announced on Wednesday, signals a renewed phase of jockeying among cellphone service providers as they race to draw in more smartphone users and upgrade to the latest high-speed data networks. And by taking one of the most attractive takeover targets, MetroPCS, off the table, T-Mobile may have strengthened its hand at the expense of Sprint.

The cellphone service industry is dominated by the virtual duopoly of Verizon Wireless and AT&T, which together claim 199 million customers, more than their next six competitors combined. That has left Sprint and T-Mobile to scramble, trying to undercut their big rivals on price even as they seek additional wireless spectrum that would support high-speed data networks.

The industry has long looked to consolidation to grow; last year, AT&T unsuccessfully sought to buy T-Mobile for $39 billion, hoping to gain size and spectrum. Growth via merger also underpinned Sprint’s aborted attempt to buy MetroPCS this year, a transaction scrapped at the 11th hour by Sprint’s reluctant board.

MetroPCS represents a potentially big lost opportunity for Sprint. The two companies use the same network technology (CDMA), which would have made for a relatively smooth integration of customers and devices. T-Mobile runs on GSM, so the company will have to convert MetroPCS’s 9.3 million customers to its technology over the next three years.

CLOSING THE GAP If the parent company of T-Mobile USA buys MetroPCS, the combined unit would have the fourth most cellular subscribers.

SUBSCRIBERS, IN
MILLIONS
Source: The companies
AT&T 105
Verizon 94
Sprint 56.4
Merged company 42.5
T-Mobile USA 33.2
MetroPCS 9.3

The newly enlarged T-Mobile will have about 42.5 million customers, compared with Sprint’s 56 million. But the merger could potentially give T-Mobile additional clout to demand popular devices like the iPhone, which it does not now carry. Adding MetroPCS will also help T-Mobile build out more quickly its Long Term Evolution network, the speedy data standard that powers the latest batch of smartphones.

T-Mobile executives argue that the unified operator can offer unlimited data and cheaper prepaid service plans to more customers.

“When you look at this as an industry, we are the alternative choice for consumers,” John J. Legere, the company’s chief executive, said in a telephone interview. “This can only be good for the industry to think about the competition and consumer.”

T-Mobile’s parent, Deutsche Telekom, and MetroPCS held on-and-off discussions about a merger for years, according to people with direct knowledge of the matter who spoke anonymously because they were not authorized to speak publicly about private discussions. But after Sprint’s board vetoed a takeover of the smaller service provider, T-Mobile and MetroPCS met early this summer to begin formal discussions about a deal.

Weeks of negotiations ensued, leading to a structure in which Deutsche Telekom would own 74 percent of the combined entity through a complicated stock swap. Existing MetroPCS shareholders will also receive $1.5 billion through a special dividend, worth about $4.09 a share.

And while antitrust officials fiercely opposed AT&T’s takeover of T-Mobile, people involved in the MetroPCS transaction argued that Wednesday’s deal was more likely to pass regulatory muster. Instead of fortifying one of the country’s biggest service providers, it will bolster one of its weaker ones.

A spokesman for Sprint declined to comment.

With T-Mobile claiming MetroPCS, Sprint is likely to find itself even harder pressed to build out its next-generation network and pitch itself as the dominant low-cost service provider. Sprint’s chief executive, Daniel R. Hesse, has said he expects to participate in mergers within the industry, but few attractive takeover targets remain.

Shares in Leap Wireless International, a smaller competitor often cited as a likely deal partner, plummeted nearly 18 percent on Wednesday, as investors shook off hopes that it would be acquired anytime soon. The company, a prepaid service provider, operates largely in less-attractive markets and is in the midst of a turnaround effort.

“I don’t think that Leap would provide all that much,” Charles S. Golvin, an analyst at Forrester Research, said by telephone.

While some analysts have speculated about whether Sprint would try to outbid T-Mobile for MetroPCS, some industry deal makers were skeptical of the company’s will to revisit a target it had already left at the altar.

Sprint is still scarred by the merger that produced its current incarnation: its 2005 union with Nextel Communications, an example still used in business schools as a classic case of a bad deal.

The tie-up was marred by incompatible phone networks and infighting. As a result, Sprint slipped further behind Verizon and AT&T in market share.

Sprint may still pursue deals, especially as a way to add to its stores of spectrum, without resorting to full-on mergers. Analysts and deal specialists say one potential seller is Clearwire, which already helps provides a high-speed data network to Sprint.

Another is Dish Network, which has an abundance of spectrum but has been unable to set up its own mobile phone network. The company’s chairman, Charles W. Ergen, hinted at an industry conference that with T-Mobile out of the running as a potential partner, he would be open to others.

“Sometimes when one door closes, a window opens somewhere else,” he said, according to a report in The Denver Post.

Analysts have floated one more, bolder, possibility: buying the newly enlarged T-Mobile, creating a third major company to combat Verizon and AT&T. Industry bankers disagree on whether such a deal would be opposed by the Federal Communications Commission.

Read Full Post »

A new report from health startup accelerator Rock Health shows that funders have invested $1.08 billion in digital health startups this year, which already eclipses the $956 million they spent in all of last year.

cash roll

Venture capital support for traditional life sciences companies may be up for debate, but enthusiasm for digital health startups certainly seems to be on the rise.

According to a report out Wednesday from health startup accelerator Rock Health, in the third quarter of this year, VCs invested 70 percent more money in 84 percent more deals than in the same quarter last year.  Those trends are in line with a mid-year funding report released by Rock Health this summer.

The reports say funders have invested $1.08 billion in digital health startups this year, which already eclipses the $956 million they spent in all of last year.  By the third quarter of last year, VCs invested just $626 million in digital health.

The biggest funders of the year, so far, are Aberdare, Founders Fund, Khosla Ventures and New Enterprise Associates. But the report also notes that the field is attracting newcomers – 10 percent are first time health investors, the report said.

The four largest deals this year – which involved Castlight Health, GoHealth, Care.com and Best Doctors – comprise more than 20 percent of the year’s funding and most of the funding rounds were Series A and B, the report said. But interesting startups including Mango Health, pingmd and Meddik have raised smaller seed rounds.

The report comes a week after the Wall Street Journal said that “the health-care industry in general has fallen out of favor with venture capitalists.” While some in the industry say they’ve seen VC interest shift away from biotech and traditional life sciences that require more time and capital, and are subject to more regulation, Rock Health’s report shows that interest in digital health is still strong.

Read more here.

Read Full Post »

Article from GigaOm.

After making a public appeal for investors, MiaSole has found a suitor in Hanergy, a large renewable energy company in China that just bought another solar equipment maker in Germany. The $30M sales prices of MiaSole shows how cheap solar manufacturing assets can be picked up.

Thin Film Solar Underdog MiaSole Looks Ahead to New Plant, Solar Shingles

The search for a financial suitor is coming to an end for solar thin film startup, MiaSole, which has agreed to be bought by China-based Hanergy, according to a shareholder letter.

Hanergy plans to buy MiaSole for a measly $30 million, according to the letter, and also reported by the San Francisco Chronicle. While the Silicon Valley solar company has been mum about how much venture capital it’s raised since its inception in 2001, published reports have put the figure somewhere between $400 million and $500 million by the end of 2011. Earlier this year, the company raised $55 million.

MiaSole was desperate for a white knight to rescue it from oblivion. After years of research and development, the company seemed to have finally nailed its manufacturing process to making solar panels out of copper, indium gallium and selenium (CIGS) that are more efficient than many rivaling CIGS thin film companies. But it was running out of money and needed to expand its production and attract customers. CEO John Carrington joined MiaSole late last year, and he made a public appeal in December for investors and partners who could bring money and sales and marketing expertise.

Hanergy may not be a well-known company in the U.S., but it’s large renewable energy producer in China. We pointed out in this post back in June that Hanergy is a company worth watching not only because of its large hydropower and solar panel production plants in China, but also because of its involvement in installing solar energy equipment. Hanergy won a 3-year deal to install solar panels on Ikea’s stores in China. The company also has built a wind energy generation business within China.

With the purchase of MiaSole, Hanergy is knitting together a global solar thin film empire. Last week, the company completed the purchase of CIGS thin film maker Solibro from Q-Cells in Germany. Hanergy said it would increase Solibro’s production for the European market. With MiaSole’s purchase, Hanergy, of course, will have a CIGS thin film manufacturing base in the U.S.

Solar startups have been picked off one by one cheaply – or filed for bankruptcy – over the past 19 months because the global solar market has been plagued by a glut of solar panels. The fast-falling panel prices – roughly 50 percent in 2011 alone and 30 percent so far this year – have put an enormous pressure on companies to lower their prices. That pressure is particularly difficult to handle for startups, which often have higher manufacturing costs initially when they are scaling up production of their technology. And many of them indeed were trying to raise more money and make that leap to mass production when the financial market crisis hit in late 2008, followed by the oversupply of solar panels starting in 2011.

One of the remaining CIGS thin film company from Silicon Valley, SoloPower, hopes to reverse the trend. The company inaugurated its first large factory in Portland, Ore., last week and plans to start making use of a $197 million federal loan guarantee to expand production.

Read more here.

Read Full Post »

Article from TechCrunch.

No one got just how powerful it was that Facebook recently said it would allow ad targeting to lists of email addresses. Today at the Dreamforce conference it became clear, as Facebook ad chief David Fischer formally launched “Custom Audience” ads and how they tie into CRM. I’m convinced they’re going to be hugely profitable for advertisers and Facebook.

Why? A hotel company like Starwood has email addresses of its customers and could target “Come stay at the luxurious St. Regis” to high-end customers who’ve stayed there before, while targeting “Find cheap hotels nearby” to those who’ve stayed at its low-budget brands. That means more sales and more loyalty for advertisers, and more revenue for Facebook.

On August 30, Facebook told press that Custom Audiences was coming, but now it’s live with eight ads providers. Custom Audience ads let businesses submit a text or CSV file of privacy-protected hashed email addresses, phone numbers, or Facebook User IDs and have Facebook target those people with a specific ad. Businesses can also layer on additional ad targeting parameters, such as age or interests to reach a specific demographic within a customer segment.

Salesforce who brought in Fischer for its Dreamforce conference is uniquely suited to take advantage of custom audience ads because it owns both its massively popular eponymous customer relationship management system, but also a Facebook ads buying system Brighter Option that it got with its acquisition of Buddy Media this summer.

I’ve attained from Facebook a list of the seven other vendors working with custom audience ads, but none have their own CRM. They are AdParlor, Alchemy Social, GraphEffect, Kenshoo, Nanigans, Social Moov, and Optimal.

Custom audience targeted ads will be much more relevant than ads just targeted to a business fan’s or some biographical demographic. They can reach people who a business is sure purchased its products before, or that haven’t thanks to exclusionary targeting. Yes, businesses could just email these existing customers for free. However,  Facebook can help them hone in on certain demographic segments of their customers by overlaying additional targeting parameters, and reach them vividly through the news feed instead of their dry inbox.

Here are a few more examples of industries that could use custom audience ads:

  • A car company with email addresses of its customers could target “buy a new SUV” ads to people who bought an SUV 5+ years ago, while targeting “Find nearby charging stations” to those who recently bought an electric vehicle.
  • A bank company could target different ads to customers with savings of $5,000 versus customers with $5 million.
  • A Facebook game developer could plug in the user IDs of its gamers, targeting ads for its newest war-strategy games to those who played its old strategy game, while targeting ads for its latest shopping game to users who played its fashion game.
  • A B2B vendor could submit a file of the phone numbers of its biggest clients and target ads for a premium service to them to increase revenue, while targeting its newest clients with ads for discounts to increase loyalty.
  • Instead of targeting general ads to all its Facebook fans encouraging return visits, Amazon could advertise specific products to segments of its customers who’ve bought similar things.

Precise targeting of segments of existing customers like this could produce huge return on investment for advertisers and command high ad rates for Facebook. CRM-equipped companies might spend more when they know who they’re reaching, and that could help Facebook please Wall Street with higher revenues. In fact, it’s such a smart idea to plug CRM into ads that I bet we’ll see more advertising platforms integrate like this soon.

Read more here.

Read Full Post »

Article from PE Hub.

Venture dollars have shifted to early rounds from late-stage deals over the past several years. It is a shift that proved fastest in quick changing industry segments, such as the consumer Internet, and slowest in segments like semiconductor, which are less dynamic.

Until now, I have not seen a study with an industry-by-industry breakdown of the trend. The work came from Preqin and offers some useful detail. For instance, just 13% of “consumer discretionary” deals over the last four years were late stage transactions and just 15% of Internet fundings, the study found.

Meanwhile, 45% of semiconductor and electronics deals in the four years from 2009 to 2012 were late stage. And a third of transactions in cleantech and health care were, according to the study.

Since the Great Recession of 2008 and 2009, venture capitalists have shifted substantial dollars to the early stage. In 2007, 40% of invested capital went to late stage deals. Nineteen percent found its way to the early stage, according data from the MoneyTree Report. By 2011, early stage spending was 30% of the total and late stage had fallen to just under 34%. The breakdown for the first half of 2012 is almost identical to last year.

According to Preqin, another segment with strong early stage interest is business services, where just 17% of deals were late stage. Preqin draws the dividing line between early and late at the Series C funding, lumping expansion financing into its later stage tally.

Among the latest of the late fundings during the period were the G and H rounds. Several took place. In 2010, Onconova Therapeutics raised a $15 million Series H and the same year saw Zipcar put another $21 million in its war chest with a Series G financing from Meritech Capital Partners and Pinnacle Ventures.

SolarCity this year roped in $81 million in a Series G round with investors including Silver Lake and Valor Equity Partners.
Read more here.

 

Read Full Post »

Article from NYTimes.

Few investors have ridden the recent Internet boomlet like the GSV Capital Corporation.

After GSV announced in June 2011 that it was buying a stake in the privately held Facebook, the closed-end mutual fund surged 42 percent that day. Capitalizing on the euphoria, GSV sold another $247 million of its shares, using the money to expand its portfolio of hot start-ups like Groupon and Zynga.

Now, GSV is feeling the Facebook blues.

When the public offering of the social network flopped, GSV fell hard, and it still has not recovered. Shares of GSV, which were sold for an average of $15.35, are trading at $8.54.

“We probably benefited from our stake in Facebook more than we deserved on the way up,” said GSV’s chief executive, Michael T. Moe, “and were certainly punished more than we deserved on the way down.”

GSV, short for Global Silicon Valley, is the largest of several closed-end mutual funds that offer ordinary investors a chance to own stakes in privately held companies, at least indirectly. Closed-end funds like GSV typically sell a set number of shares, and their managers invest the proceeds. In essence, such portfolios operate like small venture capital funds, taking stakes in start-ups and betting they will turn a profit if the companies are sold or go public.

“I think GSV was really innovative in creating a kind of publicly traded venture capital fund,” said Jason Jones, founder of HighStep Capital, which also invests in private companies.

But the shares of closed-end funds trade on investor demand – and can go significantly higher or lower than the value of the underlying portfolios. The entire category has been hit by Facebook’s troubles, with GSV trading at a 38 percent discount to its so-called net asset value.

Mr. Moe, 49, has previously experienced the wild ups and downs of popular stocks.

A backup quarterback at the University of Minnesota, he started out as a stockbroker at the Minneapolis-based Dain Bosworth, where he wrote a stock-market newsletter called “Mike Moe’s Market Minutes.” He met the chief executive of Starbucks, Howard Schultz, on a visit to Seattle in 1992, and he began covering the coffee chain after its initial public offering.

“I left believing I had just met the next Ray Kroc,” Mr. Moe wrote in his 2006 book, “Finding the Next Starbucks,” referring to the executive who built the McDonald’s empire.

After stints at two other brokerage firms, Mr. Moe became the director of global growth research in San Francisco at Merrill Lynch in 1998. There he ran a group of a dozen analysts at a time when mere business models “were going public at billion-dollar valuations,” he said.

Shortly after the dot-com bubble burst, he founded a banking boutique now called ThinkEquity. At the time, he expected the I.P.O. market to shrug off the weakness and recover in a couple of years. Instead, it went into a decade-long slump.

“Market timing is not my best skill,” Mr. Moe said. In 2007, he sold ThinkEquity.

The next year, he started a new firm to provide research on private companies, NeXt Up Research. He later expanded into asset management, eventually changing the name to GSV. Within two months of starting his own fund, he bought the shares in Facebook through SecondMarket, a marketplace for private shares.

GSV soon raised additional funds from investors and put the money into start-ups in education, cloud computing, Internet commerce, social media and clean technology. Along with Groupon and Zynga, he bought Twitter, Gilt Groupe and Spotify Technology. The goal is finding “the fastest-growing companies in the world,” he said.

But Mr. Moe has paid a high price, picking up several start-ups at high valuations on the private market. He bought Facebook at $29.92 a share. That stock is now trading at $19.10. He purchased Groupon in August 2011 for $26.61 a share, well above its eventual public offering price of $20. It currently sells at $4.31.

Max Wolff, who tracks pre-I.P.O. stocks at GreenCrest Capital Management, said GSV sometimes bought “popular names to please investors.”

“This is such a sentiment-sensitive space, the stocks don’t trade on fundamentals,” Mr. Wolff said, adding, “If there’s a loss of faith, they fall without a net.”

GSV’s peers have also struggled. Firsthand Technology Value Fund, which owns stakes in Facebook and solar power businesses like SolarCity and Intevac, is off 65 percent from its peak in April. “We paid too much” for Facebook, said Firsthand’s chief executive, Kevin Landis.

Two other funds with similar strategies have sidestepped the bulk of the pain. Harris & Harris Group owns 32 companies in microscale technology. Keating Capital, with $75 million in assets, owns pieces of 20 venture-backed companies. But neither Harris nor Keating owns Facebook, Groupon or Zynga, so shares in those companies have not fallen as steeply.

GSV is now dealing with the fallout.

In a conference call in August, Mr. Moe was confronted by one investor who said, “the recent public positions have been a disaster,” according to a transcript on Seeking Alpha, a stock market news Web site. While Mr. Moe expressed similar disappointment, he emphasized the companies’ fundamentals. Collectively, he said, their revenue was growing by more than 100 percent.

“We have been around this for quite some time, and we are going to be wrong from time to time,” Mr. Moe said in the call. “But we are focused on the batting average.”

In the same call, Mr. Moe remained enthusiastic – if not hyperbolic – about the group’s prospects. Many of GSV’s 40 holdings are in “game-changing companies” with the potential to drive outsize growth, he told the investors.

Twitter, the largest, “continues to just be a rocket ship in terms of growth, and we think value creation,” he said. The data analysis provider Palantir Technologies helps the Central Intelligence Agency “track terrorists and bad guys all over the world.” The flash memory maker Violin Memory “is experiencing hyper-growth,” he wrote in an e-mail.

But Mr. Moe was a bit more muted in recent interviews. While he says he still believes in giving public investors access to private company stocks, he recognizes the cloud over GSV. “We unfortunately have a social media segment that got tainted. I completely get why our stock is where it is. It’s going to be a show-me situation for a while.”

Acknowledging some regrets, Mr. Moe said he was angriest about overpaying for Groupon, saying, “Yeah, I blew Groupon.” He said that he also did not anticipate what he called a deceleration in Facebook’s growth rate, and that it was “kind of infuriating” that some of its early investors were allowed to exit before others. GSV often must hold its shares until six months after a public offering.

But the downturn in pre-I.P.O. shares has a silver lining, Mr. Moe said. Since the Facebook public offering, he has been able to put money to work “at better prices.” He recently bought shares of Spotify at a valuation of about $3 billion, roughly 25 percent below the target in its latest round of financing.

The I.P.O. market is also showing signs of life, he said, with the strong debuts of Palo Alto Networks and Kayak Software. And he still has faith in Facebook.

Whatever its current stock price, at least it is a “real company” with revenue and profit, Mr. Moe said, adding, “It’s not being valued off eyeballs and fairy dust.”

Read more here.

Read Full Post »

« Newer Posts - Older Posts »