Michael Kors (KORS) changes name to Capri Holdings (CPRI)

• Michael Kors completes acquisition of Versace, changes name to Capri Holdings; will begin trading under symbol CPRI on January 2.
• Michael Kors bought Versace for $2.1 billion in September 2018 as part of its action plan to become a luxury fashion conglomerate to rival Kering and LVMH. Under the Capri Holdings label – the name it chose to reflect its new portfolio approach – also sits Jimmy Choo, which Kors acquired in 2017 for $1.2 billion.

     "With the acquisition of Versace, we have now created one of the leading global fashion luxury groups in the world," Chief Executive John Idol said in a statement. "The new name for our group, Capri Holdings, is inspired by the fabled island which has long been recognized as an iconic, glamorous and luxury destination." The acquisition is expected to help grow the company's revenue to $8.0 billion in the long term and to boost Versace's revenue to $2 billion. The company is aiming to grow revenue at its Jimmy Choo brand to $1.0 billion and its core Michael Kors brand to $5 billion. Versace was purchased for a total enterprise value of 1.83 billion euros ($2.1 billion). The Michael Kors brand has struggled in recent quarters to meet sales estimates, leading the company to pull back from the wholesale channel to protect it from discounting.

Dell Technologies (DELL) began trading on the NYSE on Fri 28 Dec 2018

• Sector: Technology
• Industry: Computer Hardware
• Full Time Employees: 157,000
• Founded in 1984
• headquartered in Round Rock, Texas
• http://www.delltechnologies.com/en-us/index.htm

Noble Midstream Partners LP (NBLX) : 2-year performance

GTES : 11-month performance

Mindbody (MB) to be acquired by Vista Equity Partners for $1.9 billion

Vista will acquire all outstanding shares of MINDBODY common stock for a total value of approximately $1.9 billion. MINDBODY shareholders will receive $36.50 in cash per share, representing a 68% premium to the unaffected closing price as of December 21, 2018.

  

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Mindbody Inc. (MB) announced Monday a deal to be acquired by San Francisco-based private equity firm Vista Equity Partners in a deal valued at $1.9 billion. Shares of the technology platform for the fitness, beauty and wellness industries were inactive prior to a trading halt for news, which is set to be lifted at 8:30 a.m. Under terms of the deal, Vista will pay $36.50 in cash for each Mindbody share outstanding, representing a 68% premium to Friday's closing price of $21.72. The deal is expected to close in the first quarter of 2019, and includes a 30-day "go-shop" period in which Mindbody can solicit other acquisition proposals. Mindbody's stock has tumbled 49% over the past three months through Friday, while the S&P 500 (SPX) has shed 17%.

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death cross (daily)

Focus Financial Partners (FOCS) began trading on the Nasdaq on 26 July 2018

Focus Financial Partners Inc. provides wealth management services to primarily high net worth individuals and families.

• Sector: Financial Services
• Industry: Asset Management
• Full Time Employees: 2,000
• Founded in 2006 
• Headquartered in New York, New York.
• http://www.focusfinancialpartners.com

Offer size: $615 million
Offer price:  $33

G1 Therapeutics (GTHX) : placebo beats drug in cancer response rate test

G1 Therapeutics’ cancer drug trilaciclib has failed to beat placebo against multiple efficacy measures in phase 2. Trilaciclib performed well against its neutropenia-related primary endpoints but fell short in terms of response rate, prompting investors to send G1's stock down 26%.

   

death cross

North Carolina-based G1 designed the phase 2 to assess whether short-acting intravenous CDK4/6 inhibitor trilaciclib could reduce the occurrence and duration of Grade 4 neutropenia—a condition defined by abnormally low levels of a type of white blood cell—in patients with second or third-line small cell lung cancer (SCLC). The trial hit its primary endpoints by showing that trilaciclib, when added to chemotherapy drug topotecan, is more effective than placebo at controlling neutropenia.

That primary endpoint success enabled G1 to paint the results as positive. However, investors looked past the neutropenia data and zeroed in on a line deep in G1’s statement about rates of objective responses and clinical benefit seen in the trial, as well as the progression-free survival.

Of the 26 patients in the placebo arm, six responded, resulting in an objective response rate (ORR) of 23.1%. In the trilaciclib arm, four of the 30 patients responded, giving an ORR of 13.3%. The clinical benefit rate and progression-free survival were almost identical across the two arms, coming in at around 60% and 4.2 months, respectively.

G1 thinks trilaciclib may improve overall survival (OS) by preserving immune system function during chemotherapy. But G1 is yet to generate the mature OS data needed to validate that idea, and trilaciclib’s performance against other measures of efficacy has been mixed. A metastatic triple-negative breast cancer trial recently linked use of trilaciclib to improved ORR, but an earlier study in first-line SCLC found it was numerically worse than placebo against the objective response yardstick.

Despite that, G1 Chief Medical Officer Raj Malik thinks the biotech has emerged from the midphase program with data to support the advance of trilaciclib.

“We now have four randomized phase 2 trials showing trilaciclib’s multi-lineage myelopreservation benefits. We plan to meet with U.S. and European regulatory authorities in 2019 to discuss the totality of trilaciclib data and pathways to approval,” Malik said in a statement.

REV Group (REVG) reported earnings on Wed 19 Dec 18 (a/h)

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death cross earlier this year

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REV Group misses by $0.25, misses on revs; guides FY19 revs in-line; expects FebQ will be softer than the prior year as near-term challenges persist

• Reports Q4 (Oct) earnings of $0.28 per share, excluding non-recurring items, $0.25 worse than the S&P Capital IQ Consensus of $0.53; revenues fell 3.5% year/year to $659.8 mln vs the $709.6 mln S&P Capital IQ Consensus.
• Co issues in-line guidance for FY19, sees FY19 revs of $2.40-2.60 bln vs. $2.55 bln S&P Capital IQ Consensus.

Commentary:

• "We are disappointed with our financial results for fiscal year 2018. Fiscal 2018 was a year in which we were confronted with the strong headwinds from the impacts of tariffs, chassis availability, material lead time extensions and temporary labor inefficiencies....As we look to fiscal year 2019, we expect improvement in the availability of chassis and flow of raw materials. We are taking actions to increase manufacturing output to meet the ongoing strength of demand and to catch up with the delayed shipments we have experienced."
• Co enters FY19 with expectations for a return to growth in organic sales and profitability as well as significantly stronger cash flow generation and higher returns on invested capital. Co expects the strength of its financial results in FY19 to be weighted toward the second half of the year, consistent with historical trends, and that 1Q19 (Feb) will be softer than the prior year as near-term challenges persist through the end of the calendar year.

Blue Apron (APRN) drops below $1

• Blue Apron officially became a penny stock on Tuesday. Its shares closed down 11 pennies, to 90 cents, as the stock extended a long, steady post-IPO slide.
• The slide arguably started with the June 2017 IPO itself; at $10 a share, the deal priced lower than first anticipated.

Blue Apron’s (APRN) public experience gives investors something to contemplate as they look forward to a 2019 IPO lineup that could include big names like Uber, Lyft, Airbnb and Slack Technologies.

The company has been under attack on several fronts. Its subscription and delivery model offers appealing characteristics—and many who tried it loved it, or at least liked it—but acquiring and retaining customers proved to be a costly business for Blue Apron.

Those costs are even more problematic when you’re in a competitive industry—and Blue Apron certainly is, with companies such as HelloFresh (HFG.Germany), Albertson’s-owned Plated and Kroger -owned (KR) Home Chef—vying for many of same consumers and, often, doing so with comparable strategies.

In Blue Apron’s case, meanwhile, it’s not only dealing with an evolving meal-kit delivery business but also a fast-moving food industry in which grocery delivery is competing for some of those same dollars.

Is all lost for Blue Apron? In mid-November, with the shares in the neighborhood of a buck and a quarter, management announced a plan to get to profitability next year by focusing on their best customers, finding new sales channels, improving efficiency, and cutting staff.

Investors, for now, don’t seem to be giving the company much credit for that—though Wall Street’s average price target on the stock is near $1.60. Some degree of optimism may be associated with the possibility of a buyout by a company that likes the Blue Apron brand.

The biggest takeaway for IPO-minded investors might be a simple reminder that private valuations are far from a sure indicator of what the public markets might bear. In Blue Apron’s last private round, it was valued at about $2 billion. The company is worth less than a 10th of that now.

Dave & Busters (PLAY) reported earnings on Tue 11 Dec 2018 (a/h)

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Dave & Busters beats by $0.06, beats on revs, comps -1.3%; raises lower end of full year revenue guidance

• Reports Q3 (Oct) earnings of $0.30 per share, $0.06 better than the S&P Capital IQ Consensus of $0.24; revenues rose 12.9% year/year to $282.1 mln vs the $277.3 mln S&P Capital IQ Consensus.
  • Comparable store sales decreased -1.3%, driven by a -0.7% decrease in walk-in sales and a -6.9% decrease in special events sales. Comps in Amusements & Other increased +1.5% but decreased -5.0% in Food & Beverage.
• Co raises low end of guidance for FY18, sees FY18 revs of $1.243-1.255 bln vs. $1.25 bln S&P Capital IQ Consensus and vs prior guidance of $1.230-1.255 bln. Co guides to FY18 EBITDA of $268-277 mln vs prior guidance of $263-277 mln.
  • Guides to FY18 comps of a decrease of low single digits.
• For FY19, co guides to revenue being up high single digits with EBITDA up mid-to-high single digits.

Tencent Music Entertainment Group (TME) began trading on the NYSE on Tue 11 December 2018

• China’s largest streaming service sold ADSs for $13 apiece
• Its $22.9 billion valuation on debut falls short of Spotify’s
• Traders were nervous the market volatility would adversely affect Tencent Music’s public debut.
• By pricing at the low end of the range, instead of valuing the company in the $25 billion to $30 billion range as was talked about a few months ago, Tencent came in closer to $21 billion. 

Tao Sang Tong, center, Chairman of Tencent Music Entertainment, and Cussion Kar Shun Pang, right, the company's CEO, and Guomin Xie, the company's Co-President

CEO Cussion Kar Shun Pang rings the opening bell at the NYSE.

  

Tao Sang Tong, center, Chairman of Tencent Music Entertainment, joins with members of the company for a photo in front of the New York Stock Exchange prior to the Chinese company's IPO, Wednesday, Dec. 12, 2018. (AP Photo/Mark Lennihan)

Tao Sang Tong, left, Chairman of Tencent Music Entertainment, Co-President Guomin Xie, center, and Stacey Cunningham, president of the New York Stock Exchange, strike the bell at the exchange to mark the Chinese company's IPO, Wednesday, Dec. 12, 2018.

Tao Sang Tong, center, Chairman of Tencent Music Entertainment, and Co-President Guomin Xie, right, strike the bell at the New York Stock Exchange to mark the Chinese company's IPO, Wednesday, Dec. 12, 2018. (AP Photo/Mark Lennihan)

 

Tencent Music Entertainment employees pose with the QQ Music mascot for a photo in front of the New York Stock Exchange prior to the Chinese company's IPO

QQ Music is a streaming app provided by Tencent.

China's Tencent Music raises nearly $1.1 billion in U.S. IPO

NEW YORK/HONG KONG (Reuters) - China-based music streaming company Tencent Music Entertainment Group (TME.N) said it raised close to $1.1 billion in its U.S. initial public offering (IPO) after pricing its shares at the bottom of its targeted range.

The music arm of gaming and social network giant Tencent Holdings Ltd (0700.HK) priced its American Depositary Receipts (ADRs) at $13 per share, at the low end of its indicated $13 to $15 per share range, it said in a filing with the Hong Kong stock exchange.

The IPO values Tencent Music at $21.3 billion and shows how companies are defying a bout of market volatility with flotations.

Tencent Music sold 41 million ADRs, while existing shareholders sold a further 40.9 million, the filing said.

Tencent Music’s IPO tops off a bumper year for U.S. listings by Chinese companies, with $7.9 billion raised before Tencent Music’s debut, Refinitiv data showed.

That is the highest amount since 2014, the year of Alibaba Group Holding Ltd’s (BABA) record $25 billion IPO.

Tencent Music’s U.S. IPO is the fourth largest among Chinese firms this year by deal value. Video streaming company iQiyi Inc (IQ.O) leads with its $2.4 billion listing, followed by online group discounter Pinduoduo Inc (PDD) at $1.6 billion and electric vehicle maker NIO Inc (NIO) at $1.15 billion.

Returns for investors have been mixed, with the 31 Chinese IPOs in 2018 down an average of around 11 percent as of Dec. 10, according to data provider Dealogic.

With streaming apps QQ Music, KuGou, Kuwo as well as karaoke app We Sing, Tencent Music is China’s largest online music platform boasting more than 800 million active users monthly.The firm is often compared with Spotify Technology SA (SPOT) but offers more socially interactive services that make it profitable while its Swedish counterpart is not.

Tencent Music initially planned to launch the deal in October but postponed because of a sell-off in global markets roiled by a U.S.-China trade war and fears of slowing global growth.

Tencent Music reported a 244 percent profit jump for January-September to $394 million. By comparison, Spotify lost a net $520 million.

Veritone (VERI) to be acquired by Apis Capital Management for $10.26/share in cash

  

 Apis Capital submits all-cash offer to acquire Veritone for $10.26/share in cash, or approximately $198 mln
Apis Capital Management has engaged in an initial productive discussion with Veritone to explore the merits and potential terms of a transaction, yet Veritone has stalled in moving forward with substantive discussions. Apis looks forward to continuing to work with Veritone to complete this transaction in an expeditious manner, for the benefit of the shareholders. The proposal is subject to confirmatory due diligence and negotiation of definitive documentation.

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