Northern, WI 02/28/2013 (usmarketbuzz) – California hedge fund Valiant Capital Management manager, Chris Hansen who has been a long-time Facebook Inc (NASDAQ:FB) backer is betting heavily on companies across the state. He has invested in Pinterest Inc and has shown a keen interest in buying control of the marquee sports team and shifting its base to the north. Last week, Hansen led a financing round worth $200 million in Pinterest at a valuation of $2.5 billion. The 45-year old Hansen is also the leader of an investors group that includes Microsoft Corporation (NASDAQ:MSFT).
Controversially high deals
Last month, Microsoft CEO Steve Ballmer agreed to buy-out a Sacramento Kings controlling stake taking the value of the National Basketball Association franchise to a record $525 million. He has also proposed that the team be relocated to Seattle.
Not only are both the deals high-profile but controversial as well. The Kings have spent the last 28 years in Sacramento where they have seen 10 playoff runs and 18 sold-out seasons. Hansen’s plan of having the team relocated has met with large-scale protests in the Kings hometown. Though there is no revenue generation in Valaint’s Pinterest funding it holds high value amongst Web startups which are very closely held.
CEO of CB insights, a research firm that specializes in tracking private equity and venture capital said that Pinterest’s business is not yet clearly defined and so all the betting that is taking place is only on potential. It has to be taken on a case-by-case basis but the main concern is when bad money chases rock star companies. Though Hansen’s investment interests are concentrated largely in the Bay Area, he has been a sports fanatic since his Seattle days. The San Francisco-born Hansen moved to Seattle and was a die-hard NBA SuperSonics supporter. The Seattle-based team was eventually sold after 41 years and shifted to Oklahoma City in 2008 where they moved onto becoming The Thunder.
Seattle basketball fans are looking forward to seeing some professional games returning to the city and Hansen’s smart investments is helping his hedge fund gain visibility in the state. Valiant’s biggest high-priced bet for an internet company was the $500 million Facebook Inc (NASDAQ:FB) bet and the hedge fund had started backing it at $12 per share in late 2010. 2011 saw Valiant participating in an investment in Dropbox Inc, worth $250 million. It also has an $85 million stake in Evernote Corp. All this at a time when web companies like Zynga Inc (NASDAQ:ZNGA), Facebook Inc (NASDAQ:FB) and Groupon Inc (NASDAQ:GRPN) are facing a tough time
Shares of Facebook Inc (NASDAQ:FB) went down by 1.90% to close at 426.87
Shares of Microsoft Corporation (NASDAQ:MSFT) went up by 1.61% to close at 427.81
Shares of Zynga Inc (NASDAQ:ZNGA) went up by 4.76% to close at $3.52
Shares of Groupon Inc (NASDAQ:GRPN) went up by 7.79% to close at $5.98
Top 3 Gainers: Zynga (NASDAQ:ZNGA), Eros International (NYSE:EROS), Borqs Technologies’ (BRQS)
Zynga (NASDAQ:ZNGA) is up 2.5% after Benchmark reiterated its Buy rating in a look-ahead at Q2 earnings. The firm’s expecting a beat and solid guidance for Q3, and it’s raising its guidance for the fiscal year.
Tailwinds from the pandemic won’t dissipate easily, Benchmark suggests, and the videogame maker’s acquisition of Peak (and with it new “forever franchises” in Toon Blast and Toy Blast) will drive audience, bookings, margins and free cash flow, it says. The firm has an $11 price target, now implying 14% upside.
Eros International (NYSE:EROS) is up 5.8% today, making up the last week’s lost ground, after news that its streaming service Eros Now is partnering with Sony India (SNE +2.3%).
That will mean Eros Now’s app is pre-installed on selected Sony smart televisions in India, along with availability on a large base of existing models (Bravia E series and newer).
The country over the past year has seen a 25% growth in demand for smart TVs, fueled by overall industry growth of 15%, to a record 15M units/year.
Borqs Technologies’ (BRQS) personal safety tracker sees strong market with increased orders from the electronics retail chain in the US.
The boost in product demand comes ahead coronavirus pandemic that provides company to expect delivery of 250K units this year. It reflects over 3x the volume delivered in 2019, the year of its launch.
Borqs’ mobile personal safety devices designed particularly for senior citizens come with panic button, location tracking, and fall detection.
Biotech movers: Pfizer Inc. (PFE), Celgene Corporation (CELG)
Pfizer Inc. (PFE) said on Thursday it received a request for documents as part of a U.S. investigation related to quality issues involving the manufacture of auto-injectors at its Meridian Medical Technologies site.
Pfizer, in a regulatory filing, said it would be producing records in response to the civil investigative demand from the U.S. Attorney’s office for the Southern District of New York.
Meridian, a unit of Pfizer that manufactures EpiPen injectors used to deliver an emergency allergy antidote, has been hit by a series of manufacturing problems in recent years. Mylan NV, which markets EpiPens, has recalled tens of thousands of the devices after complaints that some had failed to activate.
Bristol-Myers Squibb has been meeting with shareholders in Boston and New York over the last two weeks to try to salvage its $74 billion purchase of cancer drugmaker Celgene Corporation (CELG), the biggest acquisition announced so far this year.
The deal, announced in January, was hard sell to Bristol shareholders from the start. The acquisition adds about $32 billion in fresh debt to Bristol’s balance sheet while assuming $20 billion in Celgene’s debt, the companies said at the time. After factoring in debt, the acquisition was the largest health-care deal on record, according to data compiled by Refinitiv.
Now, hedge funds Wellington Management and Starboard Value say the deal doesn’t sit well with them. Bristol has sent executives to New York to meet with institutional investors several times over the last two weeks and met with investors in Boston on Wednesday and Thursday, according to a person who briefed on the meetings.
Bristol-Myers declined to comment.
Big Losers: Corbus Pharmaceuticals Holdings, Inc. (CRBP), Petróleo Brasileiro S.A. – Petrobras (PBR)
Corbus Pharmaceuticals Holdings, Inc. (CRBP)’s shares slumped as much as 16% to $6.94 on huge volume. The stock has been showing intense sell off suddenly after a bearish article on seekingalph.com by Alpha Exposure.
The article stated that Corbus has ties to investors convicted of or alleged to have committed securities fraud. We believe lenabasum has failed its major trials in SSc and CF. Lenabasum was also denied Breakthrough Therapy Designation in SSc. We believe lenabasum will fail in its pivotal SSc and Phase 2b CF trials. We are short Corbus with a price target of $0.50.
Petróleo Brasileiro S.A. – Petrobras (PBR) is expanding its ambitious divestment program and has “bold” plans for sales, the Brazilian state-run oil company’s chief executive said after the firm posted its first annual profit in five years.
On a conference call with analysts to discuss fourth-quarter results, CEO Roberto Castello Branco said selling non-core assets will be key to deleveraging.
Petrobras, as the company is known, can reduce its ratio of net debt to earnings before interest, taxes, depreciation and amortization, or EBITDA, to 1.5 or even to 1, he added.
The University of Chicago-educated CEO, who took the reins in early January, has long been vocal about the need to slim down the sprawling firm and focus on core activities such as exploration and production. Thursday’s comments were some of his most assertive on the matter.