iRobot to be acquired by Amazon for $61/share in deal valued at $1.7B
Amazon (AMZN) and iRobot (IRBT) announced that they have entered into a definitive merger agreement under which Amazon will acquire iRobot. Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.
We know that saving time matters, and chores take precious time that can be better spent doing something that customers love,” said Dave Limp, SVP of Amazon Devices.
“Over many years, the iRobot team has proven its ability to reinvent how people clean with products that are incredibly practical and inventive-from cleaning when and where customers want while avoiding common obstacles in the home, to automatically emptying the collection bin.
Customers love iRobot products-and I’m excited to work with the iRobot team to invent in ways that make customers’ lives easier and more enjoyable.”
iRobot makes the popular Roomba
Amazon will acquire iRobot for $61 per share in an all-cash transaction valued at approximately $1.7B, including iRobot’s net debt.
Completion of the transaction is subject to customary closing conditions, including approval by iRobot’s shareholders and regulatory approvals.
On completion, Colin Angle will remain as CEO of iRobot.
In light of the transaction with Amazon.com, iRobot will not hold its Q2 financial results conference call, which was originally scheduled for August 10.
In addition, iRobot has withdrawn its prior 2022 financial expectations issued in early May, as well as its long-term financial targets provided in December 2021. Given the ongoing disruptions and uncertainty that could impact the company’s outlook, iRobot is suspending its practice of providing financial guidance.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Google to acquire Mandiant for $23.00 per share in cash
Alphabet’s Google (GOOGL) announced that it has signed a definitive agreement to acquire Mandiant (MNDT) for $23.00 per share, in an all-cash transaction valued at approximately $5.4B, inclusive of Mandiant’s net cash.
Upon the close of the acquisition, Mandiant will join Google Cloud.
With the addition of Mandiant, Google Cloud will enhance offerings to deliver an end-to-end security operations suite with even greater capabilities to support customers across their cloud and on-premise environments.
The acquisition of Mandiant is subject to customary closing conditions, including the receipt of Mandiant stockholder and regulatory approvals, and is expected to close later this year.
Piper Sandler
Piper Sandler analyst Thomas Champion said he thinks the deal makes strategic sense given Google’s move further into the Enterprise. The Mandiant acquisition should complement Google Cloud Platform’s current security offerings, which include BeyondCorp Enterprise and VirusTotal, said Champion, who reiterates his Overweight rating and $3,475 price target on Alphabet shares.
Wedbush
Wedbush analyst Daniel Ives notes that this deal is all about Mandiant being further integrated into Google Cloud with more cyber threats facing enterprises/governments on the transformational shift to cloud and Mandiant establishing itself as “the Navy Seals of cyber security” over the last decade, the analyst contends.
#Ives believes this deal will have a major ripple impact across the cyber security space as cloud stalwarts Amazon (AMZN) and Microsoft (MSFT) will now be pressured into M&A and further bulk up its cloud platforms.
The analyst thinks cyber names such as Varonis (VRNS), Tenable (TENB), CyberArk (CYBR), Qualys (QLYS), Rapid7 (RPD), SailPoint (SAIL), and Ping (PING) standout as potential M&A candidates in cyber security given these vendors laser focus on protecting next generation cloud workloads from cyberattacks.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Lumentum to acquire NeoPhotonics for $16 per share in cash
Lumentum (LITE) and NeoPhotonics (NPTN) announced that they have entered into a definitive agreement under which Lumentum will acquire NeoPhotonics for $16.00 per share in cash, which represents a total equity value of approximately $918M.
NeoPhotonics Corporation develops, manufactures, and sells optoelectronic products that transmit and receive high speed digital optical signals for cloud and hyperscale data center internet content provider and telecom networks worldwide.
Lumentum Holdings Inc. manufactures and sells optical and photonic products in the Americas, the Asia-Pacific, Europe, the Middle East, and Africa. The company operates in two segments, Optical Communications (OpComms) and Commercial Lasers (Lasers).
Laser chips made by Lumentum
The transaction has been unanimously approved by the boards of directors of both companies.
The purchase price represents a premium of approximately 39% to NeoPhotonics’ closing stock price on November 3, 2021.
Laser chips made by NeoPhotonics
Lumentum intends to finance the transaction through cash from the combined company’s balance sheet.
Related to the transaction, Lumentum will provide up to $50M in term loans to NeoPhotonics to fund anticipated growth, which may require increased working capital and manufacturing capacity.
The transaction is expected to close in the second half of calendar year 2022, subject to approval by NeoPhotonics’ stockholders, receipt of regulatory approvals, and other customary closing conditions.
“With NeoPhotonics, we’re making another important investment in better serving our customers and expanding our photonics capabilities at a time when photonics are at the forefront of favorable long-term market trends. At the center of our strategy is a relentless focus on developing a differentiated portfolio with the most innovative products and technology in our industry so that we can help our customers compete and win in their respective markets.
Adding NeoPhotonics’ differentiated products and technology and innovative R&D team is consistent with this strategy and together, we will better meet the growing need for next generation optical networking solutions. We are confident this transaction will make us an even better partner to our customers, while enabling our team to deliver significant, long-term value to our stockholders. We look forward to welcoming NeoPhotonics’ talented team of employees to Lumentum,” said Alan Lowe, Lumentum President and CEO.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Walgreens to deploy Wing drone deliveries in Dallas-Fort Worth area
In a blog post by Alphabet’s (GOOG, GOOGL) Wing, the company said, ” Today we’re unveiling a new model for drone delivery that will allow us to expand into densely-populated metropolitan areas in the United States.
Wing will stage delivery drones at retail locations; ready to fly directly to customers.
The aircraft will arrive in small containers that serve as tiny hangars, allowing each store to quickly and easily deploy a small, dedicated fleet from its parking lot, on its roof, or in small spaces adjacent to the building.
When this model launches, Walgreens (WBA) will be the first U.S. retailer to use this new approach.
Walgreens team members will process orders and load packages onto the delivery drones, and Wing will oversee operation of the delivery service.
Our first lightweight, co-located operation will be set up at a Dallas-Fort Worth area Walgreens store in its parking lot, serving parts of the city of Frisco and town of Little Elm.
In addition to the Walgreens store, Wing has teamed up with Hillwood to prepare a separate drone delivery facility within Frisco Station, an urban, mixed-used development located in Frisco.
Hillwood has a long track record supporting forward-thinking, innovative transportation initiatives across the region, most notably at its Alliance Texas development and its designated Mobility Innovation Zone.
We look forward to working with Hillwood as we deploy a facility at Frisco Station that has all the usual delivery capabilities, but will be dedicated to exploring new use cases, community demonstrations, school field trips and public tours…
In preparation for this launch, we’ve been conducting test flights since June at Hillwood’s AllianceTexas Flight Test Center, a drone testing facility in Fort Worth.
We’ll begin a small number of practice flights next week in Frisco and Little Elm, and hope to set up delivery demonstrations to get feedback from the community in the coming weeks.
In the coming months, we expect to launch a commercial service there that would be the first of its kind in a major U.S. metro.”
Google Wing delivers a package
Wing is a subsidiary of Alphabet Inc. that develops technology of drone-based delivery of freight. The company completed their first real-world deliveries in 2014. The company has operations in Australia, the United States, and Finland.
In July 2018, Project Wing graduated from Google X to become an independent Alphabet company. As of January 2019, Wing began delivering take-out food and beverages out of its test facility in Bonython, Australia as part of a pilot program. In April 2019 Wing became the first drone delivery company to receive an Air operator’s certificate from the Federal Aviation Administration to allow it to operate as an airline in the USA.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Spectrum Brands agrees to sell Hardware & Home Improvement segment for $4.3B
Spectrum Brands Holdings (SPB) announced it has entered into a definitive agreement to sell its HHI segment to ASSA ABLOY (ASAZY) for $4.3B in cash, which it said represents over 14 times HHI’s expected FY21 Adjusted EBITDA.
Upon closing of the transaction, Spectrum Brands expects to receive approximately $3.5B in net proceeds, subject to final tax calculations and purchase price adjustments.
Spectrum Brands expects to use the proceeds from this transaction to repay debt and reduce its gross leverage ratio to approximately 2.5x times in the near term.
Excess proceeds are expected to be allocated to invest for organic growth, fund complementary acquisitions and return capital to shareholders.
The company expects to maintain its quarterly cash dividend of 42c per common share, which will be subject to the company’s continued review from time to time.
The sale of HHI is expected to close following the receipt of certain regulatory approvals and customary closing conditions.
The results of operations of HHI will be reported as discontinued operations beginning in the fourth quarter of 2021. David Maura, CEO of Spectrum Brands, said, “I am exceedingly proud of the fact that our Hardware & Home Improvement business nearly doubled its EBITDA under Spectrum Brands’ ownership.
I am pleased to know that HHI has found a new home with a great partner, and I am confident that ASSA ABLOY will take it to its highest potential, bringing great value and innovation to consumers for generations to come.
We believe this transaction demonstrates the tremendous value of Spectrum Brands as an owner and steward of our businesses and places the Company in a strong position for the future by allowing us to further reduce our leverage levels, and enhance our capital allocation strategy.
Our remaining business will be more focused, allowing us to prioritize innovation to accelerate organic growth and pursue synergistic acquisitions to further drive value creation in Global Pet Care and Home & Garden, while continuing to look for strategic and organic ways to enhance the value of Home and Personal Care.
After the closing, we will become a more pure play consumer staples company with higher growth rates and strong margins.”
The company added: “Spectrum Brands will be a simplified business consisting of three focused business units with leading market share, strong growth opportunities and consistent performance.
The pro forma business generated $3.0B in net sales and $386 million in Adjusted EBITDA representing a 13.0% margin for the LTM period ended July 4, 2021.
Spectrum Brands will report its fourth quarter 2021 results in mid-November and expects to provide Fiscal 2022 Earnings Framework at that time.”
ASSA ABLOY AB is a Swedish company that provides door opening products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, Africa, North and South America, Asia, and Oceania. In addition, the company offers entrance automation products, services, and components, such as automatic swing, sliding, and revolving doors; industrial doors; garage doors; high-performance doors; docking solutions; hangar doors; gate automation products; components for overhead sectional doors and sensors; and high security fencings and gates. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands.
Spectrum’s Hardware & Home Improvement segment offers hardware products under the National Hardware and FANAL brands; locksets and door hardware under the Kwikset, Weiser, Baldwin, EZSET, and Tell Manufacturing brands; and plumbing products under the Pfister brand. Its Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington and LumaBella brands.
The company’s Global Pet Care segment provides rawhide chewing, dog and cat clean-up and food, training, health and grooming, small animal food and care, and rawhide-free products under the 8IN1 (8-in-1), Dingo, Nature’s Miracle, Wild Harvest, Littermaid, Jungle, Excel, FURminator, IAMS, Eukanuba, Healthy-Hide, DreamBone, SmartBones, ProSense, Perfect Coat, eCOTRITION, Birdola, and Digest-eeze brands.
ASAZY is down 38 cents to $15.53 per share while SPB is up $15 to $94.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
AOC flags ‘material risks’ to Palantir investors in SEC letter
Palantir Technologies Inc. (PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.
Palantir finally becomes a public company
It offers Palantir Gotham, a software platform for government operatives in the defense and intelligence sectors, which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the handoff between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.
The company also provides Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place.
Shares soared 34% on Wednesday on their debut.
In a newly released letter, New York Representative Alexandria Ocasio-Cortez issued words of warning to the SEC over Palantir’s efforts to take the company public, cautioning the regulatory body over details the progressive congresswoman says were “omitted” in the company’s disclosures, TechCrunch’s Taylor Hatmaker reports.
New York Representative Alexandria Ocasio-Cortez
Illinois Rep. Jesus “Chuy” Garcia
“Palantir reports several pieces of information about its company – and omits others – that we believe require further disclosure and examination, as they present material risks of which potential investors should be aware and national security concerns of which the public should be aware,” Ocasio-Cortez and Illinois Rep. Jesus “Chuy” Garcia wrote.
Palantir’s chairman, Peter Thiel
Palantir’s chairman, Peter Thiel, and its work for government agencies including U.S. immigration have sparked concerns among corporate watchdogs and human rights groups including Amnesty International. The company has also drawn rebukes from governance experts who point out that Thiel will have power with little accountability because of multi-class stock that grants him outsize power in perpetuity.
PLTR closed at $9.73, up $2.48 on heavy volume of 338,584,433.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Fed members project Federal funds rate near zero until end 2023
There were some important shifts in the statement versus July’s, however, that further support the ZIRP posture.
Indeed, the Fed will “aim” for an inflation rate “moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%.
The Fed reiterated from June that it will in coming months increase its holdings of Treasuries and MBS “to sustain smooth market functioning and help foster accommodative financial conditions.” There were two dissents. Kaplan approved of the current target range, but wanted to retain a “greater policy flexibility.” Kashkari wanted the statement to indicate the current target range on rates will be maintained until core inflation has reached 2% on a sustained basis. The Fed’s SEP reflected an improved outlook on 2020 growth, as expected.
FOMC Chief, Jerome Powell
The Federal Reserve said in today’s statement,
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.
The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.”
Feds balance sheet ballons
The Fed released the economic projections of Federal Reserve Board members and Federal Reserve Bank presidents under their individual assessments of projected appropriate monetary policy, which shows that the median projection for Federal funds rate is 0.1% for the end of 2020, the end of 2021, and the end of 2022. The group’s projections in June were also for a Federal funds rate of 0.1% at the end of 2020, the end of 2021 and the end of 2022. The Fed group has extended its projection out to 2023, and still sees a Federal funds rate of 0.1% at the end of 2023.
FOMC will continue to pump money into economy
FOMC Forecast revisions, released with the FOMC statement, show the huge boosts in the official 2020 GDP forecasts that analysts had assumed, followed by a more restrained 2021-23 bounce.
The jobless rate estimates were lowered by much more than expected across the forecast horizon, and inflation was boosted as expected.
The median Fed funds rates sit at 0.1% through 2023, though the range of estimates show expectations of hikes by some starting in 2022.
The 2020 GDP central tendency was boosted sharply to the -4.0% to -3.0% from the prior central tendency of -7.6% to -5.5%, versus our own -2.4% forecast.
Unemployment expected to stay high
Analysts saw a huge trimming the jobless rate central tendency to 7.0%-8.0% from 9.0%-10.0%, versus our own higher 8.2% figure. Analysts saw boosts in the PCE chain price central tendencies to 1.1%-1.3% from 0.6%-1.0% for the headline and to 1.3%-1.5% from 0.9%-1.1% for the core, versus our respective estimates of 1.2% and 1.6%.
The central tendency for the Fed funds rate rises to 0.1%-0.4% in 2023 after unanimous 0.1% figures in 2020 and 2021. The range rises to 0.1%-0.6% in 2022, and to 0.1%-1.4% in 2023. page for a table of assumptions for the Fed’s revised forecasts.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
TikTok suing Trump Administration over efforts to ban TikTok in U.S.
TikTok stated in a post to its corporate website:
“Today we are filing a complaint in federal court challenging the Administration’s efforts to ban TikTok in the US…
TikTok sues Trump Administration
Today, 100 million Americans turn to TikTok for entertainment, inspiration, and connection; countless creators rely on our platform to express their creativity, reach broad audiences, and generate income; our more than 1,500 employees across the US pour their hearts into building this platform every day, with 10,000 more jobs planned in California, Texas, New York, Tennessee, Florida, Michigan, Illinois, and Washington State; and
On August 6th, Trump issued an executive order giving TikTok 90 days to sell
many of the country’s leading brands are on TikTok to connect with consumers more authentically and directly than they can elsewhere.
Put simply, we have a thriving community and we are grateful – and responsible – to them.
The Executive Order issued by the Administration on August 6, 2020 has the potential to strip the rights of that community without any evidence to justify such an extreme action, and without any due process.
TikTok is owned by ByteDance
We strongly disagree with the Administration’s position that TikTok is a national security threat and we have articulated these objections previously.”
ByteDance has reportedly been making progress in talks with potential acquirers of the U.S. operations of the short video app, including Microsoft (MSFT) and Oracle (ORCL), media reports have indicated. Reports have also indicated that Twitter (TWTR) is exploring a bid for TikTok.
Other publicly traded companies in the social media space include Facebook (FB) and Snap (SNAP).
TikTok/Douyin is a Chinese video-sharing social networking service owned by ByteDance, a Beijing-based Internet technology company founded in 2012 by Zhang Yiming.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Stein Mart voluntarily files Chapter 11 bankruptcy protection
Stein Mart (SMRT) announced that it and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida – Jacksonville Division.
Stein Mart files for bankruptcy protection
Stein Mart offers designer and name-brand fashion apparels, home decor merchandise, accessories, and shoes at everyday discount prices in the United States. As of June 3, 2020, it operated 281 stores in 30 states. The company was founded in 1908 and is headquartered in Jacksonville, Florida.
The Company has filed customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the Company’s ability to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral.
Too much savings caused Stein Mart’s demise
These motions are typical in the Chapter 11 process and the Company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.
Details on the Company’s Chapter 11 process and go-forward strategy are as follows:
The Company expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection therewith, the Company has launched a store closing and liquidation process.
The Company, however, will continue to operate its business in the ordinary course in the near term; and the Company is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Twitter faces FTC fine of up to $250M over alleged misuse of email, phone data
On July 28, 2020, Twitter (TWTR) received a draft complaint from the Federal Trade Commission alleging violations of the company’s 2011 consent order with the FTC and the FTC Act, the company said in a regulatory filing.
Twitter books a $150M charge., Stockwinners
The allegations relate to the company’s use of phone number and/or email address data provided for safety and security purposes for targeted advertising during periods between 2013 and 2019.
The company estimates that the range of probable loss in this matter is $150M to $250M and has recorded an accrual of $150M.
The accrual is included in accrued and other current liabilities in the consolidated balance sheet and in general and administrative expenses in the consolidated statements of operations.
FTC complaint relates to misuse of phone number and email addresses
The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.
The company is also currently involved in, and may in the future be involved in, legal proceedings, claims, investigations, and government inquiries and investigations arising in the ordinary course of business.
These proceedings, which include both individual and class action litigation and administrative proceedings, have included, but are not limited to matters involving content on the platform, intellectual property, privacy, data protection, securities, employment and contractual rights.
Class Action suits have been filed against Twitter
Legal fees and other costs associated with such actions are expensed as incurred.
The company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies.
Litigation accruals are recorded when and if it is determined that a loss related matter is both probable and reasonably estimable.
Material loss contingencies that are reasonably possible of occurrence, if any, are subject to disclosure.
Twitter used customer phone numbers for marketing purposes, Stockwinners
As of June 30, 2020, except for the referenced class actions, derivative actions and FTC matter, there was no litigation or contingency with at least a reasonable possibility of a material loss.
Except for the aforementioned accrual of $150M recorded in relation to the FTC matter, no other material losses were recorded during the three and six months ended June 30, 2020 and 2019 with respect to litigation or loss contingencies.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Beginning July 15, AMC will resume operations of 450 U.S. theatres as part of a phased plan that is expected to bring the 600-plus U.S. theatre circuit to nearly full operation leading into the opening of MULAN on July 24 and TENET on July 31.
Adam Aron, CEO & President, AMC Theatres, said, “After a painful almost four-month hiatus due to the coronavirus, we are delighted to announce that movies are coming back to the big screen at AMC.
Our next 100 years of making smiles happen officially begin at approximately 450 theatres across the United States on July 15. I cannot emphasize enough how much care and attention to detail we have taken in developing AMC Safe & Clean, our absolute commitment to optimizing the health and safety of our theatres for our guests and associates.
Remember that there is a rumor that Amazon may buy AMC
Developed along with The Clorox Company, and current and former faculty of Harvard University’s School of Public Health, AMC Safe & Clean represents a comprehensive commitment with a broad array of tools being used in sanitizing our theatres.
Social distancing, reduced seat capacity, greatly intensified cleaning regimens, new employee health protocols, contactless ticketing and mobile food & beverage ordering are all part of AMC Safe & Clean.
So too is a new multimillion-dollar commitment to implementing high tech solutions in making AMC theatres safe, including deploying electrostatic sprayers, HEPA vacuums and upgraded MERV 13 ventilation filters.
All this is being put into motion because at AMC our single highest priority is the health and safety of our guests and associates. Both personally and professionally, I couldn’t be more excited for what this means for movie lovers.”
Disney’s Mulan to open July 24th
In the coming weeks, theatre teams will begin returning to their theatres for training on AMC’s new, enhanced cleaning and safety procedures.
AMC expects that almost all its 600-plus U.S. locations will be open and in operation for the launch of MULAN on July 24 and TENET on July 31.
The resumption of AMC operations may be adjusted if there are changes to the current theatrical release schedule, or as needed in response to local or regional conditions.
To facilitate proper social distancing within theatre auditoriums, AMC will approach seat capacity limitations in four distinct phases. But AMC will always follow all federal, state and local directives, including those that mandate a maximum capacity if lower than those envisioned in AMC’s four phases as now planned.
Tenet is scheduled for July 31 opening
The reopening schedule for specific theatres will be communicated in early July. During the weeks leading up to new major theatrical releases, AMC will be showing popular repertory titles made available from its studio partners. Those titles and ticket price information will be announced prior to reopening.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
The Department of Justice has released a set of reform proposals to update the outdated immunity for online platforms under Section 230 of the Communications Decency Act of 1996.
Responding to bipartisan concerns about the scope of 230 immunity, the department identified a set of concrete reform proposals to provide stronger incentives for online platforms to address illicit material on their services while continuing to foster innovation and free speech.
The department’s review of Section 230 over the last ten months arose in the context of its broader review of market-leading online platforms and their practices, which were announced in July 2019.
The department held a large public workshop and expert roundtable in February 2020, as well as dozens of listening sessions with industry, thought leaders, and policy makers, to gain a better understanding of the uses and problems surrounding Section 230.
The first category of recommendations is aimed at incentivizing platforms to address the growing amount of illicit content online, while preserving the core of Section 230’s immunity for defamation claims.
These reforms include a carve-out for bad actors who purposefully facilitate or solicit content that violates federal criminal law or are willfully blind to criminal content on their own services.
Additionally, the department recommends a case-specific carve out where a platform has actual knowledge that content violated federal criminal law and does not act on it within a reasonable time, or where a platform was provided with a court judgment that the content is unlawful, and does not take appropriate action.
A second category of proposed reforms is intended to clarify the text and revive the original purpose of the statute in order to promote free and open discourse online and encourage greater transparency between platforms and users.
One of these recommended reforms is to provide a statutory definition of “good faith” to clarify its original purpose.
The new statutory definition would limit immunity for content moderation decisions to those done in accordance with plain and particular terms of service and consistent with public representations. These measures would encourage platforms to be more transparent and accountable to their users.
The third category of recommendations would increase the ability of the government to protect citizens from unlawful conduct, by making it clear that Section 230 does not apply to civil enforcement actions brought by the federal government.
A fourth category of reform is to make clear that federal antitrust claims are not, and were never intended to be, covered by Section 230 immunity.
Over time, the avenues for engaging in both online commerce and speech have concentrated in the hands of a few key players.
It makes little sense to enable large online platforms (particularly dominant ones) to invoke Section 230 immunity in antitrust cases, where liability is based on harm to competition, not on third-party speech.
The action follows President Trump’s executive order seeking to weaken broad immunity enjoyed by Facebook (FB), Twitter (TWTR) and Google (GOOGL).
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
As JC Penney’s files for bankruptcy, others line up to do the same
Retailers have long been suffering from a tough retail environment due to competition from online retailers such as Amazon, Etsy and eBay; it seems like COVID-19 fired the kill shot.
J.C. Penney
J.C. Penney announced that it has received approvals from the U.S. Bankruptcy Court for the Southern District of Texas, in Corpus Christi, TX for the “First Day” motions related to the company’s voluntary Chapter 11 petitions filed on May 15, 2020, including approval for the company to access and use its approximately $500M in cash collateral.
The 118 year old retailer files for Chapter 11 bankruptcy, Stockwinners
J.C. Penney entered into a restructuring support agreement with lenders holding approximately 70% of J.C. Penney’s first lien debt to reduce the company’s outstanding indebtedness and strengthen its financial position. J.C. Penney has approximately $500M in cash on hand as of the Chapter 11 filing date.
James Cash Penney started the company in 1902
JCP Gets Delisted
The New York Stock Exchange announced that the staff of NYSE Regulation has determined to commence proceedings to delist the common stock of J.C. Penney Company – ticker symbol JCP – from the NYSE. NYSE Regulation reached its decision that the company is no longer suitable for listing after the company’s May 15, 2020 disclosure that the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Recent Retail Bankruptcies
On May 4th, J.Crew Group announced it has reached an agreement with its lenders holding approximately 71% of its Term Loan and approximately 78% of its IPCo Notes, as well as with its financial sponsors, under which the company will restructure its debt and deleverage its balance sheet, positioning J.Crew and Madewell for long-term success.
Houston-based Stage Stores Inc. filed for chapter 11 bankruptcy in Texas last week.
GNC Holdings (GNC), the nutritional supplement retailer, avoided bankruptcy by reaching a last-minute deal with creditors that allows it to avoid bankruptcy for at least 30 days but no more than 90 days under a deal announced Friday.
GNC avoids bankruptcy for 90 days
True Religion
Even before COVID-19 forced True Religion to close its 87 stores, the denim specialist’s sales were in decline and its profits were negative. After shuttering its footprint in response to the pandemic, 80% of its sales disappeared, according to the company.
Others on the list
According to Law.com, both Macy’s (M) and Neiman Marcus have hired bankruptcy law firm Kirkland, and Wachtell. Neiman filed for Chapter 11 last week. Macy’s should be forthcoming.
Pier 1 Imports (PIR) filed for bankruptcy protection this month. It would only make sense if it’s competitors follow the same path.
Nashville-based retailer, Kirkland’s, Inc. operates as a specialty retailer of home décor in the United States. The company’s stores provide various merchandise, including holiday décor, furniture, ornamental wall décor, decorative accessories, art, textiles, mirrors, fragrance and accessories, lamps, artificial floral products, housewares, outdoor living items,
Kirkland’s has avoided Chapter 11, Stockwinners
In 2019, seventeen major retailers filed for bankruptcy. For some of them it was their second trip to the alter including Payless, Gymboree, and Charming Charlie.
Some of the retailers that filed for bankruptcy in the past 18 months. Stockwinners
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
Uber made all-stock offer to acquire GrubHub, WSJ reports
Shares of food delivery company GrubHub are sharply higher after the Wall Street Journal reported that Uber Technologies (UBER) approached GrubHub (GRUB) earlier this year with a takeover offer and the parent company of Uber Eats and its rival service operator continue to discuss a possible combination.
Uber may buy GrubHub, Stockwinners
Uber is seeking to acquire GrubHub in an all-stock deal that would reshape the meal-delivery business, but “it’s far from guaranteed the talks will produce a deal,” according to the report.
UberEats has 25% of the food delivery market, Stockwinners
Bloomberg’s Ed Hammond has separately reported this morning that Uber has made an offer to acquire GrubHub.
The companies are in talks about a deal and could reach an agreement as soon as this month, sources told Bloomberg.
“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said Uber CEO Dara Khosrowshahi.
Uber has a market cap of $57B
Uber Eats is a direct competitor to Grubhub, with Grubhub controlling 26.7% of the market while Uber holds a 25.2% market share.
Grubhub has a market cap of more than $5.3 billion. Uber has a market cap of $57 billion.
GrubHub (GRUB) is seeking 2.15 Uber (UBER) share in exchange for each of its own shares in a potential takeover and Uber’s board is expected to review the latest GrubHub counter proposal, according to The Wall Street Journal, citing sources.
NEEDHAM
After Bloomberg reported that Uber (UBER) has approached GrubHub (GRUB) with a takeover offer, Needham analyst Brad Erickson said such a deal would be consistent with his bullish thesis that Uber Eats could eliminate as much as $500M of its roughly $1.2B in losses last year through such a GrubHub acquisition.
With Uber having exited India and seven other unprofitable markets, Erickson thinks investors would “further recognize a dramatically clearer picture towards food delivery profitability” if a GrubHub deal were to occur, he added. Erickson reiterates a Buy rating and $42 target on Uber shares.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
As AMC considers bankruptcy, Amazon may snap up the company
Amazon.com (AMZN) has held talks to acquire the troubled movie chain AMC Entertainment Holdings (AMC), but it is unclear if the discussions are still active, Jamie Nimmo of Daily Mail reports, citing sources.
The companies are thought to have held talks about a potential takeover of AMC by Amazon, the sources said.
Amazon may buy AMC
Buying a cinema chain would enable Amazon to control the screening of films, giving it greater dominance of the industry. Amazon’s interest in cinemas is not new.
In 2018, Amazon looked at buying American arthouse cinema chain Landmark Theatres, but lost out to the eventual buyer, Cohen Media Group. Netflix was also reportedly in the running to buy Landmark.
Amazon.com is in talks to buy AMC, Stockwinners
However, a takeover of AMC would be on a different scale as Landmark only had about 250 screens in the US, while AMC has about 1,000 around the world.
Amazon certainly has the means to buy AMC, whose stock market value has collapsed in recent years to just $420million.
In a sign of bad times in the movie business, earlier this month AMC Theatres (AMC) sent a letter to Universal Studios (CMCSA) chairman Donna Langley, saying that, going forward, AMC will not license any Universal films in any of its 1,000 globally effective immediately.
Amazon bought supermarket chain Whole Foods Market in 2017 in a sign that the company was willing to spend money buying non-web-based companies.
Amazon bought Wholefoods in 2017
AMC was bought by Chinese conglomerate Dalian Wanda for $2.6 billion in 2012, but it bought back $600 million worth of shares in 2018 after Beijing cracked down on overseas investments by Chinese companies.
Under Wanda, AMC launched a major expansion plan, and in 2016 bought Odeon in the UK for £920 million from British financier Guy Hands’ private equity firm, Terra Firma, and US group Carmike Cinemas for $1.1 billion.
The deals turned AMC into the world’s largest cinema company, with 1,000 outlets and 10,000 screens around the world.
However, the expansion plan backfired and left AMC saddled with debts that are now close to $ 5billion. Last month, AMC raised $500 million from bond investors in an effort to stay afloat during the crisis.
However, investors still questioned whether AMC could avoid bankruptcy, given its parlous financial state.
A group of AMC’s lenders reportedly hired lawyers to advise on restructuring options last month, underlining AMC’s financial strife.
In Monday’s pre-market trading, AMC shares are up 70% to $7.00. AMZN closed at $2379.61.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.
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