Microsoft buys Nuance

Microsoft to acquire Nuance for $56.00 per share in cash, or $19.7B

Microsoft (MSFT) and Nuance Communications (NUAN) announced they have entered into a definitive agreement under which Microsoft will acquire Nuance for $56.00 per share, implying a 23% premium to the closing price of Nuance on Friday, April 9, in an all-cash transaction valued at $19.7B, inclusive of Nuance’s net debt.

Nuance sold for $19.7B

Nuance is a trusted cloud and AI software leader representing decades of accumulated healthcare and enterprise AI experience.

Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft.

The transaction is intended to close this calendar year.

Upon closing, Microsoft expects Nuance’s financials to be reported as part of Microsoft’s Intelligent Cloud segment.

Microsoft expects the acquisition to be minimally dilutive (less than 1%) in fiscal year 2022 and to be accretive in fiscal year 2023 to non-GAAP earnings per share, based on the expected close timeframe.

Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses.

The acquisition will not impact the completion of its existing share repurchase authorization.

Nuance Communications, Inc. provides conversational and cognitive artificial intelligence (AI) innovations that bring intelligence to everyday work and life. The company delivers solutions that understand, analyze, and respond to people – amplifying human intelligence to increase productivity and security.

B. Riley analyst Zach Cummins reiterates a Buy rating on LivePerson (LPSN) with a $77 price target after Microsoft (MSFT) acquired Nuance Communications (NUAN), a provider of conversational commerce solutions, with expertise geared toward the healthcare vertical.

The potential deal acquisition provides a “positive valuation data point” for LivePerson, a leading provider of conversational commerce solutions across the telecom, financial services, retail, and consumer verticals, Cummins tells investors in a research note.

LivePerson currently trades at an enterprise value to sales multiple of 6.5 times, below the comp group median of 9.5 times and Nuance’s implied takeout multiple of 12.5 times, says the analyst.

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Palantir’s Bulls and Bears

Goldman Sachs upgrades the recent IPO while Citi says Sell

Palantir Technologies Inc. (PLTR) builds and deploys software platforms for the intelligence community in the United States to assist in counterterrorism investigations and operations.

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. 

The company took the unusual route of becoming a public company by directly listing it’s shares and bypassing the brokers. Shares came public around $9 and shot up to $45 a share before pulling back. There were a number of brokers who made comments about the shares today following the company’s earnings.

Earnings

Palantir Technologies reported 4th Quarter December 2020 earnings of $0.07 per share on revenue of $322.1 million yesterday morning. The consensus earnings estimate was $0.02 per share on revenue of $300.4 million.

The company said it expects 2021 revenue of $1.42 billion or more. The current consensus revenue estimate is $1.41 billion for the year ending December 31, 2021.

Goldman Sachs

Goldman Sachs analyst Christopher #Merwin upgraded Palantir Technologies to Buy from Neutral with a price target of $34, up from $13. Palantir reported “strong” Q4 results and its Q1 guidance called for revenue growth of 45%, while fiscal 2021 revenue guidance was for 30%-plus, Merwin tells investors in a research note. The analyst is “encouraged” to see management guide to $4B of revenue in fiscal 2025, implying a 30% annual growth from fiscal 2020. With a growing backlog of $2.8B in deal value, there is increasing visibility into the achievability of that long-term target, says Merwin.

Further, the analyst believes Palantir’s recent efforts to modularize Foundry and add channel partners like IBM “should improve product market fit” for the commercial business in the coming quarters.

Morgan Stanley

Morgan Stanley analyst Keith #Weiss raised the firm’s price target on Palantir to $19 from $17, telling investors after the company’s Q4 report that Palantir’s results in FY20 showed a big expansion of existing customers, “huge leverage” in operating margins and the seeds for future distribution capability.

However, he keeps an Underweight rating on the shares as he would like to see evidence of effective investment behind the company’s opportunity to support growth and what he views as a “lofty valuation.”

Jefferies

Jefferies analyst Brent #Thill noted that Palantir reported a top and bottom line beat in Q4 along with “robust” large deal metrics and said it is targeting $4B or more in 2025 revenues, but that the stock remains under pressure due to Thursday’s lock-up expiry and the recent run-up that saw the stock up 35% year-to-date ahead of the report.

However, he views Palantir as “a highly unique story for long-term investors” given that he thinks its growth sustainability at significant scale, and “aggressive profitability ramp,” puts the stock “in rarified air” among software companies. Thill maintains a Buy rating on the stock, which he expects to “trend to $40,” his price target on Palantir shares.

RBC Capital

RBC Capital analyst Matthew #Hedberg raised the firm’s price target on Palantir to $27 from $15 and keeps a Sector Perform rating on the shares.

The company ended 2020 with a “solid” set of Q4 results while forecasting acceleration and margin improvement in Q1, the analyst tells investors in a research note. Hedberg adds however that while he is positive on Palantir’s catalysts, he remains on the sidelines due to the stock’s “full valuation”.

Citi

Citi analyst Tyler #Radke keeps a Sell rating on Palantir Technologies with a $15 price target following the company’s Q4 results.

The results featured “solid” reported revenue upside, but came with “signs of growth drivers narrowing with new customers growth still lacking and Commercial revenue missing expectations,” Radke tells investors in a research note.

The new five-year revenue target of $4B “looks high,” but ultimately may be a non-event for the stock, says the analyst. He thinks the stock is overvalued and “could be particularly volatile” into the upcoming lockup on February 18.

Insiders

Peter Thiel, Chairman, and well connected Washington insider

Several insiders have sold shares into the lockup expiry on Thursday but Peter Thiel, Chairman of the Board, reported a 5% ownership of the stock.

PLTR last traded at $28.50.

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Wrike sold for $2.25B cash

Citrix to acquire Wrike for $2.25B in cash

Citrix Systems (CTXS) announced that it has entered into a definitive agreement to acquire Wrike, a rapidly growing, recognized leader in the SaaS collaborative work management space, for $2.25B in cash.

Wrike ended calendar year 2020 with more than $140 million in unaudited SaaS ARR, reflecting more than 30 percent CAGR in SaaS ARR over the prior two years.

Citrix spends $2.55B to expand its offerings

The company is expected to have approximately 30 percent stand-alone growth to between $180M-$190M in SaaS ARR1 in 2021, with the opportunity to accelerate growth over time under Citrix’s ownership.

The addition of Wrike is highly complementary to Citrix’s existing customer base and is expected to accelerate Citrix’s SaaS ARR growth.

Wrike founders cash out

Financing and purchase accounting impacts to deferred revenue will affect 2021 non-GAAP earnings per share. Integration and other costs related to the acquisition are expected to be modestly dilutive to non-GAAP earnings per share in 2021.

The transaction is expected to be neutral to Citrix’s fiscal year 2022 non-GAAP earnings per share and free cash flow, and accretive thereafter.

Citrix expects to fund the transaction with a combination of new debt and existing cash and investments.

Citrix is committed to its investment grade credit ratings and plans to return to historical leverage levels within 24 months.

Citrix has obtained a commitment from JPMorgan Chase Bank, N.A. for a $1.45B senior unsecured 364-day bridge loan facility.

The transaction, which has been unanimously approved by the board of directors of both Citrix and Wrike, is expected to close in the first half of 2021, subject to regulatory approvals and other customary closing conditions.

SaaS is the new trend in software usage

Until close, the companies will continue to operate independently.

Upon closing, Andrew Filev, Wrike CEO will continue to lead the Wrike team and report to Arlen Shenkman, EVP and CFO, Citrix.

CTXS closed at $132.00.

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RealPage sold for $10.2 billion

RealPage to be acquired by Thoma Bravo for $88.75 per share in cash

RealPage (RP) announced it has entered into a definitive agreement to be acquired by Thoma Bravo, a private equity investment firm focused on the software and technology-enabled services sector, in an all-cash transaction that values RealPage at approximately $10.2B, including net debt.

Real Page sold for $10.2 billion

Under the terms of the agreement, RealPage stockholders will receive $88.75 in cash per share of RealPage common stock upon closing of the transaction.

The purchase price represents a premium of 30.8% over RealPage’s closing stock price of $67.83 on December 18, 2020, a premium of 36.5% over RealPage’s 30-day volume-weighted average share price through that date, and a premium of 27.8% over RealPage’s all-time high closing stock price of $69.47 on December 7.

The RealPage board has unanimously approved the agreement with Thoma Bravo and recommends that RealPage stockholders vote in favor of the transaction at the special meeting of RealPage stockholders to be called in connection with the transaction.

Thoma Bravo buys the real estate software company

Upon completion of the transaction, RealPage expects to continue operating under the leadership of chairman and CEO Steve Winn and the existing RealPage leadership team based in Richardson, Texas.

Closing of the transaction is subject to customary conditions, including approval by the holders of a majority of the outstanding shares of RealPage common stock, expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and receipt of other required regulatory approvals.

A special meeting of RealPage stockholders will be held in early 2021, following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission.

Winn and certain affiliated entities, which collectively own approximately 10% of the outstanding shares of RealPage common stock, have entered into a voting agreement with Thoma Bravo pursuant to which they have agreed, among other things, to vote their shares of RealPage common stock in favor of the merger, and against any competing transaction, so long as, among other things, the RealPage board continues to recommend that RealPage stockholders vote in favor of the merger.

Consistent with the board’s commitment to maximizing stockholder value, under the terms of the definitive merger agreement, RealPage’s board and advisors may actively initiate, solicit and consider alternative acquisition proposals during a 45-day “go shop” period.

RealPage has the right to terminate the merger agreement to accept a superior proposal during the go-shop period, subject to the terms and conditions of the merger agreement.

There can be no assurances that this process will result in a superior proposal, and RealPage does not intend to disclose developments with respect to this solicitation process unless and until RealPage’s board makes a determination requiring further disclosure.

The parties expect the transaction to close in Q2 of 2021. Upon completion of the transaction, RealPage will become a privately held company, and its common stock will no longer be listed on the Nasdaq stock market.

RP closed at $67.83.

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Slack Technologies sold for $27.7 billion

Salesforce acquires Slack in cash and stock deal worth $27.7B

Salesforce (CRM) and Slack Technologies (WORK) have entered into a definitive agreement under which Salesforce will acquire Slack.

Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7 billion based on the closing price of Salesforce’s common stock on November 30.

The boards of each of Salesforce and Slack have approved the transaction and the Slack board recommends that Slack stockholders approve the transaction and adopt the merger agreement.

The transaction is anticipated to close in the second quarter of Salesforce’s fiscal year 2022.

Salesforce goes shopping

Salesforce has also entered into a voting agreement with certain stockholders of Slack common stock, under which each such stockholder has agreed to vote all of their Slack shares in favor of the transaction at the special meeting of Slack stockholders to be held in connection with the transaction, subject to certain terms and conditions.

The Slack shares subject to the agreement represent approximately 55% of the current outstanding voting power of the Slack common stock.

Salesforce expects to fund the cash portion of the transaction consideration with a combination of new debt and cash on Salesforce’s balance sheet.

One year chart of Slack Tech. stock price

Salesforce has obtained a commitment from Citigroup, Bank of America, and JPMorgan Chase for a $10B senior unsecured 364-day bridge loan facility.

Salesforce said, “Slack will be deeply integrated into every Salesforce Cloud.

Five year chart of Salesforce stock price

As the new interface for Salesforce Customer 360, Slack will transform how people communicate, collaborate and take action on customer information across Salesforce as well as information from all of their other business apps and systems to be more productive, make smarter, faster decisions and create connected customer experiences.”

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DOJ approves sale of Credit Karma to Intuit

Intuit gets DOJ nod to buy Credit Karma after pact to sell tax unit to Square

Intuit (INTU) and Credit Karma announced that they have entered into a consent decree with the U.S. Department of Justice, or DOJ, which they call “an important step” in completing their previously announced merger.

The companies also announced that they have entered into an Assurance of Discontinuance with the New York State Attorney General that, along with the DOJ action, moves Intuit’s acquisition of Credit Karma “one step closer to closing,” subject to the satisfaction of customary closing conditions.

Intuit and Credit Karma also announced Credit Karma’s agreement with Square (SQ), pursuant to which Credit Karma will divest its Credit Karma Tax business to Square.

The completion of the transaction with Square is contingent upon the successful closing of Intuit’s acquisition of Credit Karma, among other customary closing conditions.

As part of the divestiture transaction, Intuit and Credit Karma have made certain commitments to Square, including the provision of certain transition services to help ensure a successful transition of the business.

“We are very excited to reach this important milestone today. This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice.

We are pleased to have cleared this necessary regulatory review with DOJ and appreciate their careful consideration of this transaction.

Consumers will continue to benefit from the Credit Karma Tax product as part of Square,” said Sasan Goodarzi, CEO of Intuit.

Shares of Square (SQ) are up 5.2% while Intuit shares are up 1.5%.

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Walmart to partner with Microsoft on TikTok deal

Walmart backs TikTok U.S. partnership with Microsoft

Walmart (WMT), which was previously said to have been working with SoftBank (SFTBY) on a potential acquisition of TikTok’s U.S. business, has now confirmed its involvement in a potential TikTok deal in partnership with Microsoft (MSFT), according to CNBC’s Alex Sherman.

“The way TikTok has integrated e-commerce and advertising capabilities in other markets is a clear benefit to creators and users in those markets.

We believe a potential relationship with TikTok U.S. in partnership with Microsoft could add this key functionality and provide Walmart with an important way for us to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses.

We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of US government regulators,” a Walmart spokesperson told CNBC.

TikTok is nearing an agreement to sell its U.S., Canadian, Australian and New Zealand operations in a deal that could be announced as soon as next week, sources say. The deal is likely to be in the $25 billion to $30 billion range, sources say.

Earlier this week, TikTok filed a lawsuit against Trump Administration claiming that 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.

WMT shares are up 5% on the news while MSFT is better by 3.5%.

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Microsoft acknowledges security flaw in its new Windows operating system

Microsoft says aware of new security flaw found in Microsoft Windows

Microsoft (MSFT) said it is aware of limited targeted attacks that could leverage un-patched vulnerabilities in the Adobe Type Manager Library, and is providing the following guidance to help reduce customer risk until the security update is released.

A security flaw is discovered in Windows, Stockwinners

Two remote code execution vulnerabilities exist in Microsoft Windows when the Windows Adobe Type Manager Library improperly handles a specially-crafted multi-master font – Adobe Type 1 PostScript format.

There are multiple ways an attacker could exploit the vulnerability, such as convincing a user to open a specially crafted document or viewing it in the Windows Preview pane.

Vulnerability exists on Adobe Type Manager, Stockwinners

Microsoft is aware of this vulnerability and working on a fix.

Updates that address security vulnerabilities in Microsoft software are typically released on Update Tuesday, the second Tuesday of each month.

This predictable schedule allows for partner quality assurance and IT planning, which helps maintain the Windows ecosystem as a reliable, secure choice for our customers.

The operating system versions that are affected by this vulnerability are listed below. Please see the mitigation and workarounds for guidance on how to reduce the risk.

Software patch is coming, Stockwinners

The security flaw, which Microsoft deems “critical” — its highest severity rating — is found in how Windows handles and renders fonts, according to the advisory posted.

Although Windows 7 is also affected, only enterprise users with extended security support will receive patches. In the meantime, the advisory offered a temporary workaround for affected Windows users to mitigate the flaw until a fix is available.

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Cision sold for $10 per share

Cision to be acquired by Platinum Equity affiliate in deal valued at $2.74B

Cision (CISN) announced that it has entered into a definitive agreement to be acquired by an affiliate of Platinum Equity in an all cash transaction valued at approximately $2.74B.

Cision sold for $2.74B, Stockwinners

Under the terms of the agreement, which has been unanimously approved by the members of Cision Ltd.’s board of directors, an affiliate of Platinum Equity will acquire all of the outstanding ordinary shares of Cision Ltd. for $10.00 per share in cash.

The purchase price represents a 34% premium over Cision Ltd.’s 60-day volume-weighted average price ended on October 21, 2019.

A special meeting of Cision Ltd.’s shareholders will be held as soon as practicable following the filing of a definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) and subsequent mailing to its shareholders.

Certain affiliates of GTCR, collectively holding approximately 34% of the outstanding shares of Cision Ltd., have entered into a voting agreement committing them to, among other things, vote in favor of adopting the acquisition agreement.

The proposed transaction is expected to close in the first quarter of 2020 and is subject to approval by Cision Ltd.’s shareholders, along with the satisfaction of customary closing conditions and antitrust regulatory approvals, as necessary.

Cision Ltd. provides public relations (PR) software, media distribution, media intelligence, and related professional services to businesses worldwide. The company enables public relations and communications professionals to manage, execute, and measure their strategic PR and communications programs.

Upon completion of the acquisition, Cision Ltd. will become wholly owned by an affiliate of Platinum Equity.

Cision Ltd. may solicit alternative acquisition proposals from third parties during a “go-shop” period from the date of the agreement until November 12, 2019.

There is no guarantee that this process will result in a superior proposal, and the agreement provides Platinum Equity with a customary right to match a superior proposal and termination fee if a superior proposal is accepted.

Cision Ltd. does not intend to disclose developments with respect to the solicitation process unless and until the company determines such disclosure is appropriate.

“This transaction will provide shareholders with immediate and substantial cash value, while also providing us with a partner that shares in our commitment to customers and employees and can add strategic and operational value,” said Kevin Akeroyd, Cision’s CEO.

“Based on our extensive engagement with Platinum over the past several months, we are confident that Platinum’s support will enable Cision to execute on its strategy and next phase of growth.”

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Datawatch sold for $176 million

Altair to acquire Datawatch for $13.10 per share

Datawatch sold for $176 million, Stockwinners
Datawatch sold for $176 million, Stockwinners

Altair (ALTR) and Datawatch (DWCH) announced the signing of a definitive merger agreement under which Altair has agreed to acquire Datawatch. Under the terms of the agreement, Altair will pay $13.10 per share in cash, representing a fully diluted equity value of approximately $176M.

The transaction was unanimously approved by the boards of both companies.

Under the terms of the definitive merger agreement, Altair will commence a tender offer within ten business days to acquire all of the outstanding shares of common stock of Datawatch for $13.10 per share in cash.

This represents a 35% percent premium to the closing price of Datawatch’s common stock on November 2.

The tender offer is subject to customary closing conditions, including the tender of at least a majority of the outstanding shares of Datawatch common stock and the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Following the closing of the tender offer, a wholly-owned subsidiary of Altair will merge with and into Datawatch, with each share of Datawatch common stock that has not been tendered being converted into the right to receive the same $13.10 per share in cash offered in the tender offer.

The transaction is anticipated to close in Q4.

Datawatch Corporation designs, develops, markets, and distributes business computer software products to self-service data preparation and visual data discovery markets in the United States and internationally.

Altair Engineering Inc. provides enterprise-class engineering software worldwide. The company operates through two segments, Software and Client Engineering Services. Its integrated suite of multi-disciplinary computer aided engineering software optimizes design performance across various disciplines, including structures, motion, fluids, thermal management, electromagnetics, system modeling and embedded systems, as well as provides data analytics and true-to-life visualization and rendering.


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CA Technologies sold for $18.9 billion

Broadcom to acquire CA Technologies for $44.50 per share in cash

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CA Technologies sold for $18.9 billion, Stockwinners

Broadcom (AVGO) and CA Technologies (CA) announced that the companies have entered into a definitive agreement under which Broadcom has agreed to acquire CA to build one of the world’s leading infrastructure technology companies.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, CA’s shareholders will receive $44.50 per share in cash. This represents a premium of approximately 20% to the closing price of CA common stock on July 11, 2018, the last trading day prior to the transaction announcement, and a premium of approximately 23% to CA’s volume-weighted average price for the last 30 trading days.

The all-cash transaction represents an equity value of approximately $18.9B, and an enterprise value of approximately $18.4B.

The transaction is expected to drive Broadcom’s long-term Adjusted EBITDA margins above 55% and be immediately accretive to Broadcom’s non-GAAP EPS.

On a combined basis, Broadcom expects to have last twelve months non-GAAP revenues of approximately $23.9B and last twelve months non-GAAP Adjusted EBITDA of approximately $11.6B.

Broadcom intends to fund the transaction with cash on hand and $18B in new, fully-committed debt financing.

Broadcom expects to maintain an investment grade rating, given its strong cash flow generation and intention to rapidly de-leverage.

The transaction is subject to customary closing conditions, including the approval of CA shareholders and antitrust approvals in the U.S., the EU and Japan.

Careal Property Group AG and affiliates, who collectively own approximately 25% of the outstanding shares of CA common stock, have entered into a voting agreement to vote in favor of the transaction.

The closing of the transaction is expected to occur in the fourth calendar quarter of 2018.


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Worldwide IT spending to reach $3.7T in 2018

Gartner says worldwide IT spending to reach $3.7T in 2018 

worldwide IT spending to reach $3.7T in 2018. Stockwinners.com
Worldwide IT spending to reach $3.7T in 2018

Worldwide IT spending is projected to total $3.7 trillion in 2018, an increase of 4.5 percent from 2017, according to the latest forecast by Gartner, Inc.  (IT)

“Global IT spending growth began to turn around in 2017, with continued growth expected over the next few years. However, uncertainty looms as organizations consider the potential impacts of Brexit, currency fluctuations, and a possible global recession,” said John-David Lovelock, research vice president at Gartner.

“Despite this uncertainty, businesses will continue to invest in IT as they anticipate revenue growth, but their spending patterns will shift.

Projects in digital business, blockchain, Internet of Things, and progression from big data to algorithms to machine learning to artificial intelligence (AI) will continue to be main drivers of growth.”

The devices segment is expected to grow 5.6 percent in 2018. In 2017, the devices segment experienced growth for the first time in two years with an increase of 5.7 percent.

End-user spending on mobile phones is expected to increase marginally as average selling prices continue to creep upward even as unit sales are forecast to be lower.

PC growth is expected to be flat in 2018 even as continued Windows 10 migration is expected to drive positive growth in the business market in China, Latin America and Eastern Europe.

The impact of the iPhone 8 and iPhone X was minimal in 2017, as expected. However, iOS shipments are expected to grow 9.1 percent in 2018.


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Nvidia launches ‘functionally safe’ AI self-driving platform NVIDIA DRIVE 

Nvidia announces ‘functionally safe’ AI self-driving platform NVIDIA DRIVE 

Nvidia pullback after Q2 beat a buying opportunity. See Stockwinners.com Market Radar for more
Nvidia announces ‘functionally safe’ AI self-driving platform NVIDIA DRIVE

NVIDIA (NVDA) unveiled details of its functional safety architecture for NVIDIA DRIVE, its AI autonomous vehicle platform, which uses redundant and diverse functions to enable vehicles to operate safely, even in the event of faults related to the operator, environment or systems.

The NVIDIA DRIVE architecture enables automakers to build and deploy self-driving cars and trucks that are functionally safe and can be certified to international safety standards, such as ISO 26262.

The NVIDIA DRIVE AV autonomous vehicle software stack performs functions like ego-motion, perception, localization and path planning. To realize fail operation capability, each functionality includes a redundancy and diversity strategy.

For example, perception redundancy is achieved by fusing lidar, camera and radar.

Deep learning and computer vision algorithms running on CPU, CUDA GPU, DLA and PVA enhance redundancy and diversity.

The NVIDIA DRIVE AV stack is a full backup system to the self-driving stack developed by the automaker, enabling Level 5 autonomous vehicles to achieve the highest level of functional safety. Included are lockstep processing and error-correcting code on memory and buses, with built-in testing capabilities.

The ASIL-C NVIDIA DRIVE Xavier processor and ASIL-D rated safety microcontroller with appropriate safety logic can achieve the highest system ASIL-D rating.

NVDA closed at $219.59.


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Barron’s is bullish on Apple, Western Digital

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review 

BULLISH  MENTIONS

Apple may hit $1T in market value next year- Apple (AAPL) could soon reach a milestone, namely to be the first U.S. company with a $1T market valuation, with iPhone X and a rising stream of service revenue helping it get there, Jack Hough writes in this week’s edition of Barron’s. Hough does not thing the peak is near as Apple seems to be escaping its product supercycle peaks and troughs to post more-consistent year-to-year growth.

Opportunity seen in semiconductors as Bitcoin plummets on Friday – Last Friday, the price of Bitcoin plummeted over 25% before bouncing back, and no major crypto asset was immune to the selloff, with even Bitcoin Investment Trust momentarily changing hands at more than a 5% discount of its NAV, Crystal Kim writes in this week’s edition. But in every “bloodbath” there is an opportunity to buy, she adds, noting that while bitcoin is a possibility, a better one may be the stocks of semiconductors companies that make the chips and equipment needed to mine bitcoin and other cryptocurrencies.

Some tech still a bargain– For investors looking to buy low, there are a number of good candidates to pick up, such as Qorvo (QRVO) that features in Apple’s (AAPL) iPhone and Finisar (FNSR) that also got the nod from Apple to produce parts for augmented reality and that may be a target for Oclaro (OCLR), Tiernan Ray writes in this week’s edition of Barron’s. Additionally, Ray sees Universal Display (OLED) as the biggest beneficiary of the iPhone rise, while Cisco Systems (CSCO) should get a lift from the new tax law.

PG&E looks like a buy– A sharp drop last week in shares of PG&E (PCG) could present a buying opportunity, Andrew Bary writes in this week’s edition of Barron’s. Shares of California utilities Sempra Energy (SRE) and Edison International (EIX) also fell this past week amid concerns about their liability for this month’s wildfire outbreak in Southern California, Barron’s adds.

Investors should give REITs a chance – Income investors should give real estate investment trusts a chance, Bill Alpert writes in this week’s edition of Barron’s. Among REITs with nice payouts are Macerich (MAC), Simon Property Group (SPG), Agree Realty (ADC), National Retail Props (NNN) and Realty Income (O), he contends

Western Digital (WDC) could be worth $120 – Flash-memory prices are expected to fade in 2018, which has worried investors in Western Digital, Andrew Bary writes in this week’s edition of Barron’s. However, at $83, Western Digital shares look undervalued, as the stock could be worth $120 at $10 a share in free cash flow, Bary notes.

BEARISH  MENTION

 Bitcoin bourses should be avoided by small traders – Derivatives exchanges Chicago Board Options Exchange (CBOE) and CME (CME) recently launched futures trading on the digital cryptocurrency bitcoin, but these securities do not trade actual bitcoin and are instead based on indexes of bitcoin prices that are calculated differently, Theresa Cary writes in this week’s edition of Barron’s. Putting aside the risk reflected in last week’s bitcoin plunge, these are not retail-friendly products in their current form, she notes, adding that market observers expect that to change over the next six months.

Cryptocurrency mania may not end well – Cryptocurrency mania is obvious in the stock market activity of companies like beverage seller Long Island Iced Tea (LTEA), with shares soaring after the company said it would change its name to Long Blockchain, Vito Racanelli writes in this week’s edition of Barron’s. The real risk is regulatory as governments around the world will gradually see the cryptocurrencies as a threat to their fiat currencies and policies, he notes, adding that it is a mania and eventually the bubble will pop amid tears.


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Cavium sold for $6 billion

Marvell to acquire Cavium for $40.00 per share in cash plus 2.1757 MRVL stock

Cavium sold for $6 billion. See Stockwinners.com

Marvell Technology Group (MRVL) and Cavium (CAVM) announced a definitive agreement, unanimously approved by the boards of directors of both companies, under which Marvell will acquire all outstanding shares of Cavium common stock in exchange for consideration of $40.00 per share in cash and 2.1757 Marvell common shares for each Cavium share.

Upon completion of the transaction, Marvell will become a leader in infrastructure solutions with approximately $3.4B in annual revenue.

The transaction combines Marvell’s portfolio of leading HDD and SSD storage controllers, networking solutions and high-performance wireless connectivity products with Cavium’s portfolio of leading multi-core processing, networking communications, storage connectivity and security solutions.

The combined product portfolios provide the scale and breadth to deliver comprehensive end-to-end solutions for customers across the cloud data center, enterprise and service provider markets, and expands Marvell’s serviceable addressable market to more than $16B.

This transaction also creates an R&D innovation engine to accelerate product development, positioning the company to meet today’s massive and growing demand for data storage, heterogeneous computing and high-speed connectivity.

The transaction is expected to generate at least $150M-$175M of annual run-rate synergies within 18 months post close and to be significantly accretive to revenue growth, margins and non-GAAP EPS. Under the terms of the definitive agreement, Marvell will pay Cavium shareholders $40.00 in cash and 2.1757 Marvell common shares for each share of Cavium common stock.

The exchange ratio was based on a purchase price of $80 per share, using Marvell’s undisturbed price prior to November 3, when media reports of the transaction first surfaced.

This represents a transaction value of approximately $6B.

Cavium shareholders are expected to own approximately 25% of the combined company on a pro forma basis. Marvell intends to fund the cash consideration with a combination of cash on hand from the combined companies and $1.75B in debt financing.

Marvell has obtained commitments consisting of an $850M bridge loan commitment and a $900M committed term loan from Goldman Sachs Bank USA and Bank of America Merrill Lynch, in each case, subject to customary terms and conditions. The transaction is not subject to any financing condition.

The transaction is expected to close in mid-calendar 2018, subject to regulatory approval as well as other customary closing conditions, including the adoption by Cavium shareholders of the merger agreement and the approval by Marvell shareholders of the issuance of Marvell common shares in the transaction.

Matt Murphy will lead the combined company, and the leadership team will have strong representation from both companies, including Marvell’s current CFO Jean Hu, Cavium’s Co-founder and COO Raghib Hussain and Cavium’s Vice President of IC Engineering Anil Jain.

In addition, Cavium’s Co-founder and CEO, Syed Ali, will continue with the combined company as a strategic advisor and will join Marvell’s Board of Directors, along with two additional board members from Cavium’s Board of Directors, effective upon closing of the transaction.


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