Investors unhappy with Bed Bath & Beyond

Investor group outlines strategic plan for Bed Bath & Beyond

Bed Bath & Beyond tumbles on competition. Stockwinners.com

Investor group outlines strategic plan for Bed Bath & Beyond , Stockwinners

Legion Partners Holdings, Macellum Advisors GP and Ancora Advisors released a presentation outlining the Investor Group’s Strategic Plan for Bed Bath & Beyond (BBBY).

The group said, “The plan outlines the path forward to modernizing Bed Bath’s retail practices and delivering a significant earnings per share improvement which could drive $5.00 per share of annual earnings – a level that Bed Bath achieved just a few short years ago.

The Investor Group’s Strategic Plan includes the following highlights: Revamp executive management – recruiting a top-flight CEO to lead Bed Bath going forward and instill a world-class winning culture.

We plan to launch a search in the near term to address this key position. Reverse sales weakness – fixing the merchandise over-assortment problem through a detailed SKU rationalization process as well as developing a merchandise architecture that will better resonate with customers.

Making the in-store experience something that drives traffic to the stores will be a major priority.

Turn around Company culture – increase focus on employee training and education to improve motivation; empower employees to better use technology and improve customer experience.

Significantly expand gross margins – improve vendor relations and drive profits by establishing a direct sourcing strategy and private label program as well as fixing mix issues created by the Company’s shift to commoditized and lower margin products.

Implement cost cutting – conducting an extensive reassessment of the increases in expenses over the last five years, including the explosion of the Company’s advertising budget, seemingly endless array of initiatives that have failed to produce meaningful results and extensive use of consultants.

Improve inventory – increasing inventory turns which would result in a substantial release of cash tied up in slow moving goods. Fix capital allocation – reviewing all non-core businesses and assessing their value as part of the business or their potential value to other parties.

Excess cash created could be applied to share or debt repurchases, both of which are significantly accretive given discounted trading levels.

Lastly, the increase in capital expenditures will be addressed. Above all, the Investor Group’s director nominees have the relevant experience and commitment to execute on these priorities and hold management accountable for delivering results.”

BBBY last traded at $16.68

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FDA to hold hearing on cannabis products

FDA to hold hearing on potential regulatory pathways for cannabis products

FDA to evaluate cannabis use, Stockwinners

The FDA issued a statement from outgoing Commissioner Scott Gottlieb on new steps to advance the agency’s continued evaluation of potential regulatory pathways for cannabis-containing and cannabis-derived products, in which he stated in part:

“In recent years, we’ve seen a growing interest in the development of therapies and other FDA-regulated consumer products derived from cannabis and its components, including cannabidiol, or CBD…We also recognize that stakeholders are looking to the FDA for clarity on how our authorities apply to such products, what pathways are available to market such products lawfully under these authorities, and how the FDA is carrying out its responsibility to protect public health and safety with respect to such products.”

The FDA is announcing a number of new steps and actions to advance its consideration of a framework for the lawful marketing of appropriate cannabis and cannabis-derived products under its existing authorities, Gottlieb said.

These new steps include:

A public hearing on May 31, as well as a broader opportunity for written public comment, for stakeholders to share their experiences and challenges with these products, including information and views related to product safety;

The formation of a high-level internal agency working group to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or regulatory changes might be needed and what the impact of such marketing would be on the public health;

Updates to its webpage with answers to frequently asked questions on this topic to help members of the public understand how the FDA’s requirements apply to these products;

and the issuance of multiple warning letters to companies marketing CBD products with “egregious and unfounded claims that are aimed at vulnerable populations.”

Publicly traded companies in the cannabis space include Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Canopy Growth (CGC), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), MediPharm Labs (MLCPF) and Tilray (TLRY).

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Advaxis jumps on its prostate cancer drug data

Advaxis says ADXS-PSA in combination with KEYTRUDA prolonged survival in mCRPC

Advaxis jumps on its prostate cancer drug data, Stockwinners

Advaxis (ADXS) announced updated data from the Phase 1/2 KEYNOTE-046 study in metastatic, castration-resistant prostate cancer.

Castrate-resistant prostate cancer refers to prostate cancer that keeps growing even when the amount of testosterone in the body is reduced to very low levels. Many early-stage prostate cancers need normal levels of testosterone to grow, but castrate-resistant prostate cancers do not. 

Androgens are required for normal growth and function of the prostate. Androgens are also necessary for prostate cancers to grow. Androgens promote the growth of both normal and cancerous prostate cells by binding to and activating the androgen receptor, a protein that is expressed in prostate cells Once activated, the androgen receptor stimulates the expression of specific genes that cause prostate cells to grow .

Early in their development, prostate cancers need relatively high levels of androgens to grow. Such prostate cancers are called castration sensitive, androgen dependent, or androgen sensitive because treatments that decrease androgen levels or block androgen activity can inhibit their growth.

This trial is being conducted in conjunction with Merck (MRK) and is evaluating ADXS-PSA, one of Advaxis’ Listeria monocytogenes-based immunotherapies, alone and in combination with KEYTRUDA, Merck’s anti-PD-1 therapy.

Findings will be highlighted in a poster discussion entitled “Effects of ADXS-PSA with or without Pembrolizumab on Survival and Antigen Spreading in Metastatic, Castration-Resistant Prostate Cancer Patients” at the American Association for Cancer Research Annual Meeting underway in Atlanta.

KEYNOTE-046 is an open-label, multicenter, dose-determining safety and tolerability Phase 1/2 trial of 50 heavily pretreated patients conducted in two parts, with a Phase 2 expansion cohort. The objective of the study is to evaluate ADXS-PSA alone and in combination with KEYTRUDA for primary endpoints that include safety, tolerability and dosing.

Secondary endpoints include anti-tumor activity and progression-free survival, and exploratory endpoints include associations between biomarkers of immunologic response with clinical outcomes.

Key findings from the combination arm of KEYNOTE-046 include the following: The majority of treatment-related adverse events consisted of transient and reversible Grade 1-2 chills/rigors, fever, hypotension, nausea and fatigue.

The combination of ADXS-PSA and pembrolizumab has been well-tolerated, to date, with no additive toxicity observed. Median overall survival was 21.1 months at data cutoff in this dataset of 37 patients.

Correlative immune analyses showed T-cell responses against PSA in 75% of subjects and antigen spreading in 85% of subjects. Broader immune stimulation, including B-cell activation, was observed in the combination arm than in the ADXS-PSA monotherapy arm.

ADXS closed at $5.91, it last traded at $8.15. MRK closed at $83.17.

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Tribune to buy nineteen stations from Nexstar

Nexstar enters agreements to divest nineteen stations for $1.32B

Nexstar to sell 19 stations, Stockwinners

Nexstar Media Group (NXST) and Tribune Media Company (TRCO) announced that Nexstar has entered into definitive agreements to sell a total of nineteen stations in fifteen markets for an aggregate $1.32B in cash following the acquisition of Tribune Media by Nexstar.

Under the terms of the agreements, TEGNA Inc. (TGNA) will acquire eleven stations in eight markets for $740M and The E.W. Scripps Company (SSP) will acquire eight stations in seven markets for $580M.

Separately, Nexstar remains engaged in active negotiations to divest two stations in Indianapolis, Indiana. On December 3, 2018, Nexstar and Tribune Media entered into a definitive merger agreement whereby Nexstar will acquire all outstanding shares of Tribune Media.

Nexstar agrees to acquire Tribune Media, Stockwinners
Nexstar agrees to sell stations from Tribune, Stockwinners

The planned divestiture of nineteen stations reflects Nexstar’s stated intention to divest certain television stations in order to comply with the FCC local and national television ownership rules and to obtain FCC and Department of Justice approval of the proposed Nexstar / Tribune Media transaction.

Nexstar intends to use the net proceeds from the divestitures to fund the Tribune acquisition and to reduce debt.

Given that the net proceeds from the divestitures exceed those initially estimated at the time the transaction was announced, Nexstar now estimates that net leverage at the closing of the transaction will be reduced to approximately 5.1x.

The planned divestiture of the nineteen stations is subject to FCC approval, other regulatory approvals, the closing of the Nexstar / Tribune Media transaction and other customary closing conditions and is expected to be completed on, or about the time of, the closing of the Nexstar / Tribune Media transaction, which is expected later this year.

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Economy expanded at a moderate rate

Fed’s Beige Book says “economic activity continued to expand”



Fed’s Beige Book says economic activity continued to expand , Stockwinners


Fed’s Beige Book: “economic activity continued to expand in late January and February,” said the report.

But 10 Districts noted “slight-to-moderate” growth, with Philly and St Louis reporting flat conditions. That’s the most tepid characterization in sometime, as the more normal description has been “moderate” to “modest.”

About half of the Districts said the shutdown weighed on some sectors, including consumer spending was mixed, but in part due to “harsh winter weather and higher costs of credit.”

Manufacturing generally strengthened but “numerous” contacts worries about weaker global growth, higher costs due to tariffs, and continued trade policy uncertainty.

The service sector increased at a modest-to-moderate pace. Also, residential construction activity was steady or slightly higher in most of the U.S., but home sales were generally lower.

There was little change in the employment outlook, with employment increasing in most Districts, with “modest-to-moderate gains in a majority of Districts and steady to slightly higher employment in the rest.

Labor markets remained tight for all skill levels.

Wages continued to increase for both low- and high-skilled positions, and a majority of Districts reported increases were moderate.

And for prices, they continued to increase at a modest-to-moderate pace, “with several Districts noting faster growth for input prices than selling prices. The ability to pass on higher input costs to consumers varied by region and industry.”

The report (prepared by KC Fed with data collected on or before February 25) is consistent with the FOMC’s outlook for slower growth with tame inflation.

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Kraft Heinz shares tumble 28 percent

Kraft Heinz says SEC probing procurement accounting policies

The company (KHC) said in a filing it received a subpoena in October 2018 from the SEC associated with an investigation into the company’s procurement area, more specifically the company’s accounting policies, procedures, and internal controls related to its procurement function, including, but not limited to, agreements, side agreements, and changes or modifications to its agreements with its vendors.

Kraft Heinz shares tumble 28% on SEC investigation, Dividends cut, Stockwinners

Kraft Heinz confirms quarterly dividend cut to 40c from 62.5c per share

The Board of Directors of The Kraft Heinz Company declared a regular quarterly dividend of 40c per share of common stock payable on March 22 to stockholders of record as of March 8.

This represents a reduction of 22.5c from the company’s previous quarterly dividend of 62.5c.

“We believe this action will help us accelerate our deleveraging plan, provide us strategic advantage through a stronger balance sheet, support commercial investments and set a payout level that can both grow over time and accommodate additional divestitures.

By doing this we can improve our growth and returns over time,” said Kraft Heinz CEO Bernardo Hees.

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Buffett loses $4.4billion on Friday, See Stockwinners

Warren’s Loss

Warren Buffett’s Berkshire Hathaway owned 325,634,818 shares of Kraft Heinz as of Dec. 31, according to the latest 13-F filing with the Securities and Exchange Commission. That represented about 26.7% of the shares outstanding, while the value of the holding was just under 8% of Berkshire’s total equity holdings.

If Berkshire’s stake remained intact, it would be worth about $4.4 billion less than it was the day before. And you thought you had a bad day in the market?!?

Berkshire’s stake in Kraft Heinz has been the same since the third quarter of 2015, according to SEC filings.

Before that, filings showed ownership of just 192,666 shares of Kraft Foods Group Inc. and 578,000 shares of Mondelez.

Since Sept. 30, 2015, the stock has now plummeted 50.9%. That indicates Berkshire’s investment has lost $11.7 billion in principal value since then, including an $11.3 billion loss in 2018 alone.

KHC is down 28% to $34.75.

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Achieve Life Sciences higher on smoking data

Achieve Life Sciences announces final data from cytisinicline study

Achieve Life Sciences (ACHV) announced final data from their Phase I/II multi-dose, pharmacokinetic and pharmacodynamics, or PK/PD, clinical study of cytisinicline in smokers.

The study evaluated the repeat-dose PK and PD effects of 1.5 mg and 3 mg cytisinicline in 26 healthy volunteer smokers when administered over the standard 25-day course of treatment.

Smokers in the study had a mean age of 39 years, smoked on average 17.2 cigarettes a day, and were not required to quit smoking or have a predetermined quit date while on study.

All subjects had a significant and immediate reduction in cigarettes smoked within 2 days of initiating cytisinicline treatment.

By Day 26, subjects had an average 80% reduction in cigarettes smoked, 82% reduction in expired carbon monoxide, and 46% had stopped smoking.

The biochemically verified smoking cessation rates were 39% and 54% in the 1.5 mg and 3.0 mg cytisinicline treated groups, respectively.

The PK results indicated expected increases in plasma concentration between the standard 1.5 mg and higher 3.0 mg doses of cytisinicline with no evidence of drug accumulation.

Cytisinicline at either dose was well tolerated with only transient, mild-to-moderate headache as the most common adverse event, which was not treatment limiting. No adverse events were severe, serious, or led to withdrawal from the study.

Cindy Jacobs, CMO at Achieve commented, “Given the short 25-day treatment period, the abstinence rates observed are impressive, particularly since subjects were not required to commit to quitting and received minimal behavioral support during the study. These results continue to support our belief that cytisinicline could be a well-tolerated and effective potential treatment option for the millions of people who are battling nicotine addiction.”

ACHV closed at $1.81, it last traded at $2.88.

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Rig counts rise!

Baker Hughes reports U.S. rig count up 2 to 1,051 rigs

The international offshore rig count for April 2018 was 194. Stockwinners
The U.S. rig count rises to 1,051

Baker Hughes (BHGE) reports that the U.S. rig count is up 2 rigs from last week to 1,051 rigs, with oil rigs up 3 to 857 and gas rigs down 1 to 194.

The U.S. Rig Count is up 76 rigs from last year’s count of 975, with oil rigs up 59 and gas rigs up 17.

The U.S. Offshore Rig Count is up 2 rigs to 21 and up 3 rigs year-over-year.

The Canada Rig Count is down 16 rigs from last week to 224, with oil rigs down 6 to 152 and gas rigs down 10 to 72.

The Canada Rig Count is down 94 rigs from last year’s count of 318, with oil rigs down 66 and gas rigs down 28.

USO is up 12 cents to $11.60.

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WalMart Earnings Outlook

Walmart (WMT) is scheduled to report results of its fourth quarter before the market open on Tuesday, February 19, with a conference call scheduled for 8:00 am EDT.

Wal-Mart reports next week. See Stockwinners.com for the report

What to watch for:

1. OUTLOOK: Walmart previously raised its fiscal 2019 EPS view to $4.90-$5.05 and narrowed its net sales view to up about 2%, but cut its EPS outlook at its investor meeting in October to $4.65-$4.80.

In its November earnings report, Walmart again raised its FY19 EPS outlook to $4.75-$4.85. The current Street forecast for FY19 EPS stands at $4.84 on revenue of $514.33B.

The company previously said it was moving to an annual guidance framework with its quarterly updates, and that while there may be fluctuations within the quarters, “we believe EPS growth will be relatively consistent across the year.”

Baird analyst Peter Benedict said he expects Walmart’s Q4 earnings to be solid, and expects guidance to remain intact, although he recognizes the uncertainty with Flipkart as the result of new regulations in India.

2. HOLIDAY SEASON:

Jet.com’s holiday weekend was “truly horrible,” with sales down 6% on Thanksgiving and Black Friday and a 39% plunge on Cyber Monday vs. last year, BuzzFeed News reported, citing data from market research firm Edison Trends.

According to the data, Target.com (TGT) sales increased 48% on Thanksgiving and Black Friday and 19% on Cyber Monday, Amazon (AMZN) increased by 25% on Black Friday and Thanksgiving and 17% on Cyber Monday, and Jet.com parent Walmart.com increased sales revenue by 23% on Thanksgiving and Black Friday and 32% on Cyber Monday.

In late December, Amazon said that it had a “record-breaking” holiday season with more items ordered worldwide than ever before. Amazon customers shopped at record levels from a wide selection of products across every department, it said.

3. COMPETITION:

Retailers like Walmart have been hurt by an increase in online shopping on sites like Amazon rather than at brick-and-mortar stores. Walmart is seeking to create a big ad business to rival that of Amazon, Bloomberg reported, adding that it has hired executives from NBC (CMCSA) and CBS (CBS) to help bolster its advertising business.

Walmart has also launched a private-label furniture brand, called MoDRN, which is “a direct hit to big furniture retailers” such as Wayfair (W) and Ikea and a challenge to rival Amazon, Erica Pandey wrote for Axios.

4. FLIPKART:

Bernstein analyst Brandon Fletcher said that India has been bandying about restrictive e-commerce regulations this past year, and finally pulled the trigger despite protestations from both Walmart and Amazon.

Walmart to pay about $16B for initial stake of about 77% in India's Flipkart, Stockwinners
Walmart to pay about $16B for initial stake of about 77% in India’s Flipkart, Stockwinners

The new rules put a damper on 1P selling models, pricing discounts, supplier exclusives, and supplier shares of sales above 25%, all of which are important to both companies’ planned models.

While not significant to Walmart’s total revenues, the analyst believes it does put a damper on its long-term growth potential in the market through Flipkart and raises the question of where Walmart will make up that growth.

Morgan Stanley analyst Simeon Gutman said Flipkart’s losses will likely rise due to new e-commerce regulations in India and Walmart investors “can’t ignore Flipkart” as it once again becomes a bigger part of the retailer’s investment narrative.

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Cinedigm to acquire ComicBlitz 

Cinedigm to acquire ComicBlitz 

 

Cinedigm to acquire ComicBlitz , Stockwinners
Cinedigm to acquire ComicBlitz , Stockwinners

Cinedigm (CIDM) announced an agreement to acquire the digital comic book service ComicBlitz, which will provide access to approximately 10,000 digital comic books, with more than 175,000 pages of content from a growing network of 30 or more publishers.

#ComicBlitz content will be distributed globally as a licensed offering for mobile carriers, OTT providers and other media companies.

It will also be integrated with Cinedigm’s existing and planned OTT services, including the fandom lifestyle network CONtv.

Cinedigm expects that the acquisition will close before the end of the year. Cinedigm plans on rapidly enhancing ComicBlitz’s content and services offering by leveraging Cinedigm’s forthcoming, next-generation technology platform and expects to service global distribution of the ComicBlitz content and platform offerings alongside Cinedigm’s existing footprint of nine OTT channel offerings.

From a business perspective, the transaction is expected to generate revenues through content licensing, subscription and advertising revenues, new distribution platform partnerships and by accelerating global expansion of Cinedigm’s OTT business.

Cinedigm expects the acquisition will be accretive within the first quarter following closing, pending certain license deals currently in negotiation. The deal could be expected to generate more than $5M in incremental annual digital revenues within 18-24 months after closing, if new platform and licensing agreements related to this acquisition are consummated.

This deal will support Cinedigm’s strategy to provide high quality turn-key offerings to third party platforms on a global scale through acquisition and partnerships.

It will also provide a deep portfolio of quality comic book offerings that significantly broadens the company’s content portfolio for highly sought after fandom audiences worldwide.

The worldwide digital comic book and graphic novel market is estimated at over $1B in annual sales. Launched in 2015, ComicBlitz has a distribution footprint of over 133 countries, with key penetration in North America and major territories including the United Kingdom, Australia, India, Mexico, Brazil and Germany.


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Pareteum to acquire iPass

Pareteum to acquire iPass in all-stock transaction

Pareteum to acquire iPass, Stockwinners.com
Pareteum to acquire iPass, Stockwinners.com

Pareteum (TEUM) and iPass (IPAS) announced that they have entered into a definitive agreement under which Pareteum will acquire iPass in an all-stock transaction whereby iPass shareholders will receive 1.17 shares of Pareteum common stock in an exchange offer.

With this accretive acquisition, Pareteum expects to gain a strategic position with new marquee brands and new markets including the enterprise, airline, hospitality, retail and internet of things sectors.

Pareteum expects to strengthen its established intellectual property portfolio with the addition of over 40 U.S. and international patents.

With more than 500 expected new customers and a global network of over 68M Wi-Fi hot spots, coupled with proven connection management technology, location services and Wi-Fi performance data, Pareteum is now poised to take its global communications software solutions to every market vertical.

The transaction is expected to be immediately accretive to Pareteum’s non-GAAP EPS and free cash ow after anticipated synergies.

Pareteum anticipates achieving more than $15 million in annual cost synergies with greater than $12 million of those expected to be realized in the rst full quarter of combined operations. Pareteum currently estimates approximately $2.0 million of GAAP earnings accretion and $5.5 million of non-GAAP earnings accretion in the rst full year after closing the transaction.

In addition, the acquisition will add new offices and talent in Silicon Valley, California and Bangalore, India, expanding Pareteum’s presence globally.

Under the terms of the acquisition agreement, a wholly-owned subsidiary of Pareteum will commence an exchange offer to acquire all of the outstanding shares of iPass common stock, offering 1.17 shares of Pareteum common stock in exchange for each share of iPass common stock tendered.

Upon satisfaction of the conditions to the exchange offer, and after the shares tendered in the exchange oer are accepted for payment, the agreement provides for the parties to effect, as promptly as practicable, a merger, which would not require a vote by iPass stockholders, and which would result in each share of iPass common stock not tendered in the exchange offer being converted into the right to receive 1.17 shares of Pareteum common stock.

The exchange offer is subject to customary conditions, including the tender of at least a majority of the outstanding shares of iPass common stock and certain regulatory approvals, and is expected to close in the rst quarter of calendar year 2019.

No approval of the stockholders of Pareteum is required in connection with the proposed transaction.

Terms of the agreement were approved by the board of directors for both Pareteum and iPass.


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ConvergeOne sold for $1.8 billion

ConvergeOne to be acquired by CVC for $12.50 per share

ConvergeOne sold for $1.8 billion, Stockwinners
ConvergeOne sold for $1.8 billion, Stockwinners

ConvergeOne Holdings (CVON) announced that it has entered into a definitive agreement to be acquired by affiliates of CVC Fund VII in an all-cash transaction valued at approximately $1.8B.

ConvergeOne Holdings, Inc. provides collaboration and technology solutions for large and medium enterprises in the United States. The company offers unified communications solutions, including communications applications, such as voice, email, presence, chat/text, and video technologies; voice and text messaging solutions; mobility and bring your own device solutions for business continuity with the seamless connection of mobile, landline, cellular, and Wi-Fi enabled devices.

Subject to customary closing conditions and regulatory approvals, ConvergeOne expects the transaction to close in the fourth quarter of 2018 or the first quarter of 2019.

ConvergeOne will maintain its corporate headquarters in Eagan, MN and continue to be led by its current executive team.

Pursuant to the terms of the merger agreement, affiliates of CVC will commence a tender offer for all of the outstanding shares of the company in an all-cash transaction valued at $12.50 per share of common stock of the company, representing a 35% premium to the thirty-day VWAP prior to October 25, 2018 and representing over a 56% premium to the closing price on ConvergeOne’s debut date on the Nasdaq on February 23.

John McKenna Jr., Chairman and CEO of ConvergeOne commented, “Today’s announcement is a tremendous accomplishment for ConvergeOne and highlights the continued success of the Company. We are extremely proud of the ConvergeOne team, and we truly appreciate our phenomenal partnership with Clearlake and our other shareholders that has resulted in significant value creation. Our team is thrilled to partner with CVC to execute on the compelling growth opportunities in the rapidly evolving collaboration and technology services market.”

CVON closed at $9.43.


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LSC Communications sold for $1.4 billion

Quad/Graphics to acquire LSC Communications in all-stock deal valued at $1.4B

LSC Communications sold for $1.4 billion, Stockwinners
LSC Communications sold for $1.4 billion, Stockwinners

Quad/Graphics (QUAD) and LSC Communications (LKSD) announced that their boards of directors have approved a definitive agreement whereby Quad will acquire LSC Communications in an all-stock transaction valued at approximately $1.4B, including the refinancing of LSC Communications’ debt.

As of September 30, 2018, the combined company would have had annual revenue of approximately $8B.

The deal is expected to close in mid-2019, and be accretive to earnings, excluding non-recurring integration costs.

Net synergies are expected to be approximately $135M, and will be achieved in less than two years and result in substantial additional Free Cash Flow generation.

Under the terms of the agreement, LSC Communications shareholders will receive 0.625 shares of Quad Class A common stock for each LSC Communications share they own, representing approximately 29 percent total economic ownership of the combined company and approximately 11 percent of the vote of the combined company.

Based on the closing share prices of both companies on October 30, 2018, the merger consideration represents a premium of 34 percent to LSC Communications shareholders.

Quad shareholders will continue to own Class A and Class B shares, representing approximately 71 percent total economic ownership of the combined company and approximately 89 percent total voting power of the combined company.

The transaction supports Quad’s long-term strategic vision by preserving the Quadracci Family leadership and voting control in the company. Quad expects the transaction to be accretive to earnings, excluding non-recurring integration costs.

Net synergies are expected to be approximately $135 million, and will be achieved in less than two years, through the elimination of duplicative functions, capacity rationalization, greater operational efficiencies and greater efficiencies in supply chain management that will also benefit our clients.

Joel Quadracci will be Chairman, President and Chief Executive Officer of the combined company.

Quad will expand its board of directors to include two members from LSC Communications’ existing board.

The transaction is expected to close in mid-2019, subject to approval by Quad and LSC Communications shareholders, regulatory approval and other customary closing conditions.

The Quadracci Family Voting Trust, holder of approximately 64 percent of the voting power of Quad’s outstanding common stock, has entered into a voting agreement with LSC Communications pursuant to which it will vote in favor of the issuance of shares in connection with the transaction.


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Peoples Natural Gas sold for $4.28 billion

Aqua America to acquire Peoples in all-cash transaction for $4.28B

Peoples Natural Gas sold for $4.28 billion, Stockwinners
Peoples Natural Gas sold for $4.28 billion, Stockwinners

Aqua America (WTR) announced it will acquire Peoples in an all-cash transaction that reflects an enterprise value of $4.275B, which includes the assumption of approximately $1.3B of debt.

This acquisition marks the creation of a new infrastructure company that will be uniquely positioned to have a powerful impact on improving the nation’s infrastructure reliability, quality of life and economic prosperity.

Peoples consists of Peoples Natural Gas Company LLC, Peoples Gas Company LLC and Delta Natural Gas Company Inc.

The multi-platform entity brings together the second-largest U.S. water utility and fifth-largest U.S. stand-alone natural gas local distribution company and will serve 1.74 million customer connections, which represent approximately 5 million people.

In 2019, the new company will have approximately $10.8 billion in assets and a projected U.S. regulated rate base of over $7.2 billion.

The transaction is not expected to have any impact on rates.

The combined enterprise will be among the largest publicly traded water utilities and natural gas local distribution companies in the U.S., uniquely positioned to meaningfully contribute to the nation’s natural gas and water infrastructure reliability.

The transaction will bring together two companies that each have more than 130 years of service and proven track records of operational efficiency, complementary service territories and strong regulatory compliance.

Aqua will acquire Peoples from infrastructure funds managed by Sausalito, California-based SteelRiver Infrastructure Partners.

The resulting company will be well positioned to grow and generate shareholder value through increased scale, a balanced portfolio and stable capital structure.


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Musk’s tweet sends Tesla shares lower

Tesla slides after Elon Musk mocks SEC on Twitter

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Musk’s tweet sends Tesla shares lower

Shares of Tesla (TSLA) dropped in Friday’s trading after Elon Musk, the company’s CEO, mocked the Securities and Exchange Commission in a tweet, calling the agency the “Shortseller Enrichment Commission.”

Last weekend Musk reached an agreement with the SEC to settle fraud charges, and that charge is currently pending approval from a federal judge.

MUSK MOCKS SEC

On Thursday, Musk tweeted, in apparent reference to the SEC, “Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!”

Musk’s tweet came just hours after Musk and the SEC were told by U.S. District Court Judge Alison Nathan, who must approve the deal, to explain why the settlement is “fair and reasonable” by October 11, Bloomberg reported.

Separately, Musk took aim at BlackRock (BLK) and other large fund managers for fueling short sellers.

Musk alleged in a tweet that BlackRock and other firms pocket “excessive profit from short lending while pretending to charge low rates for ‘passive’ index tracking.”

SEC SETTLEMENT

This past weekend, the SEC announced that Musk agreed to settle the securities fraud charge brought against him last week.

The settlement requires that Musk will step down as Tesla’s chairman and will be ineligible to be re-elected chairman for three years.

Additionally, Tesla will appoint two new independent directors to its board and both the CEO and company will each pay $20M penalties to settle allegations that Musk misled investors in August by tweeting that he was considering taking Tesla private and had secured funding for the effort.

According to the SEC’s complaint, Musk’s misleading tweets caused Tesla’s stock price to jump by over 6% on August 7, and led to “significant market disruption.”

Additionally, the SEC is requiring that Musk get approval from the company’s lawyer before tweeting anymore company news, which reports had said could clamp down on Musk’s “headline-grabbing, unpredictable approach to promoting Tesla’s brand.”

Recode’s Teddy Schleifer reported via Twitter after the “Shortseller Enrichment Commission” tweet that the SEC agreement on Musk’s tweets “does not take effect for 90 days from the settlement date, per source. So he still has ~80 days to tweet whatever he wants.”

The SEC declined to comment on Musk’s tweet, Schleifer said.

Additionally, Fox Business Network’s Charlie Gasparino also tweeted, saying that the “@SEC_Enforcement continues to investigate @Tesla over possible misstatements on production/profitability targets-sources focus is on stated targets for Model 3/co profitability.

SEC sources say case is tougher case than @elonmusk ‘funding secured’ tweet.”

PRICE ACTION

In Friday morning trading, shares of Tesla are down 4.2% to $270.17.


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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.