Good Thursday Morning, and you have both Twitter and Tesla surging in premarket trade as both topped expectations, making a profit – not a GAAP profit, but a company profit according to them. First thing this morning, Twitter also said separately it will cut nine percent of its workforce, focused on reorganizing sales, marketing and partnerships. Lol.
Daylight – Fox News Without the Founder – Well, I was wrong about this – Fox News would fall apart in six months without Founder Roger Ailes in charge. It took three months to the day for the Fox team to come apart at the seams with on-air fighting and a bigger split in office politics over the purpose of Fox News, journalism or conservative ratings machine. Rupert’s sons are said to be surprised at how bad things are going so fast, as Ailes’s former Number 2, who is now Number 1, is reporting to basically both of Rupert’s sons behind the scenes and along with Ailes’s former Number 3, who is also now a Number 1.
Culture – This matrix management mess has two big problems. First, since Ailes left, a Brilliant Jerk has emerged and believe it or not, it is not Newt Gingrich. It is Ms. Megyn Kelly, breaking with the network’s conservative worldview and the rancor that build sky high ratings with the right. Her show, for the last two months, has been so far off message and very little to do with what Fox is selling. It’s more to do with what Ms. Kelly is selling: herself to another network with a new contract coming up next year. Ailes used to pacify the star by letting her do “one or two journalism experiments” within a tightly produced Fox News type of show.
The second problem is an even bigger problem: Trump TV will be here as fast as you can say “election is over.” Trump’s son, Eric, is already calling around to private equity groups that specialize in media investments – the first sign that Trump TV will be here before Christmas. Does Fox have any shot of staying the number one cable news channel in ratings?
Yes – fire the Brilliant Jerk, who is demoralizing the whole place, putting themselves ahead of the brand – seen it a thousand times. Looking at their organization chart, who would fire the Brilliant Jerk? If they don’t want to fire the Brilliant Jerk, Rupert’s boys might want to send everybody to see the movie “Deepwater Horizon,” a very good movie, by the way, on the importance of workplace communication and the destruction caused by a BP Brilliant Jerk, who literally blew up the place. Mark Wahlberg is the star and producer and seems to be finding a great niche in these docu-disasters.
M&A – Can we all agree now that 3D consumer printing was a bust? By now, we should be printing medicines and makeup right in our home if you believed the hype three years ago. At a big write down price, Generation Growth Capital has agreed to sell Atlantic Precision, Inc., a manufacturing company that specializes in 3D printing, to Precision Castparts Corp.
Economics – An EpiPen Rival Is About to Return to the Shelves – The Auvi-Q, which drew an ardent fan base, but was taken off the market in 2015. It is unclear whether its comeback next year will help lower the price of the EpiPen. Before we get too excited, the rival was more expensive than EpiPen when it discontinued, so we will see.
Live Rounds – Goldman Sachs files a WARN. – The firm filed a “WARN notice” with New York state authorities, which indicates when a company plans to shed large numbers of employees as part of a plant closing or “mass layoffs,” involving 250 or more. All are guessing that the WARN notice comes first and the firings later – no announcements made to any staff or offices. Here is something for HR – should the company file the WARN first or make the announcement first to its employees?
Buzzard’s Roost – Retailers are leaving Fifth Avenue. – Manhattan landlords are sitting on a record amount of open space, as retailers balk at committing to expensive new leases. Word is landlords are not budging on prices – yet. When everybody else is leaving is often the best time to go, so moonshots can be taken on 5th Ave in 2017.
Hot – Yesterday, Microsoft unveiled its first desktop computer, which can turn into a drafting table. They want to be a rival to Apple’s iMac. Shouldn’t they be focusing on the LinkedIn acquisition instead of taking on probably the most creative product brand in the world. Calling Daddy Bill.
Profiting from the opiod epidemic. – Purdue Pharma, a manufacturer of OxyContin, thwarted West Virginia’s plan to fight the deadly epidemic by eliminating the middleman who prevents insurers from limiting prescriptions. And we wonder what is wrong with healthcare when this little battle cannot be won. Pharma has more lobbyists in Washington DC than any other industry. Number 2 is AT&T and cable.
Spotlight – Member Honeysuckle Gelato is in Vogue, and that’s more than food cool. Vogue Magazine featured the fast growth food company in a feature story on the best dining halls in America.
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IPO – Snapchat – The company will seek to raise as much as $4 billion in its planned initial public offering, which could value Snap at about $25 billion to $30 billion. Rumors flying around Wall Street that Snapchat will now indeed go public in January, and not push the date out to March.
Smart Sand, a frac sand producer, has set its IPO terms. It will sell 10.6 million at a price between $15 and $18 a share, and would have an initial market cap of around $175 million.
Exits – Kohlberg & Company has agreed to acquire MarketCast, a market research company, from RLJ Equity Partners LLC and State Street Global Advisors.
Altaris Capital Partners LLC has acquired Senior Helpers, an elderly home care franchise, from Levine Leichtman Capital Partners.
Venture Capital – Daqri, an augmented reality company, is attempting to raise as much as $200 million.
Hyperloop One, a transit company trying to turn Elon Musk’s vision of high-speed travel into a reality, is seeking to raise tens of millions.
Wavefront, a cloud analytics company, has raised $52 million.
Habit, a personalized nutrition and wellness company, has raised $32 million.
Lendio, a loan company for small businesses, has raised $20 million.
Verse, a instant mobile payments service, has raised $8.3 million.
IrisVR, a virtual reality company that builds tools for the architecture industry, has raised $8 million.
TVision Insights, a facial recognition software company, has raised $6.8 million.
Brickwork, a software provider for retailers, has raised $5 million.
Lively, a direct-to-consumer lingerie company, has raised $4 million.
Baffle, a data encryption company, has raised $3 million.
Underscore.VC, an early-stage VC firm focusing on cloud intelligence, has closed its first fund at $85 million.
SJF Ventures, a venture capital firm, has raised a total of $74.4 million.
Private Equity – Simmons Private Equity has made an undisclosed investment in Leap Energy, a consulting company for the oil and gas industries.
Confie, a commercial insurance broker, has acquired two auto insurance agencies, as well as a personal and commercial insurance company: Salermo Insurance Agency, LLC, Hulme Corporate, and Lockwood Agency.
Goode Partners LLC has acquired Stonefire Grill Inc., a fast-casual restaurant chain.
And that’s what’s ahead, Cliff
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