Know. Grow. Exit.
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Good Tuesday Morning, good body language and a good vibe last night at the US – North Korea Summit – if both sides sign a Joint Declaration, it will show things went well. Joint Communiques are not signed. Separate statements mean a long ride home.
Daylight – Call it a Baby Doe’s Economy – everybody can bag one, even an old flame like Dave & Busters can blow out their quarterly numbers and see a stock price surge last night in after-hours trading.
Baby Doe’s Fever – M&M’s, Snickers Bars, Dove chocolate and vets – yes, animal doctors. That’s the name of the game for Mars, which announced Monday that it would spend more than $2 billion to acquire UK veterinary business and clinic operator Anicura.
Hot – Dave & Buster’s stock surges 20 percent after earnings beat Wall Street estimates. Revenue rose to $332.2 million from $304.2 million in the year-ago period. Dave & Buster’s also said its CEO, Stephen King, will retire at the end of the second quarter, succeeded by CFO Brian Jenkins.
M&A – Cindy Eckert is back at the helm of Sprout Pharmaceuticals, the company behind female libido drug, Addyi. She started Raleigh-based Sprout with no money in the bank, received FDA approval on the third try and sold it to Valeant for $1 billion.
With total sales stymied at $10 million instead of the targeted $1 billion in 2017, Valeant gave the company back to her for no upfront fee with a 6 percent off the top royalty fee paid to them on every dollar of sales. Valeant loaned her $25 million to kickstart operations. Clean Kill.
Today, a district judge in DC will rule on the government’s effort to block AT&T’s bid to buy Time Warner. If he rules for the bid, Aetna and CVS is a done deal along with a flood of new mega deals. The investment bankers are starving for this one – calling it the Super Bowl ruling – pray to just let me win this one is all they are saying.
Aterian Investment Partners acquired Albany Industries, a maker of home furnishings.
Style – Marketing stunts are often rewarded on social media, and, IHOP rolled the dice and got the reaction it sought. It said it would now be known as IHOb, for International House of burgers instead of Pancakes, and customers pleaded a return to the old name. It’s the Coke – New Coke routine.
The US retook the lead from China in the race to build the world’s speediest $200 supercomputer called Summit, built for the Oak Ridge National Laboratory in Tennessee.
It can make mathematical calculations at the rate of 200 quadrillion per second, or 200 petaflops. For comparison’s sake: If a person performed one calculation a second, he or she would have to live for more than 6.3 billion years to match what the machine can do in a second.
Economics – Junky loans surpass the junk-bond market as investors gamble on higher yields and chase companies with low credit ratings – junk loans have surged by 20 percent in the past year to $1.22 trillion in May. At that level, the market now has more assets outstanding than junk bonds, at $1.21 trillion.
Live Rounds – Entrepreneur Exits can leverage Baby Doe’s investors.
Recurring revenue is always golden but investors now accepting Revenue Predictability as a close second and it’s often better than trying to create an artificial recurring revenue stream.
Redundant Entrepreneur – Before you exit reduce your role in the business like hiring an employee from a brand name company in your industry. If you are selling bars, Mars candy is it. This is a trophy hire not a Number 2 Who Can Do.
Rembrandt in the Attic – Identify the special reason why your company exists like an exceptional culture to get things done – hot market.
Buzzard’s Roost – It’s official: Net neutrality is over. As of Monday, six months after the Federal Communications Commission dismantled regulations that the Obama administration enacted in 2015, internet providers can charge more for certain content or for giving preferential treatment to certain websites. Democrats miss a layup.
Culture – The World Cup begins in Russia on Thursday. The US didn’t make the cut. AI says Spain wins it all.
Speaking of world class athletes, triple crown winner Justify has bagged total winnings of $3.8 million in his one year of racing and is expected now to earn $200,00 for every live foal he sires in the breeding shed.
A horse of his caliber can produce 150 per spring season. Owners could also one-up American Pharoah and choose to race him in the $16 million Pegasus Cup. If he gets injured, no stallion fees. Majority owner WinStar Farms said nothing settled as a decision.
Investment Banking – HIG Capital made an investment in Grupo Meridional, a hospital group.
Hedge Funds – EyeSouth Partners creates a fund to invest in South Georgia Eye, an eye care provider.
IPO – Eidos Therapeutics, a biopharmaceutical firm focused on diseases caused by transthyretin or amyloidosis, plans to raise $100 million in an IPO of 6.3 million shares priced between $15 to $17.
Magenta Therapeutics, a focused on bone marrow transplants, plans to raise $100 million in an IPO of 6.7 million shares priced between $14 to $16.
Kezar Life Sciences, a small molecule therapeutics maker for autoimmune diseases and cancer, plans to raise $70 million in an IPO of 4.7 million shares priced between $14 to $17.
Venture Capital – Claroty, a company focused on cybersecurity for industrial control networks, raised $60 million.
JetClosing, a provider of digital real estate title and settlement transactions, raised $20 million.
Nextinput, a provider of MEMS-based force-sensing solutions, raised $13 million.
iBeat, a health tech company, raised funding of an undisclosed amount.
Spotlight – The Morning Report will return on Friday due to Porsche Event Thursday
Oxford Entrepreneurs will be at the Wharton Business school on SiriusXM.
June 14 1:00 p.m.
Tune into Channel 111 to call-in live.
And that’s what’s ahead, Cliff