YogaWorks has registered an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company did not mention any pricing details in the filing, although the offering is valued up to $74.75 million. The company intends to list its shares on the Nasdaq under the symbol YOGA.
The underwriters for the offering are Cowen, Stephens, Guggenheim Securities and Roth Capital Partners.
This is one of the largest and fastest growing providers of high-quality yoga instruction in the United States, with almost 3 million student visits in 2016 and 50 company-owned studios, as well as its internet-based digital media service. YogaWorks is the only national, multi-discipline yoga instruction company, and its brand is present in six geographically dispersed U.S. markets: Los Angeles, Orange County (California), New York City, Northern California, Boston and Baltimore/Washington D.C.
Its teachers taught more than 180,000 classes in its conveniently located studios and attracted more than 225,000 students in 2016. Since 1990, YogaWorks has offered the YogaWorks teacher training program, which it believes is the gold standard within the yoga community and respected across the globe for instructing teachers on how to teach yoga to a broad population of students.
Management believes its YogaWorks teacher training program extends the brand beyond current six markets and that its 11,000 graduates serve as ambassadors of the YogaWorks brand.
The company said in the filing:
We strive to make yoga accessible to everyone and offer a lifestyle approach that can be applied on and off the mat. We help people improve their physical and mental well-being through the 5,000 year old tradition of yoga, which we practice as a community-oriented experience. Our classes are designed to safely challenge practitioners of all levels, making yoga accessible to a diverse population ranging from beginners and casual practitioners to seasoned yogis and professional athletes. We are told some students find yoga to be the only form of exercise they need or wish to do. Others enjoy how yoga complements their other exercise routines, as yoga can enhance performance and reduce injuries by helping people stretch to increase flexibility, strength, balance and focus.
The company intends to use the net proceeds from this offering to repay debt and for working capital and general corporate purposes.
AGIO CLINICAL TRIAL NOT GOING WELL
Google wants to make it easier for governments to access customer data stored on overseas servers.
The company believes current rules on information sharing are outdated, and is set to press US lawmakers to update them.If it gets its way, governments would be able to quickly get their hands on the personal data of Google account holders around the world. The move follows a spate of terrorist attacks in Europe, and is designed to make it easier for investigators to track down culprits.
The company’s efforts will cause concern though, as government agencies are known to have overstepped the mark on several occasions, as revealed by Edward Snowden.Current electronic communications rules allow government access to overseas data, but the process of requesting the data and receiving a warrant for it can takes months. “This couldn't be a more urgent set of issues,” said Kent Walker, Google's senior vice president and general counsel, reports Reuters.However, it represents a major change in attitude for the company.
Earlier this year, Google opposed a court ruling declaring that it must comply with FBI search warrants for Gmail messages stored outside the US, if the requests are issued as part of a domestic fraud investigation.
The magistrate in this case departed from precedent, and we plan to appeal the decision,” said a Google spokesperson at the time. “We will continue to push back on overbroad warrants.”
Google and Facebook 'should share' users' data to fight terrorism
It also said that it sometimes breaks up emails to improve its network’s performance, and often doesn’t know where messages are being stored.According to Reuters, Google will only call for countries “that commit to baseline privacy, human rights and due process principles” to be able to request people’s data directly from US companies without having to go through the US government first.
The arrangement is planned to work both ways.
Elon Musk's SpaceX completed an impressive, bicoastal demonstration of launch capability Sunday, successfully executing the second of two unmanned missions within a roughly 48 hour period in a high water mark for the company's operational prowess. Parts of both rockets returned to floating platforms repeating what has become a signature feature of company launches. The back to back launches went off withut a hitch will all engines and navigation equipment performing as expected and the SpaceX team for the firsst time smoothly juggling the demands of coordinating blastoffs from opposite coasts of the US on such a compressed time table After using previously flown main engines to blast a Bulgarian telecommications satellite into orbit Friday from a Florida launchpad the closely held company on Sunday afternoon used a California Air Force base to send a batch of 10 smaller satelites into space for Iridium Communications, Space's largest customer
Travis Kalanick's ouster as chief executive of Uber Technologies dealt a blow to its efforts in Asia, where the ride hailing company is locked in a multibillion dollar battle with local rivals. Uber retreated from China last year, selling its business there following a costly battle with homegrown rival Didi Chuxing Technology. After ward Uber said it was sharpening its focus on India and Southeast Asia. Investors and analysts say the San Francisco company worries at home may add momentum to startups capitalizing on a home field advantage local knowledge and good relationships with regulators
Mr Kalanick was critical in turning Uber into a company valued at nearly $70 billion. The business in which Uber is engaged is an alll out battle, a constant daily battle against city regulators, taxicab unions. Travis while he had many flaws greatly personified this warrior thos and was able to execute on this vision and grow the company at such a pace and such a valuation. His departure follows hard on Uber's firing of its Asia president Eric Alexander. In Inida where the rise of the cheap smartphone is creating millions of potential new customers, Uber has said it is investing more than $1 billion, boosting its mapping capabilities, hiring more engineers and training new drivers
BERKSHIRE BUYS STORE CAPITAL
Stress tests long dreaded by executives at the antion's largest banks are getting easier. The Federal Reserve on Wednesday will release the final results which probe firms ability to withstand a severe financial shock. Officials made the tests easier for some banks this year and for the nest time around they are preparing to further change the exmas in fundamental ways. The most significant shift would remove a major risk for banks, failing the tests purely for subjective reason. The qualitative part of the tests has in past years created embarrassing failures for firms such as Citigroup, Deutsche Bank and Banco Santander Fed officials now envision a system where fims would generally only fail the test if their capital levels falls below the level the Fed views as healthy in other words for quantitative reason That likely means fewer test failures. Between 2014 and 2016 the Fed gave banks a failing grade nine times, only once did a bank fail the test because of low capital ratio
JUNE NEWSLETTER 4
Daniel Cullinane CPA
25 Plaza 5 25th fl Jersey City NJ phone 732-516-1648 fax 732-516-9778
2500 Plaza 5 25th fl Jersey City NJ 07311 phone 732-516-1648 fax 732-516-9778
Venmo has become a verb among people who want to send money digitally to each other. What it hasnot become is a huge money maker for parent Paypal Historically that has not been much of a concern for PayPal, although that is starting to change. Making money might matter even less to big tech and finance firms like Apple Inc and JPMorgan that are going after Venmo's business. Those firms are trying to prevent Venmo from becoming to person to person payments what Google is to search or Facebook to social media. The reason: Even if such services are not profitable today, companies believe they are vital to getting and keeping customers, especially coveted millennials. "We do not charge cutomers" Gordon Smith, head of consumer banking at JP Morgan, said at an investor conference whiledescribing the bank's efforts in person to person payments. "So you all quite rightly will ask me, "Well what is the revenue model? The revenue model is that the customer is engaged in our banking app"
JPMorgan this month connected its smart phone apps to a new money transfer network called Zelle which is owned by several banks and is expected to reach 85 million consumers. That followed an announcement from Apple that it was also getting into person to person payments. With these payment services consumers link a bank account, debit card, credit card to a smartphone app and can send money to anyone else with just the email address or phone number of the recipient . Venmo and other services typically eat the charges that banks or card networks impose on transfers that move over their payment rails. " It has been all cost and no revenue, but a tremendous acquistion tool and tremendous engagement tool.
YOGA WORKS TO GO PUBLIC
UBER HAS TROUBLES
New home sales rose in May and prices hit a recored level, more evidence of a housing market characterized by stong emand and tight inventories. Purchases of new, single family homes, a narrow slice of all US home sales, rose 2.9% to a seasonally adjusted annual tate of 610,000 in May. From a year earlier, new home sales rose 8.9% in May and so far this year have climbed 123.2% indicating the market for new homes appears to be picking up. The name of the housing market over the past few years has been low supply not low demand. The median price for a new home sold in May was $345,000 the highest recorded for data dating back to 1963. The average sale price also came in the highest on record at $406,400. Home prices for new homes have climbed steeply since dipping in the recession
CBO ON HEALTH BILL
The Senate Republican health care overhaul would result in 22 million more people uninsured and cut the cumulative federal deficit by $321 billion in the next decade compared with the Affordable Care Act , according to an estimate released Monday by the Congressional Budget Office. The assessment comes as Senate Majority Leader Mitch McDonnell is engaged in last minute negotiations with more than a half dozen GOP lawmakers wavering in their support of the bill. Senator Susan Collins came out against the bill citing the CBO report. Also on Monday, the American Medical Association announced its opposition to the bill in a letter to Senate leaders saying "it will expose low and middle income patients to higher costs and greater difficulty in affording care" Insurer Anthem said it believed the legislation would bring stability to the individual insurance market.
Copyright © Daniel Cullinane CPA.
BANKING STRESS TESTS
STORE Capital Corp. (NYSE: STOR) is not exactly a household name. Within the investing community, almost the entire float of its public shares is owned by institutional investors. That lack of public visibility may change now that Berkshire Hathaway Inc. (NYSE: BRK-A) has taken a 9.8% shareholder stake in the company. The big question to ask here is why Warren Buffett and his team would take such a keen interest in a commercial real estate investment trust (REIT) when other investors have developed cold feet.
Berkshire Hathaway’s stake came from an investment of $377 million in STORE Capital. In the transaction, STORE Capital issued some 18.6 million shares of company stock in a private placement to one of Berkshire Hathaway’s subsidiaries, National Indemnity Company, at a price of $20.25 per share. These were issued under a Regulation D filing, so they may not be resold back into U.S. markets without a registration or obtaining exemptions.
STORE Capital plans to use the funds to repay debt, to fund property acquisitions and for working capital and other general corporate purposes.
STORE Capital primarily invests in single-tenant properties that lease to chain restaurants, supermarkets, drug stores and other companies tied to retail, movie theaters, early childhood education, service and distribution.
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The Scottsdale, Arizona-based outfit was founded in 2011 and STORE is an acronym for single tenant operational real estate. It is listed as one of the largest and fastest-growing net-lease REITs in America, owning a large and diversified portfolio of single net-lease properties in 1,750 locations within 48 states as of March 31, 2017.
The company has only about 70 employees, and its 27.5 million share initial public offering was at $18.50 per share back in 2014. Its equivalent yield after the post-Berkshire pop for new investors was listed as 5.16%.
Amazingly, the 18.6 million shares would not even make Berkshire Hathaway the largest shareholder, based on March 31, 2017, SEC holding data. At that time, Vanguard funds owned 26.13 million shares (a 15.25% stake) and Fidelity funds owned 23.43 million shares (a 13.67% stake). Other key holders as of that date were listed as follows:
Cohen & Steers, 10,732,987 shares (6.26%)
BlackRock, 10,152,844 shares (5.92%)
Principal Financial Group, 9,948,918 shares (5.81%)
MFS, 8,996,601 shares (5.25%)
BNY Mellon, 7,579,529 shares (4.42%)
Wellington Management, 5,867,685 shares (3.42%)
Daiwa Securities, 5,699,412 shares (3.33%)
CI Global Investments, 5,001,272 shares (2.92%)
Janney maintained a Buy rating on STORE Capital, with a fair value estimate raised by $1 to $25, on the same morning after the Berkshire Hathaway deal. Janney noted that, despite a 2.5% discount to its prior closing price, this Berkshire Hathaway deal on a net basis provided a superior price to STORE Capital than an overnight equity offering. Due to the increased share count, Janney lowered the is funds from operation per share estimates from $1.67 to $1.66 for 2017 and from $1.78 to $1.75 in 2018.
Other recent analyst calls were made after STORE Capital’s earnings:
On May 5, 2017, Wunderlich maintained its Buy rating but trimmed its target to $25 from $27.50, based on a falling net asset value estimate and multiple compression in the freestanding single-tenant REITs.
On May 4, 2017, Wells Fargo maintained its Market Perform rating with a $23 to $25 valuation range, while noting that its strong portfolio metrics should support steady and predictable cash flows.
On May 4, 2017, UBS maintained its Neutral rating but lowered its target to $24 from $26 over increased concerns about a challenging retail environment.
On May 4, 2017, KeyBanc Capital Markets maintained a Sector Weight rating.
On April 20, 2017, Goldman Sachs maintained a Buy rating but removed STORE Capital from the Conviction Buy list. Its target price was $28 at that time.
On February 10, 2017, Labenburg Thalmann raised its rating to Buy from Neutral with a $28 target price, but on May 10, 2017, it downgraded STORE Capital back to Neutral and removed that target price after noting that the growth narrative was deteriorating as the credit landscape had worsened.
STORE Capital shares were trading up over 10% at $22.87 Monday morning. Its 52-week range is $19.65 to $31.44, and the $3.5 billion REIT has a consensus analyst target price of $26.13.
SPACEX COMPLETES MILESTONE
Agio Pharmaceuticals Inc. (NASDAQ: AGIO) saw its shares sink on Monday after the firm announced results from its midstage trial for the treatment of relapsed or refractory acute myeloid leukemia (R/R AML). Unfortunately, results did not live up to expectations.Specifically, the firm reported results from its Phase 1/2 study evaluating investigational oral IDHIFA (enasidenib). IDHIFA is in development in collaboration with Celgene Corp. (NASDAQ: CELG).
Data in an oral session at the 22nd Congress of the European Hematology Association (EHA) demonstrated an overall response rate of 37%, including a complete response rate of 20.1% in 214 patients with R/R AML who received enasidenib.
Unfortunately, a maximum tolerated dose was not reached. Although, the overall safety profile observed for enasidenib was consistent with previously reported data. The most common treatment-emergent adverse effects were nausea (48%), diarrhea (41%), fatigue (41%), decreased appetite (34%) and blood bilirubin increased (33%). For all patients in the study, 26.1% had treatment-related serious adverse events, notably IDH differentiation syndrome (7%), leukocytosis (4%), tumor lysis syndrome (3%) and hyperbilirubinemia (2%).
Chris Bowden, M.D., chief medical officer of Agios, commented:
With data from an additional 105 patients and the first look at data from the Phase 2 expansion in R/R AML patients treated at the recommended Phase 2 starting dose of 100 mg once daily, these updated results underscore the consistency and durability of response for enasidenib as a potential first-in-class therapy for patients with relapsed or refractory AML and an IDH2 mutation. We are working with our partner Celgene to quickly bring this oral, targeted therapy to patients with limited treatment options.
Shares of Agio were trading down about 10% at $53.20 on Monday, with a consensus analyst price target of $61.89 and a 52-week range of $35.84 to $67.74.
Celgene was down about 0.7% at $133.33, with a consensus price target of $142.04 and a 52-week trading range of $94.42 to $135.18.
INTERNET CRIME COST US $1.3 BILLION
Internet Crime Cost Americans $1.3 Billion in 2016
The U.S. Federal Bureau of Investigation (FBI) last week issued its 2016 Internet Crime Report based on data from the Bureau’s Internet Crime Complaint Center (IC3). The center logged nearly 300,000 complaints in 2016 with reported losses of more than $1.3 billion.
Over the past five years, the agency has received more than 1.4 million complaints reporting losses totaling $4.63 billion. That’s actually the good news. The FBI estimates that just 15% of U.S. internet fraud victims each year report the crimes.
The most costly types of internet crime are categorized as business email compromise and email account compromise (BEC/EAC), which together accounted for more than $360 million in losses and 12,000 complaints last year. BEC/EAC scams target businesses working with foreign suppliers or those that regularly move money by means of wire transfers.
The second-most costly type of fraud is confidence or romantic fraud, which resulted in more than 14,000 complaints and cost Americans about $220 million last year. We wrote about romantic fraud earlier this year.
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The top five states based on victim counts were:
New York: 16,426
Based on loss values, the top five states were:
California: $255.2 million
New York: $106.2 million
Florida: $88.8 million
Texas: $77.1 million
Virginia: $49.2 million
Americans over the age of 60 were the most frequent victims (more than 55,000) and suffered the greatest total losses ($339.5 billion). Loss totals increased by age group, but the second highest total number of victims came in the 30 to 39 age group (54,670).
Additional details can be found in the FBI report and state-by-state reports.
GOOGLE WANTS TO GRANT GOVERNMENT MORE ACCESS
MARKET FOR NEW HOMES UP