Tag Archives: Sale
FILE PHOTO: People walk past a ZTE logo outside its booth at the Mobile World Congress in Barcelona, Spain, Feb. 25, 2019. REUTERS/Sergio Perez/File Photo
HONG KONG (Reuters) – Chinese telecom equipment maker ZTE Corp’s controlling shareholder plans to reduce its stake by as much as 3 percent after the stock more than doubled in value since surviving a U.S. sanction last year, showed regulatory filings late on Tuesday.
The stock slumped as much as 7.6 percent in Shenzhen on Wednesday following the news. Its Hong Kong-listed shares dropped as much as 5.6 percent.
The Chinese firm was crippled early last year after breaking U.S. sanctions and was only able to resume business in July after paying $ 1.4 billion in penalties to lift a U.S. supplier ban. The stock has since risen around 150 percent in Shenzhen.
ZTE in the filings said state-owned controlling shareholder Zhongxingxin Telecom plans to sell up to 2 percent in ZTE A-shares via block trades within 90 days. Zhongxingxin has also proposed to use not more than 41.9 million ZTE A-shares, or 1 percent of the company’s total share capital, to subscribe for units in the ICBCCS SHSZ 300 exchange-traded fund.
Reporting by Sijia Jiang; Editing by Christopher Cushing
At this time of the week, we usually like to scour the web for great prices on our favorite headphones or gaming consoles. But this is a special occasion: REI’s End of Season sale started yesterday, and will continue through Monday, October 15. This is your best chance to snag the outdoor gear you’ve been coveting all summer for unbelievable prices. We combed through thousands of deals to bring you some of our favorite picks.
Rumpl’s soft, eye-catching blankets are made out of technical ripstop nylon with a DWR finish. It will shed dirt and dog hair, repel moisture, and keep you warm on your next fireside outing. Buy the Rumpl Puffy Blanket for $ 72 (was $ 129).
Dakine Cassette Stomp Pad for $ 4 (was $ 8). According to the reviews, it might not last that long. But it will look amazing on the day that you stick it on.
Darn Tough Crew Socks for $ 7 (was $ 20). You knew these would show up here. Everyone always needs more indestructible socks. Unless your socks are already all Darn Tough socks, in which case you might be set. REI’s entire selection of socks is worth browsing; there are plenty of men’s versions on sale too.
Brooks Juno Bra for $ 24 (was $ 65). This is one of the best-selling sports bras from Brooks’ sister company, Moving Comfort, which is best known for bras that, er, strap it all down.
Patagonia Black Hole Gear Tote for $ 27 (was $ 49). Patagonia’s tote in the Black Hole line serves as a tough, durable catch-all for everything from wet hiking boots, dirty gym clothes, or laundry. It stuffs down into its own pocket when not in use.
REI Co-op Midweight Base Layer for $ 29 (was $ 80). The end-of-season sale is a great time to stock up on a lot of essentials that would otherwise be extremely pricey, like merino wool base layers. REI’s in-house line offers a lot of value for the money, but if you prefer other brands, they also have a lot of Smartwool and Icebreaker on sale too.
Patagonia Baggies for $ 30 (was $ 55). Depending on where you live, you probably won’t need these for a while. But these are the some awesome outdoor shorts. They’re also made from recycled materials and come in a variety of fun prints.
Chacos Classic Z/1 Sandals for $ 45 (was $ 105). You won’t be able to use these for awhile either. But now is a good time to stock up, if you don’t currently have a pair of Colorado’s or Oregon’s official summer state shoe.
Nathan Speed 2L Hydration Vest for $ 31 (was $ 85). Are you running in the Los Angeles, Eugene, or, God help us, the Boston Marathon this spring? You’ve probably been looking for a hydration vest, which sits close to your body, has breathable mesh panels, and won’t bounce like a bladder backpack would.
Manduka Prolite Yoga Mat for $ 37 (was $ 82). Manduka’s high-density, closed-cell yoga mats are very popular, and usually very heavy. This one is light enough to tote to and from class.
Vuori Movement Hoodie for $ 44 (was $ 118). REI carries a lesser-known outdoor brands, like Bridge & Burn, United by Blue, and Topo Designs. Vuori’s soft, moisture-wicking hoodies have a cult following and very rarely (if ever?) go on sale.
Ruffwear Cloud Chaser Jacket for $ 48 (was $ 80). Ruffwear’s doggy jacket is waterproof, windproof, and even has reflective trim. If you’re going to be decked out to protect yourself from the elements, maybe your pup should be too.
Patagonia Nano-Air Jacket for $ 74 (was $ 199). All of Patagonia’s vaunted midweight jackets (Nano Air, Nano Puff, Micro Puff?) will quickly become the layer that you never take off.
REI Co-op Camp Bundle for $ 134 (was $ 239). Have you put off camping because all the gear seemed incomprehensibly expensive? This is an amazing value for a three-season tent, air-foam sleeping pad, and 30-degree sleeping bag. Now all you need is a cookstove, a headlamp, a backpack…
Suunto Ambit3 Vertical GPS Watch for $ 246 (was $ 469). Suunto’s GPS watches are good-looking, lightweight, and offer incredible capabilities for the price. The Ambit3 Vertical tracks vertical gain (no doy!) for ultrarunners, trail runners, and hikers.
Lib Tech Attack Banana 2017/2018 for $ 310 (was $ 589). If you’re an all-mountain rider who is more likely to carve around in powder or pop into the park, rather than bomb down as fast as possible, Lib Tech’s poppy Banana boards are a great choice.
Coalition Snow Bliss Skis for $ 359 (was $ 599). Do you need another reason to get excited about ski season starting up? Coalition Snow is just one of many great snow brands that are on sale right now.
CycleOps Magnus Bike Trainer for $ 412 (was $ 600). ‘Tis the season, for bringing your bike indoors and pedaling while watching The Great British Baking Show, instead of biking outside.
Surftech Universal 10’6” Stand Up Paddleboard for $ 668 (was $ 1049). ‘Tis also the season for buying paddleboards on clearance and fantasizing about going out on lakes and rivers again.
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TOKYO (Reuters) – Japan’s Toshiba Corp said on Friday it had completed the $ 18 billion sale of its chip unit to a consortium led by U.S. private equity firm Bain Capital.
The completion of the deal, initially aimed for by end-March, had been delayed due to a prolonged review by Chinese antitrust authorities. China approved the deal last month.
The Bain consortium last year won a long and highly contentious battle for Toshiba Memory, the world’s No. 2 producer of NAND chips. Toshiba put the business up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit had plunged it into crisis.
The consortium includes South Korean chipmaker SK Hynix, Apple Inc, Dell Technologies, Seagate Technology and Kingston Technology.
Under the deal with Bain, Toshiba repurchased 40 percent of the unit, it said in a statement.
Reporting by Makiko Yamazaki; Editing by Sunil Nair
TOKYO (Reuters) – Japan’s Toshiba Corp has decided it will cancel the planned $ 18.6 billion sale of its memory chip unit if it does not get approval from China’s anti-monopoly regulator by May, the Mainichi newspaper said on Sunday.
A consortium led by U.S. private equity firm Bain Capital last year won a long and highly contentious battle for the unit, which Toshiba put up for sale after billions of dollars in cost overruns at its Westinghouse nuclear unit plunged it into crisis.
But Toshiba was unable to complete the sale by the agreed deadline of March 31 as it was still waiting for approval from China’s antitrust authorities.
Toshiba raised $ 5.4 billion from a share issue to foreign investors late last year and it had now decided it did not need to go through with the sale, the Mainichi newspaper reported. It did not cite any source.
“Toshiba has come to a decision that there is little necessity for the sale as it is no longer in insolvency,” the newspaper reported, adding that Toshiba would consider listing the unit if the sale did not go ahead.
A Toshiba spokesman said the company was still aiming to complete the sale as soon as possible.
In early April, Toshiba Chief Executive Nobuaki Kurumatani said his company would not use the option of cancelling the sale unless there was any “major material change” in circumstances.
Reporting by Makiko Yamazaki, Kiyoshi Takenaka; Editing by Robert Birsel
WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday will consider whether to let states force out-of-state online retailers to collect sales taxes on purchases in a fight potentially worth billions of dollars pitting South Dakota against e-commerce businesses.
South Dakota is asking the nine justices to overturn a 1992 Supreme Court precedent that states cannot require retailers to collect state sales taxes unless the businesses have a “physical presence” in the state.
The state, appealing a lower court decision that favored Wayfair Inc, Overstock.com Inc and Newegg Inc, is being supported by President Donald Trump’s administration.
A ruling favoring South Dakota could eventually lead to online customers paying more for many purchases.
Such a ruling could help small brick-and-mortar retailers compete with online rivals while delivering up to $ 18 billion into the coffers of the affected states, according to a 2017 federal report. The justices are due to decide the case by the end of June.
South Dakota depends more than most states on sales taxes because it is one of nine that do not have a state income tax. South Dakota projects its revenue losses because of online sales that do not collect state taxes at around $ 50 million annually, while its opponents in the case estimate it as less than half that figure.
The justices will hear the case against a backdrop of Trump’s harsh criticism of Amazon.com Inc, the dominant player in online retail, on the issue of taxes and other matters. Trump has assailed Amazon CEO Jeff Bezos, who owns the Washington Post, a newspaper that the Republican president also has disparaged.
Amazon, which is not involved in the Supreme Court case, collects sales taxes on direct purchases on its site but does not collect taxes for items sold on its platform by third-party venders, amounting to about half of total sales.
South Dakota is supported by industry groups representing major retailers that have brick-and-mortar stores, and therefore already collect state sales taxes. The National Retail Federation, which supports the state, has a membership that includes Walmart Inc and Target Corp, as well as Amazon.
E-commerce companies supporting Wayfair, Overstock and Newegg include two that provide online platforms for individuals to sell online: eBay Inc and Etsy Inc.
The 2016 South Dakota law requires out-of-state online retailers to collect sales tax if they clear $ 100,000 in sales or 200 separate transactions. The state sued a group of online retailers to force them to collect the state sales taxes, with the aim of overturning the 1992 precedent.
Reporting by Lawrence Hurley; Editing by Will Dunham
Chris Lee, a member of Hawaii’s state House of Representatives, is drafting legislation that would prohibit the sale of games with randomized in-app purchases, known as “lootboxes,” to gamers under 21 years old. Lootbox systems have been increasingly compared to gambling, as well as drawing the ire of gamers themselves, who derisively refer to the mechanic as “pay to win.”
Lee describes lootboxes as “predatory,” and their randomized nature seems to be built around the same reward structures that make gambling addictive. Lee’s push was highlighted today by Kotaku, and Lee told the gaming outlet that since announcing his proposal, he’s heard stories of children spending thousands of dollars on gaming microtransactions. In one case relayed to Lee, a child reportedly stole a parents’ credit card to pay for game purchases.
Lee’s initative could pave the way to national legislation, and is being documented in videos posted online by his office.
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In taped discussions with aides, Lee has made clear he has no desire to prohibit or restrict in-game purchases as such, as long as rewards are not random.
The marketplace seems to be making some headway in fighting back against lootboxes. Player disgust with the systems reached a fever pitch surrounding Electronic Arts’ Star Wars Battlefront II, leading the publisher to remove lootbox elements from the game at launch. The controversy nonetheless seems to have badly tarnished the game, which as of this week has fallen dramatically short of sales projections. Lee — himself an avowed gamer — has previously referred to Battlefront II as a “Star Wars-themed online casino.”
Lootbox sales still drive big revenue for publishers including EA. Lee, a Democrat, told Kotaku that he’s seen interest in and support for his and similar legislation across party lines, but warns that game industry lobbying groups are gearing up to defend the practice.
We bought Teva Pharmaceutical (TEVA) stock recently close to $ 10-$ 11/share earlier this month. Shares are up >20% since we bought them but could have more upside.
Why shares are in decline since 2015:
Investors who have been following the generics drug industry in general, and this company specifically, must be aware of the various issues summarized below.
- The blockbuster drug for multiple sclerosis Copaxone represents about 45% of Teva’s EBITDA and bears are betting that the approval of its generic version by Mylan (MYL) would result in the loss of this revenue stream. Copaxone had $ 1B sales in Q3 2017 and accounts for 25% of the company’s $ 20B in annual sales.
- The generic drug industry overall has been under regulatory scrutiny like the DOJ investigation of drug pricing. Teva is one of the drug makers under investigation. The investigation is for charges like 8 of the 10 drugs with the biggest price hikes in 2014 were generic drugs (Medicare data).
- Some of the other brand names of Teva like Azilect and ProAir are also facing patent cliffs.
- Teva has $ 35B of debt on its balance sheet after a $ 40B acquisition of Allergan’s (NYSE:AGN) generics business. The acquisition has been widely criticized with respect to the price paid and the timing when the regulatory pressures on the generics industry are tightening.
- On November 7, Fitch downgraded Teva’s credit rating to junk, resulting in a big decline in the stock. Bears are betting that Teva will have troubles paying off its debt obligations if the interest rate on its debt increases due to credit rating downgrade (when combined with a decline in future revenue).
Turnaround efforts: a new CEO with a successful track record
Teva appointed Kare Schultz as the new CEO in September. The new CEO Kare Schultz announced plans for reorganizing the company as part of the restructuring efforts. Rather than having two separate divisions for generics and specialty medicines, there will be a single organization, which will be divided into geographical divisions: North America, Europe and Growth Markets. Each of these geographical regions will manage generics, specialty, and OTC products. The company also announced plans for laying off 25% of its workforce in Israel.
The separate R&D divisions for generic and specialty organizations have been combined into a single global R&D division, which will focus on specialty and generic divisions. A new Marketing and Portfolio Division will work across different geographical regions. We expect cost synergies and reduced operating expenses as a result of these reorganization efforts.
(Teva’s new organizational structure)
A more detailed restructuring plan will be announced in mid-December (something to watch out for since it could be a stock price catalyst).
Notably, Mr. Schultz has a history of a successful turnaround at Lundbeck, which he returned to profitability.
New management changes are bullish
Dr. Hafrun Fridriksdottir was newly appointed as Executive Vice President, Global R&D. She served as Senior VP and President of Global Generics R&D at Allergan. She also served as Senior Vice President, R&D for Actavis (bought by Teva).
Michael McClellan was newly appointed as Executive VP and CFO of Teva and importantly, will oversee Business Development efforts (and future acquisitions). He also served as the U.S. CFO for Sanofi (SNY).
Details of more management changes can be read here.
What are the company’s strengths?
The generics business acquired from Allergan has some of the best products in the space. Through this acquisition, Teva acquired Actavis U.S. and international generic commercial units, third-party supplier Medis, global generic manufacturing operations, the global generic R&D unit, Allergan’s international OTC commercial unit (excluding OTC eye care products), etc.
While the price paid for this acquisition has been criticized, Teva’s former CEO Erez Vigodman’s intentions seem right. While Teva was originally a generics company, the success of Copaxone made it a combined generics+specialty drugs company. With Copaxone’s patent cliff looming, Mr. Vigodman intended to return Teva to its generics roots through this large acquisition whose true worth would only be apparent in few years. As this article rightfully points out, the margins have been shrinking in the generics industry and profitability is only possible through economies of scale (through consolidation and acquisitions).
Teva had either the option of making a large acquisition or getting itself acquired. Moreover, the deal was the only way for Teva to fight the growing dominance of its rival Mylan in the generics business. Teva’s management estimate for cost savings was $ 1.5 billion per year. The deal was also expected to have less antitrust issues compared to a similar deal between Allergan and Mylan.
Newer drugs in the pipeline have the potential to make up for some of the revenue losses due to Copaxone. Fremanezumab, an anti-CGRP antibody, which is planned for migraines, could reach peak $ 1 billion in sales (global anti-CGRP antibody market is estimated to be $ 6-7B in size). Austedo, a new medication to treat involuntary movements called chorea in Huntington’s disease is expected to reach peak $ 1.3 billion in sales.
It is like buying Valeant below $ 9/share
I remember bears betting that Valeant (VRX) will go to zero with a similar story playing out a year ago. We all know what happened after that. Valeant changed its CEO, sold assets to pay down the debt, launched restructuring efforts and shares have almost doubled in less than a year. Investors are getting another similar opportunity to get in Teva’s stock at its current lows.
VRX data by YCharts
A Holiday season discount on Teva’s common stock
The table given below shows Teva’s forward relative valuation metrics (using Wall Street consensus: Thompson Reuters).
The forward P/E ratio for Teva is very low compared to the mean for the pharmaceutical sector (21.2) as per NYU-Stern data. Teva’s 5-year mean P/E ratio is 25.
EV/EBITDA may be a better way to perform relative valuation for Teva (since it accounts for debt) and is lower than the mean for the pharmaceutical sector (13.27). Please note that the EBITDA erosion from Copaxone generics is factored in with the declining EBITDA estimates. Teva’s stock has traded at EV/EBITDA as high as 39.1 in the past 10 years. Our own EBITDA estimates are also in line with consensus.
Teva’s debt is manageable and the concerns over the debt covenant breach are overblown
From the recent quarterly report:
“In September 2017, Teva amended certain terms of these loan agreements, including increasing the maximum permitted net debt to EBITDA ratio. As of September 30, 2017, Teva was in compliance with all applicable financial ratios and expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations for the foreseeable future. However, Teva may experience lower than required cash flows to continue to maintain compliance with its net debt to EBITDA ratio covenant within the next twelve months. Teva believes it will be able to renegotiate and amend the covenants, or refinance the debt with different repayment terms to address such situation as circumstances warrant.“
The management outlined plans to tackle debt in the recent quarterly earnings call.
In brief, the current selloff appears an overreaction to a combination of factors like Copaxone’s patent cliff, concern over Teva’s ability pay off its debt, lowered guidance by the management, etc. On the other hand, it is a perfect setting for a large-cap, dividend-paying, diversified contrarian investment with a few years’ time frame. At the current all-time market highs, there are not many large-cap biotech/pharma investments, which I would have confidence that they could double in the next 3-4 years.
Teva, on the other hand, seems to have limited downside here and hit by investor overreaction. Such investor overreactions can provide some of the best buying opportunities as we have seen with our past experiences with Tobira Therapeutics (NASDAQ:TBRA), Juno Therapeutics (NASDAQ:JUNO), Portola Pharmaceuticals (NASDAQ:PTLA) and Alnylam Pharmaceuticals (NASDAQ:ALNY). With a new CEO in the driver’s seat, we are optimistic about the success of the turnaround efforts and expect the stock to hit $ 20-$ 25 in the next 3-4 years. As the Oracle said: ‘Buy when there is blood on the streets.’
Initiation rating: Buy, price target = $ 25.
Risks: Generic industry remains under pressure due to regulatory investigations. Teva is also facing litigation risks like anticompetitive practices. Our price targets may not be achieved. An equity raise by the company to pay off debt could put downward pressure on the stock in the near term.
Disclosure: I am/we are long TEVA.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: This article represents my own opinion and is not investment advice.
You will soon be able to ride home from your local car dealership in a car that finds its way there unassisted while you nap or read. That reality came a whole lot closer this week, with bipartisan agreement in the Senate on legislation allowing self-driving cars to take the the roads. The law is expected to come up for vote in the near future, and pass.
The House passed similar legislation, also with bipartisan support, several weeks ago. That legislation allows car manufacturers to sell up to 25,000 autonomous vehicles the first year they offer them. That will go up to 100,000 cars a year if the self-driving cars prove as safe as human-driven ones. And that’s not all. The Trump administration also helped out recently by issuing voluntary safety guidelines for autonomous cars and at the same time requesting that states avoid writing laws or regulations governing self-driving cars and possibly hampering their introduction.
The senators who arrived at the self-driving deal note that autonomous cars appear to be safer than human-driven ones. “Ultimately, we expect adoption of self-driving vehicle technologies will save lives, improve mobility for people with disabilities, and create new jobs,” said Senators John Thune (R-S.D.) and Gary Peters (D-Mich.) in a joint statement. They may be right: When a Tesla owner died while his car was in Autopilot mode last summer, company founder Elon Musk pointed out that it was the first known Autopilot fatality in 130 million miles of driving, whereas there’s a human fatality for every 89 million miles of traditional driving.
But if cars with no one at the wheel will soon become a common sight, the same won’t be true of semi trucks. The Teamsters successfully lobbied for the House version of the bill to limit self-driving vehicles to 10,000 pounds or less. That could be a problem for the U.S. trucking industry, which was short an estimated 48,000 drivers at the end of 2015, a shortage that’s expected to grow to 175,000 over the next seven years. That will create enormous pressure to replace hard-to-find long-haul truck drivers with no-muss, no-fuss AI.
LEXINGTON, KY (May 20, 2017) – Klaravich Stables and William H. Lawrence’s Cloud Computing, purchased at Keeneland’s 2015 September …