Blackberry Jumps with Movirtu


BlackBerry Ltd. (BBRY) has acquired mobile technology company Movirtu Ltd., shoring up its smartphone management features as it targets business users.

London-based Movirtu uses a virtual SIM card enabling customers to connect more than one phone number to a single device. The service lets employees who use one phone for work and home to switch easily between business and personal profiles with billing clearly separated, the Waterloo, Ontario-based company said in a statement today.

As BlackBerry’s share of the smartphone market has diminished, the company has shifted focus to selling software-based services to businesses and governments and exploiting the bring-your-own-device trend, where employees use work-related apps and features on their personal phones. Gartner Inc. predicts half of employers will ask workers to use their own phones for business by 2017.

We’ve been very clear as part of our turnaround strategy that we had full intention to not only manage BlackBerry devices but to manage iOS, Android and Windows Phone devices,” John Sims, head of BlackBerry’s enterprise services business, said in a phone interview. “It’s a sizable market opportunity.”

BlackBerry plans to start offering the phone-splitting software to customers early next year, Sims said.

The company’s shares rose 4.9 percent to $10.78 at the close in New York, the biggest daily gain since July 24.

Founded in 2008, Movirtu is run by CEO Carsten Brinkschulte and has 22 employees. It received $5.5 million in a 2010 funding round.

Disclosure BBRY is the largest long position in Jack A. Bass Managed Accounts

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Novus Energy : China Connection ? Jack A. Bass Managed Accounts

Novus 2
Novus 2 (Photo credit: Wikipedia)

Novus Energy* (NVS : TSX-V : $0.86)
Chinese buyers emerge? The Hong Kong Economic Times reports that China-based Yanchang Petroleum International Ltd.
plans to acquire Novus Energy for C$500 million (or ~C$2.00 per share). At the time of this writing, Yanchang shares remain
halted in Hong Kong and Novus was halted on the TSX Venture Exchange. Recall, Novus reported Q2/13 results last week and commented on its ongoing value maximization process.

The company confirmed that it is currently in exclusive negotiations with respect to a potential transaction. In that regard, Novus received an order of the Court of Queen’s Bench of Alberta, as well as confirmation from the TSX Venture Exchange, that it may delay its annual general meeting of shareholders until October 24, 2013. This may save the company the expense of holding an additional meeting, should the company undertake a transaction which requires shareholder approval. On December 4, 2012, Novus announced that it had retained financial advisors to assist the Special Committee of the Board of Directors in exploring and evaluating a broad range of options to optimize shareholder value. The company cautions that there can be no assurance that a potential transaction will result from the current negotiations, and Novus does not intend to disclose future developments with respect to the process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is appropriate or required.

Novus’ Q2/13 production averaged 3,452 boe/d (80% liquids) falling short of Canaccord  forecast of 3,844 boe/d and consensus of 3,939 boe/d. Production was down 15% quarter-over-quarter due to weather conditions which adversely affected its field operations. Second-quarter CFPS of $0.07 was commensurately below Toth’s estimate and consensus of $0.08 given reduced production volumes.

The company has ramped up activity in Q3 with current production of 4,050 boe/d. Subsequent to June 30, Novus has drilled an additional 17 wells in the Dodsland area with continued focus on well costs that have averaged ~$875,000.

Yahoo Looking At Pubmatic and Rubicon

Image representing Yahoo! as depicted in Crunc...
Image via CrunchBase
rubicon lychee
rubicon lychee (Photo credit: osde8info)

Nov. 21

According to Business Insider Yahoo is seeking to expand via Merger and Acquisition and has set its criteria when analyzing targets:

Yahoo’s business is pretty simple.

It makes money by selling ads on Web pages.

This is the formula:

Number Of Visits To Web Pages X Rate Yahoo Can Charge For Ads On Those Pages = Revenues

That formula means there are only two ways for CEO Marissa Mayer to grow the business.

  • Method One: She can increase the number of visits to Yahoo Web pages. The way Yahoo does that is by creating new popular products and media.
  • Method Two: She can increase the rate Yahoo charges to put ads on Web pages. The way Yahoo does that is by using ad tech to find out as much as it can about the people looking at its Web pages, and, in “real-time” sell that inventory to buyers willing to pay more to reach certain demographics.
Mayer is going to embrace both methods.

Mayer’s favorite thing to work on is consumer-facing products. So she’s going to personally invest lots of time in “method one.”

As for “method two,” Mayer would like to delegate.

The problem is that Yahoo does not currently have a team running ad tech that Mayer trusts.

There is a reason for this.

Back in 2007, Yahoo acquired a hot ad tech company called Right Media for $680 million.

This deal brought a huge amount of ad tech leadership into Yahoo.

But since then, Right Media leaders Michael WalrathBill WiseWendi Sturgis, and Ramsey McGrory all quit to take senior roles at other companies (or, in the case of Walrath, start investing in companies).

In short, Yahoo botched the integration of its huge acquisition. This happened for the same reasons that Yahoo as a whole has suffered over the past five years. It had a horrible board that hired under-performing CEOs.

All that said, our sources say that Yahoo believes it still owns a solid brand in the name “Right Media” or “RMX” – even if Right Media’s leadership is gone and its technology has rotted.

So Mayer’s plan, according to our sources, is to buy an ad tech company with a strong executive bench, and install it as the new leadership of Yahoo RMX.

There are lots of candidates Yahoo is considering, but our sources say there are two current favorites.

The one Yahoo likes best, according to a Yahoo source, is called Rubicon. Founded in 2007, Rubicon’s clients are publishers. Rubicon helps them categorize their ad inventory and sell it to the highest-bidding marketers. Yahoo would acquire it, and essentially become its sole client. Yahoo especially likes the depth of Rubicon’s executive bench.

The problem with Rubicon is that it has raised more than $50 million from startup investors. Startup investors expect a 5x to 10x return on their money. So Rubicon is not cheap. It’d cost Yahoo several hundred million dollars to buy.

During Yahoo’s last earnings call, Mayer said that Yahoo will be acquiring companies, but only in the tens and low hundreds of millions of dollars range.

A second Yahoo source cautions us, however, that Yahoo could buy Rubicon if it wanted to.

It’s true; industry M&A bankers say that between Yahoo’s cash and its reasonably liquid assets, like a stake in Yahoo Japan, Yahoo has about $10 billion it could spend.

Our Yahoo source says just don’t expect Mayer to run out and spend a billion dollars on something like Pinterest.

So perhaps Rubicon’s price is not too rich for Yahoo.

If it is, however, the first Yahoo source tells us the next company on its list is one called PubMatic. Like Rubicon, Pubmatic’s clients are publishers. It helps them optimize their inventory.

Over the summer, Evercore put out a note that said acquiring a couple of companies, including PubMatic, could increase Yahoo EBITDA by $400 million. Mayer didn’t miss that detail.

The problem with PubMatic, from Yahoo’s perspective, is that it does not have a deep bench of executives or technical people.

A source close to Pubmatic tells us the reason its executives may not seem as strong as Rubicon’s is that PubMatic is not going through a fundraising process, and executives have not spent a lot of time prepping for meetings with investors. This source says PubMatic CEO Rajeev Goel does not want to distract his team.

This source says that Rubicon, meanwhile, has hired Merrill Lynch/Bank Of America and is in the middle of a fundraising process.

To be clear, it is not certain that Yahoo will buy Rubicon, PubMatic, or even any ad tech firm.

What can report, for sure, is that two Yahoo sources tell us that Yahoo wants to buy an ad tech company in order to install a new team to run RMX. One of these Yahoo sources says that the current favorites are Rubicon and Pubmatic.

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TAG Oil Expanding In New Zealand

A fisherman statue at Greymouth.
A fisherman statue at Greymouth. (Photo credit: Wikipedia)

TAG Oil  (TAO : TSX : $7.00)

Nov. 1

TAG Oil acknowledged medai reports about a $ 534 M offer for New Zealand-based oil & gas producer Greymouth Petroleum. TAO reports that as part of its ordinary course of business identifies and, when deemed to be accretive, pursues new business opportunities. TAO however did not submit an offer to acquire Greymouth. TAO did submit a non-binding indicative expression of interest (EOI) stating an interest to potentially acquire the assets of Greymouth or all of, or a majority of, Greymouth shares. The EOI was subject to many conditions such as satisfactory due diligence, board approval, funding consisting of debt and equity on terms acceptable to TAO and the negotiation of a definitive agreement should TAO want to proceed.

No formal due diligence has been conducted and no definitive agreement has been entered into or is being negotiated. Garth Johnson, TAO CEO, commented, “The non-binding expression of interest (EOI) TAG submitted in relation to Greymouth was not an offer, it was TAG expressing an interest in looking at an opportunity, subject to strict confidentiality that appears to have been breached. As part of TAG’s normal course of operations our team continually identifies and reviews potential opportunities that are deemed to be accretive to TAG’s valuation and routinely conducts rigorous due diligence on potential opportunities and Greymouth was one that was identified to be evaluated.” All parties that had access to the non-binding EOI are subject to confidentiality restrictions.

Greymouth is a closely held an oil & gas producer with projects in New Zealand‟s Taranaki and Great South Basins and in Chile. The company is 86% owned by Chairman and CEO Mark Dunphy and associated interests. The remaining 14% is owned by former Greymouth COO John Sturgess. Greymouth is New Zealand’s second-ranked private petroleum production company by daily oil production.

Abercrombie & Fitch – Hiding From Shareholders ?

Abercrombie & Fitch Ad in Tokyo
Abercrombie & Fitch Ad in Tokyo (Photo credit: seanmccann)

Abercrombie & Fitch (ANF : NYSE : US$38.54)

Sept. 14

Abercrombie & Fitch has hired Goldman Sachs (GS) as an advisor to help ward off pressure from investors, according to a source close to the matter. While the source did not specify the details of the pressure or name the investors, CNBC speculates that Goldman was brought in to help keep activist investor Relational Investors at bay.

Relational holds a 3.8% stake in Abercrombie, and has a history of taking stakes in companies in order to lobby for a change. Abercrombie declined to comment on the move; however one Wall Street analyst speculates that the company would likely be considering all of its alternatives, including going private, in its consultations with Goldman. She commented, “Ultimately, this company has to rebuild its brand and recalibrate in the U.S., and that’s most likely done best in a private setting.”

Abercrombie has had a spotty showing over its last few quarters due to disappointing sales and an increase in discounted merchandise. Last month,  management cut its full-year outlook and reported a 52% decline in Q2 earnings, while analysts expressed concern with high  inventory levels and markdowns as well as the possibility of missed fashion trends.



Talisman Energy – CEO Out – Shareholders Restive

Logo Ontario Teachers' Pension Plan
Logo Ontario Teachers’ Pension Plan (Photo credit: Wikipedia)

Sept. 11

Talisman Energy* (TLM : TSX : $14.13 )

  Hal Kvisle, former President and CEO of TransCanada (TRPbeen appointed President and CEO. Kvisle was viewed as a very competent CEO and the market appeared to like him when he was at TransCanada. Given he was already a director of TLM, there should be no learning curve for him. 

Canaccord Genuity :thesis has been that frustrated shareholders of TLM would like to see a similar end result. Shareholders could make a push of some sort as well, and therefore TLM either fixes itself or it gets sold.

Recall at the end of August, the Globe and Mail reported that Ontario Teachers’ Pension Plan (OTPP) and hedge fund West Face Capital, have become TLM’s largest shareholders. In the second quarter, OTPP added 12.3 million shares of TLM to hold 17.4 million, or 1.7% of the company. Meantime, West Face in the second quarter bought 10.8 million TLM shares to hold just over 1% of the company. Prior to the second quarter, West Face held none. Neither OTPP and West Face have made no public indication that they plan to stage an activist campaign.

The Globe and Mail notes that OTPP and West Face disclosed their filings in a 13F filings, rather than 13Ds that signal activist intent. In the spring of 2009, OTPP and West Face, both played key key roles in pushing for the sale of Petro-Canada to Suncor Energy..

The price CNOOC is paying for NXY equates to ~20% upside to TLM, which currently trades at ~5.0x.



Has Warren Buffett A New Target ? ( Forbes )

August 15
or is he getting ready to Pass The Torch ?
WASHINGTON, DC - JUNE 05:  Warren Buffett, cha...Buffett cut long-held holdings of J&J, P&G and Kraft Foods. Why? (Image credit: Getty Images via @daylife)

Berkshire Hathaway took the ax to some of the longest-held names in its stock portfolio last quarter, sparking questions over just how much sway Warren Buffett is sharing with his recently-installed investing colleagues.

to help manage a chunk of the firm’s approximately $75 billion equity portfolio. Both managers were expected to start small and gradually manage more and more of the company’s holdings until ultimately taking over whenever Buffett steps down.

An SEC filing Tuesday detailing Berkshire’s portfolio at the close of the second quarter revealed significant cuts to holdings in Johnson & JohnsonProcter & Gamble and Kraft Foods, all stalwarts of Buffett’s portfolio.

Deal Journal’s Erik Holm says the cuts may represent a changing of the guard to some small degree, with Buffett sharing more investing responsibility with his younger colleagues:

The moves, disclosed in a regulatory filing Tuesday, reveal an uncommonly active quarter for Berkshire leader Warren Buffett and Berkshire’s new portfolio managersTodd Combs and Ted Weschler.…

Tom Russo, a longtime Berkshire shareholder who manages more than $5 billion as a partner at Gardner Russo & Gardner, theorized that Buffett was selling off the positions to allocate more capital to Combs and Weschler, who are expected to take on ever-larger slices of Berkshire’s investment portfolio in coming years.

The cuts were substantial, and did come from some of the biggest positions in the Berkshire portfolio: J&J, P&G and Kraft were three of 14 equity positions worth more than a billion dollars at the end of 2011. Positions of that size are assumed to be Buffett’s bailiwick, considering the Oracle of Omaha told  shareholders earlier this year that his two deputies each had their mandates raised by a billion dollars and manage about $2.75 billion.

At recent prices, and with the caveat that it is quite possible Berkshire’s positions have changed since June 30, Buffett holds $706 million worth of J&J, just under $4 billion in P&G and $2.4 billion in Kraft. Those positions were cut by two-thirds, a fifth and a quarter from March 31. But it is not a guarantee that the cash raised from paring those stakes found its way into the baskets of Combs and Weschler

While the logic makes sense, another longtime Berkshire shareholder, money manager and Forbes contributor Martin Sosnoff, thinks the portfolio reduction – the overall equity portfolio was trimmed to $74.3 billion from $75.3 billion — might mean Buffett is readying another big acquisition along the lines of his 2010 takeover of Burlington Northern Santa Fe.

Sosnoff, who manages $6 billion at Atalanta Sosnoff Capital writes that while Buffett may be conserving capital in the face of ”investment waters filled with riptides ,” he thinks there is just as good a chance the world’s third-richest man is readying for one last mega-play, another opportunity to step up to the plate when few others can or will. Remember, Buffett also stepped up with sorely-needed capital in 2008 for Goldman Sachs Group and General Electric — bets that paid off handsomely — and again in 2011 for Bank of America.