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Today we will run through one way of estimating the intrinsic value of Colgate-Palmolive Company (NYSE:CL) by...
Coca-Cola (KO) launches Powerade Ultra and Powerade Power Water under Powerade Sports drink category. This is likely to aid the company's sales.
(Bloomberg) -- Scott Bluestein has a favorite type of debt investment: companies with no profits, no cash flow, and in some cases even no revenue.While that may seem like a recipe for disaster for most fixed-income money managers, it’s perfectly normal in the world of venture debt. And few companies in the space have been more successful in recent years than Bluestein’s Hercules Capital Inc., the largest nonbank lender in the business.The market for venture debt operates largely in the shadow of venture equity, the segment of startup financing famous for providing early funding for technology giants such as Facebook Inc. and Alibaba Group Holding Ltd. Winning wagers tend to not produce the sort of eye-popping payouts the equity side has become renowned for, but they’re also less risky, relatively speaking. Flying under the radar also has its benefits, according to Bluestein.While investors have plowed hundreds of billions of dollars into direct-lending funds over the past few years amid a global hunt for yield, the $15 billion venture debt market has yet to see the same influx of cash. As a result it’s largely avoided the intense competition, record dry powder and pricing pressures seen in other corners of private credit. In fact, the Hercules chief executive expects core loan yields to keep pace with the long-term average of about 12% going forward.“Venture debt has historically mystified the direct-lending market,” Bluestein said in an interview. “We have the opportunity to partner with and help finance some of the most exciting growth-stage technology and life-sciences companies in the world.”Hercules’s current borrowers include rare-disease drug developer BridgeBio Pharma Inc. and fake-meat producer Impossible Foods Inc.Lending to such companies requires a unique blend of credit, equity and industry expertise, according to Bluestein. The ability to assess why the companies are burning cash is critical.“Venture lending is a pretty esoteric, specialized part of the market,” Bluestein said. “It requires significant domain expertise. It requires an achievement of scale from a performance perspective.”Hercules originally provided BridgeBio a $35 million secured term loan in June 2018. The financing had grown to $75 million by the time BridgeBio went public a year later. Since then, its market capitalization has ballooned to $4.3 billion.As for Impossible Foods, Hercules closed a $50 million commitment in the second quarter of 2018. A year later, the meat-substitute company reached a $2 billion valuation. In both deals, Hercules made equity investments alongside the loans. In others, it often receives equity kickers in the form of stock warrants.Of course, the lender’s record isn’t spotless. Portfolio company Sungevity Inc. filed for bankruptcy in 2017, and the debt was subsequently converted into equity of the company that bought some of its assets. BIND Therapeutics Inc. went bust in 2016, though Hercules says it was able to fully recover its outstanding commitment.Last year, the company’s main challenge was unrelated to its investments. Founder and then-CEO Manuel Henriquez was forced to step aside after being charged by federal prosecutors in March for participating in the college-admissions cheating conspiracy.Wall Street was quick to cut its expectations for publicly-traded Hercules’s shares, worried that access to capital and origination growth may be hurt. The stock has since recovered, and the company said earlier this week it had surpassed more than $10 billion in committed debt capital since its inception in 2003. Assets under management stood at $2.3 billion as of Sept. 30.Niche PlayOthers are also growing in the space. Avenue Capital has sought to raise about $500 million for a venture debt fund, Reuters reported in November. Specialty lenders in the business also include TriplePoint and Horizon Technology Finance, while Silicon Valley Bank is seen as an industry pioneer.Still, the strategy isn’t for everyone. Direct-lending giant Ares Capital Corp. exited the space in 2017, offloading its $125 million portfolio of venture loans to Hercules. CEO Kipp deVeer at the time attributed the exit to the overwhelming challenge of overseeing so many small and complicated financings.Along with being relatively small, maturities on the loans tends to be short. That makes for a fast-churn, research-intensive business. The average tenor of a Hercules loans is 36 to 48 months, but the actual average duration is just a year-and-a-half, according to Bluestein.“Our portfolio turns about every 18 months,” Bluestein said. “The treadmill is set at 10, and you can’t stop.”While recent high-profile venture-capital stumbles such as WeWork may make investors wary of startup financing broadly, Bluestein welcomes the greater scrutiny and caution, acknowledging there have been a number of so-called unicorns where valuations reached extreme levels.“It’s a positive. It puts more focus on fundamentals,” Bluestein said. “Anything that makes the market more realistic is good for business.”(Updates with Hercules assets under management in 13th paragraph.)\--With assistance from Lisa Abramowicz.To contact the reporter on this story: Lisa Lee in New York at email@example.comTo contact the editors responsible for this story: Natalie Harrison at firstname.lastname@example.org, Adam Cataldo, Boris KorbyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The traditional ways to plan for your retirement may mean income can no longer cover expenses post-employment. But what if there was another option that could provide a steady, reliable source of income in your nest egg years?
SkyWest (SKYW) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
On Thursday, the U.S. Senate overwhelmingly approved the new free-trade agreement between Canada, the United States and Mexico. The deal, which covers the biggest free-trade zone in the world, should boost the economies of all three countries.
HONG KONG/BEIJING (Reuters) - Ant Financial [ANTFIN.UL] shares are being offered privately at levels which value the Chinese financial giant at $200 billion (£153.4 billion), two people with knowledge of the discussions said, lifting it up the ranks of the most valuable unlisted companies. Alibaba affiliate Ant, which had an implied valuation of $150 billion during a 2018 fundraising, is preparing to step up plans for eventually going public in Hong Kong and mainland China, three other sources told Reuters. Speculation has grown that Ant, the world's largest so-called "unicorn" -- a newly-formed unlisted tech firm valued at $1 billion or more -- is working towards an IPO this year.
In the latest trading session, Vipshop Holdings Limited (VIPS) closed at $14.41, marking a -0.96% move from the previous day.
Indian e-commerce space gets pepped up with the growing initiatives of overseas companies like Amazon (AMZN), Walmart (WMT) among others.
(Bloomberg) -- Chinese ride-hailing startup Dida Chuxing is seeking to raise as much as $300 million and is considering an initial public offering, escalating competition with larger rival Didi Chuxing, according to people familiar with the matter.IDG Capital-backed Dida is raising between $250 million to $300 million in a pre-IPO round that it pitched to a wide range of investors, the people said, asking not to be named because the matter is private. Dida has mulled floating on exchanges in mainland China or Hong Kong, but prefers the latter, one person said. A Dida spokeswoman declined to comment.Ride-hailing operators are grappling with dwindling investor sentiment after Uber Technologies Inc. went public last May only to see its shares tumble. Dida, which infuses social elements into its car and taxi-hailing operation, has been trying to raise capital since around the middle of last year, the people said. It’s unclear what valuation the Chinese company is targeting.In May 2015, Dida received a $100 million funding from China Renaissance Capital Investment, according to Dida’s website. In March 2017, Chinese private equity fund Nio Capital led a new round in Dida. Hillhouse Capital, IDG, JD.com and Nio Capital participated in the company’s last funding round, according to a slide deck created in August but that’s been recently circulated to investors and viewed by Bloomberg News.Dida says it became profitable last April, earning 29 million yuan ($4.2 million) in the second quarter of 2019, according to the investor presentation slides. The company generated 151 million yuan in revenue for 2018, and expects that to have jumped to 643 million yuan last year, the same presentation shows.Beijing-based Dida is a distant second to Didi in China’s ride-hailing arena but its popularity grew after two female passengers were murdered while using the services of competitor Didi. Dida operates a network of 1.2 million taxi drivers and its daily orders has surpassed 3.65 million, according to the deck.To contact the reporters on this story: Zheping Huang in Hong Kong at email@example.com;Dong Cao in Beijing at firstname.lastname@example.org;Manuel Baigorri in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Vipshop Holdings (VIPS) stock has soared 140% in the last year to crush Alibaba as the online discount retailer expands its customer base...
(Bloomberg Opinion) -- Bangkok’s billionaires don’t usually have to contend with much resistance as they expand. Tesco Plc’s sale of its Southeast Asian supermarkets may be about to change that.The $32 billion British retailer said in December it was considering selling the group’s stores in Thailand and Malaysia, becoming the latest international grocery giant to bow out of Asia. First-round bids for the asset, estimated to be worth between $7 billion and $9 billion, are due this week. Suitors are likely to be drawn from local conglomerates, among them: Dhanin Chearavanont’s CP Group; Central Group, controlled by the Chirathivat family; and beer-and-spirits magnate Charoen Sirivadhanabhakdi's TCC Group.So far, so normal for tycoon-heavy Thailand. Perhaps not. Last month, the Office of Trade Competition Commission, or OTCC, threw a wrench in the gears, signaling before offers even materialized that it would review the deal and could rule against any combination that grabbed too much of the market.Thailand’s government has revamped the antitrust authority since 2017, turning it from a dormant and toothless appendage of the Ministry of Commerce into an impartial agency with an independent workforce. Taking a tough stance could burnish the pro-military administration’s consumer-protection credentials, as it battles a slowing economy and the country’s worst drought in decades.Added to that, this is the the first high-profile, consumer-facing case that the new-look OTCC has handled. It’s also, potentially, one of the largest-ever acquisitions by a Thai group, and among the largest deals in Asia this year. That all but sets up a tussle with some of the most powerful patriarchs in Thai business.In theory, problems arise when a company has a market share of 50% or more. The trouble here, as in every antitrust debate, is deciding what counts as a market.Tesco, under the Tesco Lotus brand, is already Thailand’s biggest supermarket chain with almost 2,000 stores, plus 74 in Malaysia. So, do convenience stores, like CP’s 7-Eleven outlets, count as part of the same market? By the broadest definition, CP touches the vast majority of Thailand’s food chain. What about duty-free, should a last-minute bid come from King Power Group, run by the billionaire Srivaddhanaprabha family that owns Leicester City Football Club? Central Group, meanwhile, has 200 supermarkets, and TCC owns Big C hypermarkets.All of that suggests plenty of wrangling ahead. Worse, Thailand now has a two-stage reporting structure: Unusually by global standards, would-be merger partners may have to report both ahead of and on completion of any deal that creates a dominant player. That means passing the first hurdle doesn’t guarantee a bidder will clear the second.In the end, asset sales may be the most palatable solution, should a big retailer win the contest. Antitrust bosses, still early in their tenure, may be reluctant to irk too many big names. Chinese regulators ruffled plenty of feathers when the Beijing-based Ministry of Commerce vetoed Coca-Cola Co.’s acquisition of a Chinese juice maker in 2009. And Thailand, with its unimpressive economy, badly needs investment.Still, supermarkets are a sensitive and unpredictable area for antitrust authorities, with their focus on safeguarding consumers. Britain’s Competition and Markets Authority, after all, last year stopped J Sainsbury Plc from buying Walmart Inc.’s Asda to create the country’s largest supermarket chain. This could turn into quite a food fight. To contact the author of this story: Clara Ferreira Marques at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Zacks.com featured highlights include: Calavo Growers, BMC Stock, Humana, Vipshop and AllianceBernstein
The world's fast move toward cola-coffee drinks has soda giants Coca-Cola Company and PepsiCo fighting for a strong foothold in the hybrid coffee space in 2020.
The New York Times Company (NYT) has been diversifying business, adding new revenue streams, realigning cost structure and streamlining operations to increase efficiencies.