Tech Rewind: Earnings, Exits and Cash Injections
This week the Street was atwitter with IPO excitement and buzzing about a still-public BlackBerry.
The distressed Canadian smartphone maker said it was scrapping plans to go private, and would instead continue as a public company after a $1 billion cash injection from Fairfax Financial and its partners. Fairfax said Thursday in a regulatory filing that its partners on the BlackBerry (NASDAQ:BBRY) financing deal include several Canadian investment firms and a sovereign wealth fund based in Qatar.
On Sunday, Reuters reported that BlackBerry’s board denied inquiries from rivals interested in buying parts of the company. The report said the firm’s board members do not believe it is the company’s best interest to break it apart, citing “people familiar with the discussions”.
On Tuesday, Tesla (NASDAQ:TSLA) posted a narrower loss and revenue soared in the third quarter, but the Silicon Valley electric automaker forecast weaker-than-expected adjusted profit. The company also said it delivered 5,500 Model-S cars in the third quarter, and on Thursday revealed it was looking into a fire that involved a Model S in Tennessee. This is the third reported fire on the $70,000 sedan in the last several weeks, and the news prompted shares to fall sharply this week. Tesla closed the week about 15% lower at $137.95 a share; the stock is still up more than 300% this year.
Daily-deal site Groupon (NASDAQ:GRPN) announced earnings on Thursday, reporting weaker-than-expected sales and a wider quarterly loss. The company said changes to Google’s (NASDAQ:GOOG) Gmail were partly to blame for the revenue miss; Gmail now separates daily deal mail into a separate folder from regular mail, and it’s easier for customers to miss some of Groupon’s offers.
Groupon said active users grew 10% compared to the year-ago quarter to 43.4 million, and the company announced plans to buy Korean e-commerce business Ticket Monster from its rival LivingSocial for up to $260 million, prompting shares of the discount deal service to rally. Groupon shares gained nearly 6.5% on Friday, finishing the week at $10.11 a share.
Online travel service Priceline.com (NASDAQ:PCLN) also weighed in with results on Thursday, and they were better than expected. The company earned adjusted profit of $17.30 a share on revenue of $2.27 billion during the quarter, beating expectations for revenue of $16.15 a share on $2.22 billion in sales.
Priceline also said its Chief Executive Jeffery Boyd will step down from that post at the end of this year, and Darren Huston, currently the CEO of the company’s Booking.com segment, will take the helm. Shares of Priceline.com rallied nearly 5% on Friday to close the week at $1073.20 a share.
And earlier Thursday, a new class of Silicon Valley millionaires watched their net worth soar when Twitter (NYSE:TWTR) finally had its big public debut. The social media service priced Wednesday night at $26 a share, giving Twitter a valuation of $14.4 billion, making the company’s offering the biggest American tech IPO since Facebook (NASDAQ:FB). The stock started trading Thursday morning at $45.10, briefly touched a high of $50.09 a share, before closing its first day at $44.90 a share—a 73% first day pop. Twitter finished the week at $41.65 a share.