Category: Technology

Release – Bitcoin Depot Amends Equity Support Agreement

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Research News and Market Data on BTM

October 04, 2023 8:00 AM EDTDownload as PDF

ATLANTA, Oct. 04, 2023 (GLOBE NEWSWIRE) — Bitcoin Depot Inc. (“Bitcoin Depot” or the “Company”), a U.S.-based Bitcoin ATM operator and leading fintech company, today announced the execution of an amendment (the “Amendment”) to the PIPE Agreement dated June 23, 2023 (the “PIPE Agreement”) between the Company, certain of its subsidiaries and the subscribers thereto (the “Subscribers”). Pursuant to the Amendment and upon the closing of the private sale by the Subscribers of all of their shares of Series A Convertible Preferred Stock of the Company (the “Series A Preferred”) as discussed below, all Reference Periods (as defined in the PIPE Agreement) will be pulled forward and the economic arrangements set forth in the forward agreement provisions in the PIPE Agreement settled in full based on the net price in the private sale. The Company will receive a small payment in connection with the settlement of the Reference Periods.

In addition, certain institutional investors, including AWM Investment Company, Inc., the investment adviser of the Special Situations Funds, have agreed to purchase an aggregate of 3,475,000 Series A Preferred beneficially owned by the Subscribers (the “Preferred Sale”) in a private transaction. The Series A Preferred are convertible at the option of the holders into Class A Common Stock at an exchange ratio of 1:1. The Company will not receive any proceeds from the Preferred Sale.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction.

About Bitcoin Depot

Bitcoin Depot Inc. (Nasdaq: BTM) was founded in 2016 with the mission to connect those who prefer to use cash to the broader, digital financial system. Bitcoin Depot provides its users with simple, efficient and intuitive means of converting cash into Bitcoin, which users can deploy in the payments, spending and investing space. Users can convert cash to Bitcoin at Bitcoin Depot’s kiosks and at thousands of name-brand retail locations in 48 U.S. states through its BDCheckout product. The Company has the largest market share in North America with approximately 6,400 kiosk locations as of June 30, 2023. Learn more at www.bitcoindepot.com.

Cautionary Note Regarding Forward-Looking Statements

This press release and any oral statements made in connection herewith include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements are any statements other than statements of historical fact, and include, but are not limited to, statements regarding the expectations of plans, business strategies, objectives and growth and anticipated financial and operational performance, including our growth strategy and ability to increase deployment of our products and services, the anticipated effects of the Amendment, and the closing of the Preferred Sale. These forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements are often identified by words such as “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions that predict or indicate future events or trends or that are not statements of historical matters, although not all forward-looking statements contain such identifying words. In making these statements, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions, and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond our control.

These forward-looking statements are subject to a number of risks and uncertainties, including changes in domestic and foreign business, market, financial, political and legal conditions; failure to realize the anticipated benefits of the business combination; future global, regional or local economic and market conditions; the development, effects and enforcement of laws and regulations; our ability to manage future growth; our ability to develop new products and services, bring them to market in a timely manner and make enhancements to our platform; the effects of competition on our future business; our ability to issue equity or equity-linked securities; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and those factors described or referenced in filings with the Securities and Exchange Commission. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that we do not presently know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect our expectations, plans or forecasts of future events and views as of the date of this press release. We anticipate that subsequent events and developments will cause our assessments to change.

We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events, or other factors that affect the subject of these statements, except where we are expressly required to do so by law. All written and oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary statement.

Contacts:

Investors 
Cody Slach, Alex Kovtun 
Gateway Group, Inc. 
949-574-3860 
[email protected]

Media 
Zach Kadletz, Brenlyn Motlagh, Ryan Deloney 
Gateway Group, Inc.
949-574-3860 
[email protected]

Source: Bitcoin Depot Inc.

Released October 4, 2023

Biotech Poised for a Powerful Comeback

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After a fallow period, signs point to the biotech sector regaining its prior momentum. Several factors indicate a pending return to rapid growth and prolific innovation for biotech companies. This prospective resurgence could replicate the boom years of the 1980s and 1990s.

The first driver is scientific advancements that open new possibilities. CRISPR gene editing has revolutionized biotech, allowing cheaper and easier manipulation of genetic code. This enables creation of novel treatments and cures previously out of reach. Other breakthroughs like mRNA vaccines have proven the ability to rapidly develop radically new therapeutic approaches.

Vast amounts of genomic data generated in recent decades have also unlocked new understandings of biologically rooted diseases. By identifying key genetic drivers, drug targets can be validated to produce higher success rates in clinical trials. Failed drug candidates have historically been a major drag on biotech.

Substantial investment capital is also lining up behind biotech again after the sector fell out of favor. While biotech IPOs dropped sharply in 2022, venture funding actually rose to its second highest level ever at $32 billion. Investor appetite remains strong, especially for companies with promising new platforms.

Large cash piles among pharmaceutical giants could further bolster biotech. Big pharma companies have routinely turned to buying biotech firms to fill product pipelines. With major players like Pfizer and Merck holding over $25 billion in deployable cash reserves, expect more dealmaking ahead.

Take a look at several emerging growth biotech companies by looking at Noble Capital Market’s Senior Research Analyst Robert LeBoyer’s coverage list.

Regulatory incentives additionally sweeten the proposition of getting back into biotech. The FDA is actively supporting development in areas like gene therapy, rare diseases, and certain cancers through its pilot programs and priority reviews. This guidance can derisk investments.

The maturing ecosystem around biotech also fuels its potential rebound. Experienced veteran executives can now be tapped to steer startups. Clustering in hubs like Boston and San Francisco persists to provide concentration of talent, capital, and resources.

While risks like high failure rates remain, the ingredients are aligning for biotech’s next generation. Comparisons to the internet boom of the late 1990s resonate, with biotech representing a similar pivotal platform shift. The world’s demographics also underpin demand for new therapies – aging populations in developed nations will drive need.

This fertile environment parallels periods that produced prior biotech booms. In the late 1970s and 80s, the industry arose virtually from scratch around pioneering companies like Genentech and Amgen. The advent of genetic engineering allowed creation of the first biologic drugs.

Another surge came through the 90s as enabling technologies like high throughput screening scaled up the drug discovery process. The mapping of the human genome unleashed another wave of possibilities.

Today’s scientific advances pose an even greater leap, allowing drug development and treatment paradigms hardly imaginable just decades ago. The bounds of human understanding keep expanding.

The stars are aligning for biotech 2.0, an evolution building on past successes but catalyzed by new potentials. It promises to usher in an era of curative therapies, genomic precision, and accelerated innovation. The post-pandemic landscape offers the ideal springboard for this biotech revival.

With therapeutic bottlenecks getting cleared, investor interest rekindling, and confidence restored, expect biotech to reclaim its prior growth trajectory. The lessons of past booms were well learned, leaving companies better positioned to capitalize. Weapons to fight disease grow more powerful by the month.

The public expects and demands new treatments for pressing needs, from cancer to neurological conditions. Demographics favor biotech’s prospects as populations age. An energized ecosystem stands ready to nourish exciting science from lab to market.

The pieces are in place for biotech liftoff. As science unlocks new horizons, investor insight aligns with public health demands, fueling momentum. Biotech’s foundational role in driving modern medical progress is poised to only accelerate. The cycle of innovation spins up again.

DoorDash Ditches NYSE for Nasdaq in Major Stock Exchange Switch

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Food delivery app DoorDash announced it will transfer its stock exchange listing from the New York Stock Exchange to the Nasdaq. The company will begin trading on the Nasdaq Global Select Market under the ticker ‘DASH’ starting September 27, 2023.

This represents a high-profile switch that exemplifies the fierce competition between the NYSE and Nasdaq to attract Silicon Valley tech listings. It also reflects shifting sentiments around brand associations and target investor bases.

DoorDash first went public on the NYSE in December 2020 at a valuation of nearly $60 billion. At the time, the NYSE provided the prestige and validation desired by the promising young startup.

However, DoorDash has since grown into an industry titan boasting a market cap of over $30 billion. As a maturing technology company, Nasdaq’s brand image and investor mix provide better positioning.

Tony Xu, co-founder and CEO of DoorDash, emphasized the benefits of the Nasdaq in the company’s announcement. “We believe DoorDash will benefit from Nasdaq’s track record of being at the forefront of technology and progress,” he said.

Nasdaq has built a reputation as the go-to exchange for Silicon Valley tech firms and growth stocks. Big name residents include Apple, Microsoft, Amazon, Tesla, Alphabet, and Facebook parent company Meta.

The exchange is also home to leading next-gen companies like Zoom, DocuSign, Crowdstrike, Datadog, and Snowflake. This creates an environment tailor-made for high-growth tech outfits.

Meanwhile, the NYSE leans toward stalwart blue chip companies including Coca Cola, Walmart, Visa, Walt Disney, McDonald’s, and JPMorgan Chase. The historic exchange tends to attract mature businesses and financial institutions.

Another factor likely influencing DoorDash is the investor makeup across the competing exchanges. Nasdaq generally appeals more to growth-oriented funds and active traders. The NYSE caters slightly more to institutional investors like pension funds, endowments, and passive index funds.

DoorDash’s switch follows ride sharing pioneer Lyft’s jump from Nasdaq to the NYSE exactly one year ago. Like DoorDash, Lyft desired a brand halo as it evolved past its early startup days.

“It’s a signal of us being mature, of us continuing to build a lasting company,” said Lyft co-founder John Zimmer at the time of the company’s NYSE listing.

Jared Carmel, managing partner at Manhattan Venture Partners, believes these exchange transfers reflect the “changing identities of the companies.”

As startups develop into multi-billion dollar giants, they evaluate whether their founding exchange still aligns with their needs and desired perceptions. Brand association and shareholder registration are becoming as important as operational capabilities for listings.

High-flying growth stocks like DoorDash also consider indexes, as the Nasdaq 100 often provides greater visibility and buying power from passive funds tracking the benchmark. Prominent inclusion in those indexes requires trading on Nasdaq.

Whether mature blue chips or emerging Silicon Valley darlings, the rivalry between Nasdaq and NYSE will continue heating up as each exchange vies to attract and retain brand name public companies. With lucrative listing fees on the line, exchanges will evolve branding, services, and capabilities to better cater to their target customers.

The DoorDash switcheroo exemplifies the changing perspectives and motivations influencing exchange selection. As companies lifecycles and personas transform, they reevaluate decisions made during those frenetic early IPO days.

One Stop Systems (OSS) – A New Market

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Wednesday, September 27, 2023

One Stop Systems, Inc. (OSS) designs and manufactures innovative AI Transportable edge computing modules and systems, including ruggedized servers, compute accelerators, expansion systems, flash storage arrays, and Ion Accelerator™ SAN, NAS, and data recording software for AI workflows. These products are used for AI data set capture, training, and large-scale inference in the defense, oil and gas, mining, autonomous vehicles, and rugged entertainment applications. OSS utilizes the power of PCI Express, the latest GPU accelerators and NVMe storage to build award-winning systems, including many industry firsts, for industrial OEMs and government customers. The company enables AI on the Fly® by bringing AI datacenter performance to ‘the edge,’ especially on mobile platforms, and by addressing the entire AI workflow, from high-speed data acquisition to deep learning, training, and inference. OSS products are available directly or through global distributors. For more information, go to www.onestopsystems.com.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Submarine Award. One Stop Systems has received an order to design and develop prototypes for a sonar data processing system to be used in a foreign navy submarine application. The order expands OSS’s AI Transportable solutions into a new vertical, new prime relationship, and new application.

Details. The award was procured through a new global defense prime contractor. The win represents the first AI transportable program win for a foreign navy as well as for a subsurface application. OSS expects to deliver the first prototypes by the end of 2023, followed by potential production orders in 2024. If production orders begin, we anticipate the award could add over $2 million to 2024 revenue.


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Precision Motion Company Allient Acquires Design Firm Sierramotion

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Allient Inc. (Nasdaq: ALNT), a designer and manufacturer of specialty motion control products, has acquired Sierramotion Inc., a private company specializing in precision motion solutions. The deal expands Allient’s capabilities in highly-engineered motion components for robotic, medical, industrial and other applications.

California-based Sierramotion brings decades of experience designing customized electro-mechanical systems. Their expertise spans rotary, linear and arc motion applications. Sierramotion provides rapid prototyping, testing and low volume manufacturing for customers across industries like semiconductor, defense and robotics.

The acquisition aligns with Allient’s strategy of adding new technologies through M&A. Sierramotion’s engineering talent and nimble product development will aid Allient’s push into integrated motion systems. Combined with Allient’s larger scale manufacturing footprint, the deal creates opportunities to commercialize Sierramotion’s innovations.

Allient sees motion control as a high-growth market driven by automation and electrification trends. Their targeted sectors include factory automation, surgical robotics, last-mile delivery, drones and electric vehicles. Allient aims to leverage acquisitions to expand capabilities across this diverse customer base.

The addition of Sierramotion also boosts Allient’s new product development capacity, speeding time-to-market. Quick turn prototyping and close customer collaboration helps Sierramotion rapidly refine motion components. Integrating these strengths with Allient’s global manufacturing creates a competitive advantage.

Founded in 2019, Sierramotion has worked previously with Allient to co-develop motion solutions. The existing relationship and complementary capabilities make for a seamless integration of the two companies per management. Expect the deal to be immediately accretive.

Allient continues executing on a well-defined acquisition strategy aimed at shareholder value creation. The company looks for targets that expand its motion technology portfolio and bring specialized engineering talent. Disciplined capital deployment and operating excellence remain priorities for the Buffalo, NY-based firm.

Sierramotion also offers entry into growing West Coast technology hubs. The acquisition provides a footprint near potential customers across tech sectors. Overall, the deal enhances Allient’s competitive positioning within precision motion control, a key focus area for the company.

Keep an eye out for new motion control products as Allient leverages Sierramotion’s unique capabilities. The merger kicks Allient’s acquisition-driven expansion into higher gear as management vows to seize opportunities and lead innovation.

Amazon Bets Big on AI Startup to Advance Generative Tech

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E-commerce titan Amazon is making a huge investment into artificial intelligence startup Anthropic, injecting up to $4 billion into the budding firm. The massive funding underscores Amazon’s ambitions to be a leader in next-generation AI capabilities.

Anthropic is a two-year old startup launched by former executives from AI lab OpenAI. The company recently introduced its new chatbot called Claude, designed to converse naturally with humans on a range of topics.

While Claude has similarities to OpenAI’s popular ChatGPT, Anthropic aims to take natural language AI to the next level. Amazon’s investment signals its belief in Anthropic’s potential to pioneer groundbreaking generative AI.

Generative AI refers to AI systems that can generate new content like text, images, or video based on data they are trained on. The technology has exploded in popularity thanks to ChatGPT and image generator DALL-E 2, sparking immense interest from Big Tech.

Amazon is positioning itself to capitalize on this surging interest in generative AI. As part of the deal, Amazon Web Services will become Anthropic’s primary cloud platform for developing and delivering its AI services.

The startup will also let AWS customers access exclusive features to customize and fine-tune its AI models. This tight integration gives Amazon a competitive edge by baking Anthropic’s leading AI into its cloud offerings.

Additionally, Amazon will provide custom semiconductors to turbocharge training for Anthropic’s foundational AI models. These chips aim to challenged Nvidia’s dominance in supplying GPUs for AI workloads.

With its end-to-end AI capabilities across hardware, cloud services and applications, Amazon aims to be the go-to AI provider. The Anthropic investment caps off a flurry of activity from Amazon to own the AI future.

Recently, Amazon unveiled Alexa Voice, AI-generated voice assistant. The company also launched Amazon Bedrock, a service enabling companies to easily build custom AI tools using Amazon’s machine learning models.

And Amazon Web Services already offers robust AI services like image recognition, language processing, and data analytics to business clients. Anthropic’s generative smarts will augment these solutions.

The race to lead in AI accelerated after Microsoft’s multi-billion investment into ChatGPT creator OpenAI in January. Google, Meta and others have since poured billions into AI startups to not get left behind.

Anthropic has already raised funding from top tier backers like Google’s VC arm and Salesforce Ventures. But Amazon’s monster investment catapults the startup into an elite group of AI startups tapping into Big Tech’s cash reserves.

The deal grants Amazon a minority stake in the startup, suggesting further collaborations ahead. With Claude 2 generating buzz, Anthropic’s next-gen AI technology and Amazon’s vast resources could be a potent combination.

For Amazon, owning a piece of a promising AI startup hedges its bets should generative AI disrupt major industries. And if advanced chatbots like Claude reshape how customers interact with businesses, Amazon is making sure it has skin in the game.

The e-commerce behemoth’s latest Silicon Valley splash cements its position as an aggressive AI player not content following others. If Amazon’s bet on Anthropic pays off, it may pay dividends in making Amazon a go-to enterprise AI powerhouse.

The $68.7B Blockbuster Microsoft-Activision Deal

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Microsoft’s proposed $68.7 billion acquisition of Activision Blizzard has the potential to completely transform the gaming landscape. While regulators have scrutinized the deal over competition concerns, the merger could bring tremendous benefits to Microsoft, Activision, and the broader video game industry.

For Microsoft, owning Activision Blizzard will expand its catalog of exclusive titles and strengthen its position in the rapidly growing cloud and mobile gaming markets. Activision’s stable of popular franchises, including Call of Duty, World of Warcraft, and Overwatch, will give Microsoft’s Xbox platform exclusive access to some of the most iconic brands in gaming.

The deal also bolsters Microsoft’s Game Pass subscription service. By adding Activision games into the Game Pass library, Microsoft could attract millions of new subscribers. Game Pass now has over 25 million subscribers, and Activision’s titles provide strong incentive for even more gamers to sign up.

Microsoft also aims to leverage Activision’s titles to boost its cloud gaming efforts. Cloud gaming allows players to stream games over the internet, without needing expensive hardware. Microsoft’s Project xCloud trails behind competitors, but owning rights to Activision’s diverse lineup of games could help close the gap with rivals.

For Activision Blizzard, the deal provides much-needed stability after a rocky couple of years. The company faced intense backlash over allegations of sexual harassment and discrimination against female employees. Activision also lost favor with gamers over accusations of declining game quality. Joining forces with Microsoft gives Activision renewed focus along with the resources to potentially revitalize its culture and game development efforts.

Take a moment to take a look at Motorsport Games Inc., an award-winning esports video game developer and publisher for racing fans and gamers around the globe.

The merger can also reinvigorate Activision’s floundering esports leagues. Microsoft brings immense expertise in managing leagues like the NBA 2K League. With dedicated support, Activision’s Overwatch League and Call of Duty League can get back on track to engage fans.

More broadly, the deal validates the tremendous growth potential of the $200 billion gaming market. Investors originally balked at the $68.7 billion price tag, which was nearly a 50% premium over Activision’s market value. However, Microsoft likely sees this as a long-term investment, as analysts forecast the gaming sector to expand to over $300 billion by 2027.

While there are understandable concerns about one company gaining so much influence, Microsoft has committed to keeping Activision games available across multiple platforms. The tech giant also faces strong incentives to continue investing in blockbuster franchises like Call of Duty rather than making them Xbox exclusives.

After months in limbo, the deal now appears to be back on track for completion in late 2023 or early 2024. Assuming it passes the final regulatory hurdles, this acquisition has the scope to reshape gaming for players and developers alike. By bringing together two titans of the industry, the new Microsoft-Activision partnership could help unlock gaming’s true potential.

MGM Hack Highlights Casino Cyber Risks

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Casino and hotel operator MGM Resorts tumbled last week after revealing it was hit by a data breach impacting over 10 million former guests. The hack showcases the cyber risks facing hospitality firms and dragged down related stocks as investors weighed the potential fallout.

MGM shares dropped over 4% following its disclosure of the breach as investors reacted to the cyberattack. The stock slide reflected concerns over potential costs from lawsuits, technical remedies, and reputational damage.

The attack also stoked fears of similar incidents across the broader hospitality sector. Airline, cruise, and casino stocks all declined as analysts noted cyber threats facing the industry. Leisure companies handle vast customer data and suffer from downtime, making them prime hacker targets.

Take a look at Travelzoo, a company providing members with travel, entertainment and lifestyle experiences.

Broader equity markets proved resilient to the MGM incident. But cybersecurity stocks rallied on expectations companies may now invest more in protecting data and systems going forward. Top gainers included cyber firms Palo Alto Networks and CrowdStrike.

The MGM breach follows several recent high-profile hacks of casinos and gaming firms. The frequency of attacks has put the industry on notice. New Nevada regulations now require prompt breach disclosures from casinos. Once inside a network, hackers can often access customer financial data. Small casinos have paid millions in ransoms to regain control of systems.

While the MGM breach didn’t significantly sway major indexes, it highlights the dangers posed by cyber criminals. A larger incident paralyzing critical infrastructure could certainly roil markets. This incident is an important reminder of the growing cyber threats facing corporations and customers alike in today’s digitally connected world.

Cisco to Acquire Cybersecurity Firm Splunk in $28 Billion Cash Deal

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Cisco Systems announced Thursday it will acquire cybersecurity company Splunk in an all-cash deal valued at around $28 billion. The acquisition, Cisco’s largest ever, aims to expand its presence in the security software market and boost recurring revenue streams.

Under the agreement, Cisco will pay $157 per share to buy Splunk, representing a premium of over 20% to Splunk’s recent stock price. Splunk shares jumped 21% on the news, while Cisco stock slipped nearly 5%.

The network gear giant has been on an acquisition spree lately to grow its software offerings. Splunk provides data analytics software and services focused on security, internet of things and infrastructure monitoring.

Take a look at One Stop Systems Inc., a company that designs and manufactures innovative AI Transportable edge computing modules and systems, and data recording software for AI workflows.

Cisco CEO Chuck Robbins said Splunk’s data capabilities combined with Cisco’s network telemetry presents an opportunity for more AI-enabled security solutions. The deal is expected to close in late 2024 after clearing regulatory approvals.

Cisco aims to leverage Splunk’s analytics tools to improve threat detection and better predict cyber risks. Splunk’s software is used by over 9,000 customers including over 90 of the Fortune 100. The acquisition provides Cisco an avenue into more subscription-based software sales.

The company said it expects the deal to be cash flow positive and accretive to gross margins within the first year post-closing. Cisco forecasts the acquisition boosting adjusted earnings per share starting in the second year.

Splunk CEO Gary Steele will join Cisco’s executive leadership team once the merger is finalized and report directly to Robbins. Together the companies aim to become a leading force in security infrastructure.

The acquisition reflects Cisco’s ongoing shift toward software and subscription revenue. It provides both an expanded customer base and advanced analytics capabilities around security, core focuses for Cisco. The company will fund the sizable purchase through cash reserves and new debt financing.

Klaviyo Shares Jump 23% in NYSE Debut, Providing Another Tech IPO Opportunity

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Shares of marketing software firm Klaviyo jumped 23% in their trading debut Wednesday on the New York Stock Exchange. The successful initial public offering provides investors a rare opportunity to buy into a high-growth U.S. tech startup following a nearly two-year IPO drought.

Klaviyo priced its shares at $30 each, raising $345 million and valuing the company at over $9 billion on a fully diluted basis. The listing comes just a day after grocery delivery service Instacart went public on the Nasdaq after cutting its valuation target. Investor appetite for unprofitable technology names has waned in recent years amid rising interest rates.

But demand for Klaviyo shares was strong right out of the gate. For investors, IPOs provide a chance to gain exposure to emerging, innovative companies before they are available on public markets. Companies utilize IPOs to raise cash for growth and operating expenses.

Klaviyo reported revenue jumped 51% last quarter to $165 million, as its marketing automation software is now used by over 130,000 customers. The company swung to a $11 million profit last quarter after losing money a year earlier.

This transition to profitability is an attractive quality for investors who have soured on money-losing technology firms in the current environment. One major backer providing strong IPO demand is e-commerce platform Shopify, which owns around 11% of Klaviyo’s shares.

Klaviyo gets approximately 78% of its annual recurring revenue from customers who also use Shopify, indicating close ties between the two tech firms. Shopify invested $100 million into Klaviyo last year.

The marketing software provider enables companies to store customer data and build profiles to target marketing campaigns across email, text messaging, social media, and other channels. It initially focused on e-commerce companies but is now seeing growing traction in other sectors like restaurants, travel, and entertainment.

Tech IPOs ground to a halt in 2022, as surging inflation led the Federal Reserve to aggressively raise interest rates, sparking volatility and a flight from risk assets. Klaviyo is the first notable U.S. venture-backed software IPO since HashiCorp and Samsara debuted in December 2021.

The offering provides investors hungry for exposure to high-growth tech the chance to buy into a next-generation software vendor. U.S. tech IPOs slowed to their lowest level in over a decade last year. If strong demand for Klaviyo shares continues, it could open the door for more tech IPOs in 2023.

Companies that only recently considered going public may once again pursue IPOs after Klaviyo’s success. The IPO window for unprofitable tech names appeared shut, but Klaviyo’s ability to raise over $340 million shows investors still have appetite for rapidly growing software vendors.

Looking ahead, the pipeline for tech IPOs includes names like Reddit, Databricks and Discord. But many may delay plans or explore direct listings to avoid leaving money on the table like Instacart. If markets grow choppy again, Klaviyo’s offering window could close as quickly as it opened.

For now, its strong first day of trading is a boon for both the company and tech investors. Early buyers are already sitting on sizable gains from an asset class that struggled last year. If the tech IPO market thaws, it would provide investors access to the high-growth innovators driving the future.

Boston Scientific to Acquire Relievant Medsystems for $850 Million

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Medical device maker Boston Scientific announced Monday it will acquire Relievant Medsystems for $850 million upfront and additional contingent payments. Relievant has developed a minimally invasive technology to treat chronic low back pain.

The deal aims to expand Boston Scientific’s portfolio in neuromodulation, the use of devices to modulate nerve activity. Relievant’s Intracept system uses targeted radiofrequency energy to ablate the basivertebral nerve, stopping pain signals from reaching the brain. It is the only FDA-cleared device specifically for vertebrogenic pain, a type of chronic back pain originating in the vertebrae.

Relievant’s system is designed to provide long-term pain relief and improve function through an outpatient procedure. It targets an estimated 5.3 million patients in the U.S. with vertebrogenic pain from degenerative disc disease or vertebral compression fractures. Boston Scientific cited Relievant’s novel technology and strong clinical data from multiple randomized controlled trials in deciding to acquire the company.

The Intracept procedure is implant-free, sparing patients from potential complications associated with implants. It also avoids destroying the intervertebral disc. The system has been used to treat over 2,000 patients since receiving FDA clearance in 2018 based on Level 1 clinical evidence.

The deal expected to close in the first half of 2024 pending approvals. Boston Scientific said Relievant is projected to generate over $70 million in sales this year with 50%+ growth in 2024. The acquisition is forecasted to be neutral or slightly accretive to Boston Scientific’s adjusted earnings per share.

“We look forward to working with the Relievant team to expand access to care for those with chronic back pain,” said Jim Cassidy, president of Neuromodulation at Boston Scientific. Both companies aim to transform the diagnosis and treatment of vertebrogenic pain through a minimally invasive approach.

Take a moment to take a look at Noble Capital Markets Senior Research Analyst Gregory Aurand’s coverage list.

Instacart Shares Surge 40% in Strong Nasdaq Debut

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Instacart experienced a red-hot debut on the public markets as shares soared 40% in its first day of trading. The grocery delivery pioneer opened at $42 per share on the Nasdaq exchange, well above its IPO price of $30.

The opening trade valued Instacart at nearly $14 billion, up from the $10 billion valuation set by its IPO pricing on Monday. Demand from investors seeking exposure to the future of grocery commerce drove the shares sharply higher out of the gate.

Trading volume was heavy early on, with over 18 million shares changing hands in the first 30 minutes. The stock traded as high as $47.57 at its peak, showcasing strong appetite for the newly minted public company.

Instacart (CART) raised $420 million through the IPO by selling 14.1 million shares, representing just 8% of its total outstanding shares. Existing shareholders also sold 7.9 million shares in the offering for liquidity.

The blockbuster debut delivered significant returns for IPO participants during a volatile time for tech stocks. But Instacart’s valuation remains below the $39 billion mark it reached at the height of pandemic demand in 2021, reflecting more measured recent tech valuations.

Still, the strong first day pop is a promising sign for Instacart as it embarks on the public market journey. The company priced its offering conservatively to allow room for an impressive inaugural rally.

The offering adds Instacart to the ranks of publicly traded ecommerce innovators disrupting traditional retail models. It joins the likes of DoorDash, Uber, and Amazon in leveraging technology to unlock the potential of online grocery delivery.

Instacart is at the forefront of transforming the $1 trillion grocery industry through its on-demand digital marketplace. Its platform connects customers with personal shoppers who handle orders from partner grocers and deliver items in as fast as an hour.

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Founded in 2012 by an Amazon veteran, Instacart was early to recognize the coming wave of grocery ecommerce. The company scaled rapidly when the pandemic accelerated adoption of online ordering and delivery.

Instacart seized its first-mover advantage to emerge as a leader in the space. It has partnered with prominent national, regional, and local grocers to build a retail network covering over 85% of U.S. households.

The company aligned with shifting consumer preferences for convenience and digital experiences. Busy lifestyles and smartphone ubiquity make grocery delivery a killer app of modern ecommerce.

Instacart smartly invested to expand services like fast unstaffed delivery and self-service pickup. Its Instacart Ads platform also lets brands promote products through sponsored listings.

The company rapidly grew revenue to over $7 billion in 2021 during the pandemic-driven surge. More recently it has focused on boosting profitability as demand normalizes post-Covid.

Instacart generated $14 billion in gross merchandise volume in 2021. Its net revenue neared $2 billion, doubling from 2020. But losses have narrowed dramatically since the company turned EBITDA positive last year.

As the first major tech IPO of 2023, Instacart’s trading provides a blueprint for startups and venture investors awaiting public debuts this year. The initial reception indicates persistent investor appetite for innovative tech names with strong growth narratives.

The blockbuster debut opens an exciting new chapter for Instacart and the future of digital grocery. Its first trading day validated Instacart’s pioneering business model and resilient growth prospects.

FTX Lawsuit Targets Parents of Disgraced CEO Sam Bankman-Fried

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The bankrupt cryptocurrency exchange FTX has taken a surprising legal step by launching a legal battle against Allan Joseph Bankman and Barbara Fried, the parents of its former CEO and founder, Sam Bankman-Fried. The lawsuit aims to recover both luxury property and millions of dollars in what FTX alleges to be “fraudulently transferred and misappropriated funds.”

FTX, once a rising star in the cryptocurrency world, faced financial turmoil amid allegations of extensive financial misconduct. The exchange’s new leadership has been working tirelessly to locate the billions of dollars in missing assets. Their latest move is an attempt to hold Bankman and Fried accountable.

Legal representatives of the FTX bankruptcy estate assert that Allan Joseph Bankman and Barbara Fried “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars.” This stunning accusation suggests that Bankman and Fried might have played a significant role in the financial irregularities that led to FTX’s collapse.

One of the most notable claims in the lawsuit is that Bankman and Fried discussed transferring a $10 million cash gift and a $16.4 million luxury property in The Bahamas to their son, Sam Bankman-Fried, despite FTX’s precarious financial situation. This raises questions about whether Bankman and Fried were aware of the exchange’s dire financial straits.

The lawsuit doesn’t stop there. It also alleges that as early as 2019, Allan Bankman actively participated in efforts to cover up a whistleblower complaint that could have “exposed the FTX Group as a house of cards.” The lawsuit cites emails written by Bankman in which he complained about his annual salary being only $200,000 when he believed he was “supposed to be getting $1M/yr.” The suit portrays this as Bankman lobbying his son to significantly increase his own salary.

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Shockingly, within two weeks of these discussions, the suit claims that Sam Bankman-Fried collectively gifted his parents $10 million in funds from Alameda. Within three months, Bankman and Fried were deeded the $16.4 million property in The Bahamas. The timing and circumstances of these transactions raise serious questions about their legality and ethical implications.

Moreover, the lawsuit alleges that Bankman-Fried’s parents urged substantial political and charitable contributions, including significant amounts to Stanford University, seemingly aimed at enhancing Bankman and Fried’s professional and social status. Barbara Fried is also accused of encouraging her son and others within the company to avoid or even violate federal campaign finance disclosure rules by engaging in straw donations or concealing the FTX Group as the source of the contributions.

The involvement of Bankman-Fried’s parents in these activities is particularly noteworthy. Both are accomplished legal scholars who have taught at Stanford Law School. Barbara Fried specializes in ethics, while Allan Bankman’s expertise is in taxes. Their involvement in the alleged misconduct at FTX raises questions about their awareness of the situation and their potential role in enabling it.

Sam Bankman-Fried himself is independently facing multiple wire and securities fraud charges related to the alleged multibillion-dollar FTX fraud. Federal prosecutors and regulators have accused him of orchestrating “one of the biggest financial frauds in American history.” Bankman-Fried has maintained his innocence and pleaded not guilty to all charges. His criminal trial is scheduled to commence on October 3 in Manhattan.

The lawsuit against Bankman and Fried asserts that they “either knew or ignored bright red flags revealing that their son, Bankman-Fried, and other FTX Insiders were orchestrating a vast fraudulent scheme.” This suggests that FTX believes the parents played a more significant role in the alleged fraud than previously thought.

In their legal action against Bankman and Fried, FTX seeks various forms of compensatory relief, including punitive damages. The exchange aims to hold them accountable for their alleged “conscious, willful, wanton, and malicious conduct” that contributed to FTX’s financial woes. Additionally, FTX is looking to recover any property or payments made to the couple from the exchange.

The outcome of this legal battle remains uncertain, and it raises questions about how any potential clawbacks may affect Bankman and Fried’s ability to support their son’s legal defense as he faces criminal charges. The legal counsel for Allan Joseph Bankman and Barbara Fried has vehemently denied the allegations, characterizing them as “completely false.” They view FTX’s legal action as an attempt to intimidate their clients and undermine the upcoming trial of their child.

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The implications of this legal showdown extend beyond the immediate parties involved. FTX’s efforts to recover lost assets and hold those responsible accountable are a crucial chapter in the cryptocurrency industry’s ongoing struggle with regulatory scrutiny and legal challenges. The outcome of this case may set a precedent for how authorities and stakeholders deal with alleged fraud and financial misconduct in the rapidly evolving world of cryptocurrencies.

As the legal battle unfolds, it will be closely watched by industry observers, legal experts, and cryptocurrency enthusiasts alike. The allegations and accusations against the parents of Sam Bankman-Fried have added another layer of complexity to a case that has already drawn significant attention and could have far-reaching consequences for the cryptocurrency ecosystem.