Weekly Meta

11.14.2016

[This is something new we are assembling from our weekly research process. We hope it helps you to cut through the noise, be better-informed and a little entertained – the cartoon of the week is at the end! If you want to get this note regularly and before everyone else – just sign up below.]

What we published last week:

  1. 1. The future of the so-called “Internet of Things” is bright but with some bumps in the road. Privacy and security are big problems for IoT. Here’s a link to our report on Nxt-ID (PDF).
  2. So much promise, so few results – How Mattersight (MATR) ended up with the kind of “success” with large customers that end up controlling your destiny. Link to MATR report.If you are an M&A banker they need help!
  3. MRI-guided brain surgery is the way to get the accuracy we need for improved treatments and to allow drugs to be delivered directly to the brain. MRI Interventions (MRIC) reported another strong quarter. Link to MRIC report.

Seismic:

  1. Samsung buys Harman (NYSE: HAR) for $8B. The deal is big, the largest ever for Samsung. Harman is a major supplier to the auto industry. While there is a little too much hype around self-driving cars the fact remains that the content of vehicles will continue to shift from metal to silicon as they become more efficient, connected and advanced. The trend does make you admire the vision and execution of Tesla (TSLA) in a very large traditional industry. Now those auto companies will be looking to retrofit these technologies into their products. Tesla already has a “pure” electronic automobile with a real software platform underneath it. Lots of money will be spent by all the major auto makers to incorporate this technology. Harman is a prosaic supplier of audio systems, IoT solutions, embedded “infotainment” offerings and entertainment solutions in venues like stadiums and theaters. It’s a sensible acquisition for Samsung since there are many complementary lines of business here – semiconductors, displays, and wireless networking. The move begs some questions for Google, Apple, Intel, Nvidia and others as they all seek a meaningful share of this “digital car” future.
  2. NVDA Yuge Quarter – Nvidia reported quarterly results that shocked and awed. $20B was added to the NVDA market cap with a 30% gain on the day. If this signals the era where the GPU will now be at the center of computing it means more bad news for the hapless Intel (INTC.) Although AMD is an also-ran in the GPU space they still have a position there. More broadly the success of Nvidia is a good reason to consider that as we proliferate “smart devices and sensors” the roll for highly parallel computing cores will keep expanding.

Tremors:

  1. Adobe (ADBE) sprung for video advertising technology player TubeMogul (TUBE) for $540M. TubeMogul has been focused on programmatic advertising for video. The move signals that video advertising (much as many hate them) is firmly in the mainstream. There are 22M views of Otto the skateboarding bulldog so it’s just too much money at stake not to have a pre-roll video ad. In this case it’s the Smithsonian with an animal-themed ad. The acquisition makes us more interested in even better programmatic companies (though they are general purpose). Two names that are in our sights are TradeDesk (TTD) and Criteo (CRTO.)
  2. Belden (BDC) is buying Digi (DGII) – This is really an IoT story. The core asset that DGII brings to the table is *secure* networks for IoT applications. The company was turning around as well and getting more profitable. They may look like a “niche” networking provider but it seems that Belden knows what they are doing. This could be a good reason to do a little more work on BDC which is a name we haven’t looked at in the past.
  3. Siemens is buying Mentor Graphics (MENT) for $4.5B. It’s a big deal but motivated more by industry consolidation than anything else.

Best stuff we saw:

  1. There’s a good slide deck from Kyle Lacy at OpenView called “You can’t growth hack your way to success. It’s 72 pages but they flip fast and give a good overview of kind of “where we are” in terms of growing a successful startup amidst the current technology trends driving business right now.
  2. What private companies does Goldman Sachs think are the hot ones? Check out the agenda of their invite-only conference to whet your appetite. This PDF is courtesy of Re/code

Capital Markets:

  1. The IPO markets have been fairly quiet as most investment banks and companies wanted to wait out election day. Now that the market has surged the calendar might begin to get busy as everyone makes one last push to get deals done after Thanksgiving and before the lull at the end of the year. In the meantime we have added a new feature to IPO Candy which keeps track of pending coverage and lockup expirations. These events tend to have meaningful impacts on recently-public companies. You can access the IPO Candy calendar here.
  2. Snapchat has selected bankers including both Goldman and Morgan to lead what will be a very hot deal.

Next Week:

  1. Tons of investor conferences – UBS Global Tech, BofA Financials, Stifel Healthcare, Craig Hallum Small Cap, Canaccord Genuity MedTech and many others.
  2. I’ll be at a “think tank style” technology conference in NYC this week.
  3. Earnings reports to watch – VUZI, ALRM, MBLY. We published a report in September on Vuzix which is available here: Vuzix September Report.

Cartoon of the Week:

We would love feedback on this note. If there are things we should add, change or delete please let us know! We’d love to hear from you.

 

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