Slack Files For Confidential IPO; ‘Bond King’ Bill Gross To Retire; Tesla Acquires Battery Company

by 2 years ago

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THE HEADLINES

 

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS

“Bond King” Bill Gross has announced his retirement following a second act with Janus Henderson that began in 2014. Of course, the King made a name for himself as the co-founder of Pacific Investment Management (PIMCO), racking up outsized returns, and generally moving size.

He ran the world’s largest bond fund, PIMCO’s Total Return Fund since ‘Nam (literally), managing almost $300B at its peak. Gross rose to prominence in a time when stock picking Big Swinging D*cks dominated the headlines and was a staple on business news TV.

Deuces

Gross’ career at PIMCO came to an abrupt end after a falling out with management that included the exit of CEO and Co-CIO Mohamed El-Erian and a Gross-led witch hunt that has ‘Billions’ plotline written all over it.

Coupled with diminishing returns Gross jumped ship for Janus in 2014. And Billy Bond’s resignation belongs in the power moves hall of fame: the fixed income guru announced his departure via a handwritten note … one minute before markets opened.

But alas, all good things must come to an end. Gross’ mouthwatering returns never hit Pimco levels at Janus, with the King losing more than 4% in 2018.

Fun fact

Bonds weren’t the Kings only forte. Gross had a reputation for being petty AF. Exhibit A: he was accused by his now ex-wife of contaminating their home with fart spray during a nasty divorce.

 

SLACK THAT A**

slack IPO

Slack


Messaging app Slack filed for a confidential IPO indicating that it will move forward with a direct listing at some point this year.

Traditionally, companies will have banks underwrite the offering. The direct listing, however, makes the shares readily available on an exchange for all to buy. Get your Robinhood accounts ready, boys and girls. Spotify performed a similar listing in 2018.

The benefit of a direct listing is two-fold. First, there is a massive cost saving on underwriting fees billed by bankers named Chad in Gucci loafers who charge dinner at Dorsia to the client. Second, is that current shareholders (e.g. owners, investors, employees) can sell their shares instantly.

With a total valuation of $7.1B, Slack isn’t worried about raising capital as part of the IPO. The company boasts 10M daily users and some 3M paid users

A healthy DM

Another interesting tidbit accompanied Slack’s announcement: the company is HIPAA compliant! Sooo …? It likely means that Slack is planning to delve into the untapped market of digital healthcare. HIPPA friendly features are only available with the premium service and the compliance greenlight currently only covers image uploads, not messaging.

A competitor, Stitch, offers a similar product but has had issues when it came to HIPAA licensing.

MAXED OUT

Tesla announced that it would buy battery technology company Maxwell Technologies in a straight-stock (… homie) deal worth $218M or $4.75 a share.

Tesla’s deal marks a 33% premium to Maxwell’s previous stock close of $3.07 per share and will allow the automaker to leverage Maxwell’s ultracapacitor technology. The tech, which sounds eerily similar to the flux capacitor of ‘Back 2 the Future’ fame, can store and rapidly deliver surges of energy.

Elon, in the past, had mentioned that something like ultracapacitors could lead to breakthroughs in electric cars as a whole, not just batteries.

Maxwell’s method of creating batteries is also much more efficient than most of the rest of its competition, which could help Elon win his uphill battle to finally manufacture the elusive $35k Model 3.

Let’s get down to brass tac—er, batteries 

Tesla shares fell more than 3% immediately following the news, before leveling out and ending the day slightly positive.


IN OTHER NEWS

news

iStockphoto


  • Turns out Papa John is a sand-baggin’ son of a b*tch. He had a plan all along. Following an announcement that the company would be seeking an investor instead of a buyer, Papa John’s landed a deal with Starboard Value that would inject $200M into the struggling pizza parlor. But it comes with a stipulation: there’s a new Papa in town. Starboard CEO, Jeffrey Smith will take over as Chairman of the Board.

 

 

  • Despite beating top and bottom line expectations, Alphabet shares fell following its Q4 earnings announcement. The reason? Pressure on advertising revs. Cost per click across Google dropped 29% year over year. It’s no surprise that investors were frightened by the prospect of a company which funds outrageous initiatives, like, you know “curing death,” with its Scrooge McDuck piles of ad income, seeing a decrease in ad revs.

 

  • Turns out Adam Levine’s nipples and all 400 LA Rams fans weren’t the only losers on Sunday night. For the second year in a row, TV ad revenue from the Big Game declined. This year CBS pulled in just $382M. And that’s not all, viewership was at its lowest since 2008. I wonder if Tony Romo predicted that.

 

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The Water Coolest is a daily business newsletter consisting of business news, financial advice, and unfiltered commentary. Delivered fresh in your inbox every morning so you're ready to snap necks and cash checks. Written by Tyler Morrin, AJ Glagolev, Nick Ellis, and Ian Barto.

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