Got Lunch?
Working on Wall Street has its advantages...particularly for buy siders who know how to work over their sell side counterparts for a meal in the name of research.
Smith & Wollensky has long been Wall Street’s midtown cafeteria...and it appears that Alan Stillman will retain control of his venerable NYC operations after the sale…
NEW YORK (AP)—Steakhouse chain operator Smith & Wollensky Restaurant Group (SWRG-NASDAQ) Inc. on Monday said it has agreed to be acquired by Patina Restaurant Group LLC for about $79.6 million in cash, or $9.25 per share.The sale price represents a 12.8 percent premium over Smith & Wollensky’s Friday closing price of $8.20 on the Nasdaq Stock Market. The company has about 8.6 million shares outstanding.Smith & Wollensky’s board of directors approved the agreement and is recommending that its stockholders do the same. The deal is expected to close during the second quarter.As part of the transaction, Alan N. Stillman, Smith & Wollensky’s chief executive, will acquire from Patina the restaurants currently operated in New York and other assets, and will assume specified liabilities, according to a company release.Patina’s New York properties include the Ice Rink and Sea Grill in Rockefeller Center, and Nick & Stef’s Steakhouse at Madison Square Garden. AP
Do the Math
The stories circulating over the Fortress Investment Group (FIG-NYSE) IPO remind us of the furor over the Netscape IPO. It would seem everyone on Wall Street is watching this deal all along their Watchtowers.
In July of 1995 I placed a courtesy call to the underwriters of the Netscape deal to snag a seat at the lunch as the circus made its way through New York City...dealing with the gatekeepers that control the velvet rope at these rubber chicken gatherings can be frustrating.
The roadshow was booked solid and I was told I could not attend..and this was two weeks ahead of pricing. Incredulous, I thanked Morgan Stanley for the love and hung up the phone. Of course, I deftly skirted the muscle at the roadshow door and stole someone’s precious seat at a table.
While the food was less than memorable, the deal put the internet on Wall Street’s map.
And the stock ripped:
On 14 November 1995 the Mountain View producer of Internet software announced a 2 for 1 stock split just 97 days after going public. That ranks among the fastest few dozen stock splits ever. Netscape’s management wasn’t just showboating: The stock was ripe for a split. It has soared spectacularly since its initial public offering at $28 per share on August 9, and last week it broke through $100. It closed at 96 ½. The split will cut the price by half, but shareholders will get an additional share for every one they hold, so the total value won’t change. Its stock trading was 242% premium to its initial public offering price. NeoMinds
Today’s stories of packed meetings are cute....but this time it is different. At least with the motivations of the managers hanging from the rafters.
Sure, some of those in attendance were looking for an allocation on the deal...they might even tuck it away in the hope it is the next new, new thing.
And others go to roadshows looking for a free lunch...it is one of the few the Street will ever provide.
But most of the managers in attendance were just comping the deal against their own business...in an effort to place a valuation on their own firm. Then they look at their stake and guesstimate their net worth...then they go to Bobby Van’s or other watering holes and chew it over.
We will take a rain check on Fortress...to us it is just another Castle Made of Sand.
But we do love America...Is this a great country or what?
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The content contained represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position in the securities mentioned
Hold ‘em
Do you love a good game?
The pot continues to build in the stakes for Riverbed Systems (RVBD-NASDAQ). This story offers up excitement in spades...high-profile VC’s, hyper growth end-markets and solid sponsorship.
If this one doesn’t get your juices flowing nothing will…
But it seems the good ship Riverbed has attracted naysayers as well. The rise in the short interest could mean we have stumbled upon the next installment in our Battleground Stox series. Not much of a contest thus far; the bears buttocks have been firmly paddled. No doubt they are skeptical about Riverbed’s valuation, which seems mighty rich to us too.
But shorting a stock purely on valuation is an iffy proposition at best. Hopefully, for the shorts, the bear case includes more than a valuation call. Perhaps they are counting on a follow-on offering to finally throw a little cold water on this red hot stock. We should note that more than 5% of the float changes hands every day...and the ample liquidity should offer opportunities for the shorts to jump ship. Certainly some already have. 12/04/06
Riverbed only been public for a few months...but management knows how to play Wall Street’s game. The first pullback in the stock was met with a press release. A rather pedestrian group of growth investors lead by the boys at Turner tried to run and gun the stock right through
4 - 3 Defense
the opposing defensive formation. Nice try...but these Bears are no push over. We look forward to getting another peek at short interest and an updated shareholder list…
Management beat numbers and raised...as they needed to...but the pending follow-on offering and a downgrade or two today will cap the rally attempt and keep the stock range bound.
We are not in bed with Riverbed. But a pullback and a little consolidation on the chart might allow the stock to gather its strength and assault the highs once again.
At some point a fling might be in order.
Fair warning....our flings usually end badly.
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No positions in securities mentioned above.
Lock and Load
*UTC Breaking News*
Heelys Inc.’s 6.43 million-share initial public offering. lead by Bear Stearns, priced Thursday evening at $21 a share, well ahead of the expected price range of $16 to $18 a share.
