Today we are watching…
1. L Brands (#lbrands)
55% of Victoria’s Secret is being made secret with private equity firm Sycamore Partners seizing control. Investors in the other 45% of the company through L Brands aren’t happy about the covert new owners, punishing the shares 16% in early trading on Thursday. The deal values the lingerie business at $1.1 billion, less than Wall Street had in mind. However, analysts are bullish long-term. Bank of America said yesterday that “while out best-case scenario included a clean break from the struggling Victoria’s Secret, we think today’s transaction will create shareholder value.”
2. Dropbox (#dbx)
Everything went right for investors in file-sharing start-up Dropbox yesterday. The company added two billion dollars to its market capitalization as it beat top-line forecasts, bottom-line forecasts, and profitability timeline forecasts. CEO Drew Houston announced investors could start clawing back losses by the end of this year, app usage trends positive and data security strengthening. The Dropbox board issued $600 million in share buybacks, too. A definite sign of insider belief in the stock’s performance in the months to come, buybacks will concentrate more value in Dropbox’s free float shares.