progress report for internet and social mediagood technology develops mobile device management (mdm)...
TRANSCRIPT
Making diffuse information about the
Internet and Social Media crystal clear
IN THIS ISSUE:
Good Technology
Nextdoor
Seamless
500 Startups NY Demo Day Recap
February 19, 2013
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PROGRESS REPORT for INTERNET and SOCIAL MEDIA
PRISM
Michael Pachter
(213) 688-4474
Yoni Yadgaran
(212) 938-9924
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About Wedbush Securities Private Shares Group The Private Shares Group of Wedbush Securities is a leader in providing research and trading to the rapidly growing industry of privately traded securities, with an emphasis on companies in the social media space. We assist companies in raising growth capital through traditional private placements and provide liquidity options for existing and former employees through tailored selling programs. We also work with venture capital, private equity and hedge fund investors to help them adjust their holdings in some of the most dynamic companies. We endeavor to understand the underlying industries of the private companies we trade, in order to help our clients make informed decisions about their investments. We provide discreet customized solutions for our institutional and accredited private clients through a team of professionals located in New York, Los Angeles and San Francisco.
About Michael Pachter
Michael Pachter is the Managing Director of Equity Research, providing coverage across the Digital Media sector, as well as the Head of Research for the Private Shares Group. He has been recognized as StarMine’s “Top Earnings Estimator” year after year and “Best on the Street” by the Wall Street Journal. Michael brings over 20 years of experience as a financial professional to the Private Shares Group, along with extensive knowledge across the social media sector in both public and private companies.
Mr. Pachter holds an M.B.A. from the Anderson School at the University of California at Los Angeles, a juris doctor from Pepperdine University, an LL.M. in Taxation from the University of Florida, and a bachelor’s in Political Science from California State University, Northridge.
About Yoni Yadgaran
Yoni Yadgaran joined Wedbush from Bank of America Merrill Lynch. Originally covering Internet & E-commerce within Equity Research, he later moved on to help pioneer the Private Shares Group’s Research efforts. Yoni is a CFA level 3 candidate and received a B.B.A in Finance from Baruch College. Contact Wedbush Securities Private Shares Group: Michael Pachter Managing Director, Equity Research Head of Research, Private Shares Group (213) 688-4474 | [email protected] Twitter: @michaelpachter Yoni Yadgaran Research Associate, Private Shares Group (212) 938-9924 | [email protected]
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nationwide, Wedbush focuses on relentless service, client financial safety, continuity, and advanced technology. (www.wedbush.com)
Kevin Cohen Director of Trading, Private Shares Group (213) 688-8089 | [email protected]
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Wedbush Private Shares Group
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Good Technology Good Technology develops mobile device management (MDM) software for enterprise customers looking to secure their employees’ mobile devices for work-related use. The company also offers mobility management solutions, analytics tools, and consulting services for its customers, which are primarily large corporations and government agencies. As of May 2012, Good Technology was doubling revenue on an annual basis, according to a report published by Fortune. According to a report published by the Wall Street Journal, Good Technology will be starting the process of selecting bankers as early as this week, and is likely to IPO this year at a valuation of over $1 billion. Good benefits from the growing popularity of corporate bring-your-own-device (BYOD) policies, which are being implemented by employers who, in the past, have required employees to carry company-issued phones for work-related use. With Good Technology’s software, a company can allow its employees to use their personal phones for work, while ensuring that company security won’t be compromised. Good Technology’s solution includes a secure messaging service, as well as the ability for employees to securely access corporate data (i.e., a company’s intranet) using their mobile devices.
Source: Company Data Good Technology secures data on an application level, which means that even if a customer lost an unlocked phone, data within the Good Technology email app would be inaccessible without the app-specific password. Using Good for enterprise, a company can set authentication parameters that ensure sensitive corporate data is deleted in a scenario where a phone is stolen or lost and there are multiple attempts to access the phone with failed passwords. Corporate data is also secured, with encryptions that ensure data can’t be accessed en route to a company’s server. Employers can set access levels for particular Good client versions, enabling administrative and project-specific access for different employees. Using Good’s MDM solution, customers can install and update software across a large number of devices, mitigating the need for IT to program each device manually. Good Technology was founded in 1996, is headquartered in California, maintains offices in 14 countries, and has grown to over 700 employees. The company has grown to over 4,500 corporate clients globally, including more than half of the Fortune 100 companies. Good Technology’s services are available across over 200 carrier networks, and the company maintains partnerships with a number of mobile manufactures including Google, Apple, HTC, LG, Microsoft, and Nokia. According to a report published by Gartner, Good Technology charges corporate clients a relatively high fee per employee, due to the bundling of its mobile device management and messaging services. Furthermore, the company continues to collect licensing royalties from a number of vendors including Blackberry and Microsoft, according to the report. Good Technology began with the formation of Visto in 1996 and the subsequent separate formation of Good Technology in 1999. Visto offered push e-mail services to corporations that wanted to allow their employees to access e-mails securely outside of their firewalls. In 2007, Good Technology was acquired by Motorola for $500 million as part of a larger strategy to compete with Research in Motion’s (RIM) messaging service on its BlackBerry devices, according to a report published by the Wall Street Journal. Motorola subsequently sold Good Technology to Visto in February 2009. The sale was likely at a discount to what Motorola had paid for the company, due to ongoing litigation that had first been brought by Visto against Good Technology (and by extension Motorola) in 2006, according to the report.
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In July 2009, Visto settled a patent suit against RIM over alleged patent infringement, which had started in 2006, along with lawsuits against a total of seven of Visto’s competitors, and included a $268 million payment to Visto from RIM, according to a report published by the Wall Street Journal. Given the short period of time between the sale of Good Technology and the settlement, we believe it’s safe to assume Visto’s case against Motorola was solid enough to provide significant negotiating leverage in the sale of Good Technology, which allowed Motorola to extract itself from what was likely very expensive litigation. Shortly after the acquisition, Visto rebranded the combined entity as Good Technology, with a total of over 400 employees in 10 countries. The new company targeted government, IT, and consumers, with a device agnostic platform that combined real-time synchronization for applications with secure communication services. Soon thereafter, the company launched Good for Government, which offers government-cleared data encryption for messaging services that meets security criteria set by the Department of Defense, and Good for You, which offers a platform for organizations to enable employees to securely communicate outside the organization (i.e., with their friends and family), via a suite of apps that include e-mail (syncs with an employee’s personal Gmail account), social networking (syncs with Facebook, MySpace, and Twitter), as well as instant messaging. In May 2009, Good Technology acquired Intercasting, a company that focused on mobile social networking connectivity, integrating the technology with Good for You. In January 2010, the company acquired CloudSync, a provider of cloud-based device management for enterprise customers, which was based in Denver. In October 2011, the company launched Good Dynamics, which is a security platform for third-party developers of mobile apps that would be used by costumers utilizing the company’s Good for Enterprise solution. In September 2012, the company acquired Copiun, the developer of software that enabled collaboration among mobile users working on the same files. In October 2012, the company acquired AppCentral, which developed mobile application management (MAM) solutions. Unlike mobile device management, which allows enterprise customers to secure an employee’s entire device, mobile application management secures data on an application-specific level. According to data published by Forrester, two-thirds of employees in North America and Europe report spending time on work-related projects outside of work. Good Technology projects the number of mobile phones used for business to grow by 28% to 213 million by 2016. The company reports that as of 2013, 76% of enterprise companies support bring-your-own-device (BYOD) policies, up from 72% and 60% in 2012 and 2011, respectively. Furthermore, only 5% of surveyed corporations indicated that they had no intention of supporting a BYOD policy in the future, down from 9% in 2012. According to Good Technology, larger corporations are most actively embracing a BYOD policy, likely due to cost savings derived from forgoing issuing devices on a mass scale, with 75% of corporations supporting BYOD policies maintaining workforces of over 2,000 employees.
BYOD Support
Yes, 76%
Plan To
Within 1
Year, 13%
Considering
, 6%
Don't Plan
To, 5%
BYOD Policies in Place by Company Size (# of Employees)
9%
12%
4%
18%
12%
45%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
500 or less
501 to 1,000
1,001 to 2,000
2,001 to 5,000
5,001 to 10,000
10,001 or more
Source: Wedbush Securities, Good Technology, Ovum
In November 2005, Nokia acquired Intellisync, a developer of messaging services for mobile devices, and at the time a competitor of Good Technology, for $430 million in cash. Good Technology’s current competitors in the mobile device management space include Zenprise, MobileIron, AirWatch, and Fiberlink, according to a report published by Gartner. In November 2012, Good Technology sued MobileIron and AIrWatch for patent infringement. The company had at least 75
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patents in its portfolio, with an additional 50 patents pending, according to a report published by the Silicon Valley Business Journal.
Source: Gartner
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Nextdoor Nextdoor is a neighborhood-centric social network that facilitates communication and socializing online among neighbors. Last week, the company raised $21.6 million in funding at a $200 million valuation, in a Series B venture round led by Greylock Partners, with participation by Google Ventures, Bezos Expeditions, and Benchmark Capital, according to a report published by the Wall Street Journal. According to the report, Greylock’s investment, which was about three-quarters of the latest round ($15 million), was the largest investment in a single company that Greylock partner David Sze has ever made, which we believe is an endorsement of the potential for the online hyper-local ad market. Neighbors use the service to informally communicate, ranging from recommendations for a babysitter to organizing a block party to warning each other about suspicious activities. Members can leave tips and reviews for other neighbors, and can use the platform to organize events. Nextdoor has also integrated its platform with local fire stations and police departments, and offers real-time alerts to member’s phones in emergencies, according to a report published by VentureBeat. In order to sign up for the social network, users must undergo a simple verification process to confirm their address, with four options that include submitting a postcard or credit card bill, as well as phone verification or an invitation by a neighbor.
Source: Company Data
In conjunction with its latest raise, the company launched a new version of its site, which includes the ability to communicate with users outside of the group’s immediate neighborhood in cases of emergencies, and an increased focus on crime detection within a user’s community. Note that for the most part, members are limited to communication with other members within their own neighborhood. The company launched its platform in October 2011, is based San Francisco, and has grown to about 40 employees. Nextdoor previously raised $18.6 million in funding in July at a $115 million valuation, in a venture round led by Benchmark Capital, with participation by Greylock Partners, Allen & Company, Pinnacle Ventures, DAG Ventures and Shasta Ventures, according to the Wall Street Journal. At the time, Nextdoor had over 600,000 households in 3,700 neighborhoods in the U.S. signed up for its service, and was adding 22 neighborhoods daily, according to a report published by TechCrunch. The social network has since grown to over 8,000 neighborhoods and is adding 40 neighborhoods daily, although the company has yet to generate any revenue, according to the Wall Street Journal. The company estimates that there are about 20,000 communities in the U.S., and intends to scale to all of them.
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Seamless Seamless is an online food order service that allows consumers to place online orders from nearby restaurants. Once placed, orders are sent to the restaurant and are either ready for customer pickup or delivered by the restaurant. Seamless’s service is an easy way for its members to order food online from a centralized platform. To help users choose which restaurant to order from, the company combines objective and subjective ratings, based on behavioral patterns of existing users. The company’s data set is well-differentiated in that it provides insight into which restaurant’s users are frequently returning to, in addition to pricing data and peak order times.
Source: Company Data
Seamless’s network has grown to over 12,000 restaurants in 40 cities, with over 2 million members having placed orders since the service launched in 1999. The company grew its consumer business by 60% in 2012, while its corporate business has grown to over 3,500 clients as of August, including virtually every large investment bank and law firm. The company also offers catering services and group orders, and offers mobile apps for iOS, Android, and BlackBerry users. In order to monetize its platform, Seamless takes a percentage of sales that varies by city but generally falls close to 10% of an order value The company estimates the delivery market in the U.S. to have grown to over $25 billion, while the order pickup market adds an additional $50 billion opportunity, according to a report published by Fortune. Seamless generated $60 million and $85 million in 2011 and 2012, respectively, and expects to generate over $100 million in 2013, according to a report published by Reuters. Seamless is now generating twice as much revenue as Grubhub, Seamless’ closest competitor, and the company expects to reach $1 billion per year in transaction volume in the near future, according to the report. According to Reuters, mobile devices generate more than 30% of orders, with iPads accounting for 40% of total mobile volume In June 2006, ARAMARK, a provider of food, uniforms and facilities services, acquired Seamless, which is headquartered in New York. In June 2011, ARAMARK sold a minority stake in Seamless to Spectrum Equity for $50 million. As part of the sale, ARAMARK separated Seamless’s operations from its core business. At the time, gross order volume for 2011 was projected to reach over $400 million from Seamless’s more than 1 million members in 27 cities. In September 2011, Seamless acquired MenuPages, a site that listed restaurant menus, from New York Media (publisher of New York magazine), in addition to one year of rights to sell advertising against content published by MenuPages, for $15 million, according to a report published by BetaBeat, In October 2012, ARAMARK announced that it would spin-off its stake in Seamless to its shareholders.
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500 Startups NY Demo Day Recap Last week, we attended a demo day in New York that was hosted by 500 Startups, an accelerator that provides early stage funding (up to $250,000) and mentorship to newly launched companies. Since its launch in 2010, 500 Startups has invested in over 450 companies, including TaskRabbit, Twilio, and WildFire. The presentations were delivered by the founders of 500 Startups newest class. Below is a summary of a few of the company presentations we attended: GazeMetrix – Provides brands with data on trending content (i.e., shared pictures) on social networks that contain a brand’s logo. The company analyzes millions of photos daily, and helps brands discover and then engage with the same consumers that were just exposed to the brand’s logo. Since its launch in December, the company has partnered with 30 major brands, and has an additional 300 brands in its pipeline. The company notes that its first brand contract is already generating $400,000 in annual subscription revenue for GazeMetrix. The company was looking to raise $750,000 in seed funding. BabyLists – Consolidates baby registries into a single app for pregnant mothers that want to communicate to their family and friends what they’ll need for their new baby. The app’s interface is similar to Pinterest’s, and links to e-commerce sites that carry items requested, ensuring that purchasing an item on a registry is frictionless. The company takes a 4% cut of transactions facilitated through its app, and has facilitated over $2.3 million in gifts in 2012. The company notes that the average family spends $15,000 on their baby in the first year, and the market for baby products has grown to over $43 billion. On average, the company generates $13 in revenue per new sign-up to its app, and 11,000 women are already using its app. The company was looking to raise $500,000 in seed funding, of which $110,000 was already committed. EverBill – Develops invoicing and accounting software for small and mid-sized businesses (SMB) that can be used in every stage of a company’s supply and distribution processes. The company has already enlisted 3,500 companies for trials, of which 650 have signed-up as paying subscribers. To-date, the company has enabled the accounting of over $300 million in billings for customers, and has recently partnered with T-Mobile to offer its app on new plans for small business owners. The company was looking to raise $500,000 in seed funding. iDreamBooks – Aggregates book reviews from credible sources (e.g., the New York Times), which are then utilized by paying partners and libraries. The company notes that over 80 million Americans read a book every month, and yet the only easily accessible source for reviews, Amazon, is rife with incomplete postings by random customers and fake reviews posted by authors. The company sees itself as a RottenTomatoes for books, and has recently partnered with Sony’s Reader e-book store to provide reviews to its users. The company was looking to raise $500,000 in seed funding. TouristEye – Developer of an online user-generated trip guide that offers suggestions for the best venues and locations for a particular activity in a given destination. The company’s mobile app has been downloaded over 500,000 times, and maintains over 40,000 monthly active users. The company has recently partnered with Virgin America to grow its user base, and monetizes its platform by leveraging its data on travelers to serve high performing ads that maintain click-through rates of over 20% (10x higher than its competitors). The company was looking to raise $1 million in seed funding. Hunie – Web-based platform that allows designers to upload samples of their work for detailed critiques by their peers. The platform’s 1,500 initial designers have generated over 12,000 critiques since its launch, and there are over 10,000 designers wait-listed for admission. The company notes that talented designers are currently a scarce commodity, and over 365,000 job openings for designers in the U.S. are posted at any given time. The company monetizes its platform by allowing company’s to use its access to data on design talent for recruiting purposes, and in return Hunie receives a fee of 12% of a newly hired designer’s first year salary (collected from the employer). The company was looking to raise $300,000 in seed funding. Dealflicks – Operates a marketplace for discounted movie theater tickets. The company works with over 90 theatres, which use its platform to fill empty seats by selling inventory at an average of 30% off regular prices. Customers often double mobile and online ticket sales when enlisting Dealflicks, in exchange for which the company takes a 20 – 30% cut of each transaction. The company notes that over $40 billion is spent annually on movie tickets and refreshments, and about 88% of movie theater seats are empty on average. To date, Dealflicks has generated over $5 million in bookings, and is in negotiations with a number of major theater operators. The company was looking to raise $750,000 in seed funding, of which $250,000 was already committed.
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Key News Items
Snapchat’s app allows users to send a self-destructing picture to other members, and has over 3.4 million active
users as of December, according to data published by Nielsen. The company had previously been reported to have
raised $8 million in funding at a $50 million valuation in December. However, according to a report published by
VentureBeat, the company has actually raised $13.5 million in funding at a $60 – 70 million valuation, in a round led
by Benchmark Capital. It’s worth noting that the apparent increase in valuation seems to indicate a disregard by
venture capitalists for the potential threat of Facebook’s recently launched SnapChat competitor, Poke.
Yardsellr offered a suite of tools that helped large retailers offer their inventory on Yardsellr’s marketplace on
Facebook. The company was once seen as a pioneer in what was thought to be a large opportunity for “social
commerce”, where consumers rely on their friend’s opinions when shopping. Earlier this month, the company
announced that it will be shutting down its platform by April, and immediately stopped all new item listings to its
marketplace. The company faced issues similar to other alternative e-commerce distribution channels, which included
low transaction volumes and minimal fees, primarily due to a lack of critical mass. Yardsellr’s team will be launching a
new company later this year, called CompoundM, which will focus exclusively on selling e-commerce tools to large
retailers. Yardsellr had been funded by Accel and Harrison Metal Capital, which had invested $5 million in the
company in late 2010. By September 2011, the company had grown to over 5 million members, 175,000 active users,
and 120,000 items available for sale on its platform, although we believe traffic stagnated over the last year.
Sailthru provides data to marketers that enable them to send personalized messages to subscribers and customized
web experiences for website visitors. Last week, the company announced that it had raised $19 in funding, in a Series
B venture round led by Benchmark Capital. The company anticipates using the capital to double headcount over the
next year from 85 employees at present, and is looking to expand its European operations as well. The company had
previously raised $8 million in funding, in a Series A venture round led by AOL Ventures and RRE Ventures in
September 2011.
Twitter and American Express partnered to allow Twitter users to purchase items on Twitter by tweeting special
hashtags (“#hashtag”) on the social network. Users will have to sync their Amex cards with their Twitter account
using Amex’s CardSync technology, which Twitter first experimented with in March in order to reward users who
tweeted offers for merchants. Products that can be purchased include Amex gift cards, and items from Amazon, Sony,
Urban Zen and Xbox 360. To promote the new feature, Amex is offering a $25 gift card for $15 for users who tweet
“BuyAmexGiftCard25”. We don’t think this form of social commerce is sustainable, but incentivizing Twitter users to
link their accounts with their credit cards has significant value for more viable e-commerce ventures by Twitter going
forward.
On Deck, an online lending company raised $42 million in funding, in a Series D venture round led by Institutional
Venture Partners, with participation by RRE Ventures, SAP Ventures and First Round Capital. The company offers
short-term loans to small businesses (typically between $5 – 150,000), and has loaned over $400 million since
launching in 2007. Small businesses can fill a loan application in a short period time, and are able to receive funds in
a maximum of 24 hours, if approved. The company takes into account a company’s credit score, cash flow, social
data, and a number of other data points. According to the company, within three months of accepting a loan from On
Deck, the average businesses grows revenues by 24%, as businesses are often able to invest in badly needed
working capital. In 2012, the company tripled its base of distribution partners to over 1,500, expanded to over 700
vertical markets eligible for loans, and doubled its revenues. In August 2012, the company raised a $100 million credit
facility, about 80% of which came from Goldman Sachs and Fortress Credit, with another $17 million originating from
a venture debt loan from SF Capital and Lighthouse Capital Partners. Prior to its latest round, On Deck had raised
more than $55 million in venture funding from a number of VCs, including RRE Ventures, SAP Ventures, Khosla
Ventures, First Round Capital, and Contour Venture Partners.
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Marin Software is the developer of a revenue acquisition management platform that manages over $4 billion in
annual marketing spend. Advertisers use Marin’s platform to optimize spend across paid search, display, and social
online advertising. Last week, the company filed an S-1 with the SEC, proposing a maximum sale of $75 million in
common stock in an offering that would be managed by Goldman Sachs, Deutsche Bank, UBS, Wells Fargo and
Stiefel. The company was founded in 2006, is headquartered in San Francisco, and has raised about $80 million in
venture funding to-date. The company’s largest backers are Benchmark Capital (16.4% stake), DAG Ventures
(16.1%), Crosslink Ventures (5.8%), Temasek (10.7%), and Focus Ventures (6.5%), and the company’s CEO
Christopher Lien maintains an 8.8% stake in the company as well. The company has rapidly grown revenue over the
last four years, but continues to operate at a loss and does not expect to attain profitability in the foreseeable future.
Dropbox, a file sharing service, is reportedly in the early stages of preparing to go public in 2H:13, and is currently
meeting with bankers. Box, which is Dropbox's smaller competitor, focuses on the enterprise market, as opposed to
Dropbox's core base of consumers using the service for personal use, is expected to file for an IPO in 2014.
According to the report, Dropbox has grown to over 200 million members (relative to Box’s 15 million members), and
is estimated to file at a $4 – 5 billion valuation (vs. Box’s ≈ $2 billion valuation). Note that historically, Dropbox has
been able to convert about 4% of its members into paying subscribers, who are charged between $100 – 600
annually (depending on service tier), which implies a range of $800 million to $4.8 billion in annual revenue (likely
closer to $1- 1.5 billion).
Criteo, an ad retargeting company, anticipates going public this year, and is still deciding whether to list on the NYSE
and NASDAQ, according to a report published by JDN, a French newspaper. The company generated $400 million in
revenue in 2012, up from $60 million and $200 million in 2010 and 2011, respectively, according to a report published
by Business Insider. The company is backed by IDInvest Partners, Elaia Partners, Index Ventures, Bessemer Venture
Partners and SoftBank Capital, and has raised over $50 million to-date, according to the report.
Violin Memory, which designs and manufactures flash memory storage arrays, is expected to file an IPO by May
2013, according to a report published by All Things Digital. The company filed an amendment to an earlier round,
expanding the amount of capital to be raised from $80 million to $130 million, at an $850 million valuation, of which
$96 million has been raised from 126 different investors, according to the report. The company is backed by GE Asset
Management, Toshiba, Juniper Networks, Highland Capital, and SAP Ventures.
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Covered Companies Mentioned in this Report (priced at market close February 15, 2013)
COMPANY TICKER RATING PRICE PRICE TARGET
FACEBOOK GOOGLE JUNIPER
FB GOOG JNPR
OUTPERFORM NEUTRAL NEUTRAL
$28.32 $792.89 $21.86
$35.00 $770.00 $24.00
IMPORTANT DISCLOSURES
The information contained herein is intended for accredited investors as defined in Rule 501 of Regulation
D under the Securities Act of 1933 or institutional investors.
WEDBUSH SECURITIES Wedbush does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’ investment banking activities. ANALYST CERTIFICATION I, Michael Pachter, certify that the views expressed in this report accurately reflect my personal opinion and that I have not and will not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained in this report. Disclosure information regarding historical ratings and price targets is available at http://www.wedbush.com/ResearchDisclosure/DisclosureQ412.pdf INVESTMENT RATING SYSTEM Outperform: Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Neutral: Expect the total return of the stock to perform in-line with the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. Underperform: Expect the total return of the stock to underperform relative to the median total return of the analyst’s (or the analyst’s team) coverage universe over the next 6-12 months. The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the other stocks in the analyst’s coverage universe (or the analyst’s team coverage).*
Rating Distribution (as of December 31, 2012)
Investment Banking Relationships (as of December 31, 2012)
Outperform:53% Neutral: 42% Underperform: 5%
Outperform:14% Neutral: 2% Underperform: 0%
The Distribution of Ratings is required by FINRA rules; however, WS’ stock ratings of Outperform, Neutral, and Underperform most closely conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS’ stock ratings are on a relative basis. The analysts responsible for preparing research reports do not receive compensation based on specific investment banking activity. The analysts receive compensation that is based upon various factors including WS’ total revenues, a portion of which are generated by WS’ investment banking activities.
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Capital Markets Disclosures as of February 19, 2013
Company Disclosure
FACEBOOK GOOGLE JUNIPER
1 1 1
Research Disclosure Legend
1. WS makes a market in the securities of the subject company. 2. WS managed a public offering of securities within the last 12 months. 3. WS co-managed a public offering of securities within the last 12 months.
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4. WS has received compensation for investment banking services within the last 12 months. 5. WS provided investment banking services within the last 12 months. 6. WS is acting as financial advisor. 7. WS expects to receive compensation for investment banking services within the next 3 months. 8. WS provided non-investment banking securities-related services within the past 12 months. 9. WS has received compensation for products and services other than investment banking services within
the past 12 months. 10. The research analyst, a member of the research analyst’s household, any associate of the research
analyst, or any individual directly involved in the preparation of this report has a long position in the common stocks.
11. WS or one of its affiliates beneficially own 1% or more of the common equity securities. Private securities may involve a high degree of risk and are intended for sophisticated investors who are capable of understanding and assuming the risks involved.
Private securities may have a high level of volatility. High volatility investments may experience sudden and large drop in their value causing losses that may equal your original investment.
Private securities are illiquid and may be difficult to sell or to realize gains from such investments. Similarly, it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed.
Investors should obtain advice from their own financial advisor and only make investment decisions on the basis of the investor’s own objectives, experience, risk tolerance, and resources.
The information herein is based on sources that we consider reliable, but its accuracy is not guaranteed. The information contained herein is not a representation by this corporation, nor is any recommendation made herein based on any privileged information.
This information is not intended to be or should it be relied upon as a complete record or analysis; neither is it an offer nor a solicitation of an offer to sell or buy any security mentioned herein.
This firm, Wedbush Securities, its affiliates, officers, employees, members of their families, or any one or more of them, and its discretionary and advisory accounts, may have a position in any security discussed herein or in related securities and may make, from time to time, purchases or sales thereof in the open market or otherwise.
The information and expressions of opinion contained herein are subject to change without further notice.
The herein mentioned securities may be sold to or bought from customers on a principal basis by this firm.
Any reference to past performance is not a guarantee of future results.
Supporting documentation will be furnished upon request for any claims, comparisons, recommendation, statistics or other technical data. Additional information with respect to the information contained herein may be obtained upon request.
Applicable disclosure information is also available upon request by contacting the Business Conduct Department at (213) 688-8090. You may also submit a written request to the following: Business Conduct Department, 1000 Wilshire Blvd., Los Angeles, CA 90017.
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