Category: Financial Advisors

Holmes Raises Money to Avoid Theranos Default by Fortress Investment Group

Elizabeth Holmes the Chief Executive Officer and Founder of Theranos Incorporated is attempting to raise capital from investors of in the company in order to stave off the potential default on their $65 million loans they acquired in December 2017 from Fortress Investment Group. Theranos is a research and development company seeking a cure for Zika virus and various other technologically efficient cures for various other diseases that are plaguing society. The company was having financial difficulty and slow resolutions in there research and development operations and needed financial backing in December 2017 that was accomplished by the loan from Fortress. However, this agreement requires them to maintain a threshold of $3 million in continuous liquidity for the loan to stay in effect. As of recently, Theranos has begun hovering around that $3 threshold and is on the verge of falling below that amount which will initiate a default on their $65 million loans with Fortress. As a result, Holmes has solicited her current investors at Theranos to invest more money within the company at a discounted rate that will translate into a significantly high return-on-investment once the Zika cure is formulated and approved.

Investors are extremely skeptical of potential positive results from the research and development and the strategic direction employed by Theranos leadership currently and are slow to provide the necessary resources to continue their hopes of a positive financial result. Fortress is evaluating the situation but they also have all of the cards stacked in their favor because no matter what happens with Theranos they have the opportunity to capitalize extremely heavily from the continued execution of the cure for Zika or the default of the loan and ultimate acquiring of the company that they can then sell off for an extremely lucrative profit margin. Fortress specializes in investing in companies such as Theranos where they can provide the necessary loan structuring to assist a company in their time of need and if the loan defaults they can acquire the company and reap the benefits from the sale of the assets. Fortress Investment Group provides the loan agreement for distressed companies such as Theranos and always receives profitable returns from the loan agreement.

Fortress Investment Group is continuing to provide the necessary leadership and guidance for the company even after the sale of Fortress Investment Group to SoftBank Group a global technology company that has begun investing in the alternative asset arena. Fortress Is still led by the extremely talented and respected Co-CEO partnership of Peter Briger and Wes Edens who are also two of the founders of Fortress Investment Group. Randall Nardone also provides high-level leadership for the organization and he was also one of the co-founders of the company in 1998. Fortress currently has more than $35 billion in assets under management and is continuing to thrive as a global investor in alternative asset categories that are distressed and underperforming. The distressed $65 million loan to Theranos is on the verge of default by Fortress if Elizabeth Holmes is unsuccessful in her efforts to raise money to continue her efforts to accomplish a cure for Zika and pay back the loan as agreed.

Jeff Yastine, The Veteran Investor Writes

Financial management is not a new term for all like-minded persons who have entrepreneurial orientation. Ideally, economists stratify people into two major categories; the haves and the have not. But who is there to bridge the ever-widening gap between the haves and the have not? It is the government but not necessarily so.

This concept can be demystified from a financial management point of view. One side of the spectrum has filthy rich people who have more money than they require.

Normally, they take such monies to banks and open saving accounts, and they walk away from banking hall with grins and signs of relief that their money is pretty safe in a savings account and furthermore, the money will attract some interests either quarterly, semi-annually or annually according to seekingalpha.com. On the other side of the spectrum, there exists an entrepreneurial class which is somewhat aggressive. Such a class takes a calculated risk to mobilize resources from an area where they are in plenty to an area where they are scarce.

The ultimate reward of such people is a handsome return on investment according to banyanhill.com. To bridge the gap between these two classes, financial institutions comes in and advance loans; short-term or long-term to this entrepreneurial class who pays back the Principal and interest (thanks to the concept of time value of money). Out of this, financial institutions gain some profits, and the surplus is passed on to the bank clients with the savings account.

This is a financial nugget that rarely will your financial consultant share with you.

Follow Jeff Yastine on LinkedIn

Feeling challenged by such little-known facts to the public about prudence in financial management, Jeff Yastine halted his productive investment in capital and money markets to join Banyan Hill Publishing as an editorial director. For sure, if you are an investor who has fallen in favor of investing in stock markets, you will best understand that it takes something more than a passion for taking such a bold move for relinquishing handsome returns equity that stock markets bring.

Since 2015, Jeff has made enormous contributions to emancipate investors who have little or no grip on financial management and market intelligence which are considered as a pre-requisite in stock markets. Through this platform, JL has successfully made many investors across the globe to comprehend various business processes, operations of both money and capital markets and fiscal policies.

The former Financial Correspondent and Anchor at PBS Nightly has published an array of articles such as “You are a Biased Investor,” “Cyber Security Profits Are Hiding in the Shadows,” “The Entire Oil Sector Is Screaming ‘Buy Me! ’” You can’t afford to miss out on his articles. He has valuable insights to investors.

See: https://www.bloomberg.com/research/stocks/private/person.asp?personId=332074010&privcapId=109183793&previousCapId=109183793&previousTitle=The%2520Sovereign%2520Society

Madison Street Capital is the Name for Expert Financial Advice for Businesses

Madison Street Capital, an leader in the international investment industry, has recently served as the exclusive financial counselor to DCG Software Value in their recent merger with the Spitfire Group. The merger was made public by Charles Botchway, CEO of MSC and was headed up by Jay Rogers. The entire process was organized and led Rogers on behalf of MSC from inception to completion.

 

DCG Software Value is a global provider of packages catering to function point analysis, as well as software estimation services, and software value management. The company was founded in 1994 and has been an industry leader in software analytics, software quality management, and the merger is a logical one for both parties since The Spitfire Group is a consulting firm catering to the business-oriented technology market. The exact details of the merger were not immediately made public at the announcement.

 

The Spitfire group is a global provider of services which help client bridge the gap between their business objective and their technology initiatives. They do this by providing comprehensive technology resources in the form of a “force multiplier” concept. This is accomplished thanks to the high level of experience that the team has as well as industry leading state of the art technologies to help businesses address their complex needs.

 

The combining of these two powerhouse players means that a new level of service can be achieved for their clients. By bringing together the myriad of services offered by DCG and the expertise and resources of Spitfire clients can make better use of the technology resources and plan out the best time to adjust those resources for maximum effect.

 

Madison Street Capital was an obvious choice, advising DCG in this merger, considering they have many years of success working with firms of all sizes both domestically and internationally. Specializing in mergers, acquisitions, investment strategies, financial opinions and more, they are the first choice for those who want to bring the most competent advice possible to a negotiation or undertaking. The firm considers emerging markets to be the core component driving the global growth of their clients and strives to find creative and innovative ways to enter those markets with the highest level of return on investment possible while minimizing risk to an acceptable level. Thanks to the high Madison Street Capital reputation level, clients know that they are in good hands when they work with MSC.

 

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