Welcome to the Oct. 9 Monday Business Briefing, your private business intelligence digest from Insider Louisville.
Social media campaign underway to #BringBackTheBus to Louisville
“Hey #StartupLou, quick favor: go 2 https://www.riseofrest.com/vote scroll, find “Louisville, KY” and vote #BringBackTheBus.
Here’s what everyone is jazzed about. Last summer, Steve Case of AOL fame, came to Louisville at the behest of Chuck Denny of PNC, for a talk about Case’s book “The Third Wave.” Ultimately, the visit was considered a part of Case’s national entrepreneurial tour called Rise of the Rest.
That organization, a nationwide effort to work closely with entrepreneurs in emerging startup ecosystems, is kicking off its 6.0 Tour with a friendly challenge to all 26 of its past tour cities, including Louisville. “Steve Case and the Rise of the Rest team will be bringing the bus back for a repeat visit to one of our past stops where we will meet with local entrepreneurs, explore the local ecosystem, and invest $100K in another local startup,” the organization said.
Word on the street over the weekend speculated that Louisville was in the Top 5. Local champions of the cause tell Insider that they will put on a full-court press to capture more votes this week. —Mickey Meece
Google Fiber says it won’t offer TV add-on service in Louisville
Last week, Google Fiber announced on its blog that it was taking a new approach to offering superfast internet in its next fiber cities: Louisville and San Antonio. The company is providing the fast internet but not the option to add-on television services.
Google’s reasoning is simple, given the move by consumers to a la carte TV service providers like YouTube, Hulu, Sling, Netflix and others. “If you’ve been reading the business news lately, you know that more and more people are moving away from traditional methods of viewing television content. Customers today want to control what, where, when, and how they get content. They want to do it their way, and we want to help them,” Google said.
Since 2012, when Google Fiber launched, the company says the price of its internet service has not changed. In other cities, Google is asking $70 a month for its Gigabit connection. —Mickey Meece
Churchill, Brown-Forman, PharMerica beat markets in Q3; Kindred, Sypris, CafePress plunge
Only half of 14 publicly traded companies with significant operations in Louisville outperformed the market in the third quarter, while the other half performed worse — with some faring much worse.
While Churchill Downs’ shares rose steadily throughout the quarter, closing at $206.20, up 12.5 percent, shareholders of Brown-Forman and PharMerica saw some wild swings.
Shares of Brown-Forman fell 3 percent in the early part of the quarter, to $47.11, before recovering, and then spiking in late August to $52.86 when the distiller announced better-than-expected first quarter results. Shares rose to $54.65 on Sept. 11 and remained near that level through the rest of the month.
PharMerica’s share price fell slightly in the first part of the quarter before jumping more than 15.5 percent, to $28.95, on Aug. 2 after the company announced that it had agreed to be acquired for $1.4 billion and go private. The deal calls for a newly formed company, controlled by the global investment firm KKR and, as a minority owner, Walgreens Boots Alliance, to pay stockholders of the Louisville-based pharmaceutical services company $29.25 a share. Shares had closed at $25.05 the day before the announcement. On Aug. 2, more than 8 million shares changed hands, compared to a daily average of 32,000.
Three companies based in Louisville — Papa John’s, Humana, and Yum Brands — posted smaller third-quarter stock price gains than broard markets, and Stock Yards Bancorp recorded a slight decrease — but that was much better than the significant declines that three local companies incurred:
Kindred suffered through a volatile quarter that included sales of nursing facilities and investor fears over damage from hurricanes and a federal proposal to change how home health providers are reimbursed for services. Shares plunged nearly 15 percent on July 26, closing at $9.55 and declined further to $7.25 on Aug. 10, the low point for the quarter. Just before the decline began, the government had announced that it plans to change how Kindred and competitors are reimbursed for services such as physical therapy and home health aides. The stock price then changed little until Sept. 18, before falling nearly 23 percent over three days in heavy trading, closing at $5.60 on Sept. 20 as investors worried about the impact on Kindred facilities from tropical hurricanes in Florida and Texas. The stock price recovered after Kindred said the hurricanes’ impact would be minimal. Shares on Sept. 29 closed at $6.80, down nearly 42 percent for the quarter.
Shares of CafePress declined fairly steadily throughout the quarter until July 28, when it plunged 16.4 percent, closing at $1.89, after the company announced a $3.2 million quarterly loss and declining revenue. The share price hit a low point of $1.75 on Aug. 2 before recovering, hitting to $2.26 on Sept. 15 before sliding again through Sept. 29, closing at $1.81, down more than 30 percent for the quarter.
Shares of Sypris Solutions were in positive territory early in the quarter until Aug. 10, when the stock dropped more than 8 percent, to $1.51. However, when the manufacturer announced second-quarter earnings and said that it projected higher revenue in the second half of the year, the share price rose more than 14 percent, closing at $1.69. It rose as high as $1.73 before declining fairly steadily for the rest of the quarter, closing at $1.44 on Sept. 29, down nearly 13 percent for the quarter. —Boris Ladwig
At 1 Million Cups, a Midwest venture fund gets down to business
Louisville’s a Midwestern city, right? Sure it is, and perhaps that’s why Victor Gutwein, founder and managing director of the M25 Group, was the headliner at 1 Million Cups’ inaugural Louisville meeting at LouieLab last week. Before a packed group lounging, standing and sitting at attention, Gutwein gave his spiel on the booming Midwest tech scene and how his venture capital firm chooses where to invest next.
Leaving nothing to chance, M25 decided to rank 54 Midwestern startup cities. The ranking was calculated by taking a measure of how active the tech community in the city is; how supportive the city’s environment is and what value-add it could bring to help startups grow; as well as economics and demographics, including factors such as the cost of living, population and GDP per capita, the company said.
“These rankings are a data-driven look at how cities across the Midwest compare in their ability to provide the necessary conditions to produce top-notch tech startups,” M25 said.
Louisville (and parts of Southern Indiana) came in at No. 15, ahead of Lexington at No. 19. Gutwein visited Lexington six months ago and says that he is close to finalizing an investment with a company there.
After a whirlwind day in Louisville, which ended at EnterpriseCorp’s Evening of Entrepreneurship, Gutwein declined to comment on any specific deals he may (or may not) have made in Louisville. He would say in an email exchange: “We are in serious conversations with a handful of Louisville startups. I’m optimistic we’ll see some investments in Louisville soon.”—Mickey Meece
Now’s a good time to buy a home, consumers say
Two separate consumer surveys indicate that more than 70 percent of people believe that the time is ripe to buy a house.
“In our Market, the historically low mortgage rates continue making homeownership achievable for many Americans. We believe mortgage rates will remain within a range of current low levels for the foreseeable future, but given the rising costs of the homes in our area, buyers are right to be eager to buy now,” Dave Parks, a broker for Louisville Berkshire Hathaway affiliate Parks & Weisberg Realtors, said in an analysis of the survey results.
According to the National Association of Realtors survey, 53 percent of people think home prices will rise in the next six months.
The market is tough all over when it comes to housing inventory, and millennial consumers surveyed told Berkshire Hathaway that they were concerned about overpaying for a home. Forty-five percent of millennial respondents said they’d be willing to pay closing costs in order to stand out from other potential buyers.
“In the Louisville and Southern Indiana Markets, there is tremendous demand, especially in the more urban areas and around our average market price, which is approaching the lower- to mid-$200,000 price range,” Parks said.
In addition to construction labor struggles, Berkshire Hathaway survey pointed to reticence among the baby boomer generation to sell their homes as one factor causing low housing inventory across the United States. However, the company noted that rising home prices and life changes could push boomers toward selling.
The National Association of Realtors survey found that 78 percent of people thought now is a good time to sell their house, up from 71 percent during the second quarter of 2017. Of those surveyed, 81 percent of people ages 55 to 64 thought the present was a good time to sell.
Another notable finding from the National Association of Realtors survey looks at renters. While a slight majority of those surveyed believe apartment rental rates will increase in the next six months, less than a quarter of those from the South said that would prompt them to consider buying a house. Most would renew their existing lease anyway or search for a cheaper rental. —Caitlin Bowling
GE Appliances has named Mary Putman, a longtime Procter & Gamble executive, as its vice president for marketing and brand. According to an announcement, Putman was P&G’s global associate brand director, personal cleansing, working at the company for 14 years. At GEA, she will be responsible for leading marketing and brand activities and will report to Rick Hasselbeck, chief commercial officer for GE Appliances.
Local author and teacher Sena Jeter Naslund has announced she will retire as the program director of Spalding University‘s Master of Fine Arts in Writing at the end of this year. Kathleen Driskell, the current associate program director and a published poet, will assume the role in January. Naslund helped found the nationally distinguished master’s program in 2001.
A Peddler’s Mall is opening in the former Kmart building at 191 Outer Loop in late 2017. Vendor rates start at $135 per month for an 8-by-10 space. It will be the sixth such mall in the Kentuckiana area.
Delta Dental has named former Papa John’s co-CEO J. Jude Thompson its new chief executive. Thompson had served as interim CEO since March and had been on the company’s board since 2009.