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Friday, Jan 27, 2023
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Small Investors Make a Play

What do you think will be the demand for a medical device that can cost upwards of $100,000 and so far is eligible for reimbursements in only two European countries?  Negligible perhaps? Well, that was the conclusion of big institutional investors who apparently turned up their noses at the initial public offering this month of Al Mann’s latest company to go public, Second Sight Medical Products. It’s sort of hard to blame them, just take a look at the device, which is pictured on page 30 of this edition of the Business Journal. It looks like something cooked up by some mad inventor in his backroom lab. It involves a camera, hooked up to an eyeglass that sends a signal to device that is implanted in and stimulates the optic nerve. Thankfully, I’ve never had to see through one of them, but it essentially provides the blind with a pattern of dots. The first prototypes were so crude, really only light and dark could be discerned. Now, advances have made the array denser, allowing users to make out letters. In the future, of course, the promise is nothing less than a bionic eye. Still, for all that promise, underwriter MDB Capital of Dallas went on an IPO road show and said it couldn’t find much interest from people who make a living deciding how to invest huge sums of money. So shares were priced at $9, only to open to bids of $17 and close 122 percent higher. The stock has given back some gains but as of a day or two before Thanksgiving it was still holding up. In our front page story, MDB Chief Executive didn’t deny to our reporter Elliot Golan that Second Sight left some money on the table with the IPO, which raised about $36 million in gross proceeds for the company. But he said the investing public’s imagination was captured by the idea of curing blindness. I might add, of course, it helped a lot to have a guy like Alfred Mann, with his incredible entrepreneurial record, as co-founder of Second Sight. He’s made billions off of companies he’s developed. So, here’s one for the small investor, who perhaps in this one instance, turned the tables on the professional managers and all those spreadsheets, algorithms and other 21st century math and computer tools that typically provide a huge advantage. That is, if the stock holds up. • • • Let’s give kudos where kudos is due. Los Angeles investor David Nazarian made good on his pledge this year to lead a campaign to raise money for Cal State Northridge’s business school. Not only did the CSUN alumnus kick off the campaign with a generous $10 million gift to the program, since named in his honor, but he announced another $6 million in donations from other donors at a dinner this month held at his brother’s slick SLS hotel in Beverly Hills. In case you didn’t know, let me fill you in. Nazarian is the brother of his much flashier younger sibling, Sam, who’s made a name for himself first as an L.A. nightclub impresario and now as a developer of restaurants and hotels. He recently was named one of Forbes 40 business people under 40 to watch. Nazarian is likely never going to have the profile of his brother, nor in the annals of higher education philanthropy will his donation stand out. This is an era where some of the biggest business moguls given literally hundreds of millions of dollars, and usually to Ivy League and other elite schools that already have huge endowments. Like much else in our era, the philanthropic wealth in higher education increasingly flows in one direction. But in making his donation to a business school that does not have the national prominence of, say, the Anderson School of Management at UCLA, Nazarian specifically pointed out the need to promote the development and strengthening of the middle class. And that is something the Cal State system certainly does, with its more numerous campuses and lower tuition costs compared to the University of California, which is increasingly becoming unaffordable to many students, unless they want to take out loans that might take a lifetime to pay off. So kudos to David Nazarian, a very wealthy and successful businessman who hasn’t forgotten what underlies the greatness of our country: a solid, stable middle class. Laurence Darmiento is editor of the Business Journal. He can be reached at editor@sfvbj.com.

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