Initial public offerings still have a bad reputation with many investors.

There are some reasons for cynicism. After all, a number of companies with poor business fundamentals or weak management have been foisted on the investing public, particularly during stock market booms. Some, like the now-infamous online pets supplies retailer Pets.com, suffered from weak business fundamentals and ended up in bankruptcy less than one year after going public.

Other investors believe that the only way to make money from a newly listed company is to be a hedge fund or large private investor with enough clout to secure shares as part of the offering process and flip those shares into the opening day hype.

But it’s a huge mistake to ignore the IPO market–some of the past decade’s best-performing stocks have been relatively new to the public exchanges. For example, I read countless articles about how overvalued online search giant

Complete Story »

By Josef Schuster:

Summary

The IPOX Strategy Indexes rose last week, driven by big momentum in the IPOX U.S. IPO and spin-off universe, which continued its surge in uncharted territory. The Global value of corporate spinoffs set to increase to $400 billion in 2012, an increase of 92% from $200 billion in 2011.

Weekly Highlights

The IPOX Strategy Indexes extended the relative gains:The IPOX Strategy Indexes closed out the week with strong gains with the IPOX Global 50 ((IPGL50)) rising by +1.96% to +14.81% Year-To-Date, extending the relative YTD gain vs. benchmark MSCI World (MXWD) by +44 bps. to +501 bps. Performance within the IPOX Regional Strategy universe continued to diverge: In the United States, the IPOX U.S. IPO and spin-off ETF (TICKER: FPX surged +2.60% to +16.23% YTD and extended its relative gain vs. benchmark Russell 3000 (ETF: IWV to a massive +687 bps. YTD. Performance within the IPOX Europe universe was

Complete Story »

By Thomas McLaughlin:

What’s the right valuation for Facebook (FB)? Discussion has tended to focus on P/E ratios and (largely unfavorable) quantitative comparisons to other major internet company IPOs in the last dozen years, notably Google’s (GOOG). While valuation is an exacting art, projecting future cash flows and future growth is anything but precise for companies whose business model is evolving.

With an IPO such as Facebook’s, the task becomes even more difficult. Google today remains dependent mainly on search, but Facebook is unlikely to have a revenue mix two years from now that resembles its current one.

Variant Perspective: Facebook > Apple (AAPL)

In this case, a variant perspective that’s based on qualitative analysis can be less risky than would be the case if all the risks and key variables were clearly understood.

This article will leave aside valuation metrics in order to focus on an overlooked qualitative aspect of Facebook’s investment

Complete Story »

By IPO Candy:

Summary

Proto Labs (PRLB) specializes in taking 3D designs in software and manufacturing short-runs of real parts using either injection molding or CNC machining methods. The company fills an important niche for manufacturing firms that need smaller quantities of parts much faster than conventional methods. This is also different than what is typically done on 3D printers. The company already has proven repeatable and growing sales model, high margins and good management. Our IV of $32 suggests the shares will perform well if they are priced in the range.

Positives, Neutrals And Negatives

• + Having custom parts manufactured quickly and economically has long been one of the “holy grails” for product companies. Proto Labs has focused on and solved this problem for machining and molding of parts in quantities from 1 to 25,000 units.

• + More manufacturers are using 3D CAD software for their design, which is expanding the “ready”

Complete Story »

By Paulo Santos:

Yesterday, I came across an interesting blog post by Aswath Damodaran regarding the valuation of Facebook. For those who don’t know who Aswath Damodaran is, he’s a Professor of Finance at the Stern School of Business at NYU who also teaches MBA classes, and he’s also the author of several reference books on valuation and corporate finance. Indeed, for anyone wanting to learn more on those subjects, it would be useful both to buy his books and to visit his website where much can be learned for free.

But back to his blog post, after explaining is assumptions and adjustments, he comes to a value per share of $29.05, which would give an IPO price of around $28. He also estimates a wide range of possible future values for Facebook, allowing even for a market cap of $120 billion. Then, he concludes:

Would I buy Facebook stock, if its equity

Complete Story »

By Robert Broens:

With the much anticipated IPO of Facebook (FB) happening soon, let’s have a look at how some recent initial public offerings have fared. I selected five names which have gone public this year and are valued at $500 million or more.

Guidewire Software (GWRE)
This system software provider went public January 25, at $13 a share. Its first day was a success and shares closed the day up 31.7% to $17.12. Shares continued their rally in recent weeks as the cloud-based industry is still very hot after a string of acquisitions in this area is recent months. The company is valued at roughly 6 times revenue and a 100 time annual profits as revenues doubled in the last two years. Shares closed Friday at $22.11, up 70% from its offering price.

US Silica holdings (SLCA)
This silica sand provider was sold to the public at $17 a share on the

Complete Story »

By IPOScoop:

A cloud swept over Wall Street last week and rained dollars on the IPO parade. Only one deal got out the door, but it had ties to cloud computing. Its stock soared for an opening-day gain of 30 percent. And guess what? There’s another IPO on this week’s calendar with ties to cloud computing.

Brightcove (BCOV) was last week’s screamer.

The company priced its IPO of 5 million shares at $11 each on Thursday evening. It opened on Friday, Feb. 17, at $14.50 and sold as high as $15.76 before closing at $14.30 – UP 30 percent from its initial offering price.

Based in Cambridge, Massachusetts, Brightcove is a provider of cloud-based solutions for publishing and distributing professional digital media.

Bazaarvoice (BV) is this week’s IPO connected with cloud computing.

The company plans to price 9.5 million shares at $8 to $10 each on Thursday evening, Feb. 23. The IPO

Complete Story »

By Renaissance Capital IPO Research:

The following IPOs are expected to price this week:

Bazaarvoice (BV), which provides an online customer review platform to brands and retailers, plans to raise $85 million by offering 9.5 million shares at a price range of $8.00 to $10.00. At the midpoint of the proposed range, Bazaarvoice would command a market value of $570 million. Bazaarvoice, which was founded in 2005, booked $94 million in sales over the last 12 months. The Austin, TX-based company plans to list on the NASDAQ under the symbol BV. Morgan Stanley (MS), Deutsche Bank Securities (DB) and Credit Suisse (CS) are the lead underwriters on the deal.

Ceres (CERE), which sells seeds used to produce renewable bioenergy feedstocks, plans to raise $83 million by offering 5 million shares at a price range of $16.00 to $17.00. At the midpoint of the proposed range, Ceres would command a market value of $414 million. Ceres,

Complete Story »

By Simit Patel:

Yelp (YELP) is getting ready for its IPO. Pricing should start on March 1, with the company issuing 7.15 million shares somewhere between $12- $14 per share. So, the company is looking to raise around $100 million at a valuation of $778 million.

There’s only one word to describe this: overvalued. What bankers and Internet entrepreneurs do not realize is that the Internet is primarily a cost-savings mechanism. Yes, it is disruptive, but it’s about pushing prices down — A LOT. This means that all the numbers are supposed to be getting smaller: revenue, costs, employees, valuation. The only exception is numbers that measure profitability, like return on employee or profit margins.

In the case of Yelp, it’s probably easiest to see how this company is so overvalued when one looks at its revenue model. Internet marketer Raymond Fong has a scathing — and, unfortunately for Yelp, accurate — analysis

Complete Story »

By Stockerblog:

Ever since Facebook (FB) announced that the company will have its initial public offering later this year, I have been inundated with requests from friends, relatives, and acquaintances asking how they can buy stock in Facebook on the IPO. These are people who have never talked to me before about investments, and many have never invested before in their life. Normally, if an investor is lucky enough to buy a stock on the initial offering, the investor is usually rewarded with a huge gain in the stock price during the first day or two.

So how does one get stock as part of the initial offering? It’s not just luck, it’s wealth. First of all, the three lead underwriters are Morgan Stanley (MS), J. P. Morgan (JPM), and Goldman Sachs (GS). Underwriters are the investment brokerage firms that raise money for companies. They are also in charge of the allocation

Complete Story »