Posts Tagged ‘IPOs’
Monday, July 1st, 2013
The Bull market in the second quarter (2013) sent firms scurrying to launch initial public offerings. IPOs surged in the second quarter, up 82 percent from the first quarter and up 88 percent over the second quarter last year.
The 62 IPOs in the second quarter this year raised proceeds of $13.1 billion, up from $7.8 billion in the first quarter – an increase of 68 percent.
Pwc’s IPO Watch, a quarterly survey of IPOs listed on U.S. stock exchanges, reports that “On a year-over-year basis, excluding the Facebook IPO, which raised $16 billion, total proceeds increased by 111 percent. Through the first two quarters of 2013, the IPO market has outpaced 2012, with 96 IPOs compared to 78 for the first half of last year, an increase of 23 percent. In terms of total proceeds, IPOs in the first half of 2013 raised$20.9 billion, compared to $12 billion for the first half of 2012, excluding Facebook.”
May saw the most offerings of any month since November 2007, but by June market volatility put pressure on valuations and and a number of issuers priced below the range.
A healthy IPO market is important to the venture capital and startup community, providing an opportunity to exit with a big win. While most companies probably exit via mergers and acquisitions, a healthy IPO market can help keep valuations higher in M&A activity and give larger firms that launch successful IPOs the cash to buy other firms to grow, add new products, or co-opt competition.
Tech sector saw strong increases
The technology and healthcare sectors saw strong increases in the second quarter of 2013, combining to represent 52 percent of IPO activity during the second quarter, with IPO volume in these sectors up 146 percent from the first quarter of 2013.
IPO performance has remained strong with average first day returns for the 62 IPOs that priced in the second quarter at 13 percent. Additionally, second quarter IPOs saw strong aftermarket performance, returning an average of 21 percent since IPO date,
The publicly available IPO pipeline is led by the financial services (29 percent), technology (14 percent) and healthcare (14 percent) sectors, which represent 57 percent of the total number of companies that have registered publicly with the SEC.
The publicly available IPO pipeline includes a total of 140 companies looking to raise $30.5 billion. Due to the confidential filing provision of the JOBS Act, the true IPO pipeline is likely much larger.
“IPO activity rose substantially during the second quarter, bolstered by early gains in a strong, albeit volatile, equity market, and an increased appetite for risk among investors,” said Henri Leveque, leader of PwC’s U.S. Capital Markets and Accounting AdvisoryServices.
“We are also continuing to see a broadening of sectors represented in the IPO market, especially growth related offerings in sectors that are well-positioned to capitalize on a recovering economy. These factors, combined with the increase in IPO readiness activity that we are seeing and the increasing number of issuers filing confidentially as emerging growth companies, lead us to remain optimistic about the health of the U.S. IPO market for the remainder of 2013.”
Click here to view: Value and volume of IPOs by quarter
Click here to view: Q2 comparison: Value and volume of IPOs
Friday, February 15th, 2013
By Allan Maurer
Is it still possible to build a digital media company into a disruptive force that leads to a hugely successful IPO these days? Bob Hower, general partner at Advanced Technology Ventures, believes it is.
Hower was instrumental in Acme Packet’s 2006 IPO, one of the most successful in the communications sector this decade. Forbes named him to its Midas list the last two years. is ATV‘s East Coast lead partner for investments in information technology and is primarily focused on the internet, digital media and software sectors with an Enterprise focus.
“I don’t know that it’s harder or easier to launch a successful IPO now,” he tells the TechJournal. “But on the Enterprise side, there are all kinds of disruptive opportunities and trends going on. You need a really strong idea and a team that understands the market.”
Hower will join two-dozen other top venture capitalists and more than 50 innovative presenting companies at the upcoming Southeast Venture Conference in Charlotte, NC, March 13-14.
Going after problems businesses have takes exceptional people and ideas, Hower says, and winning in the end probably requires some first mover or other advantage in the beginning. “Every startup needs to look for that kind of thing,” he adds. “Technology advances that give them an advantage.”
Look for an advantage
Businesses, he notes, “Are looking at the cost structure of lots of things they have.” For instance, he says, “It used to be that moving your apps to the cloud was risky. Now it’s risky if you’re not thinking about it.”
Today, Hower says, startups have to move faster because “Information is moving faster than ever. You can be sure your competitors will be looking at you,” and given the chance, they’ll stomp on your new idea. So, he says, “You have to move faster and be more conscious of building a protectable business model and go-to-market strategy.”
Ash Ashutosh, CEO, actifio.
There are ways to get it done. Hower points to one of ATV’s portfolio companies, Actifio. “It’s in the digital storage space, which is hard, because people are careful with their storage. The CEO (Ash Ashutosh) is an incredibly customer-centric guy. He understands how difficult it is for people to manage their storage now. I’ve actually heard some of his customers say, ‘Now I can sleep at night.’ That’s the kind of emotional impact you need to have.”
Hower says that one of the things great entrepreneurs have is “A way of telling a story that is both credible and exciting. They emphasize the possibilities without being unrealistic.”
How do you get there?
The quality of an idea and the business narrative are related, he points out. “If you say you have a billion dollar market, you have to build some credible assumptions so people know how you are going to get there.”
Entrepreneurs can do research to show how companies that came before them achieved certain penetration rates, for instance.
What does Hower look for in an entrepreneur’s narrative when they’re seeking an investment?
Questions a VC asks
He says, “An early question I ask is ‘How many customers have you talked to? How much will they pay for this? Then you have a basis for how big the market can be.”
Beyond that, he says, “An entrepreneur has to understand not only his customers, but also the ecosystem they’re going to be in. Do they know anyone who can give them a leg up? Who can become a partner or a customer?”
He looks for entrepreneurs who “Are eager to learn and can do an accurate self-assessment of what they do and do not know.”
He also looks for optimism, “based in reality.” Running a startup is an up and down business. Some days you sign a major customer. The next day everyone you talk to says “No.”
“They have to be able to put with a lot of ambiguity and hard work. If you’re going to walk the long trail with this person (as an investor) you have to think he’s savvy enough to get there.”
Wednesday, June 27th, 2012
Following very healthy levels of IPO activity during the first five months of the year, the number of IPO pricings slowed following Facebook’s fumbled debut in mid-May, according to PwC US.
Overall, the number of U.S. IPOs in the second quarter of 2012 declined to 27, from 44 in the first quarter. The second quarter started strongly with 17 IPOs pricing in April, and ten IPOs pricing in May, but IPO activity stalled due to ongoing global macroeconomic concerns that have increased investor uncertainty and market volatility.
Consequently, no pricings have been completed in the U.S. since the Facebook IPO in mid-May.
Despite a slowdown in IPO pricings, the registration pipeline remains at high levels and there is optimism that pricing activity will return as some of these concerns are resolved, according to IPO Watch, a quarterly and annual survey of IPOs listed on U.S. stock exchanges by PwC.
Fewer IPOs, slightly larger returns in first half of 2012
Year-to-date, 71 companies have completed IPOs raising total proceeds of $26.9 billion, compared with 85 companies that completed IPOs in the first half of 2011 raising $25.8 billion.
The slowdown in pricings in June led to a 39 percent decrease in volume compared with the first quarter of 2012, and a 48 percent decrease compared to volume in the second quarter of 2011.
Including the $16 billion in proceeds from the Facebook IPO, total IPO proceeds raised in the second quarter of 2012 amounted to $21.2 billion, 66 percent higher than the comparable period in 2011 and the third highest quarterly proceeds since 2007.
“The IPO market entered the second quarter with considerable momentum and with confidence levels supported by the high registration pipeline,” said Henri Leveque, leader of PwC’s U.S. Capital Markets and Accounting Advisory Services.
“However, pricing activity proved unsustainable as volatility increased along with renewed concerns over global uncertainty and other market dynamics.
Companies ready if window-reopens
That said, as the markets are seeing increasingly compressed IPO windows of opportunity, our clients are now more than ever focused on readying themselves to be able to execute deals when, and not if, the windows re-open.”
Excluding Facebook, second quarter IPOs raised total proceeds of $5.2 billion, at an average value of $200 million per IPO, representing an increase of 53 percent over the first quarter average IPO size of $131 million.
Total proceeds, excluding Facebook, were only 10 percent less than the first quarter of 2012, illustrating the strength of the IPO markets earlier in the quarter.
Continuing on the positive IPO pricing trends of the first quarter, IPOs in the second quarter produced an un-weighted average return of 8 percent since IPO date, which again exceeded the S&P500 quarterly loss of 6 percent.
Click here to view: Value and volume of IPOs by quarter
Click here to view: Q2 comparison: Value and volume of IPOs
Unresolved macroeconomic concerns decreased investor confidence
Unresolved U.S. domestic, European and Chinese macroeconomic concerns have led to a broad decrease in U.S. investor confidence in the near term, as evidenced by a quarterly 11 percent increase in the VIX measure of market volatility.
Resolution of some of these issues may return some stability to the markets in the coming months.
Despite the slowdown in pricing activity, the IPO registration pipeline has remained at a high level. During the second quarter of 2012, 29 companies filed for IPOs.
As of June 21, 2012, the number of companies that had publicly filed for an IPO in the last twelve months was 121, seeking to raise $23.7 billion. This represents a decrease from the 157 companies in the pipeline at the end of the first quarter, partly due to lower filings and the confidentiality filings provisions of the JOBS Act.
The pipeline by value is led by the financial services and REIT sectors, followed closely by the energy, technology and consumer sectors, and which combined account for 80 percent of the total proceeds.
Click here to view: Value and volume of U.S. IPOs by industry
“The solid registration pipeline remains a positive forward-looking indicator for the IPO market in 2012 and beyond given that historically the majority of companies that file will ultimately price their IPOs,” added Leveque.
Registrations may be higher than reported
“In addition, actual registrations may be higher than reported given the impact of the JOBS Act, which allows emerging growth companies to file confidentially with the SEC with the requirement that they publicly disclose their filings within 21 days of their anticipated IPO road shows.
There is a lot of interest around this new piece of legislation and while it’s too soon to predict its ultimate impact, we expect a number of companies to explore this new avenue as a vehicle to go public.”
Financial sponsors continued their history of strong presence in U.S. IPOs, backing 70 percent of IPOs in the second quarter of 2012 and generating 90 percent of total proceeds.
This high level of sponsor involvement remains consistent with the comparable quarter in 2011 which also saw two-thirds of the quarter’s IPOs backed by financial sponsors, representing 74 percent of proceeds.
Click here to view: Value and volume of Financial Sponsor-backed U.S. IPOs
Wednesday, June 13th, 2012
Internet companies may launch their initial public offerings of stock with a splash, but that public arena has its drawbacks as both Facebook and Zynga are learning.
Zynga Inc., the maker of Facebook’s most popular games, Farmville, Words with Friends, Draw Something and others, saw it shares fall sharply yesterday on the heels of a report from analysts at Cowen and Co. saying the number of active daily users of its games fell 8 percent in May.
That’s the second consecutive monthly drop. All the Zynga games declined.
The San Francisco-based company’s stock fell 10 percent to $4.98 yesterday afternoon, down more than 50 percent from its $10 IPO price. The stock has traded as high as $15.91 (March).
I don’t know about you, but I’ve been seeing a decline in Zynga game-players on my Facebook stream for quite a while. While the games were extremely popular, many Facebook users did not like all Farmville and other game requests popping up on their newsfeed if they didn’t play.
Cowen and Co. analyst Doug Creutz said consumers are switching to mobile games, something Zynga has been experimenting with, although the Facebook games are still its major focus.
Creutz said that Zynga’s games trail more weighty role-playing and multi-player games on mobile phones.
We’re not sure we agree with that. We see people playing easy zombie shooter games, Angry Birds, and solitaire most often on mobile devices.
What do you think? Are Facebook games a dying fad? Would you be sorry if they were?
Creutz cited figures from AppData in his analysis. — Allan Maurer
Tuesday, February 28th, 2012
Statista, the numbers crunchers, has created an infographic profiling Yelp, the review site planning its initial public offering of stock in early March:
Thursday, July 21st, 2011
CHICAGO – Is there a tech boom or are we in another tech bubble? That’s the question that pops up in the face of extremely high valuations for digital media companies, particularly on the West Coast, and whenever a no-profits company such as Linkedin or Pandora launches an IPO. Sean Harper, CEO of Chicago-based FeeFighters.com, a firm that is like a LendingTree for small businesses looking for services such as credit card processing, says he doesn’t think were in another tech bubble.
“The biggest valuations are similar to those in the bubble era,” he tells the TechJournal, but, he adds, “The companies now have way, way more traction. Companies such as Zynga and Groupon have lots of users and revenues. That’s our perspective,” he says, following the data FeeFighters collected to make the infographic below. “Others could look at the same data and come to the opposite conclusion,” he says.
FeeFighters, a seven employee firm founded in 2009, has raised $1.5 million in backing. It’s provides a shopping platform to help small businesses get better deals on credit card processing, insurance and other financial services. What do you think? Are we in a tech boom or headed for a tech bust? Here’s the inforgraphic:
Tuesday, July 5th, 2011
Go Daddy Group Inc., parent of domain registrar GoDaddy.com, has sold to private equity firms for $2.25 billion, the company said. The company sold to KKR, Silver Lake and Technology Crossover Ventures.
GoDaddy is looking to exceed $1.1 billion in revenue this year. The company is known for its excellent company service. If you ever bought a domain name from GoDaddy, you likely got a call not long after from one of its service people. The company, based in Scottsdale, AZ, was founded by CEO Bob Parsons in 1997.
Some folks in the tech community have expressed concerns that the private equity buyers of the company will milk it for all its worth without regard to its tradition of selling domain names inexpensively with great service. We’ll see.
Zynga, Farmville-maker files for $1 billion IPO
San Francisco-based Zynga, the game maker that created Farmville and Mafia Wars, two of the most popular Facebook games, has filed with the U.S. Securities and Exchange Commission for an initial public offering of stock to raise at least $1 billion.
For a detailed infographic on Zynga’s path from founding to IPO see: Zynga infographic at Namesake.com.
Zynga, founded four years ago, has users in 166 countries. About 230 million people play its games every month. The company has revenue of $597 million in 2010, up from $121 million in 2009. The profitable company earned $90.6 million in 2010.
It is the latest of the much ballyhooed Internet companies to seek public status following LinkedIn (Linkd) Corp. Analysts expect even greater interest in Zynga’s IPO and the amount of money it decides to raise may change as the level of that interest is better evaluated.
The company was founded by CEO Mark Pincus and has about 2,300 employees. The company’s shares recently sold for $15 each on secondary markets, which would value the firm at $12.6 billion.
The filing with the SEC reveals the company is investing in its own data centers to supplement its use of the Amazon cloud service, which allowed the company to grow fast without building infrastructure. Most Facebook game companies rely on Amazon’s cloud. VentureBeat says Zynga’s ability to design apps that take advantage of Amazon’s cloud is one reason for its success.
Despite the inevitable suggestions that the moonbeam valuations of Internet companies may signal another Internet bubble, many analysts point out that the difference is in the fact the today the Internet is more fully integrated into our public, personal and professional lives. These companies have substantial revenues, enormous numbers of users, and some, such as Zynga are even profitable.
Some analysts note, though, that their market values may still be quite overvalued.
BLiNQ names John Tawadros president, COO
BLiNQ Media, a global technology innovator in Facebook advertising and the only pure-play media and technology company worldwide with official access to the Facebook Ads API, has hired former COO for top search-marketing firm iProspect John Tawadros as president and COO.
Prior to joining BLiNQ Media, Tawadros was the COO of iProspect. Over the course of ten years he helped build the company from a basement startup to the #1 search marketing firm in the world, acquired for $50MM in 2004.
While at iProspect, he built and ran a world-class client services team with a 90%+ client retention rate, a companywide training program and scalable business processes to drive efficiencies, communications, ROI and overall performance.
The client-facing, algorithmic and paid search, technology, training and innovation teams all reported to Tawadros. He also played a significant role in the integration of iProspect with Aegis and in the acquisition and integration of a Texas-based retail industry search firm.
“Social media is the new search,” said Tawadros. “Facebook, the biggest player in digital media, is now the home of innovation, and BLiNQ Media helps advertisers make the most of it. It’s an honor to join this creative, intelligent and hard-working team.”
Tuesday, June 28th, 2011
Game-maker Zynga is expected to file for an initial public offering of stock this week, possibly Wednesday, according to CNBC.
Zynga, already profitable, unlike some of the other digital media companies that have launched IPOs, such as Pandora, recently rasied $250 million at a $7 to $10 billion valuation, according to reports.
The company is expected to have a valuation of between 15 billion and 20 billion and will raise between $1.5 and $2 billion in its IPO, according to Kelly.
Zynga’s investors include Google, DST, Reid Hoffman, Tiger Global, Kevin Rose, Kleiner Perkins, Union Square Ventures, Andreessen Horowitz, Peter Thiel, Foundry Group and IVP.
Among other games, Zynga makes Farmville and Mafia Wars, two of the most popular Facebook games.
Friday, March 18th, 2011
The mobile gaming phenomenon, Angry Birds, may catapult its maker, Rovio, to public company status in as little as a year, according to an interview board chair Kaj Hed gave Finnish business magazine Talouselama.
Hed told the magazine the game-maker wants to be as big as Facebook or Google.
The company recently landed $42 million in funding from Accel Partners, Atomico Ventures and Felicis Ventures for approximately 15 percent of the company on a valuation pegged at about $281 million, according to reports.
Angry Birds recently flew into the PC world and numerous other platforms.
We found the game addicting, as many other users have. It passes the time on a train ride or car commute, while waiting in lines, or just as an increasingly difficult challenge. We wrote about our own adventures with the game here: Kill the Pigs, Kill the Pigs, Angry Birds.
We wonder what else Rovio has in its game plans. It’s probably a mistake to rely too much on one game, popular or not. Pac Man was a phenominal success too, but when was the last time you saw anyone play that?
Rovio’s finances were ok, but not stupendously impressive if reports are correct. The company made $7 million in revenue for a profit of $4.2 million from July to December.
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Thursday, December 23rd, 2010
ROCKVILLE, MD - Supernus Pharmaceuticals, which is developing central nervous system treatments, has filed for a $100 million initial public offering of stock.
The company plans to trade on Nasdaq under the symbol “SUPN.”
The venture-backed company has raised funding from New Enterprise Associates, OrbiMed Associates, and Abingworth Management. NEA holds 44.8 percent pre-IPO stake, the largest. The other two investors hold 17.9 percent each.
Formerly known as Shire Laboratories, the company develops drugs for the treatment of epilepsy, Parkinson’s disease, conduct disorders, depression, anxiety, and attention-deficit/hyperactivity disorders.
Monday, November 22nd, 2010
DURHAM, NC – Tranzyme Inc., a Durham-based drug developer, has filed for a $75 million initial public offering of stock.
The company, which has raised about $53 million in venture backing, develops drugs for gastrointestinal and metabolic disease. It plans to use funds from the IPO to further development of its lead product, Ulimorelin, an intravenous hormone intended to treat gastrointestinal motility disorders, which affect two-fifths of the U.S. population.
Ulimorelin is headed for late stage trials, while another drug for the same indication is in mid-stage development by Tranzyme.
Normally, food moves through the digestive track via rhythmic contractions called peristalsis. In people with digestive motility disorders, the contractions are abnormal. That can result in a host of problems caused by food not moving through the system properly, including gas, heartburn, vomiting, constipation, and diarrhea, among others.
Tranzyme plans to trade on Nasdaq under the ticker symbol “TZYM.”
Investors include H.I.G. Ventures, Thomas McNerney & Partners, and Quaker Bioventures, each with a 21.4 percent stake, along with Desjardins Venture Capital and BDC Venture Capital, both with just over 12 percent.
With what appears to be a receptive window for IPOs open, we expect to see more registrations popping up.
Thursday, November 18th, 2010
MCLEAN, VA – Booz Allen Hamilton, the management and technology consultant company, raised $228 million in its initial public offering of stock Wednesday and saw its stock, initially priced at $17, saw the share price rise 13.2 percent to close at $19.25 on the New York Stock Exchange.
Carlyle Group, majority owner of the company, will retain a 71 percent stake in Booz Allen.
The company plans to use funds to pay off outstanding debt.
Booz Allen makes most of its money from contracts with the federal government.
The success of the IPO is a good sign for the markets, which will see General Motors start trading today in one of the largest IPOs ever.
Thursday, October 28th, 2010
ATLANTA – ExamWorks Group Inc. priced its shares at the low end of its $16-$18 range and raised $164.8 million in its initial public offering of stock on the New York Stock Exchange, where it will trade under the symbol “EXAM.”
Earlier this year, the company closed on a $32 million equity raise.
The company’s portfolio of services include medical assessment programs designed to meet the specific needs of first-party insurers, attorneys, municipalities and third-party administrators pertaining to automobile, short-term and long-term disability, group health, liability, no-fault and workers’ compensation claims.
The current service offerings include: independent medical examinations, peer reviews, file and radiology reviews, physician and hospital bill reviews, medical bill repricing and settlement negotiation services and related special services.
In July 2009, ExamWorks bought IME Software Solutions, the makers of IME Centric. IME Centric is deployed in nearly 80 Independent Medical Examination and Review companies throughout the United States and Canada.
ExamWorks has acquired a substantial roster of companies since 2008.
The company conducts over 122,000 independent medical examinations annually. The corporate headquarters are located in Atlanta, Georgia and New York, New York with regional family company offices throughout the country.