IPO’s

Ebay Announces Skype IPO For 2010

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 0

skype ipo The IPO market really is heating up!  Just one after selling back StumbleUpon to its founders, Ebay just announced that early next year it will spin off Skype if market conditions have improved in order to recoup some of the $2.6 billion it spent for Skype nearly 4 years ago.  Many had questioned the move back then and with these plans Ebay is officially recognizing its mistake and will look to focus on its core businesses Ebay and Paypal. 

Skype founders Niklas Zennstrom and Janus Friis have been reportedly gathering private equity capital to initiate a buy back of Skype for about $1 billion so perhaps this announcement is negotiating leverage.  Either way it’s a good move for Ebay which was trading up a bit in after hours trading. 

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Changyou.com (CYOU) China IPO A Return to Glory Days

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 0

A couple weeks ago I highlighted the NIVS Intellimedia (NIV) IPO which brought back memories of the high ,flyin China IPO days of a couple years ago.  Considering the IPO market has been absolutely dead over the past year it was good to see a fast growing company come to market.  I still think that NIVS Intellimedia will take off any day now, particularly with the amount of momentum the China plays have been seeing so pay attention to it.

changyou.com cyou ipo While I was on vacation another China IPO hit the market – ChangYou.com (CYOU) which was a spinoff from Sohu (SOHU).  The developer of multi user role playing video games priced at $14 – $16/share on April 2nd and has been off to the races ever since, nearly doubling.  No way I’d be chasing this especially in this overbought market, but like NIVS Intellimedia it’s another one to put on your IPO radar.

The company really took off last year posting record revenues of about $200 million (a big pop after reporting revenues of $42 million in 2007), primarily from its martial arts game Tian Long Ba Bu which launched in May of 2007 and is the 3rd most popular online game in China.  The game is free but users must purchase a pre-paid game card used to upgrade characters by buying new weapons and other virtual goods.

Despite the massive growth of ChangYou.com, this is one IPO that carries considerable risk with 94% of its revenues coming from one game.  That being said, the growth is massive and any pull backs from lofty levels may offer a decent trading opportunity. 

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China IPO NIVS IntelliMedia (NIV)

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 1

Remember the high flying IPO days of a couple years ago when a fast growing, Chinese company would begin trading on US exchanges about every week?  Those days are likely over for the most part, but Chinese company NIVS Intellimedia (NIV) is a reminder of the glory days.  This is a company that began trading just about 2 weeks ago on March 12 and could be another high flyer.  NIVS Intellimedia (NIV) is a manufacturer of DVD players, set top boxes and other audio/video equipment and is experiencing rapid growth.  EPS numbers for the past few years – .01 (2003), .03 (2004), .05 (2005), .13 (2006), .21 (2007).  No word yet on how they did in the 4th quarter of 2008, but they had already produced an EPS of .27 through 3 quarters so most likely would be close to doubling profits in 2008 over 2007.  I’ll certainly be keeping an eye on what is currently the most promising IPO of 2009.

Here are further details on NIV from Seeking Alpha:
http://seekingalpha.com/article/127136-nivs-intellimedia-group-recent-ipo-solid-revenue-growth

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FriendFinder Networks (FFN) Files IPO In Desperation

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friendfinder networks Within the carnage of the 2008 IPO market, we have an announcement of a new IPO filing here at the end of the year that will surely generate some interest (maybe curiosity is a better word) as we head into 2009. FriendFinder Networks, formerly Penthouse Media Group (before Penthouse bought the FriendFinder sites from Various for $500 million and changed its name) have filed a registration statement with the SEC for a $460 million IPO which will by offered by Renaissance Capital.

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Another Solar IPO: GT Solar (SOLR) To Debut Thursday

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gt solar solr ipoThis week,  the IPO market will get a bit of boost in what has been a lackluster year for exciting  companies coming to market.  This week, GT Solar, a New Hampshire maker of solar cell manufacturing equipment,  is expected to begin trading under the ticker symbol SOLR.  Sure, there are far too many solar companies right now and this sector is overdue for a shakeout of buyouts, blowups and mergers but in this environment  it’s good to see any company generating a profit come to market and GT Solar is certainly doing that with revenues and profits exploding over the past year, allowing the company to turn its first profit.  I like the fact that they are a "pick and shovel" play in the industry providing a complete turnkey solution with equipment and expertise to allow solar manufacturers to get up and running quickly.

This is a company growing rapidly with a big backlog of $1.3 billion, but with 60% of its business coming from one customer it’s not a company that’s well diversified so carries considerable risk.  Also, none of the proceeds from the IPO will go to the company, but rather the investors. 

I suggest reading the two analysis articles below for more in depth details on the company.  As I do with all IPO’s I’ll let it trade for at least two weeks allowing it time to carve out a bullish technical formation. 

A few links of interest:

Presentation by GT Solar executives

Analysis from Small Cap Investor (requires free registration to see entire article)

Analysis from Money Curry (not a fan of all the ads but the analysis is detailed)

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Energy Recovery (ERII) IPO Begins Trading

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It has been EXTREMELY quiet on the IPO front this year, with the exception of a few standouts such as Visa (V) and Intrepid Potash (IPI).. I’ll throw Colfax (CFX) in there as well considering it’s held up remarkably well during the market meltdown over the past few weeks and is poised to break out of a base.

energy_recoveryerii_IPO Another IPO worth keeping an eye on in the coming weeks that began trading today is Energy Recovery (ERII), a California based company that manufactures devices for better efficiency during the water desalination process.  The company says its PX devices (its core product is the PX Pressure Exchanger) reduce the energy required for desalination by 60%.  It’s a small, but growing company in what will be an industry that will attract quite a bit of attention in the coming years.. the water treatment industry.  Clean, drinking water is one vital resource that is nearly constant in supply (around 3% of total water) and soaring in demand (doubling every 20 years).  Think oil is a problem?  Water will be much more so and the companies leading the initiative to increase supplies of clean drinking water will thrive. 

The stock priced at 8.50 raising 68 million for the company, but opened trading well above that at 11, before ultimately succumbing to overall market pressure, finishing the day more than 10% off the open at 9.83.  As I do with all IPO’s and new ETF’s, I’ll let it trade for at least two weeks to see if it can carve out a bullish technical formation, then get in on any breakout.

Fortunately I don’t need to dive into the detailed analysis here, because a few have already done it so I’ll direct you there.

Jeffrey McLarty of Blue Moat "A Buy At the Right Price"
http://blog.bluemoat.com/?p=221

Zachary Scheidt at Zach Stocks "Good IPO in a Sea of Losses"
http://zachstocks.com/2008/07/energy-recovery-inc-erii-good-ipo-in-a-sea-of-losses/

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Colfax (CFX) & Real Goods Solar (RSOL) IPOs Begin Trading

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 1

The number of decent IPO’s coming to market is picking up to a slow trickle and today two IPO’s worth watching began trading – Colfax (CFX), a global supplier of pumps for the water and oil industry & Real Goods Solar (RSOL), one of the largest installers of solar energy systems. 

colfax_cfx Colfax (CFX) began its life as a public company with a bang opening up at 24/share but finishing the day 3 bucks lower at 21/share.  Still well ahead of the 18/share initial price which raised the company 338 million.

According to Google Finance, the company is a global supplier of a range of fluid handling products, including pumps, fluid handling systems and specialty valves. The Company is a manufacturer of rotary positive displacement pumps, which include screw pumps, gear pumps and progressive cavity pumps. Its products serve a variety of applications in five markets: commercial marine, oil and gas, power generation, global navy and general industrial. The Company’s are marketed principally under the Allweiler, Fairmount, Houttuin, Imo, LSC, Portland Valve, Tushaco, Warren and Zenith brand names. Colfax Corporation’s customer base includes commercial, industrial, marine and governmental customers, such as Alfa Laval, Cummins, General Dynamics, Hyundai Heavy Industries, Siemens, Solar Turbines, Thyssenkrupp, the United States Navy and various sovereign navies around the world. In January 2007, the Company acquired Lubrication Systems Company. In November 2007, it acquired Fairmount Automation, Inc.

The financials appear to be strong and the company said that 2007 net income rose to $64.9 million on revenue of $506 million from net income of $94,000 on revenue of $394 million in 2006, but it’s difficult to say how much of that is through acquisitions rather than organic growth.  I have not poured over the numbers in Colfax but will let it trade it for a couple weeks as I do with all IPO’s then take a closer look at the financials and technicals.

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real_goods_rsol It was not such a good day for Real Goods Solar (RSOL) as the stock finished considerably lower than the $10 that it initially priced at with much of the proceeds going to parent company Gaiam.  As I mentioned in a previous post, Real Goods Solar is a subsidiary of Gaiam (GAIA), the environmentally friendly lifestyle products retailer.

From the website of Real Goods:

Real Goods has led the Sustainable Living market through sales, education and installation of solar and other renewable energy products. As the original and most experienced solar installer, we are ideally positioned to install solar on your home or business. In fact, there has never been a better time to go solar! Rebates and tax incentives like those in Colorado and California have made solar power systems more affordable than ever.

The decision to go solar is the first step. Now you must choose an experienced, reliable partner to walk you through the process—from design to installation to rebate paperwork—we’re with you every step of the way.

  • We sold the very first solar panel in the US in 1978 and expect to be here for many decades to come.
  • Real Goods has installed 2500 homes (and counting) with unparalleled and caring customer service.
  • Instant rebate –no paperwork and waiting for reimbursement.
  • 20+ years construction experience.

The company says it’s installed more residential energy systems in the US than any other company, including competitor Akeena Solar (AKNS) which reported awful results this morning.  Akeena said losses soared to 4.6 million, despite revenues nearly doubling.  Real Goods has been turning some profits and appears to be the better play in the residential solar installation field.

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Visa (V) Vs. Mastercard (MA): Earnings Results

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 3

Now that both credit card behemoths have issued earnings results (Visa for the first time as a public company) I thought it would be interesting to compare the results from each side by side.  As you’ll see, both companies beat analyst estimates and reported great quarters which were fueled by international growth and big increases in global debit card use (Visa reported that International debit card use soared 43.5% last quarter!)

From a technical perspective Mastercard (MA) appears to be well on its way to the next level of resistance around 300.  Visa (V), after breaking out from a bullish triangle a few weeks ago is a bit extended over the short term but based on today’s big reversal off the lows, may have a bit more room to run as well.  Frankly, I’m a little bit surprised at how much Visa has moved following the IPO, considering the amount of hype already built into the stock.  I am looking to take profits in Visa soon and will look take profits in Mastercard around 300.

 

Q1 2008 Numbers

Visa (V)

Mastercard (MA)

Size (market cap) 77 billion 35 billion
% Market Share 60% 32%
Total Revenues 1.45 B (22% over year ago) 1.18 B (29% over year ago)
Net Profit (excluding one time gains) .52/share (49% over year ago) 2.59/share (65% over year ago)
Analyst Est. EPS .45/share 2.00/share
US Growth (in gross dollar volume) 10% 9%
Intl Growth 27% 30%
Payment Volume 19% 16%
Cards in Circulation (% Increase) 16% 12%
Transactions Processed (% inc.) 16% 15%
CEO Quotes "Despite a challenging economic environment, Visa recorded strong growth in payments volume and transactions globally and across our diverse suite of products — a trend which is continuing into the fiscal third quarter" MasterCard continues to see U.S. growth "despite continued economic uncertainty," and  international regions are "driving significant growth."
Analyst Comments – "unique brand value and processing scale that differentiate the company from its payment peers."
– the secular story and the longer-term growth and earnings potential remain extremely compelling
"We are encouraged by these results given investors’ concerns regarding a major U.S. economic slowdown and, by extension, slower growth elsewhere," wrote KeyBanc analyst Anurag Rana in a note.
Technicals After breaking out of a bullish triangle formation a few weeks ago, the stock is now extended and probably has limited upside over the next several months Big, bullish gap up today could propel stock to major resistance around 300.
Notes International growth and increased debit-card use at home were the two main drivers for the San Francisco-based company’s results
– Consumers will use credit and debit cards for 55 percent of all U.S. transactions by 2011, rising from 40 percent in 2005, according to the Nilson Report
– Currency fluctuations contributed to 5% of revenue growth
– A price increase in cross border acquiring fees contributed 6% to revenue growth

 

Disclaimer: I own positions in both Visa (V) and Mastercard (MA)

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Hot IPO’s: Intrepid Potash (IPI) & American Water Works (AWK)

Posted By Tate Dwinnell |  Subscribe in a reader | Comment 0

Last year was a big year for IPO’s, but it’s been a slow start this year with the market languishing.  Outside of the Visa (V) IPO, there has been little for traders to get excited about.  That is until today when the largest producer of potash, Intrepid Potash (IPI) began trading and soaring more than 50%.

42208_intrepidpotash According to MSN, the mining company produces two potassium-containing minerals, potash and langbeinite, that are essential nutrients in plant and crop fertilizer. Intrepid culls these minerals from five mines in New Mexico and Utah, where it also operates production facilities. Potash accounts for 90% of its sales. The company sells primarily within the US to the agricultural, industrial, and feed markets; PotashCorp sells Intrepid’s potash internationally. It supplies nearly 10% of US potash consumption annually and is the country’s largest producer of the stuff. (The US imports the great majority of the potash it uses.)

As far as the fundamentals, they look solid but nothing extraordinary.  My take on this is that this IPO comes at a time when the agriculture stocks appear to be near a major top with perhaps one more last climax run left in them.  Does this IPO signal the top?  Just maybe.  Like all IPO’s I’ll let it trade for at least two weeks and only enter on a breakout from a bullish pattern. 

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Today, the largest potash producer in the US began trading.  Tomorrow, one of the largest US water utility holding company will begin trading – American Water Works (AWK), a subsidiary of German utility giant RWE.

42208_americanwaterworks According to MSN, it’s one of the largest water utility holding companies in the US. Through its regulated utilities and its contract services division, American Water Works serves more 16.2 million consumers in 32 US states, Canada, and Puerto Rico. The company also provides wastewater treatment in some of its service areas. Nonregulated subsidiary American Water Works Service provides contract management services for water and wastewater systems.

This company has one thing going for it.. ok two things.  It’s big and it’s a water play.  I’ve been big on the water play for a couple years now and still think you’ll see meteoric rises in water stocks at some point, but this utility lacks greats fundamentals.

Here are some previous articles I wrote relating to water:

Thirsty For Profits? Go Get Some Water – Powershares Water Resources ETF (PHO) (2006)
Legendary Oil Investor T. Boone Pickens Thirsty for Water Rights (Jan 2007)

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