Finally, something for upcoming IPO investors to be excited about again: the YELP IPO was announced this week and is planned for sometime in 2012. After a dismal September and not much better October, companies are starting to get in through the window left open by the Groupon IPO.
There’s really no much information yet about the YELP IPO, except that it is planned for 2012. The filing states a $100 million amount but that is just a ballpark figure that can change at any time. YELP was founded by a PayPal executive and isn’t even profitable yet but the YELP IPO is trying to get on the internet share bandwagon that is taking place with IPO investors.
Internet company IPOs are all the rage this year, but the details of the upcoming Zillow IPO, announced this week, make for a small beginning. The online real-estate company set modest goals for its upcoming IPO when compared to the likes of LinkedIn, Groupon and Facebook. The expect to sell around $51 million in stock and have applied to be listed on the NASDAQ. They make money by selling contracts to local real estate agents, clicks, and banner advertisements.
When a company files for an upcoming IPO, it has to estimate how much will be made in the IPO in order to calculate fees owed to the SEC. The Zillow IPO lays out a plan to sell about three and a half million shares. Often with an upcoming IPO filing, a company will also specify what the capital they raise by selling stock will be used for. The details of the Zillow IPO, however, did not say anything other than the money will be used for general purposes related to the corporation.
Yet another tech start-up is considering going public. The newest online trend is coupon sites that offer discounts to users, and we all know this idea from Groupon. Groupon made the social buying phenomenon famous, and the Groupon IPO helped make famous the new wave of social networking IPOs. The LivingSocial IPO is expected to be filed soon, and even though you may not have heard of this online social buying company, you will soon.
LivingSocial is the main competitor to Groupon. Members get daily discounts on things in their area, including restaurant deals, shopping, and more. They have just hired three major banks to oversee their LivingSocial IPO and could raise up to $1 billion in the sale of stock to the public. That would put the value of LivingSocial somewhere between $10 billion and $15 billion.
Tech start-ups are entering the stock exchanges of the world more and more these days, creating a tech IPO trend. Some in the industry are wondering whether these online companies are really worth their supposed valuations.
The upcoming Fusion-IO IPO may be another way to get in on the Facebook IPO, since the companies work together. Fusion-IO sells NAND flash memory to companies like Facebook. NAND flash memory is faster and cheaper than traditional hard-drive-stored memory and prevents bottlenecks in calls to data storage at data centers. The data is easier to retrieve and very attractive to large internet-based companies and services like Facebook, which needs to deliver data quickly to users of their site. Cloud-based data storage is all the rage these days, lending another trendy aspect to this stock.
In fact, Facebook accounted for over half of Fusion-IO’s business in the first quarter of 2011. This is an explosion of revenue, making a Fusion-IO IPO very attractive to investors. This quarter represents just the first quarter they made a profit, and there are several competitors out there, and the company is also cash poor, making the atmosphere for a Fusion-IO IPO tense and a bit risky. It makes for a ripe takeover situation, however, so keep eyes on that.
The company hopes to raise $160 million in its initial public offering, and the cash will be used to foster growth in the company.
Online gaming company Zynga, makers of famous Facebook games like Cityville, is right around the corner from an initial public offering, according to many sources who are familiar with the company. The upcoming Zynga IPO has everyone speculating about their worth, since as a privately owned company they do not disclose their financial records. One estimate on Zynga’s worth is around $14 billion.
Any company plans well in advance for an upcoming IPO, and Zynga is no different. They need to clean up their image, which became tarnished when their Facebook games clogged up the social networking site with -Ville alerts. The notifications, along with Zynga’s offers to Facebook users to try third-party “partner services” gave the company a spammy image. They have very clever methods for advertisers, since their games require lots of interaction from the user, often with sponsored things like visiting a paid-for Starbucks store in CityVille. The Zynga IPO may be aroudn the corner, but hopefully for the company, far enough in the future so the spammy past becomes a faint memory in the minds of investors.
The supposed Twitter IPO has been talk of the town since 2009, but the latest info from the Financial Times seems to be just a story. Last March, Twitter co-founder announced that the company has no plans for a Twitter IPO anytime soon. Biz Stone said the company is making money from sponsored tweets, so there is no need to go public right now.
He also quashed a story that ran in this week’s Financial Times, which had reported that Twitter was in talks with JPMorgan Chase & Co. The story, which Stone says is make-believe, reported that Twitter was discussing selling 10 percent of the business.
There are lots of big-time investors putting money into the company, sort of a pre-IPO situation. At this time, the company is worth around $3.7 billion, so a Twitter IPO doesn’t seem necessary to co-founder Stone, he says. But it’s hard to verify, since Twitter doesn’t disclose its financial information. But with other tech IPOs, we’ve seen private investors grab chunks of a hot private internet company as a pre-IPO strategy. So, watching big investors like the co-founder of Netscape, who nabbed tons of shares recently, can be a sign of an upcoming Twitter IPO.
RenRen, the Chinese version of Facebook, hopes to raise $573.1 million through a RenRen IPO in the US, the company announced this week. The largest social networking site in China, RenRen hopes to stand out among the other Chinese facebook clones, by listing itself on the US stock market with a RenRen IPO.
Chinese tech stocks are very much in demand lately, and one prime example would be the Chinese version of YouTube, called Youku.com. That company debuted last year on the US stock exchange and prices surged 161 percent, one of the shiniest examples of Chinese tech IPOs doing very well.
The world’s largest group of internet users is China, which partly explains why Chinese tech stocks are so hot right now. The other reason is that there is less competition than in other countries, because it’s just so difficult for new companies and foreign companies to break the political and cultural barriers to form new businesses and especially new social networking websites. All of this points to a very exciting Renren IPO.
The main competitor to Renren is Kaixin001, since Facebook and Twitter are banned in China, the world’s second-largest economy. Kaixin001 also plans an upcoming IPO, but has not completed many of the initial steps towards doing so, like choosing banks. So for now, the hottest Chinese tech stock news is the Renren IPO.
The much-awaited Facebook IPO will not take place for at least another year, as signs given by the company indicated this week. A document written by Facebook execs. for potential investors is the surest sign yet of things to come. The document says the hot tech company plans to accumulate shareholders this year to a number above 500. Once a company goes above that number, they must by law either disclose financial information or go public.
The social networking company initiated an equity offering of of as much as $1.5 billion through Goldman Sachs Group Inc. This contradicts CEO Mark Zuckerberg’s statement that he is in no rush to go public. In less than two years, the value of Facebook has gone from $10 billion to around $50 billion. There are fewer than 499 investors, including venture capital firms, private investors, and current and former employees.
The SEC rules that once a company has more than 500 investors, they must disclose certain financial information. At that point, a company may as well go public. They have until 120 days after the end of their fiscal year to go public, which for Facebook is April 2012. That is why we are currently looking at that date for the Facebook IPO.
Analysts don’t know why Facebook decided to disclose that the company intends to go over the 500 investor limit this year, thereby indirectly all but announcing the Facebook IPO. There is some concern over the secondary stock selling market going on with sales of former and current employees’ shares. This makes the valuation of the company difficult because of the small amounts of shares changing hands, not representative of the entire picture.