Archive for the ‘ipo’ Category

Facebook Flops & Will Continue To

Monday, May 21st, 2012

Facebook’s IPO was a spectacular flop. The shares struggled all day to stay above $38. The underwriters of the IPO, had to buy shares at $38 to support the stock and prevent it from going lower.

By the end of the day, many of the underwriters were eating into their IPO profit or were probably even losing money. It is simply a matter of time before they cut their losses, stop supporting the shares and hence Facebook’s share will sink. When that happens the big funds that bought at $38 for a quick profit flip will start dumping their shares. That will add to the selling pressure which will ultimately push the shares lower.

For months, anyone that asked for my opinion about Facebook IPO shares, I simply said, “I would stay away”. As I believed Facebook was overvalued and that was proved correct on Thursday. However, I did tell everyone, that I had placed an IPO allocation order at $30 or better and planned to sell it at the IPO. The shares were oversubscribed and I did not get any.

But, there were many that planned to buy no matter what the price was as they expected the shares to keep climbing. They are in for a rude awakening. The market now realizes Facebook is overvalued by any metric. The big money will not be buying Facebook shares for a long time. In fact, I believe it is going to be a short-sellers dream stock. I think the pressure will be so great Facebook shares could be $20 by September and with the lockup expiration it could easily be $10.

The slump in Facebook shares will have ramifications for the bay area economy as well.  Many people that had hoped to become Facebook millionaires will suddenly realize that they are not. They will put off buying home and other big ticket items. This will be a positive for home buyers because less Facebook dollars will be chasing homes. Soon home prices will resume their slide down.

Facebook is a great company but not necessarily a great stock.

Facebook To List On Nasdaq

Thursday, April 5th, 2012

Facebook will be listed on the Nasdaq when it goes public in May reports CNBC. It will trade under the symbol “FB”. The company plans to raise $5 billion from the IPO.

While the listing decision is a key component of the IPO process, it is immaterial to investors, and has little impact on how the company structures, and markets the IPO to investors.

It marks the end of a tense and drawn out courting process between the company and numerous executives at the NYSE and rival Nasdaq. Both exchanges launched aggressive marketing campaigns to woo the multi-billion dollar listing, and have made numerous pitches to the company in recent months.

Because both exchanges’ listing fees are relatively nominal for companies with billions in revenue like Facebook, the decision was seen by many observers as a choice of branding and image. The NYSE is widely seen as the home of the traditional “blue chip” company while the Nasdaq’s reputation is more associated with Silicon Valley.

In recent years however, the NYSE has made extensive efforts to pursue what would be considered more traditional Nasdaq companies – a strategy which has won them business with internet companies like LinkedIn (LNKD), Pandora (P) and Yelp (YELP).

Zynga CEO Dumping $225 Million Of Stock (ZNGA)

Friday, March 23rd, 2012

Mark Pincus

Zynga CEO Mark Pincus will be selling 16.5 million shares, or 15% of his stake, in the company’s secondary offering, according to its latest SEC filing.

Based on yesterday’s closing price that equals $227 million. Assuming a small discount to where it’s trading, Pincus probably pocket $225 million.

Dan Primack at Fortune picked through the filing and has this list of everyone that’s selling:

  • CEO Mark Pincus: 16.5 million shares, leaving him with around 94 million shares
  • Institutional Venture Partners: 5.8 million shares, leaving it with around 28.5 million shares
  • Union Square Ventures: 5.2 million shares, leaving it with around 25.5 million shares
  • Reid Hoffman: 687,000 shares, leaving him with nearly 3.9 million shares.
  • Own Van Natta: 505,000 shares, leaving him with around 2.18 million shares.

Source: SAI

Zynga’s Shares Skyrocketing On Facebook IPO

Thursday, February 2nd, 2012

zynga shares woosh

Zynga’s shares shot up as much as 20 percent in trading today, a day after Facebook revealed 12 percent of its revenue comes from the social gaming maker.

Facebook gets a huge chunk of its revenue from advertisements purchased by Zynga and from transaction fees on Zynga’s virtual goods. Zynga’s games also generate more pages where Facebook can place advertisements.

Zynga’s shares are trading as high as they ever have right now. Zynga is up around 14% right now and is trading at around $12 — higher than its debut of $11 when it first went public.

Source: SAI

Free Anti-Virus Maker AVG Files For $125M IPO

Tuesday, January 17th, 2012

Free anti-virus software maker AVG Technologies filed to raise up to $125 million in an IPO.

AVG, provides free anti-virus and monetizes it by serving targeted advertisements and by driving traffic to online search engines such as Google  and Yahoo. Yahoo accounted for 21.6 percent of the AVG’s total revenue in 2010, while Google contributed less than 10 percent to its revenue in the fourth quarter of the same year, according to IPO filing.

“The whole ‘freemium’ model has been effective in gaining subscribers, so their strategy seems to be less focused on growing the subscription revenue – if you look at the growth rate year over year.” William Blair & Co analyst Jonathan Ho told Reuters.

Using the ‘freemium’ model, AVG pulled in $130 million in the first nine months of 2011, AVG’s subscription revenue rose marginally to $130.1 million, while its platform-derived revenue almost doubled to $68.02 million. AVG reported a net income of $99.7 million on total revenue of $198.1 million for the nine months ended September 30. AVG had a user base of 106 million of which 15 million are paid users, which is very high for a fremium model.

“I think that (there is) strong demand for security, given the recent cyber-security headlines, and that’s giving the folks (a) chance to take advantage of the high valuations these stocks are attracting”, said Ho.

Avast Software BV, another anti-virus software maker, filed for a $200 million IPO recently and Imperva, data security raised $90 million in its IPO.