Tag Archives: IPO

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Twitter IPO: Breaking Down the New S-1 Filing

Bloomberg’s Jon Erlichman annd Cory Johnson take a look at Twitter’s S-1 IPO filing. They speak with Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Who’s Going To Be A Twitter Billionaire?

Bloomberg’s Doug MacMillan reports on Twitter backers that stand to gain from an IPO. He speaks with Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Is Chrysler IPO a Push to Ensure Fiat Merger?

Jeffrey Rosenberg, chief investment strategist for fixed income at BlackRock discusses the IPO market as Chrysler announces its intentions to go public amid a stalled merger with Fiat. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Wall Street A-Twitter Over IPO

Investing: Should You Still Invest In Tech IPO’s? – Infographic

The economical landscape is changing. It’s always been changing. A couple of decades ago, you could invest almost mindlessly in any technology stock and know you’d evenutally break even. The growth potential was almost a risk to forgo. And because of the unbelievable success of firms like Apple and Microsoft, Continue reading

Sheryl Sandberg ‘Disappointed’ and ‘Surprised’ By Facebook IPO Aftermath

Sheryl Sandberg ‘Disappointed’ and ‘Surprised’ By Facebook IPO Aftermath.

Sheryl Sandberg, Facebook‘s chief operating officer, opened up about the company’s difficult IPO for the first time Monday during an interview with CNBC‘s Julie Boorstin.

 

“We’re obviously disappointed and really surprised by what happened in the IPO,” Sandberg told CNBC in the interview. She also admitted that Facebook’s employees have been “disappointed” to see the company’s stock price plummet.

 

Sandberg wouldn’t comment on what exactly went wrong with the IPO or who was to blame — there are still pending lawsuits over the IPO — but she did note that Facebook has been more focused since the IPO on introducing new products and looking for ways to monetize.

 

“I think what we’ve done since the IPO is continue to really focus on building that business,” Sandberg told CNBC. “And I think we’re executing better and better.”

 

In the months since the IPO, Facebook has rolled out several promising new features intended to boost revenue and appease advertisers and investors alike. In June, the company announced a new advertising exchange to allow businesses to bid on ad spots based on user’s browser histories. Shortly afterwards, Facebook debuted its first mobile advertising unit and recently began testing mobile ads in third party applications. Just last week, Facebook re-introduced a gift giving platform on the site that could turn into a major source of revenue for the company.

 

During the interview with CNBC, Sandberg revealed the company’s plans to introduce yet another revenue-generating feature: premium services for businesses. While Sandberg didn’t offer much in the way of details, CNBC suggests this could mean better analytics and customer service.

 

Sandberg’s comments on the IPO echo those of Facebook’s cofounder and CEO Mark Zuckerberg, who said the stock’s performance has “obviously been disappointing,” during his first post-IPO interview with TechCrunch in early September.

 

Facebook’s stock opened above $22 on Monday for the first time in more than a week, but the stock is still well below its IPO price of $38 a share.

 

Image courtesy of Flickr, World Economic Forum
Source: Mashable.com

Red Devil in details of Manchester United IPO – IPO Report

Red Devil in details of Manchester United IPO – IPO Report – MarketWatch.

SAN FRANCISCO (MarketWatch) — For the upcoming Manchester United Ltd. initial public offering, the “Red Devil” is in the details, since what the fabled soccer club has already revealed to prospective investors is strong on brand promises — but little else.

On Friday, Manchester United (PRE-IPO:MANU) is set to begin trading on the NYSE Euronext’s (NYSE:NYX) New York Stock Exchange following an offering of 16.7 million Class A shares with a current pricing range of between $16 and $20 a share. Read preview of this week’s IPOs.

Half those shares will be issued by the company and the other half will be sold by Red Football LLC, the entity representing Tampa Bay Buccaneers owner Malcolm Glazer and his family.

In 2005, Glazer took over Manchester United after spending two years buying out other owners in a series of debt-backed deals. At the time, the British soccer club — one of the world’s best-recognized sporting franchises, known for its 19 championship wins, celebrity players such as David Beckham, and its “Red Devil” mascot — was valued around $1.5 billion.

It’s that retail recognition, rather than enthusiasm for the stock’s promise as an investment, that may provide support for the IPO. And that may not be enough. Much of the buildup to the IPO is making the stock sound more like a piece of sports memorabilia than a sound investment.

Issues of debt and the lopsided dual-class structure are turning many institutional investors off, said Scott Sweet, senior managing partner and principal researcher at IPO Boutique. At best, it’s going to be “a challenging offering,” he said.

“It’s only appeal is going to be to retail investors,” said Sweet. “It’s almost like having a piece of the Green Bay Packers even though those shares don’t trade.”

Assuming an $18 IPO price, the company plans to use proceeds of $141 million from 8.3 million issued shares to help pay down debt, which is currently listed as £437 million, or about $684 million, according to the prospectus. That’s down from a peak of £773 million, or $1.21 billion, at the end of fiscal 2010. As for the cash from the other 8.3 million shares, that’s going into the pockets of the sellers: the Glazer family.

After the smoke clears, new shareholders will hold 42% of Manchester United Class A shares, which, under the dual-class share structure, gives them only 1.3% of total voting power. The Glazers will retain 58% of the Class A shares, and most importantly, all of the Class B shares, which have ten times the voting power of the Class A shares, leaving them with 98.7% of the voting power.

Such lopsided dual-class share structures have been hallmarks of recent IPOs that have left a bad taste in investors mouths, namely, ones like Facebook Inc. (NASDAQ:FB) , Groupon Inc. (NASDAQ:GRPN) , and Zynga Inc. (NASDAQ:ZNGA)

Adding to the red flags, the company in charge of the 134-year-old soccer team will also take advantage of reduced financial reporting requirements for up to five years as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, and has no current plans to pay a dividend.

“I feel favors are going to be called in to get [the IPO] done,” Sweet said. “On weak IPOs, many players need to dance every dance to get in on the hot IPOs.”

Given the brand’s global appeal, however, it may very well be the retail investor that drives demand on this IPO.

“Institutional demand will not be great but retail demand may keep this alive,” said James Krapfel, IPO analyst at Morningstar. “Given the float is not that big, it won’t take that much retail demand to make it quote-unquote successful. Institutional investors are leery of the company.”

Morningstar, which models the value of the stock at about $10, said in a note it’s concerned about Manchester United’s ability to earn excess returns on capital consistently given the unpredictable nature of sports. Also, capital costs to get and retain star players are just going to rise.

One way of keeping up with those costs may lie in the bankability of Manchester United’s brand. The team made £103.4 million, or about $162 million, from sponsorship and merchandizing deals in fiscal 2011, compared with total revenue of £331.4 million, or about $518 million.

Last week, Manchester United cut a seven-year, $559 million deal with General Motors Co. (NYSE:GM) to advertise the Chevrolet brand on their jerseys beginning in 2014, a deal that reportedly led to the ouster of Joel Ewanick, the GM marketing chief who engineered the deal.

In comparison, the current shirt sponsor, Aon Corp. (NYSE:AON) , who is also among the IPO’s underwriters through its Aon Benfield Securities unit, paid $125 million for a four-year deal. Lead underwriters on the deal are Jefferies Group Inc. (NYSE:JEF) , Credit Suisse (NYSE:CS) , and J.P. Morgan Chase & Co. (NYSE:JPM)

That increasing brand value may come into play when Manchester United’s 13-year merchandise contract with Nike Inc. (NYSE:NKE) expires in three years, either through a renegotiation or through a higher bid from another apparel company, Krapfel said. The team made £31.3 million from Nike in guaranteed amounts and split profits for the 2010/2011 season.

Source: Marketwatch

Why Wall Street MUST Engage In Serious Social Media Efforts

Latest since the financial crisis, Wall Street organizations have a difficult stand with the public. The image is bad and this is probably an understatement. Over the past few years hardly any organization or leader of a Wall Street organization has made an effort to improve the public opinion. The opposite is the case. Just recently JP Morgan Chase, Morgan Stanley and Goldman Sachs provided the public again with bad ammunition against their brands and public images. The constant inactivity in brand maintenance is now starting to hurt the bottom lines.  It can now be watched how some minor efforts have started taking place.

In the past those brands believed that their brands have nothing to do with the public, since only a few are catering their services to people on the street. Morgan Stanley and Goldman Sachs don’t cater to the average Joe on the street and if, only in an indirect way. This assumption is as wrong as it gets. It took a while until this came to the surface, but since Facebook’s almost scandalous IPO even the last on Wall Street should have gotten the message. For those that haven’t understood why they have direct contact with the public and why this can hurt future business, here is the short and easy explanation: Continue reading

Facebook, Zuckerberg, Morgan Stanley Sued Over IPO

Facebook’s unfortunate IPO – Wall Street in the middle of it, again.

Three days into trading as a public company it is time to take a look at one of the most anticipated IPO’s the world has ever seen. To summarize it right at the beginning, it was and is a huge mess and it is not very short of an embarrassment for those involved.

Let’s not waste to much time on the technical issues, even though it is fair to say that NASDAQ didn’t convince the world with their performance. However, that doesn’t increase the value of Facebook and its current capabilities. While over the past weeks and before the IPO there was a huge hype about Facebook, besides of the fact that they went public there is really not much to be enthusiastic about. That counts for the short and mid term. What happens in the long term, 2 to 5 years, nobody knows. As it turned out, this wasn’t unknown by the underwriters of the IPO, Morgan Stanley, JP Morgan Chase and Goldman, who had information about downward revenue correction for the rest of the year. That the information wasn’t published during the entire hype has the easy reason that they all wanted to make their money.  This seems not to be a problem with the current regulations, but this is an entire different problem.

Sure the circulating number of 900 million users is enormous, but honestly, I don’t buy into that. In my opinion that is in no way the number of single active users. I just don’t believe it.  I believe that this number includes double and triple profiles and a huge number of inactive users. I would even go so far and claim that at least two thirds of that huge user number is absolutely useless for Facebook’s business model. In other words, the majority of users is not at all interested in advertising on the platform or has no technical ability to see the ads. Continue reading

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Facebook IPO Compared To Other Tech Giants – Infographic

Perhaps you’ve heard of a scrappy startup called Facebook. It’s some sort of website that lets you annoy your friends and stalk your high school crush.

If all goes according to plan, the company will hit the public market Friday with an estimated valuation just north of $100 billion. For an eight-year-old network that brought in less than $4 billion last year, that might seem a little…what’s the word?…crazy…Read More

Sources: Company filings, NASDAQ.com, macobserver.com, statista

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The Facebook IPO Timeline – Infographic

If the Facebook IPO were a real person, we certainly wouldn’t blame it for posting braggy status updates. This infographic, created by our friends at mbaonline.com, imagines the road leading up to the decade’s most-anticipated initial public offering, as if it were documented on its own Facebook Timeline. As a Facebook user, give yourself a pat on the back for helping the company make it this far. You are one of 900 million, and you spend an average of 20 minutes per day surfing the network. That means Facebook’s usership logs 16,000 years of combined time on the platform per day…Read More

Source: Creative Commons, Mashable.com

Many Facebook Employees Will Be Millionaires – Will They Stay?

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Facebook Mobile. Growing Fast – Infographic

Facebook hit 488 million mobile users which is absolutely amazing! There is no other app in the world that would have that many mobile users. Facebook has 50% of all its users on mobile phones and the reach is even bigger in countries such as South Africa, Nigeria and Japan with 70 – 80% (!!!) This number makes them really intense Facebook mobile countries…Read More

Source: SocialBakers.com

It is amazing to see how far mobile has progressed. For Facebook, this is not only good news. Facebook’s business model depends on advertising and advertising on mobile is only in its beginner stages. So many mobile users shrink the numbers of people on a PC where advertising is displayed.

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Can Facebook Beat Google As The Biggest Advertising Platform – Infographic

General Motors is pulling its entire $10 million advertising budget from Facebook, mere days before the IPO. According to a Wall Street Journal report, they called ads on the social network “ineffective,” but called Facebook pages “effective and important.” Looking at the data on the infographic below, courtesy of AdWords provider WordStream, it’s easy to see why. Advertising rates on Facebook rose 40% in 2012, but click through rates fell by 8%…Read More

Source: Mashable.com, WordStream.com