initial public offerings (IPOs) trading on American exchanges

Friday, January 28, 2011

LinkedIn files for IPO, reveals sales of $161 million

(CNNMoney) -- Business social network LinkedIn filed for an initial public offering late Thursday, offering the first public glimpse into the finances of the seven-year-old Web company.

LinkedIn turned a profit of $10.1 million on revenue of $161 million in the first nine months of 2010, according to documents filed to the Securities and Exchange Commission.

But it may not last: "We expect our revenue growth rate to decline, and as we continue to invest for future growth, we do not expect to be profitable on a GAAP basis in 2011," the company warned in its filing.

In 2009, its last full fiscal year, LinkedIn had a loss of $4 million on sales of $120.2 million. The company has been in the red every year except 2006, when it turned a slight profit on revenue of $32 million.

The company isn't hurting for cash: It's currently sitting on a stash of $89.6 million. LinkedIn filed to raise up to $175 million in its offering, but that's a preliminary number and companies often change those targets as they get closer to their IPO.

The professional networking site launched in May 2003, and it's now adding one new user every second. LinkedIn has more than 90 million users, with more than half of its members located outside of the United States.

But LinkedIn warned about increased competition both stateside and overseas, naming Facebook, Google (GOOG, Fortune 500), Microsoft (MSFT, Fortune 500) and Twitter as rivals who "could develop competing solutions or partner with third parties to offer such products." It also called out Xing in Germany and Viadeo in France.

In the three months ending in September, 65 million unique users visited LinkedIn's site.

The company now has 990 employees -- though many of them are newbies. LinkedIn said that more than half of its staff has been with the company for less than one year, and 74% joined within the past two years.

CEO Jeff Weiner pulled in a $250,000 salary and a $211,055 bonus in 2010.

LinkedIn has a dual-stock structure, which gives the company's insiders sigificant control over shareholder decisions even after others become stockholders. Google and Facebook have similar structures.

Co-founder Reid Hoffman and other executives hold Class B shares, which have 10 times the voting power of the Class A shares LinkedIn will sell to the public. It's a structure that's controversial with shareholder advocates but popular among Silicon Valley companies, which want to ensure that their founders are able to enforce their vision.

Perella Weinberg to advise Treasury on Ally IPO

Perella Weinberg, the independent investment bank, has won the mandate of advising the US Treasury on the initial public offering of Ally Financial, the former financing arm of General Motors.

People familiar with the matter said that Perella’s appointment would be announced by the Treasury as soon as Thursday and comes as Ally executives begin to meet with banks to discuss its stock offering, expected to happen sometime this year.

Ally is interviewing about 10 banks as possible underwriters for the IPO – expected to include all the largest Wall Street institutions – in a series of meetings in New York this week. The offering could value Ally at between $8bn and $15bn, those people added.

Perella Weinberg, in contrast, will be tasked with representing the interests of the US government in the offering.

The Treasury owns about 74 percent of Ally – the new name for GMAC – after investing a total of $17.2bn into business during 2008 and 2009 as part of the bailout of the US car industry.

The government has taken to appointing an independent investment bank, sometimes called a boutique adviser, to advise it on the process of unwinding some of its crisis-time investments.

A spokesman for Perella referred inquiries to the Treasury, who did not respond to a request for comment. Ally declined to comment.

Perella lost out to Lazard in the battle to advise the Treasury in last year’s IPO of General Motors. GM in November raised $20.1bn in one of the world’s largest public offerings, allowing the US government to cut its stake in the carmaker.

In December, Ally took the first step towards an IPO when the Treasury said it would convert $5.5bn of preferred stock in the financing company into common equity.

The conversion bolstered Ally’s common equity, bringing its capital ratios into line with other lenders in the sector and was designed to help the company raise funds on more favourable terms.

However, the US government still owns a further $5.9bn of convertible preferred stock, which could hamper the IPO process unless proceeds were used to redeem the remaining government ownership in the company.

Auto financing companies are once again back in vogue following the financial crisis. GM itself last year bought AmeriCredit, an independent auto finance business, for $3.5bn.

In December, Toronto-Dominion Bank snapped up Chrysler Financial, which was separated from its parent when Chrysler filed for bankruptcy, for $6.3bn as part of a push by the Canadian bank into the US consumer finance market.

Thursday, January 27, 2011

LinkedIn Said Likely to File for Initial Public Offering Today

(Bloomberg) -- LinkedIn Corp., the largest networking website for professionals, is likely to file with the U.S. Securities and Exchange Commission for an initial public offering as early as today, a person familiar with the situation said.

LinkedIn, of Mountain View, California, hired Morgan Stanley, Bank of America Corp. and JPMorgan Chase & Co. to lead the offering, said the person, who asked not to be identified because the information is private. LinkedIn spokesman Hani Durzy declined to comment.

The company is valued at $2.5 billion on SharesPost Inc., an exchange for shares of private companies. The filing would come after Demand Media Inc., a provider of content for social- media websites, expanded its IPO earlier this week by 26 percent, raising $151 million. A $500 million investment in Facebook Inc. by Goldman Sachs Group Inc. and Russia’s Digital Sky Technologies valued Facebook at $50 billion, Facebook said last week.

LinkedIn, which has more than 1,000 employees, has grown to 90 million users in more than 200 countries, according to the company. Members use the site to search for jobs, recruit employees and find industry experts. The site is dwarfed by Palo Alto, California-based Facebook, the most popular social network, which has more than 500 million users.

The plans for an IPO filing were reported earlier by the AllThingsDigital blog.

Wednesday, January 26, 2011

Nielsen raises $1.89bn in landmark US flotation

Nielsen, the media measurement group, has achieved the biggest private-equity led initial public offering yet in the US, at $1.89bn.

(Bloomberg) Nielsen Holdings NV (NLSN) and Demand Media Inc. (DMD) rallied in their first day of trading after selling their initial public offerings above the forecast price ranges. Nielsen Holdings shares rose 8.7 percent and Demand Media shares increased 33 percent.

Nielsen, the television ratings company owned by Blackstone Group LP, Carlyle Group, KKR & Co. and Thomas H. Lee Partners LP, climbed 8.7 percent to $25 in New York Stock Exchange trading after raising $1.6 billion in the biggest private equity-backed U.S. IPO since 2006. Demand Media, which uses freelancers to provide low-cost content for websites, surged 33 percent to $22.65 after selling $151 million in shares in the first venture capital-led U.S. IPO of 2011.

LBO funds are betting that the Standard & Poor’s 500 Index’s rally to a two-year high will increase demand for IPOs of debt-fueled acquisitions completed as credit markets started to freeze four years ago. Venture capital-backed companies from LinkedIn Corp. to Groupon Inc. are also considering initial offerings, people familiar with the situation have said.

“We’re off to a strong start to the overall market and as a result of that the IPO market is off to a good start as well,” said Quinten Stevens, managing partner at Darien, Connecticut-based hedge fund Stevens Asset Management LLC. “It’s a good environment for the balance of the year for investors and companies.”

JPMorgan, Morgan Stanley

Nielsen sold 71.4 million shares at $23 each after offering them at $20 to $22 apiece, according to its filing with the U.S. Securities and Exchange Commission. New York-based JPMorgan Chase & Co. and Morgan Stanley led the offering.

Demand Media, run by former MySpace Inc. Chairman Richard Rosenblatt, sold 8.9 million shares at $17 each yesterday after originally offering 7.5 million shares for $14 to $16 apiece. New York-based Goldman Sachs Group Inc. and Morgan Stanley arranged the IPO.

Today’s closing price gave Demand Media a market capitalization of $1.8 billion, data compiled by Bloomberg show. New York Times Co. has a value of $1.6 billion.

The sale by Nielsen was the biggest from a private equity- backed LBO target in the U.S. since Spirit AeroSystems Holdings Inc. raised $1.65 billion in November 2006, according to data compiled by Bloomberg and Renaissance Capital LLC. The Wichita, Kansas-based company, bought by Onex Corp. of Toronto in 2005, sold shares for $26 each, eight times more than the average $3.06 paid by existing owners, the prospectus showed.

2006 Acquisition

Nielsen was acquired in July 2006 for 8.9 billion euros ($11.4 billion), including the assumption of debt. The IPO price represents a 41 percent paper gain from the average $16.32 a share the company’s existing owners paid, according to the SEC filing and data compiled by Bloomberg.

The IPO was set to trim the stakes held by New York-based Blackstone and KKR, Carlyle of Washington and Thomas H. Lee in Boston to about 16 percent each from 20 percent. San Francisco- based Hellman & Friedman LLC’s holding would decline to 7.6 percent from 9.6 percent, while AlpInvest Partners NV of Amsterdam’s share would drop to 5.4 percent from 6.8 percent, according to the SEC filing.

Nielsen has operations in about 100 countries and measures audiences across TV, radio, websites and mobile phones. Its TV ratings are an industry standard that helps set advertising prices in the U.S. Nielsen also measures retail transactions and consumer behavior for the packaged-goods industry.

Relative Value

The company cited TiVo Inc. of Alviso, California, and Englewood, Colorado-based Dish Network Corp., which are developing services to measure TV viewership, along with Reston, Virginia-based ComScore Inc., which compiles statistics on Internet usage, as competitors in the SEC filing.

Nielsen’s 2010 revenue rose as much as 6.7 percent to $5.13 billion, while operating income was between $715 million and $735 million, according to a filing last week. The company, which has reported net losses every year since the buyout, said it couldn’t yet provide net income figures for last year.

At the original midpoint price, Nielsen would have about $7.2 billion more debt than cash, or about 5.8 times the company’s $1.25 billion of estimated full-year earnings before interest, taxes, depreciation and amortization based on reported results for the first nine months of 2010, according to its filing. TiVo had no debt and ComScore had more cash than its borrowings, while Dish Network had net debt equal to 1.3 times its estimated 2010 Ebitda, Bloomberg data show.

Private Equity IPOs

The 31 U.S. IPOs backed by private equity firms last year had average net debt of about 3.65 times annual Ebitda. The shares rose 4.1 percent on average in the first month of trading, less than half the 9.2 percent advance for all other IPOs, according to data compiled by Bloomberg.

More than half of the U.S. IPOs planned for 2011 are backed by LBO firms after the S&P 500 recouped all its losses since the collapse of New York-based Lehman Brothers Holdings Inc. in September 2008, data compiled by Bloomberg show. The benchmark gauge for U.S. stocks has surged 92 percent since March 9, 2009.

“Market conditions will certainly impact pricing,” said Hugh Johnson, who oversees about $2 billion as chairman of Albany, New York-based Hugh Johnson Advisors LLC. With Nielsen, “they helped the private equity issuers,” he said.

A record $1.6 trillion in leveraged buyouts were completed from 2005 to 2007, according to Preqin Ltd., a London-based research firm. In LBOs, private equity firms borrow most of the money used to take controlling stakes in companies. They try to increase the value of those companies by cutting costs, eliminating workers and closing unprofitable businesses, with the aim of selling their stakes at a higher price.

HCA, Kinder Morgan

HCA Holdings Inc. of Nashville, Tennessee, and Houston- based Kinder Morgan Inc. are among more than two dozen companies owned by buyout firms that had filed with the SEC as of the end of 2010 to sell $14 billion of shares in IPOs, according to data compiled by Bloomberg. That’s more than double the $6.6 billion raised last year. Venture capital-backed companies filed to raise $2.86 billion in IPOs.

LinkedIn, the largest networking website for professionals, has hired banks to advise on an IPO this year, people familiar with the plans said this month. The Mountain View, California- based company’s backers include Bain Capital Ventures, Sequoia Capital and Greylock Partners.

Groupon, BankUnited

Groupon, the biggest daily deal website, is talking to Goldman Sachs and Morgan Stanley about an IPO, people familiar with the discussions have said. The Chicago-based company’s Chief Executive Officer Andrew Mason said this week in an interview at the Digital-Life-Design conference in Munich that Groupon isn’t convinced it will sell shares anytime soon.

The offerings from Nielsen and Demand Media were among at least seven U.S. IPOs scheduled for this week, data compiled by Bloomberg show.

BankUnited Inc.’s IPO is likely to price above the forecast range tomorrow as demand for shares of the Miami Lakes, Florida- based lender outstrips supply, according to a person with knowledge of the matter. Private equity investors including Blackstone and Carlyle took over BankUnited for $900 million in 2009 after it was shut by federal regulators.

“The market is not going to constrain itself to a particular flavor of IPO,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees $52.5 billion. “Risk appetite is higher this year, and the market appears to be looking at a greater range of venues to put that capital to work.”

Ally Financial Said to Interview Banks to Manage IPO

(Bloomberg) -- Ally Financial Inc., the auto lender majority owned by the U.S. government, is interviewing investment banks this week to manage its initial public offering, said two people with knowledge of the matter.

Ally asked for proposals last week and is likely to select four underwriters, though the final decision hasn’t been made, said one of the people, who declined to be identified because the talks are private. The size of the IPO hasn’t been decided and will depend on valuation, the person said.

The U.S. Treasury Department, which owns 73.8 percent of Detroit-based Ally, will play a large role in deciding the size and may sell its entire stake if the valuation is high enough, one of the people said.

Ally spokeswoman Gina Proia declined to comment. CNBC reported the development earlier today.

Friday, January 21, 2011

NYSE woos Silicon Valley to catch next wave of listings

The New York Stock Exchange has its eyes set on Silicon Valley, where a wave of technology companies such as Facebook, LinkedIn and Zynga are expected to go public over the next 18 months.

NYSE missed out on the first internet boom, with Ebay, Amazon and Google all choosing to list on the Nasdaq, NYSE’s chief rival. Those companies built the Nasdaq’s reputation as the de facto home for public tech groups.

Now NYSE is looking to avoid making the same mistake twice. It has embarked on a major marketing campaign in Silicon Valley, where many tech companies are based.

It has bought billboard advertisements along Highway 101, the main thoroughfare between Silicon Valley and San Francisco, and has doubled the size of its Silicon Valley capital markets team, which works to attract new listings.

“The old NYSE was not even pitching businesses in Silicon Valley,” said Douglas Chu, head of NYSE’s western region. “We just assumed that when they got big enough they would come over. That never happened.”

Nasdaq is still the preferred home for new US tech listings. Last year, Tesla, the electronic car maker, chose to list on Nasdaq, even though GM and Ford are on NYSE.

Nasdaq has already won listings from Skype and Kayak, whose IPOs are also anticipated later this year.

Nasdaq has long had a presence in Silicon Valley, with offices on Sand Hill Road and San Francisco.

It touts its corporate services, such as web-based seminars for executives working at public companies for the first time.

While listing fees for smaller companies are similar, for bigger companies Nasdaq caps fees at $99,500 a year. NYSE fees can be up to $500,000.

“It’s not about the bell ringing, it’s about what happens when the bell stops ringing,” said Bob McCooey, head of listings at Nasdaq.

Last year NYSE won 40 per cent of tech IPO listings, its best market share since at least 1995, according to Dealogic.

NYSE recently won the listing for Demand Media, an online content company that is slated to go public on Tuesday. It also boasted the best performing IPO of 2010, China’s, a streaming video web site similar to Hulu.

The intense competition begins years before a company goes public, as exchange executives try to build relationships with entrepreneurs and likely IPO candidates.

Wednesday, January 5, 2011

Global IPOs - 2010

With a record-setting $122.2 billion raised in the fourth quarter of 2010, global IPO volume totaled US$269.4 billion, more than double the amount seen during full year 2009 when issuance totaled just US$113.9 billion. Issuers from the emerging markets have raised US$146 billion this year, accounting for 50% of IPO volume this year. Three of the top 5 initial public offerings on record took place in 2010.

Top 3 Global Financial Firms with the greatest revenue gained on fees for IPOs in the year of 2010.

1  Morgan Stanley  $22,377.3 mln  New York, NY

2  Goldman Sachs  $18,026.5 mln   New York, NY

3  JPMorgan Chase  $18,014.9 mln   New York, NY