initial public offerings (IPOs) trading on American exchanges

Friday, January 27, 2012

NYSE - Global Listings Year in Review 2011

Scott Cutler, EVP and Co-Head of U.S. Listings and Cash Execution at NYSE Euronext, discusses the company's global Listings performance in 2011 and outlook for 2012.

Wednesday, January 25, 2012

WPX Energy (WPX) looks great

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Guidewire Software (GWRE) starts trading on the NYSE and rings the NYSE Opening Bell

Guidewire Software (GWRE), an insurance technology company starts trading on the NYSE and rings the NYSE Opening Bell. Guidewire is the first technology IPO to list on the NYSE in 2012. In honor of the occasion, Marcus Ryu, President and Chief Executive Officer, joined by members of Guidewire's executive management team, rings The Opening Bell.

Tuesday, January 10, 2012

Millennial Media Sets $75 Million IPO

Baltimore – Millennial Media, the Baltimore-based developer of an independent mobile ad platform, late Thursday filed with the Securities and Exchange Commission (SEC) to raise up to $75 million in a proposed initial public offering (IPO).

The company has yet to disclose details of the offering, such as the number of shares to be sold or their expected price range. Morgan Stanley, Goldman Sachs and Barclays Capital will act as underwriters.

Millennial‘s technology, tools and services are designed to help mobile app developers maximize their ad revenue, increase the number of users of their apps and gain insight about their users. IDC reports that Millennial has 17 percent of the U.S. mobile display advertising market, making it second only to Admob. And as AdWeek notes, unlike Admob or iAd, Millennial isn’t affiliated with a specific operating system or device.

For advertisers, the company’s platform instantly determines which ad to deliver, as well as to whom and when. In December, the platform reached approximately 200 million unique users worldwide, with about half in the U.S. The company generated $69.1 million in revenue and a net loss of $417,000 during the nine months ended Sept. 30, up from revenue of $29.1 million and a loss of $5.4 million during the same period in 2010.

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Wednesday, January 4, 2012

Groupon (GRPN) - profile

A controversial and unprofitable daily-deals and coupon website. Started trading on the NASDAQ on November 4, 2011 under the symbol GRPN.

  • Groupon raised $700 million after increasing the size of its initial public offering, becoming the largest IPO by an Internet company since Google Inc raised $1.7 billion in 2004.
  • The company is now worth about $80 billion.
  • The underwriters were Morgan Stanley, Goldman Sachs and Credit Suisse
  • Filed for a $750 million IPO on June 1, 2011, originally planed to debut mid to late September.
  • Andrew Mason, the chief executive and founder of Groupon, is worth $2 billion less than Eric Lefkofsky (Groupon's largest shareholder and chairman), the man who financed Groupon’s start. Lefkofsky  has a 22% stake in the company.  The other co-founders include Andrew Mason (8% stake), and Bradley Keywell (7% stake),
  • Groupon has 10,000 employees and has offered over 1,000 daily deals to 150 million subscribers across 46 countries, and has sold over 70 million Groupons.
  • Groupon deals can be irresistible to customers. The merchant typically agrees to discount a product or service by 50 to 90 percent. Groupon then sells the coupons via its e-mail distribution list. Usually a minimum number of people have to buy the offer before the deal “tips” and becomes redeemable. Groupon and the merchant then split the revenue from the deal 50–50. They both keep the money even if the customer never redeems the voucher. An estimated 20 percent of Groupons don’t get used, which amounts to free revenue for local merchants.
  • Headquarters in Chicago; company started in 2008; the fastest growing company ever
  • Sold 30 million shares (or about 5%) at $16 to $18 apiece, out of the 630.4 million shares that will be outstanding after the offering. At the midpoint of the price range, Groupon would be valued at $10.8 billion.
  • The low-float approach, dubbed "slim to win," involves selling a sliver of a company's outstanding shares in an effort to create an artificial scarcity once the shares begin trading. It was most recently employed by LinkedIn (ticker: LNKD) and Zillow (Z), whose shares rose sharply immediately after their IPOs, and which still trade comfortably above their IPO prices.
  • Price range of between $16 and $18 per share would value the daily deals company at $10.1 billion to $11.4 billion. Early buzz had swirled around a valuation as high as $30 billion
  • Plans to raise between $480 million and $540 million, a more modest goal than its original plan of $750 million
  • Founded in 2008 by Andrew Mason, Eric Lefkofsky and Brad Keywell
  • Sales in 2010 surged to $312.9 million from $14.5 million the previous year, a growth rate so fast that Google offered to buy the company for $6 billion last year. Groupon rejected the deal, choosing instead to raise $950 million in private capital and stay independent while pushing toward an IPO.
  • That strategy came under fire in June, when Groupon filed its prospectus, showing the company had lost $540.2 million in three years and that in the first quarter alone had spent $179.9 million to bring in subscribers.
Andrew Mason, 30-year old Groupon's CEO, once spread a rumor in his office that he owned 20 cats

  • Unprofitable: Groupon lost $62.3 million in the second quarter, an improvement from the first quarter when it lost $98.3 million.
  • Zero barriers to entry; hundreds of competitors, including Living Social, Google (Google Offers), Amazon, AT&T, and The New York Times
  • Unique choice of accounting (required a new S-1)
  • Business in North American is slowing: revenue per subscriber and revenue per merchant are declining in North America. 
  • A $10 billion market value is a lot for a company with no profits and an unproven business model.
  • As of June 30, Groupon had $225 million in cash on hand, according to an amended S-1 the daily-deals website filed with the Securities and Exchange Commission. The problem: The company still owed $392 million to merchants for Groupons that had already been sold and used up by its customers.
  • The company had $243.9 million in cash at the end of September and still owed merchants $465.6 million. The 8.4 percent increase in cash from the prior period was outstripped by the rise in marketing costs, which jumped 37 percent to $234.4 million.
  • Groupon is more of an advertising company than an Internet company. It has upward of 10,000 employees—about five times that of Facebook—because it needs: an army of salespeople to call on local businesses; customer-service reps; technology staff; plus writers to craft hundreds of catchy pitches a day for the deals e-mailed to most of its 142 million subscribers.
  • Groupon faces escalating competition from LivingSocial and Google Inc. (GOOG), which are giving more favorable terms to merchants. That’s led Groupon to accept lower margins to avoid losing business. The amount of billings the company booked as revenue shrank to 37 percent in the third quarter from 42 percent in the prior period and 44 percent in the first quarter. Groupon attributes the lower margins to getting into new products, like travel and event tickets. 
  • Groupon’s margins are already being pressured as businesses become savvier at the negotiating table. Instead of making a solid 50 percent on the deals, many of Groupon’s salespeople are being told to accept less favorable margins, in the 35-to-45-percent range. National merchants are now able to negotiate deals in which Groupon’s share is 5 to 25 percent. 
  • Few companies have grown as rapidly as Groupon. Founded in 2008, the company had 142 million subscribers globally at the end of the third quarter, up from 21 million a year earlier. 
  • Nine-month revenues of $1.1 billion were more than seven times the $140 million in the same period of 2010. 
  • Much of Groupon's growth this year has come abroad, where it is aggressively expanding.Groupon is growing fast, making it attractive to investors facing a slowdown in economic growth
  • In 2010, it featured 66,289 merchants, and in the first 3 months of 2011, it featured 56,781 merchants.
  • Its 2010 revenue was $713.4 million compared to $30.5 million in 2009. During the first quarter of 2011, it generated revenue of $644.7 million.

Revenue rose to $878 million in the second quarter compared with $644.7 million in the first quarter and rose more than 900 percent from $87.3 million in the second quarter of 2010, the company reported in the filing.

The numbers show Groupon's growth slowed from the first quarter. Revenue was up 36 percent in the second quarter, below growth of 63 percent in the first quarter.

The number of Groupon subscribers jumped to more than 115 million at the end of the second quarter. But revenue per subscriber fell 12 percent to $8.57 in North America, according to David Sinsky of Yipit, which tracks the daily deal industry.

Forty-six percent of revenue was generated from North America in the first quarter 2011, and 54% was generated from Europe. In May 2010, Groupon acquired CityDeal, which added 1.9 million subscribers as of the date of the acquisition in several major European markets, including London, Berlin and Paris, and ended the year with operations in 38 countries.

Groupon has offered deals involving over 140 different types of businesses, services and activities that fall into six broad categories; the following shows the percentage of deals offered worldwide across those categories during the first quarter of 2011: Health & Beauty: 31%; Food & Drink: 23%; Activities: 15%; Events: 11%; Services: 11%; Retail: 9%.

More about Mason and Groupon
  • In 1999, Mason moved to Chicago’s North Shore to attend Northwestern University, where he studied music. (Mason, a pianist from a young age, says that he wanted to pursue his dream of becoming a rock star.)
  • Mason graduated from college in 2003 without a clear plan. He took a job as a software developer at InnerWorkings, where he met Eric Lefkofsky, a prominent Chicago investor and businessman. 
  • April of 2010: Groupon received a $135 million cash infusion from investors, including Russian Internet billionaire Yuri Milner and several prominent Silicon Valley firms. 
  • Mason and his team began snapping up Groupon’s copycat competitors like candy. In June they entered Chile and Brazil. In August they expanded to Russia and Japan. Then Singapore, South Africa, India, the United Arab Emirates, and China. Today, Groupon is in 46 countries and more than 500 cities.
  • In Australia a daily-deals company called Scoopon filed for the Groupon trademark and also purchased the Australian Groupon domain name. Mason offered the owner of the company nearly $300,000 for the site and the trademark. Scoopon balked, and Groupon sued. With no other choice, and not wanting to lose the Australia market altogether, Mason decided to launch in Australia under a different name entirely, Stardeals—while remained tied up and inactive under unrelated ownership. (The lawsuit is still pending.) Similar scenarios began playing out all over the map.
  • Groupon is still working to secure the Chinese version of, currently operating in China under the name GaoPeng. A retired government worker in Bangalore bought the Indian Groupon Web domain and is running a business that looks nearly identical to the U.S. Groupon. In Ireland, Groupon successfully brought charges before the World Intellectual Property Organization to force a subsidiary of the Irish Times Group to give up the Irish version of the Groupon domain name.
  • Domain squatting is a common pitfall of the Internet world, but it can be especially problematic with a digital business that is easily replicable.
  • In November of 2010, Google made a $6 billion acquisition offer for Groupon.

Groupon billings rose in November as rivals stalled

(Crain's) — Groupon Inc. outperformed its rivals in November, increasing revenue while its closest competitors posted declines.

Chicago-based Groupon's overall billings from its online daily deals rose 6% from October, according to Yipit, a New York-based deal aggregator. That's triple the 2% increase in the overall November billings for the industry in North America.

Billings from, the second-largest online coupon provider, fell 5% in November, Yipit said. AmazonLocal's revenue slumped 6%.

Google Inc., which launched its daily-deals product GoogleOffers in June, is enjoying rapid growth. Its billings more than doubled to $3.5 million from $1.4 million in October. Travelzoo, an online-travel site that also offers local deals through a unit based in Chicago, saw its billings jump 44%. (Customers pay for coupons upfront, and the deal providers split revenue with the merchants who provide the goods and services.)

Groupon, which went public in November and hasn't yet reported fourth-quarter results, declined to comment.

Groupon remained the industry giant with $154 million in total November revenue. LivingSocial had $52 million and Travelzoo had $7 million, followed by AmazonLocal at $5.8 million and GoogleOffers at $3.5 million.

Yipit also noted that revenue declined for all deal providers as Thanksgiving approached, highlighting seasonal trends seen over the summer that show online deal sales drop off when subscribers are on vacation. During the week of Thanksgiving, Groupon's billings skidded 46% and LivingSocial's total revenue slid 30% from the previous week, Yipit said.

Daily-deals results also fluctuate wildly when coupon sellers offer nationwide deals that drive unusually high participation. Yipit attributed much of Travelzoo's November spike to a nationwide deal for movie tickets from Fandango. Google Offers also was helped by national deals.

Tuesday, January 3, 2012

Groupon shares tumble below IPO price on worries of future deals

(Reuters) — Groupon Inc shares fell nearly 7 percent on Tuesday on concern the company may not have as many daily deals to offer as some merchants pull back.

Susquehanna Financial Group and daily deal industry tracking firm Yipit surveyed almost 400 merchants recently about their experiences running daily deals with Groupon , LivingSocial and other providers.

An average of 8 out of 10 merchants enjoyed working with daily deal companies, the survey found.

However, it also found that 52 percent of the surveyed merchants are currently not planning to feature deals in the next six months. Nearly 24 percent of the merchants intend to feature only one deal in the next six months, the poll also found.

Groupon shares closed at $19.27, down 6.5 percent today, below the company's initial public offering price of $20.

Last year, Groupon completed one of the largest Internet IPOs since Google's debut, but the Chicago-based company's business model has been questioned by some analysts.

A crucial part of the company's business involves persuading merchants to run deals and accept the large discounts that are integral to the offers.

"Our proprietary merchant survey highlights concerns of the daily deal sites and early read implies lower usage over the next six months, despite some surprisingly high satisfaction rates," Herman Leung, an analyst at Susquehanna, wrote in a research note detailing the survey results.

Groupon and LivingSocial recently unveiled instant deals, which are location-based offers that are usually run by merchants for a few hours only.

The survey by Susquehanna and Yipit found that only 10 percent of merchants polled have considered running an instant deal with Groupon or LivingSocial.

Groupon (GRPN) puts working today!

see Dec 29 : Groupon (GRPN) looks like a sell today

  • GRPN is down 7% while the market is rallying today (+2%) : weekly $20 puts +80%, weekly $19 puts +66%
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