initial public offerings (IPOs) trading on American exchanges

Tuesday, February 25, 2014

Top 10 IPOs to watch for in 2014

1. Alibaba

The Alibaba IPO has been in the works for years. The China-based e-commerce group offers business-to-business, online retail and processing services. Yahoo! Inc. (NASDAQ: YHOO) will be a key winner if Alibaba makes it to the stock market due to its large stake. Japanese telecom and Internet company Softbank is an owner as well.

Founded in 1999, Alibaba has become a key global player. According to an early 2013 article in The Economist, analysts forecast an IPO value of $55 billion to more than $120 billion. Hong Kong regulators nixed Alibaba’s IPO ambitions there, so the company may go public in the United States instead. It is not unusual for Chinese companies to decide to list in America over China, but it is somewhat ironic that listing standards for public companies are less strict in the U.S. than they are in China.

2. GoPro

GoPro has adapted video cameras to the needs of the active, or extreme, sports enthusiast. Skydivers, rock climbers, cyclists and many others are attaching GoPro cameras to their helmets to film their adventures. The company filed confidentially for the IPO with the U.S. Securities and Exchange Commission (SEC), but it will reportedly seek to raise about $400 million — the total market value could be in excess of $2 billion. In an interview last year with Forbes, founder Nick Woodman said the company sold 2.3 million cameras in 2012 for a total of around $521 million. Revenue has reportedly doubled every year since its 2004 founding. This is a hot product, but investors should remember that one-product companies, with just a few related products, often go through severe swings in their business cycle — and that some of those swings could be very unpleasant. GoPro could be public by the time summer gets here.

3. GE Consumer Lending

The GE Consumer Lending unit is expected to go public in 2014. The exact timing has not been worked out, but it could be as soon as the second quarter of this year. Parent company General Electric Co. (NYSE: GE), which aims to be valued as an industrial conglomerate rather than an eclectic mix of half-bank and half-industrial companies, has wanted to get this transition out of the way for some time. GE CEO Jeff Immelt even went as far as to name CFO Keith Sherin as CEO of the unit. This IPO will be made up of the company’s North American retail finance business. The unit first filed with the SEC in late 2013. GE’s exit will be a two-step process. First, to be a tax-free spin-off, the consumer finance unit will act like a tracking stock, with a low float of close to 20% initially. GE shareholders then likely will be distributed shares in the unit — this year or next.

4. Gilt Groupe

Gilt Groupe operates a live, online daily deals site that has been speculated upon as an IPO hopeful for quite some time now. Perhaps the Groupon IPO got in the way, or maybe Zulily also beat Gilt to the IPO market. For whatever the reason this has not yet come public, we have been awaiting this one with no confirmed IPO plans as of yet. But several market pundits, including Jim Cramer of TheStreet and CNBC, have spoken highly of this site. What is different about Gilt, compared to other deals sites, is its clearance of designer label items. The company also claims to have as many as 200 group sales per week. Gilt buys vendor inventory at deep discounts and then sells those items directly to its members, who are constantly looking for key flash sale deals. IPO chatter for this company has resumed of late, with investors expecting an IPO as soon as late spring or early summer. Gilt was founded in 2007, and as of May last year it had 7 million customers.

5. Glassdoor
Glassdoor has not yet filed for an IPO, but a $50 million round of venture capital late last year has sparked speculation that the online jobs and career resource site will likely file for one soon. In all, the company raised nearly $93 million since its start from investors Tiger Global Management and Dragoneer Investment Group, among others. Glassdoor offers job seekers access to peer-oriented reviews of companies, salary comparisons and interview reviews. According to a press release, Glassdoor has more than 22 million members and data on nearly 300,000 companies in 190 countries. Glassdoor recently ranked 243 in traffic among all U.S. websites, according to online audience measurement tool Alexa.

6. TrueCar

TrueCar was another company that was rumored to be in talks with bankers last year regarding a 2014 IPO. The car-selling site was reportedly seeking a value of some $1.5 billion. The company helps consumers buy cars by providing pricing details from more than 6,000 dealerships. TrueCar was founded in 2005 and is said to be profitable. Reportedly, it already turned down an offer to be acquired for $1 billion. Keating Capital Inc. (NASDAQ: KIPO) and GSV Capital Corp. (NASDAQ: GSVC), which tend to invest in pre-IPO companies, own shares of this company.

7. Etsy

Founded in 2009, Etsy reportedly has been profitable since 2009. The company is the most visible online market for handmade crafts and goods. The site allows independent artists, craft workers and others to sell their products, as well as vintage goods, directly to the public. Without this company there would probably be no major Internet outlet for this growing market segment. A whopping 88% of its sellers in the United States are women, and about one in five are selling their creations full time. Listings cost only two cents, and the site takes an additional 3.5% of the transaction sum. The company claims a current membership of more than 30 million, with more than 20 million items listed for sale. In January, the company’s CEO Chad Dickerson told Fox Business that an IPO could be on the horizon but underscored the company is still being built.

8. Party City

Party City is another private equity-sponsored IPO on deck. The company, which used to be public, is the largest party goods retailer in the United States and is backed by Thomas H. Lee Partners. The filing is reportedly for up to $500 million in stock. This company dates back to 1947 and, including independent party supply stores and retailers, it has thousands of outlets. It currently has almost 900 permanent party goods stores and also has approximately 350 temporary Halloween stores. Goldman Sachs, Bank of America Merrill Lynch and Credit Suisse were named the lead underwriters for the IPO.

9. Virtu Financial

Virtu Financial is a high-speed trading firm and designated market maker. In January there were reports it filed confidential documents with the SEC that would allow it to pursue an IPO. The New York-based company is reportedly a player in 200 different global markets for stocks, currencies, futures and other instruments. Because high-frequency traders are considered to have an unfair advantage over average investors, the company may not be popular with the public. Investors, on the other hand, could love it. The Wall Street Journal reported Virtu was profitable, and that it had trading revenue of about $415 million for the trailing 12 months.

10. Univision

Univision is the top Spanish language broadcaster in the United States. It was taken private in early 2007 by affiliates of Madison Dearborn Partners, Providence Equity Partners, TPG Capital and Thomas H. Lee Partners for more than $12 billion. Reports of IPO discussions with bankers surfaced late in 2013, but that speculation has been quiet ever since. While several reports anticipate an IPO in the second half of 2014, the company has yet to disclose any substantive steps it has taken. With its media focus targeting the nation’s Latin American community, Univision’s growth has been impressive — especially as many other media outlets face contraction. Still, since it went private right before the peak of the private equity craze, one has to wonder if the IPO valuation will be grossly different from its value seven years ago.

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