Coupons.com (COUP) : 3-month performance

Coupons.com (COUP) changed its corporate name to Quotient Technology (QUOT). (2015)

     

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New IPOs - when to buy?

Brand-new IPOs may offer future potential, but they can be tricky to navigate in the short run.

Those that go public with much fanfare often see a big, first-day pop, like LinkedIn (LNKD) (109%) and Twitter (TWTR) (73%), before coming back down to earth. That can make finding an entry tough, since a hot stock could keep shooting higher or drop right after the debut, a la Facebook (FB).

That's why it may be prudent to wait for a consolidation. Some IPOs pause shortly after their debut. A so-called IPO base can be shorter in length than the five- or six-week minimum, respectively, for a flat or cup base.

Michael Kors (KORS) trended mostly higher the first five sessions after jumping 21% its first day, Dec. 15, 2011. It then paused the next three weeks, giving prospective buyers a chance to get in. The first true base didn't start until March.

Coupons.com (COUP) surged 88% to 30 from its offer price on March 7. It hasn't done much since, trading mostly between 26 and 31. The Mountain View, Calif.-based digital coupon provider hasn't yet turned an annual profit, though it posted its first quarterly profit in Q4.

Its debut comes nearly eight months after that of rival RetailMeNot (SALE), which rose 32% from its IPO price and is now up more than 30% from that day's close. It had rallied as much as 76%. The company has made money since 2010.

YY (YY), which went public on Nov. 21, 2012, shows the potential of recent new issues. It saw a modest 8% rise in its Nasdaq debut. Shares climbed 35% in the first two weeks before launching into their first consolidation, which spanned seven weeks and offered a first chance for investors.

Another 36% advance ensued before the Chinese Internet stock settled into a six-week cup base, a second opportunity to buy. It cleared its most recent six-week consolidation on Jan. 3 and is up 42% from the buy point.

YY has grown its annual earnings per share the past two years. Earlier this month, it crushed fourth-quarter profit and sales forecasts with triple-digit gains. Analysts expect triple-digit EPS growth to continue in Q1.
The top- and bottom-line performance have helped it attract increasing institutional sponsorship. Forty-three mutual funds and hedge funds took new positions as of Dec. 31, while 23 added to their stakes. Three of the funds owning shares are rated A+.

Coupons.com (COUP) began trading on the NYSE on 7 March 2014

Crystal Paine is a stay-at-home mom in Wichita, Kansas, where she schools her three children. When not teaching them math, she’s pulling in a full-time income from her blog, MoneySavingMom.com.

Every month, 1.75 million visitors flock to her site for grocery coupons, magazine deals and restaurant discounts. When a reader prints an offer or clicks through to make a purchase, Paine gets 30 cents to $25 from a Web-coupon purveyor. Those referrals happen 3,000 to 5,000 times a day.

Every month, 1.75 million visitors flock to Crystal Paine's site Moneysavingmom.com for grocery coupons, magazine deals and restaurant discounts.

Paine and bloggers like her are fueling a surge in demand for digital coupons and the speedy growth of many deal suppliers, including Coupons.com Inc., which is slated to debut on the New York Stock Exchange today. With EMarketer Inc. predicting that more than 110 million American adults will cash in Web coupons this year, RetailMeNot Inc. (SALE), Ebates Inc. and Prodege LLC’s Swagbucks are also racking up sales.

Unlike daily-deal sites Groupon Inc. (GRPN) and LivingSocial Inc. that gained popularity by offering deep cuts -- half off or more -- at restaurants, spas and hotels, Coupons.com and others offer the types of discounts found in newspaper inserts, such as 5 percent off at a retailer or $1 off an item at grocery store.

Coupons.com, based in Mountain View, California, was founded in 1998, six years before Mark Zuckerberg began Facebook Inc. It took until 2009 for the company to surpass $40 million in annual sales, and only four more years to quadruple that, with revenue reaching $167.9 million in 2013. Coupons.com is led by Chief Executive Officer Steven Boal, who started the company and owns 9.3 percent of the outstanding stock.

Coupons.com, whose ticker symbol is COUP, raised $168 million in its initial public offering yesterday, selling 10.5 million shares at $16 each, and valuing the company at about $1.16 billion, based on the shares outstanding listed in the prospectus.

30,000 Affiliates

To expand across the Web, Coupons.com introduced its Brandcaster product in 2008, letting other sites such as mommy blogs promote coupons and make money, similar to Google Inc.’s affiliate program for showing text ads. The company now has about 30,000 affiliate publishers, the prospectus said.

IPOs this week : March 3 - 7, 2014 (wk 10)

Three companies going public on Friday, March 7.

Year to date, 57 companies have gone public in the United States, and it's still only the first week of March. Through the first three months of 2013, only 36 companies filed for IPOs.

For investors looking to profit from the IPO market, this week's IPOs offer interesting opportunities in the tech and bioscience fields.

March 2014 IPO Calendar: Three IPOs to Watch

The biggest IPO of the week is that of Coupons.com Inc. (NYSE: COUP), the Internet company founded in 1998 that provides its customers with digital coupons.

IPO CalendarCoupons.com is looking to raise $130 million on Friday, March 7. The company is offering 100 million shares at an expected range of $12 to $14 per share. If the $13 price target per share is hit, Coupons.com will have a market value of approximately $1.1 billion.

In September, the company reported revenue of $115 million for the first nine months of 2013, a 51% gain from the previous year. Overall, it reported a net loss of $12.8 million in that time frame. That was down from a loss of $50.1 million for the same time period in 2012.

More than 2,000 brands and 700 consumer packaged goods companies use the company's platform to engage customers.

The company's underwriting team includes Goldman Sachs Group Inc. (NYSE: GS), Bank of America Corp. (NYSE: BAC), Allen & Co, Merrill Lynch, and RBC Capital.

Next on Friday's IPO calendar is Aquinox Pharmaceuticals Inc. (Nasdaq: AQXP), which will be offering 3.7 million shares at an expected range of $10 to $12 per share. Aquinox is expecting to raise approximately $41 million through the initial public offering.

Aquinox is a clinical-stage biotech company, founded in 2003. The company discovers and develops novel drug candidates that treat cancer and inflammation. Its lead product, AQX-1125, is an anti-inflammatory treatment that has completed three clinical trials.

Jefferies & Co. and Cowen & Company were the underwriters on the IPO. Aquinox will trade on the Nasdaq.