With Facebook, Twitter and others trading at “sky-high” valuations (as well as deals like FB’s $19B purchase of WhatsApp), two things tend to happen. The “B” word debate strikes again. I can’t tell you how many “bubble” blog posts I’ve seen in recent weeks. It’s difficult to blame them and while there are similarities between now and the 2001 meltdown, this time does look very different. Of course, isn’t that what people always say before bubbles collapse?:)
The other more interesting thing that happens is that private companies do end up going public in periods like this one. There are several possible IPO’s coming this year that will likely appear in the stocks that I follow. I do generally stay away from trading them in the first few weeks/months because of the incredible level of volatility but I know that I’ll likely be trading these names.
IPO within a few months?
A few names have emerged as planning a spring IPO:
I’ve discussed the incredible value in trading Chinese internet stocks. I’ve been more quiet on that front personally because I’ve struggled to get good sources of information. I am working on that but there is no doubt that these 2 IPO’s will make big waves:
–Alibaba: The ecommerce giant is set to become one of the largest IPO’s ever with the company being valued at approx $150B. Another very interesting aspect is that Yahoo holds 24% of Alibaba. Given that Yahoo is worth around $38B, you can see that almost 100% of Yahoo’s value is based off of its Alibaba holding. It will be very interesting to see how that whole story will pan out.
–Weibo: Interesting note is that Alibaba owns 18% of Weibo… You might have never heard about this Chinese social web company that describes itself as an alternative to Facebook and Twitter in China. It has 241 million users, almost entirely based in China.
–GoDaddy: The company more known for its splashy Super Bowl ads than anything else does have a solid business as a domain registrar, web host, etc. The company was purchased a private equity group in 2011 and been rumoured to go public for at least a couple of years now. It does look more serious and while I can’t imagine holding them long term, it would make an interesting
–Dropbox and Box: Both companies are in the cloud storage area and have been looking at an IPO for some time now. They probably should have gone ahead a few months ago. Last week, Google’s surprise announcement to dramatically improve its cloud hosing prices is a major blow to Dropbox and a reminder that they will have a very difficult time competing in a low margin space (cloud hosting) with rivals such as Google, Amazon and Microsoft ready to battle and perhaps even lose money to keep market share. Already, Dropbox users have been very vocal on social networks asking for prices to improve dramatically. Box does have a stronger enterprise client base which will help but I would personally also be very careful about evaluating its long term prospects. Both are looking to turn public as soon as possible.
Would you expect to buy any of these companies when they’ll turn public? I personally am not that excited about any of them but time will tell and I’ll be more than happy to do some shorter term trading on them
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