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Hulu — Forget a Sale, Go for the IPO

Oct 17, 2011, 10:41 am EDT
Hulu — Forget a Sale, Go for the IPO

Just a few months ago, it looked like the sale of Hulu was a foregone conclusion. A variety of potential buyers — including (NASDAQ:AMZN) and Google (NASDAQ:GOOG) — definitely were interested in purchasing this fast-growing online video company. But last week, Hulu was pulled off the market. And maybe it was for the best.

Any sale would involve navigating some hairy issues. For one, Hulu is controlled by a consortium of media companies: Disney (NYSE:DIS), News Corp. (NYSE:NWS) and Comcast (NASDAQ:CMCSA) — each with CEOs with huge egos and differing views on the major industry trends.

Also, a transaction would involve a complicated agreement regarding content, which has been soaring in value. Just look at Netflix (NASDAQ:NFLX). Last week the company agreed to shell out $1 billion on a four-year deal for the shows from the CW network — and the deal isn’t even exclusive. In other words, why would the owners of Hulu want to essentially give away their content? Couldn’t they benefit more by having control over it? Read 

Ubiquiti Networks Ends IPO Drought

Oct 17, 2011, 8:48 am EDT
Ubiquiti Networks Ends IPO Drought

Last Friday, the IPO market ended its brutal drought as Ubiquiti Networks (NASDAQ:UBNT) priced its IPO at $15. By the end of the day, it was up by 17%. This was the first IPO since Aug. 16, when Tudou Holdings (NASDAQ:TUDO) came public.

However, Ubiquiti’s deal didn’t happen too easily. At first, the company wanted to issue shares at $20-$22 but then had to lower the range to $15-$17. Despite the recent market rally, IPO investors still wanted a bargain.

So what does Ubiquiti do? The company is a provider of wireless networking technologies, including things like antennas, management tools and high-performance radios. Read 

Angry Birds Creator Hopes for a Happy IPO

Oct 14, 2011, 10:55 am EDT
Angry Birds Creator Hopes for a Happy IPO

One of the biggest beneficiaries of Apple’s (NASDAQ:AAPL) iPhone is Rovio Entertainment. Based in Finland, the company is the mastermind behind the hugely popular game Angry Birds. Rovio’s chief marketing officer, Peter Vesterbacka, says the company probably is worth more than $1 billion, according to a report from Bloomberg, and it looks like the company might be prepping for an IPO.

Rovio makes intensely addictive games that have seen over more than million downloads. It also has been aggressive in finding new sources of growth, such as by moving onto other platforms like Google’s (NASDAQ:GOOG) Android and G+, as well as Barnes & Noble’s (NASDAQ:BKS) Nook.

But the big vision for Rovio is to create a mega-brand. The company actually sees itself as becoming the next-generation Disney (NYSE:DIS). And it’s on its way, at least in one humorous regard — China is home to a “fake” Angry Birds theme park. Read 

Zynga Making Progress on Its IPO Checklist

Oct 14, 2011, 10:08 am EDT

This week, Zynga made another amended filing for its expected public offering that included some forward-looking news. If you want to buy the shares, Zynga now has a name for them — ZNGA — and they’ll be traded on the Nasdaq. It was a big win for the exchange, considering the NYSE has snagged tech offerings like Pandora (NYSE:P) and LinkedIn (NYSE:LNKD) in 2011.

When it comes to social games, Zynga is the dominant player. The company’s titles attract 232 million average monthly active users, many of whom are willing to pay for the digital goods. Since its founding in 2007, the company has generated $1.25 billion in cumulative revenues.

Zynga’s latest filing also has some new details for IPO investors. First of all, the company continues to get the bulk of its revenues from a handful of games. For the $271.5 million increase in revenues for this year, FarmVille accounted for $76.6 million, FrontierVille generated $70.5 million and CityVille collected $46.6. Read 

Groupon’s Latest Filing: It’s Still a Good IPO — Really!

Oct 10, 2011, 10:02 am EDT

When a company goes through the IPO process, it needs to make various amendments to its initial filing (which is known as the prospectus or S-1). Often, the changes are fairly technical. For Groupon, these amendments often are bombshells.

For example, in late June, Groupon indicated that the Securities and Exchange Commission required that the company change its accounting for its revenue recognition. It could include only the commission on a groupon, not the total value of the voucher. So for 2011, revenues were $688.1 million, not the juicy figure of $1.52 billion.

Such things can be a buzzkill for IPO investors — especially in today’s jittery markets. In fact, it looks like the value of Groupon might be as low as $3 billion now. That’s after it reached a whopping $24 billion estimate earlier in the year. Read 

The Squeeze Is on for Venture Capitalists

Oct 10, 2011, 10:00 am EDT

At a recent event in Silicon Valley, I asked a venture capitalist, “Do you think the market volatility and lack of IPOs will hurt your business?” While it was clear he had too much to drink, his answer was clear: “We are focused on the long term. So we’ll win in the end.”

You have to love VCs’ optimism. It’s what has led to the emergence of great companies.

Yet my venture capitalist friend should be somewhat worried. You see, it really does not matter what he thinks about the future. What matters is what his own investors think. These include pensions, endowments and institutions that are looking for strong returns. For the most part, they make up most of the funding for VC funds. And unfortunately, they are getting careful with their wallets. Read 

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