Apr 30, 2012, 12:50 pm EDT
Even though it’s much cheaper to create companies nowadays — especially those based on the Internet and mobile platforms such as Apple’s (NASDAQ:AAPL) iOS and Google’s (NASDAQ:GOOG) Android — those companies still a need to raise capital. And that process has changed little over the years.
There are essentially four major steps. The first three happen when a company is private: seed, angel and venture rounds. The final type of financing is the IPO.
How does each one work? Let’s use Facebook as an example: Read
Apr 30, 2012, 11:13 am EDT
Last week, the IPO market was fairly subdued. Only four companies went public, and all saw losses except Envivio (NASDAQ:ENVI). Unfortunately, this week also looks like more of the same. Yet there are some deals that look interesting.
Carlyle Group
Founded over 25 years ago, Carlyle Group (NASDAQ:CG) is one of the world’s top private equity firms. It has $147 billion in assets and manages 89 funds.
But its performance has been rocky. Profits last year — which are based on a calculation called economic net income — fell 18%, to $833.1 million. The problem is that it has been tougher to sell companies as well as take them public to generate gains. Read
Apr 27, 2012, 2:56 pm EDT
E-commerce consulting firm Acquity Group (AMEX:AQ) struggled with its initial public offering Friday. AQ’s deal ended up pricing at $6, which was below the $8-to-$10 range originally expected, and it headed about 5% lower in Friday trading.
Founded 11 years ago, Acquity has become a top player in the digital agency space — with the main focus on creating e-commerce sites for numerous big-name brands, including Proctor & Gamble (NYSE:PG), Adobe (NASDAQ:ADBE) and Wal-Mart (NYSE:WMT). Since inception, the company has served more than 500 clients.
“We focus on something we call brand e-commerce,” Christopher Dalton, CEO and co-founder of Acquity, told me this morning. “It means that the brand must be part of all digital experiences for the customer.” Read
Apr 27, 2012, 2:15 pm EDT
It’s been a rocky ride since Zynga’s (NASDAQ:ZNGA) IPO in December 2011. The stock has seen a range of $7.97 to $15.91. And Zynga’s first-quarter report didn’t help. Investors were not impressed — so far in today’s trading, the stock is off 5.6%, to $8.89.
Zynga is the dominant player in social games for the Facebook platform. But it’s getting tougher to find growth. In Q1, sales increased 32%, to $329 million, and profits came to 6 cents a share, down from 11 cents in the same period a year ago.
The key for Zynga will be moving to mobile. But that’s far from easy. The market is still in its infancy, and monetization tends to be lower compared to desktop platforms. This explains why Pandora (NYSE:P) has had problems, as seen in its quarterly report. Read
Apr 26, 2012, 4:00 pm EDT
Detroit Big Three automaker Chrysler definitely shifted into high gear for its first quarter.
Profits came to $473 million, up a spectacular 300% from the year-ago period’s $116 million and the company’s best quarter since Q3 1998, when it made $682 million.
If Chrysler can keep up the momentum, the company’s corporate parent, Fiat (PINK:FIATY), could get real serious real fast about spinning Chrysler off through an initial public offering. It would be a great way to generate some cash — something Fiat could use considering its mostly European-based business continues to lag. Those continental woes also have been shared by the other American automakers General Motors (NYSE:GM) and Ford (NYSE:F). Read
Apr 26, 2012, 12:14 pm EDT
Groupon (NASDAQ:GRPN) CEO Andrew Mason is 31 years old — but he’s going on 14. According to the The Wall Street Journal, he held an employee meeting where he said the company needed to “grow up.” During his presentation, he was drinking beer. With such wacky behavior, it should be no surprise that the stock is off 40% from its IPO price (the company came public in November 2011).
Mason plans to have these presentations on a weekly basis. And yes, anyone present can drink beer, too.
Somehow this is supposed to be a way to get the company back on track. In early April, Groupon dropped a bombshell on Wall Street when it disclosed a restatement of its earnings. The company failed to account for the expected returns of vouchers for the first quarter. Because of this, revenues were $14.3 million lower, at $492.2 million. The net loss also had to be boosted to $65 million from $43 million. Read