Get Ready for Groupon — if You’re Connected

Nov 3, 2011, 11:54 am EST
Get Ready for Groupon — if You’re Connected

On Thursday night, Groupon will finalize its IPO, and on Friday, shares will trade under the GRPN ticker on the Nasdaq. According to a report from Reuters, it looks like the deal could price between $19 to $21, compared to earlier expectations around $16 to $18 — and at $21, that would put Groupon’s valuation at roughly $13 billion. So it looks like there’s heavy demand for the offering.

But when talking to many Silicon Valley CEOs this week, I found no one who was interested in Groupon. They are highly skeptical of the company’s business model, as well as its ability to create sustainable profits.

Despite all this negative opinion — which also has been nearly universal in the media — the IPO itself should be solid. Helping the case is that Groupon’s underwriters — Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) — cut the valuation on the deal by about half and will only issue 4.7% of the outstanding shares. It’s just a matter of normal demand and extremely short supply of stock. Read 

Angie’s List: A Billion-Dollar IPO?

Nov 3, 2011, 11:19 am EST
Angie’s List: A Billion-Dollar IPO?

Angie’s List, a website that matches consumers with contractors and other service providers, is getting closer to becoming a public company.  Based on a filing with the Securities and Exchange Commission on Wednesday, the company said it plans to issue 8.8 million shares at $11-$13 each.  The offering is slated to trade on the Nasdaq with the symbol ANGI.

Angie’s List had originally announced its IPO plans in August.

Assuming the stock trades at $13, the company’s value would total $722 million.  However, if there is a first-day trading pop in the stock, it wouldn’t be a stretch to see it reach $1 billion. Read 

OpenTable: From Hot IPO to Disaster

Nov 2, 2011, 2:57 pm EST
OpenTable: From Hot IPO to Disaster

Back in the summer of 2009, OpenTable (Nasdaq:OPEN) was one of the first dot-com’s to hit the market after the
financial crisis.  It turned out to be a fantastic deal, as the shares spiked nearly 60%.  OpenTable’s online reservation system seemed to have endless growth potential.

Yet it can be extremely tough to keep the momentum going.  And that has certainly been the case this year. Since April, OpenTable’s shares have plunged to $38 from $118.

The problem?  Simply put, OpenTable hasn’t been able meet Wall Street’s overly optimistic expectations.  Even though the company posted a sizzling 40% surge in revenue for the latest quarter, it wasn’t enough – analysts wanted 46%. Read 

When an Acquisition Beats an IPO

Nov 2, 2011, 2:57 pm EST
When an Acquisition Beats an IPO

On Tuesday, I talked to James Slavet, one of the partners for the Internet consumer side of venture capital firm Greylock
Partners.  He certainly knows how to spot breakout companies, some of which have included Pandora (NYSE:P), Facebook, LinkedIn (NYSE:LNKD) and Groupon.  But just as importantly, his team also has a good sense for the right exit.

While IPOs are great, Slavet said that an eventual acquisition is by far the more likely option.  For example, he has helped sell
Farecast to Microsoft (Nasdaq:MSFT) and Kongregate to GameStop (NYSE:GME).

His latest deal came this week, facilitating the sale of Auditude to Adobe (Nasdaq:ADBE) (for an undisclosed price). Auditude is a top player in video ad management, with clients like News Corp.’s (NYSE:NWS) Fox, Major League Baseball and Comcast (Nasdaq:CMCSA).  “When we invested in the company in 2007,” said Slavet, “we saw a major shift to premium web video.” Read 

Solyndra: Where Did Your Tax Dollars Go?

Nov 2, 2011, 2:04 pm EST

I had dinner Tuesday night with a Silicon Valley CEO.  He mentioned that Solyndra, the bankrupt solar operator, was liquidating its assets via an auction.  “I want to get some cool chairs and a projector,” he told me.

Not long ago, Solyndra was a showcase for President Obama’s “green jobs” movement. Over the past few years, the company received $528 million in federal loan guarantees. Now, it’s just a sad, expensive joke.

On the other hand, if you want to get some good deals on so-called noncore assets, you can check out Heritage Global Partners, which is managing the auction (they also handled the one for Enron). Read 

Global Brass & Copper Buffing Up for an IPO

Nov 1, 2011, 1:26 pm EST
Global Brass & Copper Buffing Up for an IPO

When it comes to corporate turnarounds, John Walker is one of the best operators. Among his accomplishments: He was able to restructure Weirton Steel Corporation, as well as help Delphi Corporation get back to health.

His latest gig? CEO at Global Brass & Copper, a specialty manufacturer of foil, rods and fabricated components for markets like housing, autos and munitions. Since coming on board in 2007, it looks like this has been another success for Walker.

The most recent good news: Global Brass & Copper has filed for an IPO. The underwriters include Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS). Read 

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