Angie’s List IPO Won’t Come Highly Recommended

Aug 26, 2011, 10:38 am EST

In the mid-1990s, Angie Hicks’ co-founder had lots of trouble finding good contractors in Columbus, Ohio. So why not create a website that allows for trusted reviews? Of course, the result was Angie’s List.

It definitely was a good move. Now the company has filed to go public.

Angie’s List covers more than 550 categories, such as plumbing, roof repair, remodeling and auto repair. As for the ratings, they are based only on member feedback and comments. There are no anonymous reviews. And the audience is highly engaged. It generates roughly 40,000 reviews per month (the total is 2.2 million). Read 

Toys ‘R’ Us: Could Its Buildup Blow Up?

Aug 24, 2011, 3:38 pm EST

Since its start in 1948, Toys “R” Us has always found ways to evolve and grow. But its luck might be running out as the retail landscape is undergoing cosmic shifts. In other words, can an operator like Toys “R” Us survive the onslaught from rivals like Wal-Mart (NYSE:WMT) and Amazon (NASDAQ:AMZN)? And will the stagnant U.S. economy make things even worse?

OK, it’s unlikely that Toys “R” Us will become obsolete. This seems a bit extreme. But it’s likely the problems will grow and grow.

But Toys “R” Us doesn’t look worried. For example, the company has announced plans to launch 21 stores this year, which will include 11 “R” superstores. They will be roughly 60,000 square feet and will meld the Toys “R” Us and Babies “R” Us formats. Read 

Groupon: An IPO Markdown?

Aug 10, 2011, 10:00 am EST
Groupon: An IPO Markdown?

Back when Groupon filed its IPO on June 2, the environment looked pretty good. The economy was expected to have a strong back half, and investors were desperate to get hot dot-coms, as seen with the stellar offerings from companies like Yandex (NYSE:YNDX) and LinkedIn (NYSE:LNKD).

But in light of the recent market plunge, the prospects for IPOs are looking grim. Actually, it’s a good bet that companies already are taking swift actions to “go back to basics.”

Just look at the latest S-1 filing from Groupon, which is the largest daily deal site. The company has deleted its use of its creative accounting approach known as “adjusted consolidated segment operating income” (ACSOI), which stripped out marketing. All in all, the metric spooked investors, especially in light of the accounting issues with Chinese IPOs. Read 

IPO Window May Have Slammed Shut

Aug 8, 2011, 11:36 am EST

The IPO market goes through time windows where investors are willing to take risks. These can be fairly short – say, a few months. Or they can last several years, which is what happened during the late 1990s.

In light of the recent market plunge, it looks like the IPO window has closed – at least in the near term. The global financial meltdown has created substantial uncertainty, with S&P’s downgrade of U.S. debt yet another shock to the system. At the same time, it looks like the global economy is slowing down.

These are tremendous headwinds for the 10 companies that are expected to launch an IPO this week. It’s a good bet that none of them will actually price. Read 

Let Teavana’s Hot IPO Shares Cool Down

Jul 29, 2011, 10:29 am EST

 Normally, this would have been a tough week for IPOs.  But, at least for new stock issues, investors have been willing to shrug off bad news as well as the doomsday talk about the budget standoff.  On Wednesday, Dunkin’ Brands (Nasdaq:DNKN) had a stellar IPO, with its price spiking 47% on its first day of trading.

A day later, there was another hot deal:  Teavana (NYSE:TEA).  As the name implies, it operates stores that sell tea drinks and accessories.  On its debut, the stock shot up 63.5% to $27.80, bringing the market cap to a cool $1 billion. (On Friday, the shares were off 0.8%).

If you’re a mall rat, then there’s a chance you’ve seen a Teavana store, with its employees standing outside and asking people to try a free cup.  I’ve done it a few times — and yes, I will somehow walk into the store and buy some stuff. Read 

All IPOs Are Not Created Equal

Jul 26, 2011, 12:53 pm EST

Despite the risk, IPOs offer the potential of getting in on the Next Big Thing.  Just look at investors who bought shares in the offerings of Microsoft (Nasdaq:MSFT), Wal-Mart (NYSE:WMT) and Starbucks (Nasdaq:SBUX) — those were millionaire-makers.

Interestingly enough, we may be on the verge of another IPO boom.  Already this year, there have been standout offerings from companies like HomeAway (Nasdaq:AWAY), LinkedIn (NYSE:LNKD), Zillow (Nasdaq:Z) and Pandora (NYSE:P).

Yet not all IPOs are created equal.  The fact is that the market is quite diverse.  For example, IPOs are often a way for private equity firms to get big returns for earlier acquisitions.  But often these companies have little or no growth, and returns will probably be disappointing.  Read 

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