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Yelp Leads This Week’s IPO Pack

It will get lots of attention, but three other IPOs look interesting, too


Last week saw sizzling activity in the IPO market. Bazaarvoice (NYSE:BV), which is a cloud-based platform that analyzes social media, posted a 37.6% return. But the big winner was Proto Labs (NYSE:PRLB), which surged over 81%. The company has an automated system that allows manufacturers to easily prototype new products.

The current week has four IPOs on tap. And the group is fairly diverse — ranging from social media to semiconductors to mortgages. Here’s a look:

Yelp (NYSE:YELP): The company’s website lets customers review local businesses. Since its launch in 2003, it has attracted 25 million reviews and gets 66 million unique users per month.

Over the past couple years, Yelp has aggressively invested in its mobile offerings, which now attract about 5.7 million users per month.

From 2008 to 2011, Yelp’s revenues have increased from $12.1 million to $83.3 million, but the company continues to sustain losses. It ran up $16.1 million in red ink over the past year, up from $9.6 million in 2010.

Yelp intends to sell 7.2 million shares at a range of $12 to $14. The lead underwriters include Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Jefferies (NYSE:JEF).

Home Loan Servicing Solutions (NASDAQ:HLSS): With the proceeds of its IPO as well as a private placement, the company will purchase the servicing rights to a $16 billion portfolio of residential mortgages from Ocwen. Since it won’t originate or purchase mortgages, there will be no mortgage risk. The company also plans to hedge the interest rate exposure.

The goal is to provide a highly consistent dividend yield. Based on its projections, HLSS plans to pay $1.20 per share for the current year. In fact, company Chairman William Erbey plans to invest $10 million in the financing.

HLSS intends to issue 13.3 million shares at a range of $14 to $16. The lead underwriters include Wells Fargo Securities (NYSE:WFC), Barclays Capital (NYSE:BCS) and Citi.

GCT Semiconductor (NASDAQ:GCTS): According to IDC, 4G-enabled mobile devices are expected to grow from 13.1 million in 2011 to 202.2 million in 2015, a staggering annual growth rate of 98%.

One of the beneficiaries of this megatrend is likely to be GCT Semiconductor. The company develops a single-chip solution that handles the key elements of a 4G system. For example, it supports the LTE deployments of operators like AT&T (NYSE:T), Metro PCS (NYSE:PCS), Verizon (NYSE:VZ) and Vodafone (NYSE:VOD).

From 2009 to 2011 (as of June 30), GCT’sevenues surged from $22.4 million to $68.6 million. The company is also generating profits.

GTC plans to sell 7.5 million shares at a range of $7 to $9. The lead underwriter is Bank of America (NYSE:BAC).

Argos Therapeutics (NASDAQ:ARGS): This biotech company focuses on personalized therapies for cancer and HIV. These treatment are based on the dendritic cell — which is a specialized white blood cell — to activate an immune response.

Argos’s most advanced drug is AGS-003, which deals with metastatic renal cell carcinoma. In the second quarter of 2012, the company plans to go to Phase 3 clinical trials.

Co-founder Ralph M. Steinman won a Nobel Prize for his discoveries regarding dendritic cells. Unfortunately, he died last year.

Argos plans to issue 5.3 million shares at a range of $13 to $15. The lead underwriters include Lazard Capital Markets (NYSE:LAZ) and Canaccord Genuity.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

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