Archives for IPO

Goldman Sachs BDC (GSBD) -

Goldman Sachs is spinning off some of its secured debt business in the form of an initial public offering. The company is selling 6 million shares at a price range of $20 to $21. The specialty finance company formed in 2012 makes $36.9 million on revenue of $73.3 million.  The market cap if the stock prices at the midpoint of its range will be around $725 million.

IPO Analysis -

This is a closed end fund. The way these typically trade is for a $1 to $2 decline over the first few months and for the stock price to remain flat afterwards. This is only an investment for a specific type investor and for the general investor our Recommendation – Avoid.

Tantech Holdings Ltd. (TANH)-

This company manufactures bamboo-based charcoal products that are used in household heating, cleaning, purification, agricultural and industrial energy fields. It has both a domestic and international sales and distribution network, which generate net income of $11.8 million on revenues of $64.7 million. Tantech is offering 3.2 million shares at a price range of $4 to $6 per share. The underwriter is ViewTrade Securities and the offering will be on a ‘best efforts’ basis.

IPO Analysis -

This offering is too small for us to recommend with a market cap of just $108 million. We also shy away from any stock that can easy trade below $5 per share, making the security non-marginable at most brokerages and hurting liquidity. The fact that the offering is a ‘best efforts’ means the underwriter does not have to buy all the shares before the IPO, therefore a large percent of shares could be dumped on the market shortly after the offering. Recommendation – Avoid.

National Commerce (NCOM) -

National Bank of Commerce is a relatively small local bank with locations in Alabama and Florida. They are offering just 1.6 million shares at between $18.50 and $20.50 per share. Giving them a post offering market cap of $177.5. This bank has assets of just over $1.1 billion and pulls in a net income of $5.4 million on revenue of just $31.3 million.

IPO Analysis -

This is a very small bank in comparison to many others in the region and that makes this a riskier investment. I don’t see a huge first day pop happening and the company is not right for our portfolios, however nothing terrible stands out in its balance sheet and we don’t think it will lose a lot of value in the first few months of trading. Recommendation – Neutral. 

SteadyMed (STDY) -

SteadyMed is an early stage biopharma company based out of Israel. Its main product is called Trevyent and is for the treatment of pulmonary arterial hypertension. It also has two product candidates for the treatment of acute pain and a medical device called PatchPump which delivers those drugs. The company is offering 4.3 million shares at a price range of $12 – $14 per share, giving the company a market cap of around $160 million.

IPO Analysis -

SteadyMed has yet to generate revenue from its product sales, which is typical of a biopharma at this stage. These companies usually trade flat until they start to make deals with bigger pharmaceutical companies to finally get their drugs to market. They also usually go public when their primary product is still one to two years away from FDA approval, meaning we think there will be a better entry point into the security in the near future. Recommendation – Neutral.

Valeritas (VLRX) -

This company makes medical devices, with its commercial product being an insulin delivery system designed to help people with Type 2 diabetes maintain their target blood glucose levels. Last year the company had $13.5 million in revenue but ended up losing about $75 million in net income. It is offering 5 million shares at a price of $14 – $16 per share.

IPO Analysis -

While it is nice that the company has a product on the market that is making money, its high operating expenses mean it is likely to require additional outside capital in the future to keep its business going. We don’t recommend it at this time and we think there could be better entry points in the future. Recommendation – Neutral.

Corsair Components (CRSR) manufactures high-performance components for PC gamers, specifically those who build their own computers or customize pre-built systems to achieve faster processing speeds and improve graphic capabilities. It hopes to raise $78 million and trade with a market cap of $223 million. The company has around 800 employees and is based out of Fremont, California. Corsair is pricing 6 million shares at a price of $1…..Read the full article here

A California based company is bringing professional aesthetic treatments into customers homes at a fraction of the cost. Tria Beauty (TRIA) offers two lines of aesthetic light-based treatments, a Hair Removal Laser and Skin Perfecting Blue Light. The managers underwriting the deal are Morgan Stanley (MS), Piper Jaffray (PJC), and Well Fargo Securities (WFM). The healthcare company is looking to raise $64 million in an initial public offering set to begin trading on May 24th. Tria Beauty is pricing 4.6 million shares at $1….Read the full article here

Recently the IPO market has shown signs of life, with more and more companies looking to break into the public markets. New, more relaxed regulations for smaller companies and a stock market that has been steadily recovering after the 2008 recession, have made it easier for businesses to make the transition from a private company to a public one. When a company initially sells its shares there are a lot of stipulations in the offering designed to help preserve the share price.  One of these stipulations is the “lockup” period, which is usually 90, 180 or 360 days after the IPO. This is the amount of time insiders and pre-IPO investors have to wait before they sell their shares on the open market. This sudden deluge of supply can sometimes cause the share price to fall dramatically and savvy investors can make money from this drop…..Read The Full Article Here

This company operates in a completely different space than Facebook, but while other companies are postponing their IPO’s or withdrawing them all together, one is still looking to start trading this week. Maybe because the offering is so small there will still be plenty of available capital to participate in the IPO. It hopes to raise $48 million, giving the company a total market cap of $111.9 million. The deal is underwritten by William Blair & Company, Baird, Needham & Company, and First Analysis Securities Corporation. Cancer Genetics (CGIX) is pricing 4 million shares at $1…..Read The Full Article Here

If you have been living in a cave for the past couple years, let me bring you up to speed. Facebook (FB) is going public this week. The excitement surrounding the IPO has been the highest I can remember since Google went public in 2004. The two words being thrown around last week were “highly oversubscribed”. Pretty much meaning everybody wants it, no matter what the price. I can understand some of the hype as retail investors love IPO’s of companies they see frequently and use their products often. No one disputes that Facebook is one of the best known brands in the world.

So before I go any further, here are the basics of this massive offering as it stands today: Facebook is offering 337.4 million shares at between $28 and $35 per share. It hopes to raise $11 billion and this give it a market cap of $67.4 billion.  The final prospectus has yet to be declared effective by the SEC and therefore all this information is still subject to change before May 18th (the date Facebook plans to begin trading on the public markets).

Obviously, this being the most sought after and talked about IPO in years, instead of boring readers with Facebook’s numbers; which have been thrust down investors throats for weeks now, I thought I would write about how no one should hold Facebook after the IPO……Read The Full Article Here

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