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Sabre, Weibo Jump Through Closing IPO Window
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Sabre, Weibo Jump Through Closing IPO Window

Apr 17 2014, 4:12pm CDT | by

The two-year anniversary of Facebook’s 2012 IPO is just a month away, and if recent trends continue the demand for new offerings may start resembling the freeze that followed the social...

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14 weeks ago

Sabre, Weibo Jump Through Closing IPO Window

Apr 17 2014, 4:12pm CDT | by

The two-year anniversary of Facebook’s 2012 IPO is just a month away, and if recent trends continue the demand for new offerings may start resembling the freeze that followed the social network’s debut.

After that botched open , it took weeks for the next batch of IPOs to come through, and in the midst of the hottest IPO market since the dot-com bubble there are signs that conditions have gotten overheated and investor appetite is waning.

For one thing, the number of unprofitable companies flowing through the IPO pipeline has swelled. Jason Goepfert, author of the SentimenTrader Daily Report, cites a statistic that 83% of deals in the last three months were from money-losing companies, the highest such figure since the first quarter of 2000 (h/t to the Wall Street Journal ).

That alone doesn’t mean the IPO market is going to grind to a halt. Far more important are the returns for both the broader market and the most recent predecessors to companies going public today. Unfortunately for the optimists there is softness on that front as well.

The Nasdaq Composite and Russell 2000, home to high-growth names in sectors like tech and biotech that are well-represented in the IPO market, are each in negative territory for the year, down 1.9% and 2.7% respectively.

A number of recent deals have proven disappointments as well. Candy Crush parent King Digital landed with a thud in late March. The much-hyped app-maker priced its offering two dollars below its expected range and spent its first trading day in the red. Even a recent comeback still has the stock more than 10% below its offer price.

That still leaves room for the occasional hot deal, but a 65% first-day pop like the one Zoe’s Kitchen enjoyed last week has quickly become the exception rather than the rule. This week’s slate of deals has shown cracks, with several struggling to even reach the public market. Paycom Software had to postpone its offering from last week to Tuesday, ultimately pricing below its expected range.

That wasn’t such a badge of dishonor this week, with all 10 companies conducting public offerings pricing at the low end of their range or worse, according to market data firm Ipreo. At least that shows management teams and bankers are being responsive to fading IPO appetites.

Weibo, commonly referred to as China’s version of Twitter, took a while to get going as its opening bids were sorted out Thursday, but by the afternoon shares were climbing , closing with a 19% gain. Meanwhile travel software-as-a-service firm Sabre, the parent company of Travelocity once owned by American Airlines and taken private by Silver Lake and TPG in 2007, debuted to a slim 3% gain.

Both owed their advances to more realistic expectations though, selling fewer shares than initially planned at lower prices.

To Sabre Chief Financial Officer Rick Simonson, getting out into the market and putting the company’s shares in the hands of public investors was more important than waiting for a more opportune moment.

“Markets have their ups and downs,” he told Forbes Thursday morning, “we try not to get overly enthusiastic when markets are up, or depressed when things cool off.”

Sabre, which counts major hotel chains and airlines among the clients for its travel software services and technology, is among the group of money-losing companies making their public debuts this year, but at least in its case those losses are shrinking and revenues are rising, not to mention that it will pay a dividend right out of the gate.

Simonson touted the company’s recurring revenue sources as a reason for confidence, and if investors buy in to that sentiment to send Sabre and other IPOs of recent vintage higher the window could be pushed back open for the next batch of deals. If not, the first significant IPO slowdown osince the post-Facebook freeze may be on its way just in time to greet the expected offering from Alibaba later this year that has its sights set on the social network’s records for a technology debut.

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The IPO Class Of 2014

 
Update
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7 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was b ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by th ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Mustapa Mohame ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocatio ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 2014. ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damans ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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