360° Coverage : Sabre, Weibo Jump Through Closing IPO Window

2 Updates
Sabre, Weibo Jump Through Closing IPO Window
Photo Credit: Forbes Business

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...

Filed under: news

 
 
 

19 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.

Follow @SchaeferStreet

The IPO Class Of 2014

 
Update
2

3 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new compan ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

4 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and MH17 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Return as India's envoys, Modi to India-bound Japanese youth
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday kicked-off a new initiative on training for Japanese youth started by Tata Consultancy Services (TCS) at its various facilities in India, asking them to return to Japan as India's ambassadors.
 
 
Scientists get ready for mock on-site nuclear inspection
Washington, Sep 2 (IANS) Some 40 scientists and technicians from around the world will descend on Jordan in November to take part in a simulated on-site inspection of a suspected nuclear test site on the banks of the Dead Sea.
 
 
Russian space 'sex geckos' found dead
Moscow, Sep 2 (IANS) Four female lizards and one male who were sent to space to understand the effects of weightlessness on sexual intercourse have died, the Russian Space Agency said in a statement.
 
 
Nigeria to get Japanese drug for Ebola treatment
Abuja, Sep 2 (IANS) Nigeria will soon get a Japanese drug to treat Ebola, the country's Health Minister Onyebuchi Chukwu said Monday.
 
 
 

Latest from the Network

Carrie Underwood announces pregnancy
Los Angeles, Sep 2 (IANS) Country star Carrie Underwood and NHL player Mike Fisher have announced that they are expecting their first child. Underwood and Fisher posted the news on their social media accounts Monday,...
Read more on Celebrity Balla
 
Look at India, Modi tells Japan
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday hoped Japan will follow "Look at India" policy. "Just as India is focusing on Look East policy, we expect Look at India policy from Japan," Modi said, adding...
Read more on Politics Balla
 
Return as India's envoys, Modi to India-bound Japanese youth
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday kicked-off a new initiative on training for Japanese youth started by Tata Consultancy Services (TCS) at its various facilities in India, asking them to return...
Read more on Politics Balla
 
Scientists get ready for mock on-site nuclear inspection
Washington, Sep 2 (IANS) Some 40 scientists and technicians from around the world will descend on Jordan in November to take part in a simulated on-site inspection of a suspected nuclear test site on the banks of the...
Read more on Apple Balla
 
Sam Smith was in love with straight man
Sam Smith fell in love with a straight man. The 22-year-old star - who opened up about his own sexuality earlier this year - has now revealed the man who inspired the heartbreaking lyrics to many of the tracks on his...
Read more on Celebrity Balla
 
Diana Ross hosts 'farewell barbecue'
Diana Ross hosted a ''farewell barbecue'' for Evan Ross and Ashley Simpson. The 70-year-old star threw the party for her son and his new bride the day after their wedding to wish them well on their journey into married...
Read more on Celebrity Balla
 
Family dinners protect kids from cyber-bullying
Toronto, Sep 2 (IANS) Make it a point not to miss family dinners to connect with your kids and help them cope with cyber-bullying. Like traditional bullying, cyber or internet bullying can increase the risk of mental...
Read more on Celebrity Balla
 
Maradona meets Pope at 'Match for Peace'
Rome, Sep 2 (IANS) Argentine football legend Diego Maradona briefly met Pope Francis, an avid football fan, before the start of 'Match for Peace' exhibition game and presented him with an Argentina shirt. Pope Francis...
Read more on Sport Balla
 
India committed to peace: Modi
Tokyo, Sep 2 (IANS) Prime Minister Narendra Modi Tuesday said that India is committed to peace and this commitment has "significance far above any international treaties or processes". "Commitment to peace and non-...
Read more on Politics Balla