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IPO “Spring” Might Be Sooner Than Experts Think
By Investment U on January 9, 2009 | More Posts By Investment U | Author's Website
According to Bernstein Research, the IPO market for the next year (or two) is going to be about as successful as the Detroit Lions - in other words, not great.
But the IPO market might start picking up sooner than they think. With the amount of money sloshing around in Treasuries driving returns to near 0%. It stands to reason that investors will start looking for better things to do with their money.
In addition, private equity shops aren’t going to want to be “short stacked” for too long. Like a poker game, if you aren’t adding chips, you’re losing them.
The interesting thing is that Grand Canyon Education (LOPE), which is the most recent IPO, has increased almost 50% since in November.
It’s a standout. Most IPO offerings in the last six months have been pulled, the remaining ones have lost sizeable amounts. Others, like Penthouse’ parent company, are finding that they are fighting lack of interest in addition to the chilly environment.
The take-away, is the recent IPOs that debuted in July and August like Rackspace Hosting (RAX), GT Solar (SOLR) and Energy Recovery (ERII) have been brutalized by the market’s performance - perhaps unfairly.
Underwriters will probably err on the side of caution in pricing new IPOs - under-pricing them, and that could benefit early investors.
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Have you heard of global food technologies or Ipura. If they are lined up for a spring 2009 IPO registration?
Terri, go and have a look at whether they are real, is there a machinery they say they have, spend the $1000 to investigate and then you will realise that you will now want to invest every penny that you could spare. I have invested in the company and you know what I have even put subtantially more money last week, the money is more safer here then in the bank.
Terri, stay as far away from this company as possible. They simply raise cash from nice trusting people who aren’t financial analysts, then pay it out to their employees and a news agency that floods the net with crap announcements. Dig a little on the founders, especially Keith Meeks. Or read the financials to see how much revenue they’ve ever had (answer zero). Or figure out how much stock has been issued to the controlling parent company. Or just take my word on it and don’t put in another penny. You’ll never see that money again.
Hi There,
Can I ask you what is your justification on that? I have very close relatives who have invested over £100k in them for the last 10 years and from their accounts, things will look pretty rosy in 2 years.
Will they just keep going without ever floating??
Cheers,
Becky
Hi Becky - They file statements with the SEC. Here are some of them: http://yahoo.brand.edgar-online.com/default.aspx?cik=1122108. Read the most recent 10Q and 10K. There isn’t a rosy thing about them, they’ve never had any revenue, just a bunch of press releases generated by a media company that they’ve paid in stock. They’ll keep going as long as they can keep raising money from unsuspecting investors like your relatives. They’ve got 30 million shares outstanding and that excludes the warrants and preferreds. They’re selling those at $4.50, so the company has to be worth $135 million to get your investment back. They have $1 million of assets and $1 million of liabilities, so book value is zero. Where’s the $135 million? Is their sole manufacturing facility, a leased former Pirelli wharehouse worth that? Where’s the “inventor” of this amazing patent, Mark Terry, and what’s his educational background? What’s the legal past and former businesses of Keith Meeks, Gary Neilsen, Stephen Fryer? With such an amazing patent why do they have to go hat in hand to thousands of unsophisticated individual investors instead of getting it all at once from a major food company or institutional investor?
The company files with the SEC, search Edgar and read the most recent 10Q and 10K. Zero revenues, none ever. 30 million shares outstanding and that excludes the warrants and preferred stock, so if you’re paying $4.50 a share you must believe the company’s equity is worth $135 million. It has $1 million of assets and $1 million of liabilities, so book value of that equity is zero. Where’s the $135 million? In their sole manufacturing facility, the leased former pirelli warehouse? The only real asset they’ve got is the marketing firm they’ve paid in stock to flood the internet with official-sounding press releases. With this amazing patent they’ve got to clean fish, why are they choosing to go hat in hand to thousands of small unsophisticated investors instead of doing it all at once with a large investment from a food company or an investment fund? Perhaps because anyone with industry or financial experience wouldn’t touch it, or anyone that’s bothered to read their filings? What’s the educational background of the “inventor” Mark Terry and why with such a promising firm did he leave to start a similar scam? What sorts of companies and lawsuits have the top guys been involved with - Keith Meeks, Gary Nielson, Marshall Sparks, etc?