The window for launching large-scale tech IPOs has effectively now closed until 2015. With few new significant tech listings to look forward to before the end of… Read more
The window for launching large-scale tech IPOs has effectively now closed until 2015. With few new significant tech listings to look forward to before the end of the year, let’s look back over some of the year’s capital market activity which captured the attention of the investors and the media.
From Alibaba to Zendesk, this year was a roller-coaster year for tech IPOs. Although Paul Kedrosky at Bloomberg recently tweeted that 2014 was the “best year for IPOs since 2000” not everyone ended up as a winner.
First, some of the success stories:
- Alibaba (BABA) (debut price: $92.70; closing price as of 15 December 2014: $104.70; gain: +12.9%). The Chinese ecommerce behemoth makes the list due to the amount it managed to raise, rather than any stellar growth since listing; whilst it easily wins the title of the biggest IPO of the year, its shares have been fluctuating around the $100-110 mark for the last month or so. However, commentators believe that 2015 has only good things in store, if Alibaba’s YunOS mobile operating system can begin to make in-roads on Android’s 90% market share in China.
- GoPro (GPRO) (debut price: $28.65; closing price as of 15 December 2014: $60.52; gain: +112%). Much of GoPro’s (GPRO) gains occurred in the first few months following listing, but a recent surge in value (which may be due to the recent news that GoPro has signed a deal to fit Tour de France bicycles with its PoV cameras and is looking to launch a range of consumer drones next year) has ensured GoPro ends the year with a three-figure percentage gain.
- TrueCar (TRUE) (debut price: $9.70; closing price as of 15 December 2014: $20.48; gain: +111%). TrueCar, an online car trading platform, gave early investors big returns as its share value peaked at $25 in September but analysts have subsequently downgraded the stock, citing concerns about its business model and inflated valuation.
- Zendesk (ZEN) (debut price: $11.40; closing price as of 15 December 2014: $23.94; gain: +110%). On its first day of trading, the stock of Zendesk (the cloud-based customer service platform provider) closed 49% higher than its initial pricing of $9 a share and it’s been an upward trend ever since, with stock prices currently trading around $20-25.
And the ones that didn’t quite live up to the hype? Well, King (KING) stumbled at the first, dropping from a listing price of $20.50 to $10.68 at its lowest in October. Since then, the launch of Candy Crush Soda Saga has helped restore some pride, but current trading values see its stock pegged around the $15 level. Care.com (CRCM), the online babysitting marketplace, seemed to be doing well at the start of the year (it hit a high of $29.25 in February) but analysts pointed to a slowing of growth and disappointing earnings for the second half of the year, and its share currently trade at $7.88. Similarly, Coupons.com (COUP) will be wanting to put 2014 behind them. In 2011, the digital coupons business was said to be worth $1billion; in March 2014, with Goldman Sachs as its lead underwriter, it raised $168million, debuting at $27.15 a share. Less than three months later, Goldman Sachs downgraded its outlook to sell, and its shares are currently valued at $15.29.
For our last IPO Watch of the year, we may be expected to make a few predictions for 2015, but as Neil Bohr said: “prediction is very difficult, especially if it’s about the future”; with tech IPOs, the only prediction one can make with any certainty is (Alibaba outliers apart) the unpredictability of the market. However, with GoDaddy already (potentially) lined up and Pure Storage, Dropbox and Nutanix still waiting in the wings, one thing’s for sure: it’s not going to be a quiet 12 months.
For more information, please contact Andy Moseby.