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2015 IPO Outlook


The 2015 IPO Outlook Features Some Well-Known Names

2015 IPOsThe 2015 IPO outlook features some well-known names in the technology world, some of which have put off their Initial Public Offerings (IPOs) during 2014, due to company-specific reasons and in some cases due to stock market volatility.

2014 is a tough act for 2015 to follow in the IPO market.   With the stock market in the fifth year of a bull market, 2014 was a banner year for IPOs. 231 IPOs have been completed during 2014, as of October, a 36.7% increase over 2013, netting newly public companies $73.6 billion in cash for their needs, 84.1% more than the prior year.

While it is unlikely there will be more IPOs during 2015 than there were in 2014, there are some notable companies that are part of the 2015 outlook that investors would do well to pay attention to. Some of the 2015 IPOs will include high-quality companies that investors should look at seriously as long-term investments.

IPOs represent a broad spectrum of industries. The excitement surrounding IPOs currently centers around the life sciences, technology, financial, and energy sectors. In technology, the IPO activity is skewed towards Internet companies.

GoDaddy

2015 is shaping up to be no different than recent years. From file sharing to web hosting to online dating, the headline IPOs of 2015 are all technology and Internet companies that many people know because they use them and are customers. These include the cloud storage and file sharing company Box Inc., the web hosting company GoDaddy Inc., and the online-dating site Zoosk Inc.. What makes the technology and Internet IPOs different this time around, compared to the horrendous performance of many IPOs after the dot.com bubble burst around the year 2000, is that many of the companies IPOing in 2015 run well established businesses that produce real revenues, and in some cases real earnings. Although Internet based companies are the sexy IPOs of 2015, companies in the other hot IPO sectors should also be taken into consideration, as these companies are experiencing rapid growth in revenue and for some earnings.

The 2015 IPO Outlook | The Sectors To Focus On In 2015

Not surprisingly, the technology sector has been the strongest IPO sector in 2014 and its dominance in the IPO market should continue in 2015.   Biotechnology and healthcare stocks have rallied tremendously in recent years. This broad rally has caused an uptick in interest in IPOs in this sector, which is known as the life sciences sector. Look for life sciences IPOs to be leaders again in 2015. The financial sector has also put in a big showing in the IPO market lately, and this should also be the case during 2015. Even though energy prices have fallen in late 2014, there are no signs that IPOs by energy companies will slow down in 2015. In fact, many energy companies are eager to IPO as master limited partnerships (MLPs) to take advantage of the tax advantages enjoyed by master limited partnerships, which should drive the IPO market for energy companies in 2015.

The 2015 IPO Outlook | IPOs To Look Out For In 2015

ZooskThe following are some of the IPOs that will likely garner the most attention during 2015. This is just a sampling of the hundreds of potential IPOs that may come to market in 2015.

  • Box – Box is one of the leading companies in the fast growing cloud-based storage Internet sector. Box’s clients use the company’s products to store files in the cloud and to share files with others.
  • Dropbox – Dropbox is in a similar line of business as their competitor Box. Dropbox is known as one of the leaders in the fast growing cloud-based file storage and sharing space.
  • Square – Square was founded by Twitter founder Jack Dorsey. The company is trying to make a name for itself in the quickly growing online electronic payment processing sector. Square’s software and backend payment processing systems turn any smart phone or tablet into a cash register that is capable of accepting and processing credit card payments.
  • Zoosk – Zoosk is on of the best-known names in the world of online dating.
  • GoDaddy – GoDaddy is a well-known Internet domain registrar and website hosting company.
  • Redfin – Through its website Redfin.com, users can search real estate and arrange to view homes in person via Redfin realtors.

Why IPOs Will Remain Hot During 2015 and A Word of Caution

One of the factors that is likely to keep the pace of IPOs high in 2015 is the strong state of the United States economy. With the economic recovery reaching a mature age of six years during 2015, companies will by motivated to go public via IPOs to raise capital in the stock market ahead of the next economic downturn.   Just beware that some companies that have waited this many years to do an IPO may not be very stabile financially and need to be thoroughly vetted prior to investing in them.

One thing that is missing from the 2015 IPO calendar is a blockbuster IPO that captivates everyone who follows the stock market.   In 2013, the blockbuster IPO was Twitter, while in 2014 it was Alibaba. The reality is that in a typical year, IPOs are done by hundreds of companies, big and small, for the purpose of raising money for business expansion and other business needs. Even without a blockbuster IPO that stands above the rest in 2015, there will still be plenty of opportunities for traders and investors to buy IPOs that have great potential to make gains during 2015. In fact, it is the under-the-radar IPOs that often provide the best trading and investing opportunities, since they are not overvalued coming out of the gate and have room to appreciate in price as the broader stock market realizes the success of their underlying businesses.

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