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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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2014 IPO Outlook


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2014 IPO Outlook | What’s Hot and What’s Not

2014 IPO OutlookThe 2014 IPO outlook is looking quite interesting, as several high profile Initial Public Offerings (IPOs) are expected during 2014.  Once again, Internet companies and companies in computer related industries are the hottest IPOs on the 2014 IPO calendar.  A new wave of Internet companies that have been established over the past decade and the move towards cloud computing and file sharing is driving much of the current IPO activity.  These young companies have relied upon private investors to provide funding during their start-up and early operating stages.  As they have matured into established operating companies, the need to go public via an IPO has become more urgent since private investor avenues can only provide a limited amount of funding, and early investors and company insiders want to unlock the value of the private stock that they hold in the companies.

Another factor that indicates that the 2014 IPO outlook is strong is the expected strength of the United States economy during 2014.  While 2013 has been a sluggish economic period for the United States, economic growth is expected to accelerate towards the end of 2013 and remain robust during 2014.  A strong economy and a healthy stock market often prods companies to follow through on their plans to go public via an IPO.  Investor enthusiasm is necessary for successful IPOs.  Companies realize that good times do not last forever in the economy and the stock market.  To generate the most revenue from an IPO for future corporate purposes, companies understand that it is best to undertake an IPO during strong economic times, while investors are looking to invest in companies going public via IPOs.

2014 IPO Outlook | Possible Hot 2014 IPOs

2014 IPOsWhile there will be many IPOs during 2014, there are number of IPOs that will likely be hot IPOs that are highly sought after by the Wall Street investment community.  The following 2014 IPO outlook highlights some of the high profile IPOs that are likely during 2014 and may be worth tracking for possible IPO investment and trading ideas.

  • Twitter – The highest profile potential IPO on the 2014 IPO calendar is the Twitter IPO.  Twitter, the social networking company, is one of the best known second generation Internet (Internet 2.0) companies that has not yet transitioned into a publicly traded company via an IPO.  Twitter has proven to the Wall Street investment community that it has a viable business model that can generate real revenues.  In 2013, Twitter is expected to generate revenue in the neighborhood of $600 million, which is expected to pass $1 billion during 2014.  Twitter’s solid and growing revenues, and the ability of Wall Street analysts to understand their business model and project future revenues sets the Twitter IPO apart from many other second generation Internet IPOs in recent years.  This transparency and the fact that Twitter is a well known company, is likely to make the Twitter IPO the hottest IPO since the Facebook IPO occurred during 2012.
  • Box – The Box IPO is expected to be one of the more highly anticipated IPOs on the 2014 IPO calendar.  Box is one of the leading companies in the fast growing cloud-based storage Internet sector.  Box’s achievements have been impressive, which has caught the attention of the Wall Street IPO investment community.  The company is a provider of cloud storage services to more 125,000 businesses and 11 million customers.  Their business clients include more than 80% of the companies currently on the Fortune 500 list.  While Box’s revenues are relatively modest, the high growth of the Internet sector that the company operates in gives investors reason for future optimism.  While many companies dodge questions about a potential future IPO, Box’s Chief Executive Office (CEO), Aaron Levie, has publicly indicated that Box is driven to go public to avoid being acquired by a larger competitor and to provide future funding, as well as to reach full valuation.
  • Redfin – Redfin operates an online real estate brokerage (Redfin.com) that allows users to search for and view homes for sale via a map view.  The site provides information about homes, including sales records and past appraisals.  Instead of sending users to third-party realtors, Redfin has their own team of realtors that assist site users with making arrangements to see and buy homes.  Redfin’s Chief Executive Officer (CEO), Gleen Kelman, has stated that the company intends to go public via an IPO during 2014.

Possible Hot IPOs That May Be Pushed Off Until 2014

Upcoming IPOs
The following IPOs may either occur during late 2013 or during 2014.  The IPO market is notoriously volatile, as IPO plans are often delayed due to a variety of factors, from company-specific factors to overall stock market sentiment.  Therefore, even though the following IPOs are expected before 2013 is over, some of them may very well be delayed until 2014, and are worth keeping an eye on.

  • Square – Square is a leader in the high growth online electronic payments and payment processing sectors.
  • Eventbrite – Eventbrite is a major player in the event planning and ticket processing sectors.
  • Dropbox – Dropbox is a leader in cloud based the file sharing and online file storage sectors.
  • Gilt Groupe – Gilt Groupe runs one of the best known “flash sales” sites on the Internet.
  • LivingSocial –LivingSocial is the second largest “daily deals” site on the Internet, behind Groupon.

Since the IPO market is so volatile, it is a good idea to periodically check the various IPO calendars that are available on the Internet for an update on the 2014 IPO outlook.  While IPOs such as Twitter and Box are likely to dominate the IPO market in 2014, there will likely be some hidden gems IPO during 2014 that will present real value to IPO investors.

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