Category Archives: IPO

Facebook Paper app, Twitter

Two social media companies are in news today, Facebook released the new Paper app on iPhone, and Twitter announced the user growth is not as fast as the Wall Street liked. Maybe the 3rd, LinkedIn announced not so spectacular quarter after market today.

I tried Facebook Paper app. To be honest I have been Facebook user for about 5 years, not heavy user in terms of posting news feed or pictures. But I did use Facebook to communicate with a few friends, and did post some of my daughters’ pictures: fewer and fewer as time goes. The main reason for “fewer” is two folds: 1) Fear of privacy, I saw this “tag” feature there and never liked it; 2) Baby grew up. Btw, as I talked about the picture, by now most of us knew about the Facebook “yearbook” feature which automatically puts together some of the uploaded picture, and I saw Google+ was doing the same thing recently.

Back to Facebook Paper app, “slick” is the first word I would describe it. It tries explain things when I first installed it. I am a Zite user, and I only used Flipboard briefly. In terms of the news feature in Paper app, I think they are similar. And I heard one commentator on Bloomberg saying the “twitter of news” feature. But the commentator likes it too. It may have some impact on the competing news media curating services/apps.

About Twitter, personally I always liked Twitter better. I have 3 Twitter accounts (out of 250 million Twitter users). I used it because when I started using Twitter, I found it’s popular among geeks and iOS developers, the hash tag thing. I feel this quarter or near term is just a bump of the road, Twitter basically does a lot news service now. I recall refreshing twitter feed when important events fold. In terms of their business, I liked their integration with Amex (AmericanExpress card).

I will talk about LinkedIn sometime later.

(Update 02-07-2014) Used Facebook Paper couple days now, one annoying feature appears to be the fast flicking of the news feed for each news section. For now I am using google news and Zite for news and geek stuff.

Ag Bank of China IPO: bull case, bear case

Business week: Summary Box: China’s AgBank IPO nabs $19.2 billion.

Wiki; Official web site of Ag Bank China’s (ABC, 中国农业银行股份有限公司).


(source: ForeignHR)

Bear case
Ag bank of China primarily serves the less-developed regions and people in China: the rural areas, the villages, the farmers and peasants, the agriculture related business. Since the founding of People’s Republic (and Ag bank shortly after), farm produce price has been kept artificially low by the central government (in a way subsidize other industries), and since 1978 the reform of economy, the situation has improved, but the economy gap between rural and urban has increased in last 30 years.

Bull case

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Mistras IPO looks interesting

(Update 22Oct09) SEC filing 424B4.

(Original) I talked about Mistras (NYSE:MG) IPO briefly the other day. Today I read this “MatlinPatterson Global Sells $3M Worth of Huntsman“. And in this news I saw some insiders of Mistras bought some shares in IPO:

Mistras Group (MG) Stamatakis Manuel N DIR 6,000 $75,000
Mistras Group (MG) Peterik Paul CFO 2,000 $25,000

They paid about $12.50 per share (IPO price). Very interesting. For most IPO shares “It’s Probably Overpriced”. But this one seems quite reasonable. After IPO, its market cap is about $300 m, with revenue of about $200 m. The income and earning per share number is eschewed because the company paid quite some preferred share dividend recently. I need to read whether those preferred shares will be converted.

Risks

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IPO: It’s Probably Overpriced

That’s not my observation, that’s what Graham, the value investing guru, said in his book “Intelligent Investor”. I think this is especially true in the current IPO market. Two large recent IPOs, Shanda Games (Nasdaq:GAME) and Banco Santander Brasil S.A. (BSBR, SANB11.BR), showed exactly that. Both traded lower the first day it went public. I don’t have comprehensive statistics, but from my limited experience trading IPO stocks, most stocks traded lower the first day turned out to be a dog (lagger).

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Vitacost: another recent IPO

(11Nov09) The company announced Q3 09 results. Note the company had higher than expected expense on stock based executive compensation (related to IPO). Basically the company let the executive stock options vested upon IPO.

(Update Oct 08, 2009) I sold it this afternoon (ET) at $10, and got the new IPO Mistras (NYSE:MG). Like I did many times in the past, VITC went up after I sold it, and MG went down after I bought it :-( Did I sell it too fast? Maybe. But I felt Mistras has more potential.

(Original) Vitamin, anyone?

Prospectus (424B4 here)

My comment
One interesting point is as the US population aging, consumption of vitamin, other dietary supplements, sports supplements and fitness club memberships are all rising. This buckled the trend in recession. Convenstional wisdom is as we entering recession, people watch their discretionay spending more carefully, which is not good for those business I just mentioned. But we need to notice on the other side of equation, as people felt the economic and psychological effects of recession, they pay more attention to their health: both physical and psychological, hence comes the spending on those things. In this Vitamin and diatary supplements business, obviously Vitacost is a low cost provider which match the cost concious consumers’ need.

Other people’s homework (analysis)

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Education Management Corporation EDMC IPO today

(Update 2) It appears EDMC IPO had warm reception. After all, it’s backed by Goldman (both as investor and IPO underwriter). Also from Reuters.

(Update) BTW, I found Echo Global Logistics IPO to be much more interesting, will write it up soon.

(Original) Priced at $18 a piece (Reuters), quote:

EDMC (web site), a provider of post-secondary education, said on Thursday that shares in its initial public offering priced for $18 each, at the bottom of the range.

The private equity backed company sold 20 million shares and said it expects net proceeds of $334.8 million. (My comment: 20 m shares is about 17% of the company, this priced EDMC roughly at $2 b).

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Stock lessons 2009: buy high, sell low

That’s exactly how I did with Shanda Games (Nasdaq:GAME) IPO today. Shanda is not new to me. I lost money on this one three years ago (see my old stock lesson here). I am not bitter about losing money either. Because after about 5 (6) years in US stock market, especially the roller coaster ride in the past year, I started trying to get emotion of making/losing money out of the stock game, I am not perfect yet but making progress.

One lesson I should learn is trust my own gut. The spin off of Shanda Games seems odd to me, because from business point of view, typically companies spin off non-core business, like Sohu/Changyou (Nasdaq:CYOU), EMC/VMWare (NYSE:VMW). The Shanda spin off looks like a secondary offering of Shanda Entertainment itself, because Online Game is its core business. Although Shanda (Nasdaq:SNDA) had committed itself to other ventures, including at one point use a sloan like “become China’s own Disney”. It has not make real inroad in other online business yet. Except made some money buying and selling Sina stocks couple years ago.

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