A NASDAQ listing is for many companies is the end of a long building process, for others it's the realization of a personal lifetime goal, and for others still, it marks the end of the line, the transfer of ownership and operation of an enterprise labored over, nurtured and invested in that now has to change hands in order to thrive.
When the next step is no longer in the realm of the entrepreneur's aptitude, if he's wise, he will pass his project on to other, more capable and experienced hands.
Such is the case with the following four companies, all of which listed to the NASDAQ this last month. Some came via Initial Public Offering, while others up-listed from a Bulletin Board home, the NASDAQ's 'junior', over-the-counter (OTC) trading system.
But regardless how they made it, the following crop of companies now stands to benefit from the increased exposure and status offered by having a prestigious NASDAQ ticker of their own.
Back to the Land
One of the more interesting firms among the recent graduates is Gladstone Land Corp. (LAND), a company that arrives at the shores of the NASDAQ via an IPO. LAND raised $50,000,000 this month to invest in American farmland located in agriculturally rich regions of the country.
The premise behind the project is that farmland will become an especially valuable commodity if and when the country faces an economic crisis or war, and that purchasing it now, before the 'rush', will pay off in spades when the crisis reaches full-blown proportions.
The theory has a number of prominent adherents, among them, the late Barton Biggs, former global equity strategist at Morgan Stanley, whose last book, "Wealth, War and Wisdom" detailed the advantages of owning agricultural land in the event of financial upheaval or war.
LAND's founder and chairman, David Gladstone, has decades' worth of experience in corporate finance, and today sits as chairman and CEO of three other finance companies, two of which are publicly traded, Gladstone Capital Corporation (GLAD) and Gladstone Investment Corporation (GAIN).
Gladstone's latest enterprise currently owns twelve farms, clustered in California and Florida that produce fruit and vegetables. With the U.S. economy hedging on recession and turmoil in the Middle East, just over the horizon, it may be wise to keep an eye on this company.
Child Care Solutions
Bright Horizons Family Solutions Inc. (BFAM) is another novel outfit, offering child care and early childhood education services to parents in the U.S., U.K., Canada, Ireland, the Netherlands and India. The company is currently outfitted to service over 87,000 children and comes to the NASDAQ via an IPO that wins the company more than $220 million, largely to be used to pay down existing debt.
The company's model is based on servicing large corporate clients and includes 130 Fortune 500 companies, whose employee benefit packages offer parents an opportunity to 'bring their kids to work', where in-house early childhood educators look after them.
This 'employer sponsor' model ensures Bright Horizons a predictable profit forecast and cuts down on the risks associated with opening community-based day care centers.
The NASDAQ listing is something of a 'second coming' for Bright Horizons, which was a public company from its beginnings in the late 1980's. Then, in 2008, they were purchased by Bain Capital via leveraged buyout, only to be spun out again this month in order to raise funds to pay down existing debt on the buyout.
Bright Horizons has a current market capitalization of $1.8 billion. The stock rose by almost 30% on the day of its IPO.
Biotech Micro Caps
Northwest Biotherapeutics (NWBO) is a financial lightweight compared to the two above named operations. With a market cap of less than $43 million, the company's recent upgrade to the NASDAQ from the OTC Bulletin Board didn't find favor with the investment community at all. In fact, share prices declined on the order of 50% in the weeks leading up to the up-list.
The reason for the decline was not inexplicable, however. NWBO issued stock and warrants in a deal that closed just ten days before company brass rang the bell to open trading on December 18. The deal put almost $14 million into the company's coffers and also helped them pay down a considerable chunk of debt.
For NWBO, the NASDAQ listing offers them something the company has been lacking for nearly a decade - genuine access to equity financing. Nearly all of the company's funds for the last eight years have been funneled into operations via the firm's CEO, Linda Powers, venture capital funds controlled by her, and close associates who also strongly believe in the company. The NASDAQ listing is an effort to obviate further funding activities of that sort and push the company toward commercialization of its products.
NWBO is now in phase III trials for a vaccine that treats a deadly form of brain cancer. Its product is called DCVax-L, has been in development for well over a decade and is also thought to provide an alternative to surgery for a number of other cancerous tumors. Also in the pipeline are two treatments geared toward patients with inoperable cancers.
Stemline Therapeutics (STML) is our last featured NASDAQ newcomer, a biotech company that's also involved in developing cancer treatments. STML raised $38 million earlier this month and watched as its shares climbed 18% out of the gate on the first day of trade.
IPO funds will be put toward advancing clinical trials for the company's lead products SL-401 and SL-701, both of which are at phase IIB in their testing regimen.
Another factor that may pay shareholders dividends in the future is STML's extensive patent trove. With thirteen patents already issued and over 30 more pending, the company's intellectual property base could prove profitable in the newly emerging 'patent and sue' market that has paid off in spades for companies like Vringo (VRNG) and VirnetX (VHC).
Looking for a Home Run
While Stemline waits for trials to proceed (and it could be well into 2014 before we get actionable information on that company's chances at commercialization) investors looking for a rich IPO score might be better advised to look at shares in the above mentioned Northwestern Biotherapeutics, a company with a history and a board that's committed to seeing its product through to success. With its newly clean balance sheet and meaningful phase III results expected very shortly (by Q2 of this year), a speculative nod in NWBO's direction might ring out handsomely in the months ahead.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
