Reports of the death of IPOs are greatly exaggerated. This is the time of year the IPO market goes into its seasonal hibernation period, but the real clue to “life after death” was found at last week’s U.S. Securities and Exchange Commission filing window. It was a busy place.
The SEC reported 10 companies filed to go public and, on Friday, five more companies updated their earlier filings. The latter is usually a sign a company is getting ready to file pricing terms, to jump on the IPO calendar and set a pricing date.
These IPO filings have to be taken seriously.
It costs a company million of dollars to file. Legal, accounting, printing and other fees quickly add up. In short, a filing is not like sending somebody out for coffee from the corner shop.
Now back to the present. To grasp the impact of last week’s IPO filings, look back over the last 10 years.
The records show August’s final week is usually vacation time. Typically, only a few companies file plans for an IPO during this period. From 2002 through 2011, a total of 52 companies filed plans to go public during August’s “swan song” week -- and 10 filings came last week; another 10 came in 2007. (Note: In 2007, the new-issues calendar was to price 101 of the year’s 277 IPOs after the Labor Day break.)
Based upon the past, one might conclude last week’s filings were signals that the IPO market is far from dead.
Oil, Clouds and Plumbers
Now let’s take a look at what came down. The traffic included a large deal, a small deal and one household name.
Laredo Petroleum Holdings (LPI) is a Tulsa, Oklahoma-based independent energy company focused on the exploration, development and acquisition of oil and natural gas in the Permian and Mid-Continent regions of the United States. The company filed for an IPO to raise $430 million. Laredo Petroleum, founded in 2006, has about 173 employees. It reported net income of $17.3 million on revenues of $383.9 million for the 12 months ended June 30, 2011. The lead manager is J.P. Morgan.
Brightcove (BCOV) is a Cambridge, Massachusetts-based global provider of cloud-based solutions for publishing and distributing professional digital media. The company filed for an IPO to raise $50 million. Brightcove, founded in 2004, has about 288 employees, reported a net loss of $19 million on revenues of $51.8 million for the 12 months ended June 30, 2011. The joint-lead managers are Morgan Stanley and Stifel, Nicolaus Weisel.
The Household Name
Angie’s List is an Indianapolis-based provider of consumer ratings on companies in the service industry to over 820,000 paying members. The company has reviews of over 2.2 million service providers covering more than 550 business categories, including home, health care, roofing, plumbing, landscaping, automotive services and others. The company filed for an IPO to raise $75 million. Angie’s List, founded in 1995, has about 692 employees. It reported a net loss of $42.1 million on revenues of $70.1 million for the 12 months ended June 30, 2011. The lead manager is BofA Merrill Lynch.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.