(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Insider data sourced from Yahoo! Finance.)
Can Groupon attract long-term investors? That’s the question currently on the mind of Wall Street analysts who eagerly anticipate the long-awaited November 4th IPO.
Emma Bazilian of Adweek reports that “Groupon is drawing more attention than ever from investors, venture capital firms, and tech startups that view the company as a bellwether of future public offerings.”
The company will be testing the waters, so to speak, for IPOs after an extended period of zero IPO releases and poor results for those that were released. If Groupon does well a number of IPO hopefuls waiting on the sidelines are likely to follow. If Groupon performs poorly, IPOs-in-waiting will hold off their public debut and scare off potential investors.
Is Groupon a Good Deal?
Groupon’s long wait provided the opportunity to redesign the offering for a successful debut in the current market. “Its original $20 billion valuation was cut to a more reasonable $11.4 billion, its price-to-sales ratio 6.3 is lower than other recent Web IPOs like LinkedIn and Pandora, and the unusually low number of shares being sold—just 30 million, or 4.7 percent of the total shares outstanding—is meant to ensure that there’s more than enough demand when Groupon’s stock debuts.”
But will it be enough to ensure success? Groupon has already earned criticism for its “questionable accounting metrics used in its SEC filings,” cuts in marketing spending, slowed revenue growth (“just under 10% last quarter”), and previously weak financials that have just managed to improve in recent months.
There is also a concern that interested investors are not going for long-term holdings, rather coming in with intentions to immediately flip the stock.
IPO hopefuls, those keeping a very close eye on investor response to Groupon, include the gaming company Zynga and review site Angie’s list.
So, we’re wondering: What do company insiders think of the IPO market’s outlook?
For ideas, we collected insider buying data for all the companies that have done IPOs over the last year. From this list, we’ve identified nine names that have seen significant insider buying over the last six months.
Insiders are bullish on these recent IPOs–do you agree?
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1. Aegerion Pharmaceuticals, Inc. (AEGR): Engages in the development and commercialization of novel therapeutics to treat severe lipid disorders. IPO occurred on 22-Oct-2010. Over the last six months, insiders were net buyers of 695,149 shares, which represents about 6.17% of the company's 11.26M share float.
2. Aeroflex Holding Corp. (ARX): Designs, engineers, manufactures, and sells microelectronics, and test solution and measurement equipment in the United States, Europe, the Middle East, Asia, and Australia. IPO occurred on 19-Nov-2010. Over the last six months, insiders were net buyers of 23,795 shares, which represents about 0.12% of the company's 19.77M share float.
3. Campus Crest Communities, Inc. (CCG): Focuses on building, owning, and managing student housing properties in the United States. IPO occurred on 14-Oct-2010. Over the last six months, insiders were net buyers of 10,900 shares, which represents about 0.04% of the company's 30.58M share float.
4. Complete Genomics, Inc. (GNOM): Develops and commercializes a DNA sequencing platform for human genome sequencing and analysis. IPO occurred on 11-Nov-2010. Over the last six months, insiders were net buyers of 1,650,000 shares, which represents about 16.05% of the company's 10.28M share float.
5. The KEYW Holding Corporation (KEYW): Provides mission-critical cybersecurity and cyber superiority solutions to defense, intelligence, and national security agencies in the United States. IPO occurred on 01-Oct-2010. Over the last six months, insiders were net buyers of 63,000 shares, which represents about 0.32% of the company's 19.77M share float.
6. Primo Water Corporation (PRMW): Provides multi-gallon purified bottled water, self-serve filtered drinking water, and water dispensers in the United States and Canada. IPO occurred on 05-Nov-2010. Over the last six months, insiders were net buyers of 190,000 shares, which represents about 0.98% of the company's 19.32M share float.
7. QR Energy, LP (QRE): Engages in the acquisition, production, and development of onshore crude oil and natural gas properties in the United States. IPO occurred on 17-Dec-2010. Over the last six months, insiders were net buyers of 63,300 shares, which represents about 0.37% of the company's 16.96M share float.
8. Tower International, Inc. (TOWR): Operates as an integrated manufacturer of engineered structural metal components and assemblies to automotive original equipment manufacturers (OEMs) worldwide. IPO occurred on 15-Oct-2010. Over the last six months, insiders were net buyers of 74,000 shares, which represents about 1.13% of the company's 6.54M share float.
9. Zogenix, Inc. (ZGNX): Engages in the development and commercialization of products for the treatment of central nervous system disorders and pain. IPO occurred on 23-Nov-2010. Over the last six months, insiders were net buyers of 7,155,620 shares, which represents about 18.64% of the company's 38.38M share float.