Equity markets were more volatile in the first six weeks of 2014 than many investors had expected. Despite the volatility, the initial public offerings (IPOs) market appears to be off to a strong start this year. The pace of more than 30 IPOs so far — six of them on the same day — is reminiscent of the dot-com boom.
So far, the IPO market has been dominated for the most part by niche biotech and emerging pharmaceutical companies. While many investors have never heard of most of these small biotechs, they likely will be more familiar with other possible upcoming IPOs of Internet companies and those with familiar consumer technology.
24/7 Wall St. has reviewed the field and compiled a list of the most widely followed IPOs of 2014. Most are well-known, but we expect even the more obscure companies to be just as important when they go public.
These are the top 10 IPOs to watch for in 2014.
The Alibaba IPO has been in the works for years. The China-based e-commerce group offers business-to-business, online retail and processing services. Yahoo! Inc. (NASDAQ: YHOO) will be a key winner if Alibaba makes it to the stock market due to its large stake. Japanese telecom and Internet company Softbank is an owner as well.
Founded in 1999, Alibaba has become a key global player. According to an early 2013 article in The Economist, analysts forecast an IPO value of $55 billion to more than $120 billion. Hong Kong regulators nixed Alibaba’s IPO ambitions there, so the company may go public in the United States instead. It is not unusual for Chinese companies to decide to list in America over China, but it is somewhat ironic that listing standards for public companies are less strict in the U.S. than they are in China.
GoPro has adapted video cameras to the needs of the active, or extreme, sports enthusiast. Skydivers, rock climbers, cyclists and many others are attaching GoPro cameras to their helmets to film their adventures. The company filed confidentially for the IPO with the U.S. Securities and Exchange Commission (SEC), but it will reportedly seek to raise about $400 million — the total market value could be in excess of $2 billion. In an interview last year with Forbes, founder Nick Woodman said the company sold 2.3 million cameras in 2012 for a total of around $521 million. Revenue has reportedly doubled every year since its 2004 founding. This is a hot product, but investors should remember that one-product companies, with just a few related products, often go through severe swings in their business cycle — and that some of those swings could be very unpleasant. GoPro could be public by the time summer gets here.
3. GE Consumer Lending
The GE Consumer Lending unit is expected to go public in 2014. The exact timing has not been worked out, but it could be as soon as the second quarter of this year. Parent company General Electric Co. (NYSE: GE), which aims to be valued as an industrial conglomerate rather than an eclectic mix of half-bank and half-industrial companies, has wanted to get this transition out of the way for some time. GE CEO Jeff Immelt even went as far as to name CFO Keith Sherin as CEO of the unit. This IPO will be made up of the company’s North American retail finance business. The unit first filed with the SEC in late 2013. GE’s exit will be a two-step process. First, to be a tax-free spin-off, the consumer finance unit will act like a tracking stock, with a low float of close to 20% initially. GE shareholders then likely will be distributed shares in the unit — this year or next.
4. Gilt Groupe
Gilt Groupe operates a live, online daily deals site that has been speculated upon as an IPO hopeful for quite some time now. Perhaps the Groupon IPO got in the way, or maybe Zulily also beat Gilt to the IPO market. For whatever the reason this has not yet come public, we have been awaiting this one with no confirmed IPO plans as of yet. But several market pundits, including Jim Cramer of TheStreet and CNBC, have spoken highly of this site. What is different about Gilt, compared to other deals sites, is its clearance of designer label items. The company also claims to have as many as 200 group sales per week. Gilt buys vendor inventory at deep discounts and then sells those items directly to its members, who are constantly looking for key flash sale deals. IPO chatter for this company has resumed of late, with investors expecting an IPO as soon as late spring or early summer. Gilt was founded in 2007, and as of May last year it had 7 million customers.