The IPO Buzz: Floating on the IPO Clouds

They are called cloud-computing companies.
 
This industrial sector has been hot – ultra hot – in the Land of IPOs.
 
Over the last six months, five cloud-computing companies have gone public, according to the U.S. Securities and Exchange Commission filings. There were no losers among them. The average gain for all five by year’s end was 47.1 percent.
 
Consider this: The Nasdaq Composite Index, the barometer of the IPO market, was DOWN 8.14 percent from June through December, and the IPO calendar generated only 54 of the year’s 121 total IPOS during those six months. Excluding the cloud-computing IPOs, the new-issues scorecard for the other 49 IPOs stood at 24 winners, 25 losers and an average loss of 4.63 percent for all the 49 offerings.
 
Worth repeating: The average gain for the cloud-computer IPOs was 47.1 percent.
 
Among the cloud-computing sector’s top performers:
  • Imperva (IMPV) priced its IPO of 5 million shares at $18 each on Nov. 9 and closed on Dec. 30 at $34.81, UP 93.4 percent from its initial offering price. Worth noting – it was the top-performing IPO of 2011.
  • Tangoe (TNGO) priced its IPO of 8.8 million shares at $10 each on July 27 and closed on Dec. 30 at $15.40, UP 54 percent from its initial offering price.
  • Jive Software (JIVE) priced its IPO of 13.4 million shares at $12 each on Dec. 13 and closed on Dec. 30 at $16, UP 33.3 percent from its initial offering price.
But that’s not all, folks!
 
Promising Clouds on the 2012 Horizon
The IPO pipeline is loaded going into 2012.
 
On Jan 1, 2012, there were 224 companies expecting to go public and looking to raise $37.3 billion. That is a dramatic increase from a year ago.
 
On Jan. 1, 2011, there were 83 companies in the pipeline expecting to go public and looking to raise $18.2 billion.
 
Naturally, Facebook is not included in these numbers. The company has yet to file.
 
Let’s turn back to the overlooked cloud-computing IPOs: At press time, 10 companies from this sector were in the pipeline and several were waiting in the wings to file their IPO plans. Some names to bookmark from the pipeline:
  • Demandware (DWRE – proposed) is a Burlington, Massachusetts-based provider of software solutions that enable companies to design, implement and manage their own customized e-commerce sites, such as Websites, mobile applications and other digital storefronts.
  • IntelePeer (PEER – proposed) is a San Mateo, California-based provider of on-demand, cloud-based communications services.
  • Proofpoint (PFPT – proposed) is a Sunnyvale, California-based provider of security for e-mails, instant messages and other communications to the health care, financial services, government, education, retail and technology sectors.
2011: Year of the Dog
Now let’s look back at last year.
 
The IPO Class of 2011 goes into the record book as the Year of the Dog. It was a loser.
 
By the time the dust settled on Dec. 30, 2011, 48 of the year’s 121 IPOs closed in the winner’s column and 73 were losers. The 121 had an average loss of 6.22 percent. That’s not good.
 
(Note: These numbers exclude unit offerings consisting of common stock and warrants, closed-end funds and foreign companies offering their shares in the U.S. capital markets for the first time while their shares were actively traded on their own national stock exchanges.)
 
However, 2011 was not the worst IPO year in recent memory.
 
Flip back to the IPO Class of 2008. Bankers had priced 32 IPO that year and only seven were winners, 25 were losers, and the 32 IPOs had an average loss of 25.5 percent. That’s not good.
 
The only saving grace was the Nasdaq Composite Index. It had a loss of 40.5 percent for the year 2008.
 
The IPO Class of 2009 bounced back. Bankers priced 62 IPOs and, at year’s end, 38 were winners, 24 were losers and the 62 had an average gain of 13.7 percent.
 
Flip back to the here and now. The Nasdaq Composite Index lost 1.8 percent in 2011, its first losing year since 2008. But there are some promising elements in place for 2012 that could make for quite an interesting year – hopes for a bounce back, a large IPO pipeline and the cloud-computing sector shaping up as a keyword.
 
Stay tuned.
 
 
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.