Breakingviews

Silicon Valley rule of thumb points right way

By Guest Contributor
August 31, 2015

In a land that fetishizes revenue growth over profitability, there’s a new sanity check for software firms to see if the two rates add up to at least 40 pct. A Breakingviews analysis suggests it can be a useful guideline. Investors should just be wary of extrapolating too much.

SoulCycle IPO endorphins inhibit pain potential

By Guest Contributor
July 31, 2015

The indoor cycling chain is inviting investors to join its “tribe” of athletes, renegades and rockstars. The company is profitable and sales accelerated by more than 50 pct in the first quarter to $35 mln. But management, growth plans and faddishness are weak points in the spin.

Shake Shack IPO disappoints in taste test

December 30, 2014

Celebrity restaurateur Danny Meyer’s global chain of burger joints is serving up some of the uncommon fixings found in new tech stocks. Two classes of shares and creative financial metrics are unappetizing. At least the bottom line offers a sweet refreshment to wash it all down.

Goldman updates IPOs for the Candy Crush era

December 12, 2014

CEOs of firms heading for public markets are hooked on the bank’s app, which enables them to track results of roadshow book-building in real time. With Apple and IBM coding mobile software for big companies, the smartphone economy is swiftly moving from living room to boardroom.

Uber flips the bird at critics with convertible

December 5, 2014

The taxi app’s valuation soared to $40 bln in its latest funding round. But a plan to issue securities that convert to stock at a discount to an IPO shows how firmly Travis Kalanick remains in the driver’s seat. Uber can raise money at a potentially massive premium.

BlackRock is right: European IPOs need more work

August 8, 2014

The giant investor is griping again about new issues. In structure and deal volume, the market is far healthier than when BlackRock spoke out in 2011. Performance is OK, barring a few duds. But there are still too many banks per deal and buyers are still rushed into decisions.

UK spoils Europe’s $29 bln IPO boom

June 9, 2014

Is buying new issues worth it? Across Europe, yes. This year’s top IPOs have returned an index-beating 14 pct. But while London has raised the most cash, its flotation frenzy has dented the overall performance of the region’s new share sales. No wonder investors have grown picky.

WH Group flop shows pitfalls of crowded IPOs

April 30, 2014

The Chinese pork producer hired a record 29 banks but still failed to sell its $1.3 bln listing to investors. That undermines the received wisdom that more advisers mean less risk for issuers. For banks, it’s a reminder they can share embarrassment as well as league table credit.

From Ally to Zoe’s, IPOs hint at back to basics

April 15, 2014

Investors had an appetite for most any new issue until last week. Six of 10 offerings couldn’t fetch the desired price and six were yanked as fear again mingled with greed. A fresh crop of sellers, including Moelis and Weibo, may encounter a more rational market than expected.

Michael Kors IPO cut from same cloth as Prada’s

December 7, 2011

The U.S. designer’s eponymous firm is seeking a luxury price tag of up to $3.6 bln in a New York float. It’s an all-American fashion name and the high-end valuation isn’t out of line with Prada’s Hong Kong listing this year. But Kors may struggle to keep up the pace of growth.