Thursday, micro-blogging site Twitter (NYSE: TWTR) will debut as a publicly traded company on Wall Street's Big Board. Many analysts - including those at Money Morning - will steer clear of the hotly anticipated IPO - but TWTR has had no trouble generating investor interest.
The San Francisco-based company even increased its price range Monday on roughly 70 million shares from $17 to $20 per share to $23 to $25. The move values the company at a whopping $13.9 billion, or 26 times its revenue over the last 12 months. Twitter hopes to raise as much as $1.75 billion.To continue reading, please click here...
A Guide to Pricing and Investing in Tech IPOs
Earlier this week, I shared with Money Morning readers a breakdown on how IPOs are priced.
In this IPO pricing overview, Money Morning Capital Wave Strategist Shah Gilani explained the pitfalls of over- and underpricing an IPO.
If Anyone Knows How to Make Money It's This Hot Tech IPO
You can't see them... but they're there - waiting to steal key data from your mobile phone or tablet.
It's a world where hackers and thieves will do anything to get access to your bank account, social security number, home address, lists of contacts and other secret data.
And the truth is every time you head onto the Internet you are vulnerable-especially when using a mobile device.
That's why I have my eye on a small, fast-growing tech leader that is about to capitalize on the security threats that are targeting the huge increase in mobile commerce.
Because if anyone knows how to make money in mobile security it's the leaders of AVAST Software.
Based in Europe, AVAST now protects about 160 million mobile phone users against viruses, malware, hackers and other cyber thieves. With clients in nearly every single country in the world, AVAST is the leader in this growing sector.
In fact, in just the last 30 days alone, AVAST says it has blocked 118 million wireless attempts to access infected Websites.
Now you know why so many tech observers have their eyes on AVAST's upcoming IPO....
Unlocking the Value Of the AVAST IPOThe firm expects to go public tomorrow morning on the Nasdaq, priced between $9 and $11 a share under the ticker AVST. At the midpoint of the pricing range, that would give AVAST a market cap of about $850 million.
But here's what I like about AVAST: It has an ingenious way to attract its clients. It employs the "freemium" business model. Using free offers it captures millions of users and converts them to high-margin paid products.
So far, this "freemium" approach has worked like a charm. Over the last six quarters, AVAST has had an average operating profit margin of 37.5%.
For Avast, this much is clear -- the company has found a niche with a lot of room for more growth.
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The Best High-Tech IPOs This Year
A lot of people think the Facebook Inc. (NASDAQ: FB) fiasco means the market for IPOs is dead. Story over, right?
Well, not so fast.
Sure, the IPO market has slowed in the last couple of months, after thousands lost money on Facebook's poorly managed debut in mid-May. But the market remains far from dead.
Even in this kind of weak, choppy climate we see right now, innovation always comes to the top.
America is still brimming with lots of entrepreneurs who want to change the world around them. And help line the pockets of some savvy investors.
Winning IPOs keep the tech sector moving forward. That, in turn builds the base for the next round of startups with big ideas looking to go public someday.
And when you look at the most successful tech IPOs of 2012, you can see, these ideas are big.
Imagine a new system that cuts air pollution at a coal-fired plant while the flame is still burning - providing cleaner output for any type of fuel.
Or consider a platform that gives viewers the ability to watch any TV show they want, anytime, anywhere, on any device, from a laptop to a smart phone, all with one simple login.
And if you can take a known drug and tweak a little bit so it fights depression, well, that will be a godsend for millions of Americans.
I mention these cutting-edge breakthroughs because they represent the tech behind stocks that have gone public this year with big gains for investors.
By the way, I'm calculating the "best" returns based on one simple stat - how much the price has risen since the stock began trading through the market close on Wednesday.
Let's take a look...
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Facebook Stock Price Gets Small Bump in Lackluster Debut
In what was one of the most highly anticipated initial public offerings in history, Facebook (Nasdaq: FB) finally made its debut among much fanfare and frenzy Friday.
But the Facebook stock price failed to soar as high as the hype. While not exactly a dud, the intro was definitely subdued.
Shares opened around 11:30 a.m. in New York at $42.05, up about 11% from Facebook's IPO price. Momentum quickly ebbed, and shares dropped as low at the $38 IPO price in the first half hour of trading.
By 3 p.m. shares were hovering just above $38. But with an hour of trading still to go, investors shouldn't get complacent.
"The day isn't over," cautioned Money Morning Chief Investment Strategist Keith Fitz-Gerald. But regarding Facebook's debut, "initial trading has not been impressive."
Facebook Stock Ready to Roll – But Where Will it Go?
The Facebook IPO price was set and the stock is ready to start trading - but will it live up to its hype or sharply sell-off?
The social media giant priced at $38 a share, the company announced after market close yesterday (Thursday).
That makes Facebook the largest tech IPO in history, valued at $16 billion.
It's the third largest U.S. IPO ever, behind first place Visa at $19.7 billion and then General Motors, which raised $18.1 billion.
While the stock has created unrivaled investor frenzy, there is a wide range of predictions for how Facebook will do in its first trading day - and who the real winners will be.
"The ones who make out on IPOs are the early investors, venture capitalists, founders, and underwriters," said Money Morning Chief Investment Strategist Keith Fitz-Gerald. "The public almost always goes along for the ride...whether or not they get taken for a ride remains to be seen." The Facebook stock price will be determined when it starts trading today at 11 a.m.
Where the cutoff is for considering the IPO a success varies - with many thinking anything below 50% would be a disappointment.
"I think anything over 50 percent will be considered a successful offering - anything under that would be underwhelming, Jim Krapfel, an analyst at Morningstar, told Reuters. "A lot of retail investors are not concerned about valuation. That's what is going to drive the first day pop."
These High-Tech IPOs Are Fueling the Nasdaq Rally
Don't look now but big paydays are here again in the tech-heavy Nasdaq.
From the depths of the 2009 bottom, the Nasdaq is up 139%, hitting levels it hasn't seen in more than 10 years.
In the last three months alone, the bellwether index is up nearly 19% -- outpacing the 12% gain in the S&P 500.
But here's the thing: It's not all about Apple.
The high-tech IPO market is practically on fire. One of them is Jive Software (NASDAQ: JIVE).
Since Jive debuted last December, shares have jumped 25% from the offering price on the first day.
Since then, the stock has done nothing but power ahead. At the close of trading Thursday, Jive had nearly doubled in less than four months!
Hot High-Tech IPOs are a Major Market TrendBut that is just the beginning. Successful new issues like Jive reflect major trends reshaping markets.
Jive creates tools that help businesses run social networks, clearly an important way for many firms to reach new clients.
Jive is hardly alone. Several high-tech IPOs are showing excellent returns in the market's strong rally.
In fact, this actually is the best overall period for tech stocks since the "dotcom" crash 12 years ago.
Aside from Jive, several other IPOs have turned in double-digit gains in the last several months helping to lead the overall market higher - especially the Nasdaq.
Of course, the Nasdaq still needs another 40% surge to match pre-bubble values. But that's not the point.
Investors need to remember that every bull market contains leaders that have new products in new fields.
That is what always lands solid high-tech IPOs in the winner's circle.
The good news for investors is that they can expect to find more new issues in the weeks ahead.
PricewaterhouseCoopers LLP said in a recent report that 274 firms filed registrations in 2011, the largest number in several years. Of those, about 160 remain in the IPO pipeline.
Now don't get me wrong. I'm not suggesting you throw a dart at the IPO board. Far from it.
You still have to remain a disciplined, focused investor.
Just think if you'd tied up a lot of funds in BATS Global Markets. The tech-focused exchange had to withdraw its IPO last week because of a software glitch.
Of course, that kind of mistake isn't just stupid. It's inexcusable. But let's not focus on the negative.
There are just too many winners to look at.
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