Internet IPOs

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This Chart Shows How Huge the Alibaba IPO Will Be

By Kyle Anderson, Associate Editor, Money Morning • @KyleAndersonMM - May 16, 2014

The Alibaba IPO was officially filed earlier this month, and analysts estimate that the deal could be the largest initial public offering in U.S. history.

Bloomberg has estimated that the Hong-Kong based e-commerce firm could be valued as high as $168 billion, and will be selling a 12% stake in the company through the IPO. That means the company would raise $20.16 billion through its IPO.

Here’s how the Alibaba IPO stacks up against the biggest IPOs ever…

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This Chart Shows How Huge the Alibaba IPO Will Be

By Kyle Anderson, Associate Editor, Money Morning • @KyleAndersonMM - May 16, 2014

The Alibaba IPO was officially filed earlier this month, and analysts estimate that the deal could be the largest initial public offering in U.S. history.

Bloomberg has estimated that the Hong-Kong based e-commerce firm could be valued as high as $168 billion, and will be selling a 12% stake in the company through the IPO. That means the company would raise $20.16 billion through its IPO.

Here’s how the Alibaba IPO stacks up against the biggest IPOs ever…

Alibaba IPO Is "As Big As It Gets"

By Money Morning Staff Reports, Money Morning - May 12, 2014

The Alibaba IPO is expected sometime in late 2014 and analysts are projecting that the deal will be the largest initial public offering since Facebook Inc.'s (Nasdaq: FB) $16 billion IPO in 2012.

Some experts think it could surpass Facebook's IPO, which would make it the largest Internet IPO of all time.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald joined FOX Business' "Varney & Co." today (Monday) and discussed why the factors that are driving the Alibaba IPO price higher.

Check it out here:

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The 10 Biggest Internet IPOs in U.S. History

By Kyle Anderson, Associate Editor, Money Morning • @KyleAndersonMM - April 1, 2014

A spate of Internet IPOs have made news in 2014, including the headline-grabbing initial public offerings of Alibaba Group Holding (not out yet) and King Digital Media (which went public last week).

When Alibaba confirmed that it will bring its IPO to an American exchange, analysts predicted that it could be one of the largest Internet IPOs in U.S. history, surpassing Facebook Inc.'s (Nasdaq: FB) $16 billion.

As the Internet IPO market heats up in 2014, Here's a look back at the 10 biggest Internet IPOs in U.S. history...

See how they stack up...

Is Groupon (Nasdaq: GRPN) the Next Enron?

By Keith Fitz-Gerald, Chief Investment Strategist, Money Map Report • @kfgtotalwealth - April 10, 2012

Is Groupon the next Enron? ... No. It's worse.

Before the company even went public, there were signs that internal financial controls weren't up to snuff.

Now I'm hearing refrains of "three blind mice" as "defrauded" investors line up to have their day in court. You might as well say the "dog ate my homework."

It's not like no one knew this was coming.

The U.S. Securities and Exchange Commission (SEC) made management redo Groupon's financial statements and accounting practices not once, but twice before the company's January 2011 initial public offering (IPO).

The first time involved including the cost of marketing in operating income - duh. The second was to force the company to deduct merchant payments from revenues - double duh!

Both are basic accounting principles.

If you spent $2 to gain $1 in orders you have to report that as a $1 loss if you're dealing with cold, hard cash. Also, if you have $1 in merchant payments, you can't count that as $2 in revenues, unless apparently you work at Groupon and love accrual accounting.

It's not like Groupon execs can claim they didn't know.

It's abundantly clear to me that the "company" has very little, if any, understanding of REG FD and securities litigation.

(REG FD, in case you are not familiar with it, is short for Regulation Fair Disclosure which the SEC adopted Aug. 15, 2000. REG FD is intended to eliminate selective disclosure of material non-public information.)

But I have a hunch they're going to find out the hard way.

Groupon's "Material Weakness"

When the SEC came knocking again on April 2nd the company was forced to restate its Q4 financials. That summarily reduced Groupon's revenue by $14 million and profits - assuming there were any to begin with - by $22.6 million.

In an official statement, Ernst & Young, the company's primary auditor, noted "material weakness" with regard to the company's internal controls. Investors simply noted that they'd better get going while the going was good.

Groupon's share price tumbled 16.87% Monday alone and is down 55% from its peak.

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Yelp Inc.: (NYSE: YELP) Soars in Early Trading – But Is it a "Buy"?

By Kerri Shannon, Associate Editor, Money Morning - March 2, 2012

Online review site Yelp Inc. (NYSE: YELP) joined the Internet IPO craze when it started trading today (Friday) – and soared more than 60% in its first hour of trading.

Yelp is one of the largest business search/rating sites. It allows users to search for local businesses and read reviews and opinions written by contributors.

Yelp priced its IPO late Thursday at $15 a share, above analyst expectations of $12 to $14. That gives the U.S. consumer rating site a $900 million value. The company offered 7.1 million shares, raising $106.5 million.

Yelp could be the last Internet IPO until Facebook's long awaited debut later this year. It faces the same concerns as its predecessors – can it live up to its valuation and turn a profit for investors?

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Groupon Inc. (Nasdaq: GRPN) Earnings Report Sends Investors Bailing on the Stock

By Kerri Shannon, Associate Editor, Money Morning - February 8, 2012

Today's (Wednesday's) Groupon Inc. (Nasdaq: GRPN) earnings report - the first since the company went public in November 2011 - failed to show investors why they should believe in the social media-related stock.

Groupon reported a net loss before adjustments of $42.7 million, or 8 cents a share, compared to a net loss of $378.6 million, or $1.08 a share, for the same period last year. Revenue rose 194% to $506.5 million.

Wall Street expected earnings per share of 3 cents on $475 million in sales. With profit missing expectations and disappointing investors, shares fell 12% in after-hours trading.

The lower-than-expected earnings fueled the bearish outlook on Groupon.

"True, Groupon has plenty of cash in the bank and no debt, but you can find much better tech companies out there with stronger cash flow and solid earnings," Money Morning Defense and Technology Specialist Michael Robinson said last month. "For 2012, GRPN is a tech stock to avoid."

Avoid Groupon Inc. (Nasdaq: GRPN)

Groupon has slipped about 7% since its first trading day Nov. 11 to Wednesday's closing price of $24.58. Wall Street has a one-year price target of $25.06 - a mere 2% gain from Wednesday's close.

Groupon stock, along with last year's other Internet IPOs LinkedIn Corp. (NYSE: LNKD), Pandora Media Inc. (NYSE: P), and Zynga Inc. (Nasdaq: ZNGA), got a pop from recent investor excitement over the Facebook IPO. Groupon was up 7% Feb. 2, the day after Facebook made its IPO filing. LinkedIn rose 6%, Pandora 3%, and Zynga 17%.

Regardless of a recent share price spikes, the Internet IPOs of last year still face the growth and profitability obstacles that turned investors off before.

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