December 30, 2010
The past year wasn't a blowout one for IPOs, but the market did demonstrate its ability to inhale a good business and spit out a bad one. Both established and speculative companies made the list of IPOs this year, and performance wasn't too shabby for some of the higher-profile names:
Subsequent Stock Performance
|Tesla Motors (Nasdaq: TSLA )
|General Motors (NYSE: GM )
|Molycorp (NYSE: MCP )
|RealD (NYSE: RLD )
Tesla and Molycorp are showing nothing but losses right now, but the market is willing to take a risk on companies with potential. General Motors and RealD have established businesses, even if RealD wasn't able to turn a profit last quarter, and both have enjoyed generally solid performance as public companies.
2011 should see the market open even further, as a slew of Silicon Valley darlings consider entering the market, and 2010's rejects come back for another try. And don't forget about all the private equity deals made in the boom years, now waiting to cash out. Let's review some of the most promising contenders.
Expect to see:
- Facebook. This is a pretty popular IPO pick for 2011, for good reason. Facebook can only have 500 shareholders as a private company, and shares are being spread across the company as it grows. Antsy insiders and a growing number of shareholders could force Mark Zuckerberg to give in and take the company public. Google (Nasdaq: GOOG ) and Microsoft (Nasdaq: MSFT ) eventually had to allow workers to realize the value of their paper shares, and reluctantly went public.
- Caesar's Entertainment. After being shut out in 2010, the old Harrah's will be back before the end of 2011 with pockets turned out again. By year's end, Las Vegas will probably have recovered enough for investors to at least throw private equity owners a bone this time.
- A slew of private equity buyout companies will hit the market next year. RJR Nabisco is a likely candidate, and HCA, the hospital chain, could reach the market by year's end as well.
... But not:
- Twitter, Zynga, and LinkedIn have all been rumored IPO candidates, but I think they're all more likely to be bought out than go public in 2011. Having 300 million users isn't enough for an IPO anymore, but Google may still be willing to pay a mint for more active users at any of these sites.
- The car business is hitting its stride in 2010, but I think Chrysler would get a snub from the market at this point. If I wouldn't even consider a Chrysler vehicle, why would I consider buying Chrysler stock? Sorry, Fiat.
What company do you want to see go public in 2011? Leave your pick in the comments section below.
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