One of the good things about being a privately owned company is not being beholden to the impatience of hedge fund managers and the myopic vision of some institutional investors.
Unfortunately, the corporate aversion to going public can be a major lost opportunity for individual investors. In 2012, companies such as Annie's (NYSE: BNNY ) , up 71% since its March IPO, and Splunk (NASDAQ: SPLK ) , up 67% since going public in April, have amply rewarded those wise enough to invest early. Still, many investors got burned by Facebook (NASDAQ: FB ) , down about 32% from its IPO levels, so not every IPO is going to be both a great company and a great value.
So while organic mac-'n'-cheese makers (Annie's), data diggers (Splunk), and social networks (Facebook) defined the 2012 IPO scene, there remain a handful of interesting IPOs to look forward to in 2013. From cliff-diving dogs to commercial space flights to discounted neon sunglasses, these three potential 2013 offerings could be some of the most varied and eccentric IPOs in years:
Familiar with action sports? Know what a camera is? This company marries the beloved arts of filming and photography with the gritty, exhilarating, and often dangerous world of extreme sports. GoPro sells small, light, and durable cameras built to withstand the conditions of skiing and snowboarding, surfing, mountain biking, kayaking, cliff diving (of the canine variety, too), helicopter rides, motorcycle races, you name it. Some of the first-person footage on GoPro's website is absolutely breathtaking. GoPro's newest Hero3 model prices anywhere from $199 to $399, depending on specs.
No other publicly traded company on the market offers cameras so uniquely positioned, with such high quality, at an affordable price. With 2011 sales of $250 million, GoPro is dominating a niche market that it essentially created, and that larger camera companies, such as Koninklijke Philips Electronics (NYSE: PHG ) , are seemingly oblivious to.
A Reuters source in July said that GoPro was planning an IPO within the next year. So unless GoPro decides to GoPublic on Monday, we'll probably see this IPO in 2013.
2. Space Exploration Technologies (SpaceX)
Forty-year-old Elon Musk, presumably in an effort to upstage the unbelievable achievements of fictional superhero and card-carrying genius Tony Stark, could very well bring another company of his public in 2013. It would be the third Musk-related IPO in three years. Co-founded by Musk in 2003, electric-car manufacturer Tesla Motors (NASDAQ: TSLA ) was first to go public in 2010. Since then, not only has it been trying to change the future of how we travel and consume, but the stock has also essentially doubled.
A second of Musk's enterprises, SolarCity (NASDAQ: SCTY ) , went public just a few weeks ago; investors gave the stock a nice welcome, and shares jumped nearly 50% on the first day of trading.
If SpaceX, a private contractor that transports cargo to space, goes public, it will probably be in late 2013, Musk told Bloomberg back in April. At the time, SpaceX already had $4 billion in contracts tied up through 2017, although it was rewarded with an additional $1.6 billion contract after a successful supply run to the International Space Station in May.
SpaceX Dragon Capsule docks with the International Space Station. Source: NASA.
Of course, Elon "No, really, I am Iron Man" Musk, just like his comic-book doppelganger, is making some powerful enemies as a result of his success. Lockheed Martin (NYSE: LMT ) and Boeing (NYSE: BA ) have started taking shots at their new competitor, especially after SpaceX landed a $900 million contract with the Air Force.
Partially owned by Amazon.com (NASDAQ: AMZN ) , the head of this daily-deal site's U.K. operations was quoted in July as saying a 2013 IPO is likely. Given some of the, uh, developments in 2012, it's understandable that the company would want to delay an equity offering. First, the poster child for daily-deal sites, Groupon (NASDAQ: GRPN ) , went public in November 2011 at $20 per share. Despite briefly reaching $25 a share earlier this year, the stock has torpedoed since and currently trades at less than $5 a pop.
The other 800-pound lemon in the room that would have made a LivingSocial IPO ill advised this year was, of course, Facebook. Not only was Facebook's opening day on the Nasdaq riddled with trading glitches, but the subsequent performance of Facebook's stock was also abysmal enough to give any Internet-based business considering a public offering second thoughts. Going public in May at $38 a share, the stock had lost half of its value by the end of August, causing fellow Fool contributor Morgan Housel to proclaim Facebook the worst IPO of all time.
So while LivingSocial may indeed be an exciting and highly anticipated IPO, it operates in a very competitive industry that has extensive struggles of its own. That, plus LivingSocial lost $500 million itself in the first nine months of 2012, which makes it a little less appealing to, you know, investors trying to make money. The best thing a prospective investor can do before the IPO is just keep an eye on LivingSocial's financials and pray for improvement. Amazon reports abridged versions of them every quarter in its 10-Q, so keeping tabs isn't too hard.
No matter how many great new companies are out there, it's always important to do your due diligence and get to know a company inside and out before investing in it. IPOs, as we have seen, are a volatile bunch. And yet, there are even more eclectic, determined (and, hopefully, profitable!) private companies looking for public funds next year. In the next few days, Part 2 of this article will examine three more 2013 IPO candidates that Main Street should look for in the coming year.
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