2 New Issues IPO Investors Need to Know About for This Week

Arista Networks will make its debut Friday, while MobileIron edges closer to a listing.

Jun 1, 2014 at 11:30AM

Investors could be forgiven for thinking that the IPO market has fallen into a ditch and can't get out. Last week saw a grand total of zero new issues, while in the coming five days only a single new stock, Arista Networks, is scheduled to hit the exchange.

Is the IPO market stuck? Probably not. After all, over the past few years the pre- and post-Memorial Day period has been a traditional time for IPO players to take a break. And this year is a good one for them to rest a bit; according to IPO specialist Renaissance Capital, thus far in 2014, 115 new issues of at least $50 million in market capitalization have been priced, a plump 55% higher than in the same period in 2013.

As a result, plenty of companies are straining at the leash to float their stocks. In the week preceding the holiday, 14 filed plans to list on the various exchanges. There is plenty of life in this market, but like any lively beast it needs to stop for a little R&R before continuing on the hunt.

Before we dig in to our two picks for this week, we need to issue a few words of caution. IPO investing carries above-average risk, since initial stock prices can be far from the value the market eventually puts on the company's shares. This situation provides immense upside potential, but it also opens the possibility of losing a big chunk of an investment.

Now, without further ado ...

Arista Networks
Any company hoping to compete with networking powerhouse Cisco Systems (NASDAQ:CSCO) had better have its act together. Judging by its financials, Arista certainly seems to -- its top line grew five-fold over the 2010 to 2013 fiscal years, from $71.7 million to $361.2 million, while net income ballooned from $2.4 million to $42.5 million. Our increasingly connected world needs this type of technology, so there's probably enough room for at least several key players in the segment.

Arista Networks' IPO is scheduled for Friday, with 5.25 million shares going on sale for $36 to $40 apiece. The company is to list on the New York Stock Exchange under the ticker symbol ANET. Morgan Stanley (NYSE:MS) and Citigroup (NYSE:C) are the issue's lead underwriters.

Speaking of Cisco, one of its former executives -- Bob Tinker -- is the president and CEO of this ambitious company. MobileIron's mission in life is nothing less than "to enable global companies to become Mobile First organizations, embracing mobility as their primary IT platform" through its various solutions. It'll be quite some work to pull corporate America away from the desktop workstations it's been planted at for the past few decades, but if successful, MobileIron could benefit very handsomely. There's obviously interest out there; the company's total revenues zoomed from just shy of $14 million in fiscal 2013 to over $105 million last year.

Last week, MobileIron updated its IPO documentation with the Securities and Exchange Commission, stating that it aims to sell slightly over 11.1 million shares for $8 to $10 per share. The flotation will be lead-underwritten by Morgan Stanley, Goldman Sachs (NYSE:GS), Barclays (NYSE:BCS), and Deutsche Bank Securities, and the stock will trade on the Nasdaq under the ticker symbol MOBL. The IPO date has not yet been set.

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Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Cisco Systems, and Goldman Sachs and owns shares of Amazon.com, Apple, and Citigroup. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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