Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds an about-to-be-baptized Breaker and more moola in small places.
First up this week is Riverbed Technology, which makes devices that accelerate the delivery of content of wide-area networks, or WANs. That may sound familiar if you're an investor in Motley Fool Rule Breakers selection Akamai. And it should; both firms create larger and more efficient pipes for on-the-move digital content. The difference is that Akamai's bread and butter is public network content, such as Web pages and downloads. Plus, it's a managed service provider rather than a box maker.
Riverbed is much more like Juniper Networks (Nasdaq: JNPR ) , Cisco Systems (Nasdaq: CSCO ) , F5 Networks (Nasdaq: FFIV ) , Packeteer (Nasdaq: PKTR ) , and Citrix (Nasdaq: CTXS ) . At least that's what the company says in its S-1 filing.
That's right; Riverbed is planning a public offering of roughly 8.3 million shares before the end of the year. The company expects to register the ticker "RVBD" with the Nasdaq and raise roughly $64 million in proceeds. Documents filed with the SEC say Riverbed believes its stock will roll out at between $7 and $8.50 a stub.
Color me intrigued. There's little doubt that business is becoming more global, and that reality, in turn, should boost demand for wide-area networks. WANs, you see, are like the network in your office except that they enable private connections over great distances, a requirement for growing firms with far-flung operations. Unfortunately, WAN infrastructure can be excruciatingly complex thanks to security. Performance is a secondary concern.
But it's a concern that will increase in urgency as global firms do more business digitally. A device like Riverbed's could address the problem if applied at the various gateways into and out of the network, wherever they may be. So far, the approach seems to be economically attractive; Riverbed's sales increased almost sixfold from 2004 to 2005. That's way too hot to ignore.
Next up is mobile business. It's becoming huge, and private-equity investors have taken notice. For example, VentureWire reports that Qualcomm's (Nasdaq: QCOM ) venture arm recently led a $7 million round of funding for mobile-payments platform provider Obopay.
But that's a pittance compared with other investments in the mobile market. For example, Sybase recently spent $400 million for messaging provider Mobile 365. And earlier this year, VeriSign (Nasdaq: VRSN ) spent $250 million for m-Qube while Amdocspurchased Qpass for $275 million.
The lesson for the rebel in you? Billions may be at stake, but big firms won't acquire every mobile start-up. Frankly, that's good. Some are bound to sport terrible ideas. Others, however, may uniquely address questions facing on-the-go netizens. For example, how secure is a smartphone? Can you really trust what gets beamed via Bluetooth?
I fully expect at least half a dozen Baby Breakers to emerge to address those and other questions. Want to bet that none of them will go public in the next five years? I didn't think so. Stay tuned, Fool.
That's all for this week. See you back here next Friday, when we continue the quest to find the next ultimate growth stock.
For more Rule-Breaking Foolishness:
- Check in with last week's infants.
- Don't be afraid to invest dangerously.
- Big bats can lead to big gains.
High-tech. Biotech. Nanotech. Any tech. David Gardner and his Foolish band of analysts cover it all forMotley Fool Rule Breakers, and they've unearthed four multibagger stocks in fewer than two years as a result. Want to find out what they are? Try the service free for 30 days by clicking here.
Fool contributorTim Beyersowns shares of Akamai, which is a Rule Breakers selection. Get the skinny on all of the stocks he owns by checking Tim's Foolprofile. The Motley Fool'sdisclosure policyis a rebel with a cause.