Now we're on a roll. This week is going to see a raft of new issues hitting the stock market -- 11 in total. Of those issues, nearly half are a classic type of IPO -- tech stocks. Could we be witnessing a 2.0 version of the late 1990s/early 2000s dot-com IPO gold rush? It's too early to tell, but with these guys coming to market we can't rule it out as a possibility. So out of the four stocks we're featuring this week, exactly half are tech issues.
Before we begin, however, we have to warn that IPO investing carries above-average risk. That's because initial stock prices can be far from the value the market eventually puts on the company's shares. Of course, this situation provides immense upside potential ... though it also presents the chance of losing a big chunk of an investment.
Now, with that caution out of the way, let's look at our selections for the week.
Like many young tech companies these days, this firm quite literally lives in the cloud. That's where its software resides, specifically human capital management solutions for mid-sized firms. As of last June, Paylocity Holding served roughly 6,850 clients in the United States. As to be expected of a young tech company, it's seen robust growth, nearly doubling its top line (to $77 million) from fiscal 2011 to 2013. Somewhat atypically for the sector, it's also managed to turn a profit in its past two fiscal years.
A total of 6.67 million shares of Paylocity Holding are being brought to market by lead underwriters Bank of America Merrill Lynch, Deutsche Bank Securities, and William Blair for $14 to $16 per share. The stock is scheduled to make its debut on Wednesday, listing on the Nasdaq under the ticker symbol PCTY.
Traveling out of the U.S. for the moment brings us to this Israel-based biopharma, which specializes on the development of products used to treat severe burns and other hard-to-treat injuries. It's already gotten marketing authorization from the European Medicines Agency for its burn care solution NexoBrid. The company hasn't yet posted any fiscal year revenues, but if the IPO is successful it'll pump much of the proceeds into sales and marketing efforts.
MediWound is expected to hit the market on Thursday, being led to it by lead underwriters Jefferies, a unit of Leucadia (JEF -2.10%), Credit Suisse, Bank of Montreal's (BMO -1.86%) BMO Capital Markets. An even 5 million shares will be sold in the offering for $14 to $16 apiece, and the company should trade under the ticker symbol MDWD on the Nasdaq.
The tech sector is becoming infinitely more specialized. This company, which stands to reap the most from any of this week's IPOs, is a provider of technologies that it says optimize the networks of large organizations, and make them faster and more secure. Like Paylocity Holding, A10 Networks' revenue has swollen lately (rising from $91 million to $142 million from fiscal 2011 to 2013), but the bottom line has been solidly in the red over the past two years. The company's market looks juicy, though, and its potential clients should be willing to fork over money for the kinds of improvements it promises.
A total of 12.5 million shares of A10 Networks will be sold in the IPO, at a price of $13 to $15 per share. The lead underwriters are Bank of America Merrill Lynch, Morgan Stanley (MS -2.97%), JPMorgan Chase (JPM -0.74%) division J.P. Morgan, and Royal Bank of Canada's (RY -2.69%) RBC Capital Markets. The IPO should take place on Friday, with the stock trading on the New York Stock Exchange under the ticker symbol ATEN.
Neighboring our friend Paylocity Holding in the e-cloud is this company, which in its words is "a leading provider of cloud-based global trade management" for the logistics industry. Global trade is thriving these days, giving Amber Road a tremendous potential client base to feed from. Its taken advantage of the robust China market by purchasing a fellow global trade management solutions provider located in that country, EasyCargo, in September of last year. Meanwhile, Amber Road's revenue has been floating in the right direction -- up -- over the past few years, although profitability hasn't yet risen into the black.
The firm is slated to make its market debut on Friday, trading on the NYSE under the ticker symbol AMBR. The lead underwriter is Stifel, and the issue will see just over 6.5 million shares sold at $10.50 to $12.50 per share.