While you hedge fund guys slept-in out there in the the Hamptons (year right!) and left operations to your CFO, you might have missed a sleepy little news bit on an otherwise naked wire Monday. Remember Skype, the company that made a couple dudes rich and cost eBay some time? It may be offering an opportunity now for those who might see the potential if the right creative minds were in command. Much of the market is looking at Skype in a different way, as a sort of lost cause, with that old Vonage (NYSE: VG) stigma. It's too small and too radical to make a difference against huge competitors that can shift to crush it. They see Skype as a story that can only make a few pennies giving away services to the tech-savvy and cheapsters among us looking to save a nickel here or there. To most, Skype was a nice idea, but is in a competitive pool with bigger fish. But the Street may be missing something, perhaps a sleeping giant catfish even.
Many of you may not know that "The Greek" spent a portion of his analytical career researching IPOs, and they were mostly of the tech sort. "The Greek" earned clients a 23% average annual return over five years as a stock analyst on Wall Street.
Monday's wire somehow managed to hide a little secret. Skype filed its S-1 IPO registration with the SEC on August 9. You may not know it, but I use to write research reports on IPOs in the aftermath of the dot-com bubble burst. I was covering mostly tech-offerings, since that's what dominated the wire, until the IPO market dried up and we moved to other projects. The stock-drop of the earlier part of this decade forced my old firm to kill a long-standing and widely loved newsletter, Emerging Opportunities, which focused on our favorite small-cap stock picks and about four IPO write-ups a quarter.
I was pretty good at quickly recognizing the paradigm shift taking place in my stock group coverage, and transitioned the buy list from tech-heavy never-to-be-nothings into undervalued growth stocks (that some called value stocks) selling tangible goods and services with real profits to show for it. My stock picking performance might have been lousy that first year after inheriting the small-cap tech-heavy group in the midst of the bubble burst, but instead I quickly proved my worth with some hot-shot off-beat picks that made our clients millions and boosted our overall performance record. My old clients, colleagues and the CEOs of my picks would vouch for it, if you needed to know and I needed you to know.
Anyway, I am feeling the IPO research itch again, and am going to pick up with an analysis of the Skype IPO for you. Let me know if you are interested in having the report mailed to you when published (if you're not already on our mailing list).
Skype's sort of testing interest, using major players Goldman (NYSE: GS), JP Morgan (NYSE: JPM) and Morgan Stanley (NYSE: MS) to sell its shares. The company is only looking at raising about $100 million. Remember, this is the company eBay bought for $2.6 billion in 2005, and turned around and sold 70% of in 2009 for $1.9 billion plus some promises. I wonder if this IPO might be a farce, sort of a feeling out of the marketplace and a reminder to the players that be that Skype is still around. The buyers of the 70% stake, excluding the founders - who took a 14% interest, were a savvy group led by Silver Lake. We'll see soon enough, as an IPO registration does not necessarily lead to an IPO. It would be interesting if the threat of IPO alone were to drive a higher buyer to take interest. Or it simply may be that the new owners want to see how a larger offering might swing.
Anyway, I'll refrain from further writing until I've concluded my research; then I'll have a lot to say, and something worth reading too. For now, I just wanted you to be aware of the news and pending research. You can find some of our most recent stock research here.
Monday's corporate news schedule highlighted presentations by EMC (NYSE: EMC) and Citrix Systems (Nasdaq: CTXS) at the Pacific Crest Securities Technology Leadership Forum. The day's earnings schedule highlighted reports from King Pharmaceuticals (NYSE: KG), Tyson Foods (NYSE: TSN), Scripps Networks (NYSE: SNI), Acadia Pharmaceuticals (Nasdaq: ACAD), Anika Therapeutics (Nasdaq: ANIK) and Avi BioPharma (Nasdaq: AVII).
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