Candygram – July 1, 2010: A melted market topping for dessert?

Our Candygram will go out to our email list after the close today or early tomorrow morning with the IPO ecosystem included.

The market didn’t get in the way of June being a good month for the IPO market. In fact, every deal we mentioned in our June 15th Candygram was priced in the last two weeks (Motricity, Broadsoft, CBOE, Higher One Holdings, Fabrinet, and even Vringo and China Intelligent Lighting.)

Although all of these deals were completed, some — notably Higher One Holdings — were priced well below their indicated range and offered some real opportunity in the aftermarket for investors.

The big news of the week was Tesla, which not only completed their IPO but increased the size, priced above the range, and enjoyed an after-market celebration that sent the shares up to nearly $30 after pricing at $17.

As we go to press, HiSoft Technology priced below the range at $10 and MagnaChip elected not to proceed due to “weak market conditions.”

Some of the offerings we are following closely are new or set terms recently, including:

  • InvenSense – This Valley-based firm is the leader in motion processing systems which are embedded in an expanding array of devices from the Wii to the iPhone. Goldman is leading this one and it’s a very promising company in a space we like. Revenue growth has been exponential in the last three years, going from $7.8 million to $29 million to $79.6 million.

  • RealD – RealD is the leading player in 3D cinema technology and has recently set terms and started the final marketing stage of their IPO. RealD had the vision and execution to get into 3D before other established companies like Dolby believed in the market. Now their revenues are skyrocketing with the huge growth in 3D cinema, leaving would-be competitors like Dolby in the dust. Piper and JP Morgan are leading this one.

  • SMART Technologies – This provider of interactive whiteboards is a fairly large global company with $648M in revenues in the most recent fiscal year. Although this market may have less powdered sugar on it than motion processing and 3D, it’s a large market with few direct competitors. We also see this technology in a broader context of RealVR based on touch and visualization.

  • Qlik Technology – The established business intelligence companies have been acquired (Business Objects by SAP and Cognos by IBM.) Since then a new crop of private companies has been growing up, and Qlik is one that has reached the stage for an IPO.

On or about July 6th stock coverage will begin for CBOE and GenMark Diagnostics. CBOE will have a huge raft of coverage since their were 18 banks on the cover. GenMark may get a lift since their stock is down 29% from the IPO.

Disclosures: none

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