Rock Candy: Candygram for March 2 2011

This is the full text of the Candygram published today.  Refer to the full version in PDF format on the Candygram page (login required) for all the tables.

It hasn’t been a soft and sweet two weeks in the IPO market.  There were no pricings and only a handful of deals have commenced active marketing.

The NASDAQ was flat for the month but global tensions and market volatility brought it down sharply at mid-month from near a 10-year high.

In any case, this pause has allowed us to do our preliminary research on some of the companies we will be following closely.  We published on LinkedIn (login required) last week and Pandora is up next.  Once final prospectuses are filed and roadshows are started we will publish detailed financial models.

Performance

Although the average stock was down 3% in the past two weeks, for the month the average gain was 2%. For the month the top 10 names were up 35% and the bottom 10 were down 21%.

 

There’s no question that the IPO market was a “stock picker’s market” in February.

Meanwhile, the tables below summarize the high and low points for IPO names in February.

Top 5 for February
Company Ticker Gain Area
Sky-mobi MOBI +63% Mobile Internet S/W
Ventrus VTUS +51% Biotechnology Anal Therapies
IntraLinks IL +41% Collaboration SaaS
Youku.com YOKU +36% Chinese YouTube
Broadsoft BSFT +33 Communication S/W

 

Bottom 5 for February
Company Ticker Loss Area
Rosetta Stone RST -31% Language Software
HiSoft HSFT -30% IT Services in China
Motricity MOTR -26% Mobile Internet S/W
GreenDot GDOT -22% Payment Services
ReachLocal RLOC -19% Online Marketing

See the IPO Candy Performance page below for more details.

“Lucky Candy” Update

Among the top performing IPO names from China in February, there were some familiar names like Youku.com, Changyou.com and Sky-mobi, which is a mobile Internet player that is in the IPO Candy Folio.  At the top of the list was a small computer-based testing company called ATA.  The shares doubled from $4 to $8 after strong results and some upgrades.  The company has testing centers for professional exams in financial services.

Among the losers were some names we track including SemiLEDS, Dangdang, Noah Holdings and hiSoft.

We’ve had some good success with names like Sky-mobi, which was obviously undervalued, but we may take the time to produce more IV estimates for more of the names in the Lucky Candy Ecosystem.

Selected Company Morsels

LogMeIn announced and demonstrated remote access products for the new “Gingerbread” version of the Google Android OS.  On the negative side, competitive product GoToMyPC debuted for the iPad.

Sensata completed a 20 million-share secondary offering.

Rosetta Stone materially lowered their financial guidance.  The company blames piracy of their language translation software for weakness in their business.

Calix completed their acquisition of Occam Networks.

IPO Candy Folio Update

The IPO Candy Folio was down 4.47% in the last 2 weeks of February but only down 0.59% for the month.  YTD the Folio is up 5.42%

We may take some portfolio actions in the next week. If we do we’ll send out notifications on both the Folio system and by email.

More information and disclosures regarding the IPO Candy Folio can be found at: /invest.

 

The Pipeline

We’re going to keep using the lull in active marketing and IPO pricings to add more research coverage.  Next up is Pandora, which will be a closely watched deal in the tumultuous online music space.

See the updated pipeline table in the IPO Candy Ecosystem for more details.

 

Coverage and the Calendar

In March we can expect a wave of new coverage, including: Nielsen, Demand Media, Velti, InterXion, BCD Semi, NeoPhotonics, Epocrates, Tornier, Endocyte, Gevo, Fluidigm and AcelRx.

There will also be some share lockups coming off near the end of the month.

[Refer to the full PDF for the IPO Candy Ecosystem Overview, Performance, Lucky Candy and Pipeline tables.]

 

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