Summer: Cloudy With a Chance of Tech IPOs
The next couple of months should help establish if the initial public offering market has recovered after a somewhat rocky and unpredictable first six months of the year.
Several crucial expected IPOs should help serve as a barometer for the tech market. Here's Light Reading's rundown of what's to come, what's happened so far in 2014, and what may happen in the tech IPO sector.
Arista Networks: The Santa Clara, Calif., Gigabit Ethernet switch and data center software maker is due to complete its initial offering on the New York Stock Exchange on July 6. A recent research report from the analysts at MKM Partners suggests that Arista Networks Inc. will go for a price ranging from $36 to $40 a share.
- We believe the mid-point of the pricing range implies a $2.99bn market cap and $2.74bn enterprise value. The mid-point represents 3.7x EV to our 2015 sales estimate of $733mn and 28x our 2015 non-GAAP EPS estimate of $1.35.
Arista is already a significant player in the Gigabit Ethernet market with a 6% market share, making it No. 2 behind Cisco Systems Inc. (Nasdaq: CSCO), MKM Partners says. The analysts are also expecting Google (Nasdaq: GOOG) to become a significant customer for its cloud networking data center software through 2015.
One possible downside for the company's IPO at the moment is that Microsoft is a major customer, accounting for 22% of all revenue in 2013. Another potential issue is that the company could face a legal challenge from another startup linked to an ex-board member and founder of Arista. (See Arista Faces Legal Challenge as It Files for $200M IPO .)
Com Hem: The Swedish cable operator announced plans to raise 5.5 billion kronor ($829 million) from an IPO on the Stockholm exchange late in May. (See Com Hem Preps $829M IPO.)
Good Technology: The Sunnyvale, Calif., enterprise mobility management company revealed in May that it has filed for a $100 million IPO. Formed in 1996, Good Technology Inc. posted a net loss of $118.4 million on $160.4 million in revenue in 2013, compared to a net loss of $90.4 million on $116.6 million in revenue in 2012. (See Moto Offloads Good Technology.)
Goodman Networks: The Plano, Texas, network infrastructure services company Goodman Networks Inc. filed plans for an IPO back in April. The company is reportedly hoping to raise up to $100 million through a Nasdaq offering.
MobileIron: The Mountain View, Calif., mobile device security management company is planning a 15% float of its stock on the Nasdaq this month.
At the end of May, MobileIron filed documents listing an expected price range of $8-$10 for the 11.1 million shares to be offered. If an overallotment option of 1.67 million shares is sold when the company goes public, that could take the value of the IPO to nearly $128 million. (See Mobile Gets $825.1M in New Investment in May and MobileIron Goes Flat Out for IPO.)
— Dan Jones, Mobile Editor, Light Reading