]]> http://cashatoll.com/premier-wen-says-china-will-focus-on-growth-xinhua-reports-bloomberg/feed/ http://cashatoll.com/remember-theglobecom-tech-ipos-have-a-dismal-track-record/ http://cashatoll.com/remember-theglobecom-tech-ipos-have-a-dismal-track-record/#comments Fri, 18 May 2012 17:28:04 +0000 Mister Bond http://cashatoll.com/remember-theglobecom-tech-ipos-have-a-dismal-track-record/ There are plenty of reasons to "like" Facebook, but Internet IPOs are better known for their epic flops than wild successes.

Of the 31 Internet IPOs held since the beginning of 2011, 22 are currently trading below their closing price on the day they went public. Here’s an even scarier stat: 16 are trading below their offer price.

After popping by a collective 34% on IPO day, those 31 stocks are now trading at an average of just 8% above their offer prices. Excluding LinkedIn () and Zillow (), which are trading at more than double their offering prices, the rest of the Internet IPO list is collectively up by just 2%.

Generalizing across more than two dozen Internet companies is tricky, because they all have different business models, but the trend has been quite consistent: Internet IPOs get a nice bounce on day one of public trading, then slide off in subsequent days and weeks.

That’s the environment in which Facebook () is offering its shares to the public. The social network will sell about a fifth of its shares on Thursday. Those early buyers can begin reselling their shares on the Nasdaq exchange on Friday.

"It’s hard to say exactly what’s going to happen with Facebook, but from what we’re hearing on the demand side of things, I wouldn’t expect Facebook to do anything out of the ordinary in terms of beating this trend," says Nathan Drona, analyst at ABR Investment Strategy. "There will be an initial bump, but then the time to exit is at the strength of that rise."

Facebook priced its IPO at $38 and Drona expects shares to surge as high as $50 before eventually falling back to a range of $31 to $33.

Related story: 10 big dot.com flops

The bump-and-slide trend is caused by investors’ initial enthusiasm during IPOs — which eventually gets replaced by an examination of the companies’ business fundamentals.

Wall Street analysts remain concerned about Facebook’s slowing growth, weak ad sales-per-user numbers and lack of monetization of its mobile products.

Stephan Paternot, founder of 1990’s dot-com poster child theGlobe.com, knows a little about what Facebook is getting itself into.

TheGlobe Business Card Holders.com was a pioneering Internet community, and its November 1998 IPO generated an investor frenzy. On its first day of trading, the stock had one of the biggest IPO surges in history, soaring by 606%.

The never-profitable company never again traded as high, and was out of business within five years.

"Unfortunately, our run-up on IPO day meant we left $200 million to $300 million on table and raised only $30 million," Paternot told CNNMoney this week. That’s a problem underwriters are supposed to guard against: Because companies get cash only for the shares they sell directly, they don’t profit when IPO buyers resell their shares for huge gains.

"The positive side was it created a branding event — by the end of the day, everyone had heard of theGlobe," Paternot recalls. "But when every institutional investor flipped it the next day, the stock went down, and everyone thought there was something wrong with us."

The current Internet IPO trend is starting to echo the 1990’s dot-com bubble.

The most famous example from go-go days is VA Linux, a PC company whose shares jumped 698% in its first day of trading — still a U.S. record, according to Dealogic. That stock also never traded higher than on its IPO day, falling from $239 all the way down to $8.47 a year later.

Though their fall hasn’t been nearly as epic, two of last year’s super-hyped IPOs — Groupon () and LinkedIn — have also never yet returned to the highs they reached on their IPO days.

The companies received bullish headlines when their IPOs popped: Groupon rose 31% and LinkedIn shot up 109% on their first days of trading. But the sentiment turned sour once their shares started slipping.

Though he believes Facebook’s long-term potential is strong, in the near-term, Paternot thinks the bump-and-slide serves as a harbinger of things to come for Facebook.

"Facebook is as over-hyped and inflated as a company going public can be," he says. "All that company can do is slide down in the next six to nine months." 

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The Commerce Department said today that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That’s 2.6 percent more than March’s total, which was revised higher. Construction rose for both single-family homes and apartments.

Building permits, a gauge of future construction, fell last month from a 3 ½ year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.

Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.

Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.

Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also rose to 34 from 31 guaranteed high risk personal loans.

Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.

Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what’s owed on the mortgage.

Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That’s nearly twice the markup typical in a healthy housing market.

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Coty Inc., a privately held rival, had raised its original offer last week by about 6.5 percent, but set a deadline of Monday for the New York company to accept the bid.

Avon asked for more time to consider the bid over the weekend, but it appears that Coty is having none of it. It slammed that door shut on the troubled company Monday and investors are following suite even before the markets open Tuesday in some heavy trading.

If the current prices hold, Avon shares will be worth less than when Coty made its original offer back in April.

Shares are down 14 percent to $18 in premarket trading.

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Avon says that it expects to respond to the new offer within a week. The offer was made in a letter on May 9.

Coty sweetened its 2-month-old offer by about 6.5 percent to $24.75 per share and demanded a response from Avon by Monday.

Coty indicated that Avon has said it wouldn’t review any bid until its brand new CEO, Sherilyn McCoy, finishes reviewing all of Avon’s operations instant payday loan.

Coty’s financing sources include Warren Buffett’s Berkshire Hathaway Inc., German holding company Joh. A. Benckiser GmbH, which controls Coty, and BOT Capital Partners.

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The development of the $7.5 million business incubator was shepherded by Beth Noonan, of the St. Louis County Economic Council, who will also oversee operations after the center opens its doors. With low-rent shared labs and flexible office space, the center could be home to as many as 30 fledgling companies. Its proximity to the Donald Danforth Plant Science Center, where very early-stage research is done, and the Bio-Research & Development Growth (BRDG) Park, where more established enterprises find homes, is by design. The center is the latest addition to the region’s bioscience belt and the fifth incubator developed by the council.

How did the project begin and where do things stand now?

The genesis came about when we were approached by some folks from the Danforth Center and Nidus (an entrepreneur network based next door). Their focus was changing. We have the research and the science at the Danforth Center, and BRDG is a post-incubator space, so there emerged this gap in terms of affordable space for companies in the county. We were a natural fit because we run an incubator program. This is just a specialized version. The construction is not quite completed, but we should be done in June. We’ll have 8,000 square feet of office space, 7,800 of lab space.

What’s the objective?

The bottom-line goal of any incubator is to really provide that first commercial space for early-stage companies at an affordable price, and to provide them with shared resources and amenities, and access to other entrepreneurs. They all function in the same way. But in terms of the Helix Center it provides specialized lab space and specialized equipment that early-stage technologies wouldn’t have access to. I think what’s unique about Helix is the close proximity to the specialized resources nearby.

What kind of company do you see finding a home at the Helix Center?

The kind of tenants we’re looking for are folks who are in the bioscience space, which is broadly defined: plant science, life science, clean technology. We’d like to have some nexus to the biosciences. It’s not necessarily something that finds the next drug for cancer, but a support company. A contract research company or doing something with medical records related to biosciences.

How do you go about finding these companies?

We’re doing quite a few things. We’re going to places where start-up companies gather to inform them of the space. We’re getting close to finishing our web site. I’ve been doing speaking engagements. A lot. Our goal is to provide space to companies that are growing in St. Louis. The most likely source of our tenants will be St. Louis.

What ensures that they stay here after they “graduate?”

Of course, we can’t force people to stay in St. Louis. But I think what we’re trying to do with Helix and what a lot of folks in the region are doing, is help continue strengthening the environment for entrepreneurs and making sure people have access to resources. We have early-stage companies here all the way up to Fortune 500 companies. We can help them make those connections. We have other resources to help them as we grow.

BETH NOONAN

Title • Vice President bio-sciences and technology, business development division, St. Louis County Economic Council.

Education • BA in Linguistics, Brown University, masters degrees in social work and jurisprudence, Washington University

Family • Husband, Frank Pfau; two children, Emily, 12, and Michael, 9.

Hometown • Chesterfield

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And while a computer-driven car may seem unsettling, the technology represents a potential leap forward in auto safety.

More than 30,000 people are killed each year in crashes despite huge advances in auto safety. The overwhelming majority of those crashes are caused by human-driver error.

Computer driven cars could reduce traffic deaths by a very significant degree, said David Champion, head of auto testing at Consumer Reports, but only if all cars are computer-driven.

"I think if all the cars were self-driving, it would be a benefit," he said. "I think a mixture would be a bit chaotic."

That’s because humans are better at predicting the behavior of other humans than computers could ever be, he said.

"When I’m approaching an intersection, I look to see of the other driver is looking at me," said Champion. "If he’s looking somewhere else and inching forward, I’m going to lift off the gas."

For the foreseeable future, human "drivers" will continue to bear the ultimate responsibility even in Google’ (, Fortune 500)s self-driving cars. This means you won’t be able to lounge in the back seat and check email on your way to work. You’ll still have to sit in the driver’s seat and pay attention.

Self-driving cars, like Google’s, use sensors to watch cars, pedestrians and other obstacles. They combine a number of technologies that are already available on cars today — including GPS tracking, wheel motion sensors and radar — with additional technology and sophisticated software that allow the car to read street signs and signals and actually drive itself through traffic.

Google’s cars, modified Toyota Priuses, are still in the testing stages and aren’t available to the public. But some so-called "driver assistance" technologies are already helping to lower traffic deaths in cars you can buy now.

Electronic Stability Control which uses computers to help drivers maintain control during abrupt maneuvers, has been shown to reduce fatal crashes by as much as a third.

Cars of the future: They’re going to be tiny and weird

ESC is now required on all new cars but was first used, on a wide scale, on SUVs. That’s why, last year, statistics showed top-heavy SUVs to be less prone to roll over in real-world crashes than regular cars.

Beyond that, there are various other "driver assistance" technologies.

Blind spot alerts warn drivers of cars in adjacent lanes and forward collision alerts sound an alarm when a driver is closing in too quickly on a car ahead payday loans in one hour.

"We’ll start seeing more features that will migrate from just these alerts and warnings to taking a little more control," said John Capp, director of active safety technology at General Motors (, Fortune 500).

GM’s new Cadillac XTS, for instance, will brake automatically if a driver fails to respond to an imminent collision. Nissan’s () Infiniti division has a several models that provide slight braking to nudge a vehicle back into its lane if it begins to drift out.

Many luxury cars are now also available with "active cruise control" that allows a car driving at highway cruising speeds to automatically maintain a safe following distance behind the car ahead. In some models, these systems can work even in stop-and-go city traffic.

Systems like these could be helpful, said Champion, but also present the possibility of over-reliance or abuse.

"It all comes down to the person behind the wheel using the system," he said.

Sometimes these systems can cause confusion. For instance, some reports of unintended acceleration in Toyota cars were triggered by drivers failing to understand how an "active cruise control" system worked.

With these systems, drivers set the active cruise control to a certain speed. If there’s a slower car ahead, the cruise control will automatically slow the vehicle down to maintain a safe distance between the two cars. Once the slower car moves away, active cruise control will accelerate to the higher preset speed. This acceleration can be startling to drivers unfamiliar with the system.

There is at least some evidence, however, that "driver assistance technologies" do work. A recent study by the Highway Loss Data Institute, an insurance industry group, indicated that the forward collision avoidance system in the Volvo XC60 helped reduced accident claims by 27%. Volvo’s system warns the driver of an impending collision and applies the brakes if the driver takes no action.

One technology the Google car doesn’t utilize, but which would help make self-driving cars much more effective, Champion said, is vehicle-to-vehicle communication. So called V2V communication uses transmitters to send and receive signals that tell other cars where each car is, where it’s headed and how fast it’s moving. The devices can also communicate with transmitters along the road.

V2V is already in advanced stages of development by a consortium of automakers and the federal government’s National Highway Traffic Safety Administration. 

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Annan said in Geneva that there has been “a spate of bombings that are really worrying” and that the U.N.’s cease-fire-monitoring mission “is the only remaining chance to stabilize the country.”

“There is a profound concern that the country could otherwise descend into full civil war, and the implications of that are frightening,” he said. “We cannot allow that to happen.”

Annan spoke to reporters after briefing the U.N. Security Council by videoconference from Geneva, where he warned that failure to prevent a civil war “will not only affect Syria, it will have an impact on the whole region.”

Annan said he also told the Security Council that “unacceptable levels of violence and abuse” are continuing in Syria _ that government troops are still present in and around cities and towns and human rights violations are extensive and may be increasing.

“There have been worrying episodes of violence by the government, but we have also seen attacks against government forces, troops and installations. And there have been a spate of bombings that are really worrying and I’m sure creates incredible insecurity among the civilian population,” he said paydayloans.

He said there has been “some decrease in the military activities, but there are still serious violations in the cessation of violence that was agreed and the level of violence and abuses are unacceptable,” he said.

Annan warned that his six-point peace plan aimed at halting the fighting and initiating political talks to end the 14-month conflict is not an open-ended one. The Security Council has endorsed Annan’s plan and authorized 300 unarmed military observers to monitor actions by Syrian President Bashar Assad’s regime and opposition for three months.

The fighting between the two sides is estimated to have killed more than 9,000 people.

“We may well conclude down the line that it doesn’t work and a different tack has to be taken, and that will be a very sad day, and a tough day for the region,” he said.

Yet, he also tried to sound a note of optimism.

“We’ve been small in numbers, but even where we’ve been able to place two or three observers, they’ve had a calming effect,” he said. “And I think that when they are fully deployed and working as a team, establishing relations with the people, we will see much greater impact on the work that they are there to do.”

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The Irvine, Calif.-based company’s stock jumped $2.30, or 14.8 percent, to $17.80 in morning trading after opening at $18.80 and briefly rising as high as $19.29 per share.

The company had priced its initial public offering of 8 million shares at $15.50 per share. It is offering 7.6 million shares and selling stockholders are offering 400,000 shares.

Tilly’s sells surf-inspired and casual West Coast-styled clothing and accessories at its chain of 140 stores in 19 states. It was founded by Hezy Shaked and Tilly Levine, who opened their first store in Orange County, Calif., in 1982 and are still principal shareholders.

Tilly’s expects to receive net proceeds of about $107.6 million after expenses. It won’t receive any proceeds from the sales by the selling stockholders cheap credit report.

Tilly’s is a holding company and does its business through Tilly’s World of Jeans & Tops. It plans to use proceeds from the IPO to pay shareholders with a stake in Tilly’s World Jeans & Tops, which will be made into a wholly owned subsidiary of Tilly’s.

In the fiscal year ending Jan. 28, the company earned $34.3 million. That was up 41 percent from the prior year. Its revenue rose 20 percent to $400.6 million for the year.

The underwriters of the IPO included Goldman, Sachs, BofA Merrill Lynch, and Piper Jaffray. Underwriters have a 30-day option to purchase up to an extra 1.2 million shares to cover overallotments.

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