3 tech offerings that defied the shorts
All of these IPOs have continued to triumph despite numerous short calls.
When we look back at the evolution of the social-, mobile- and cloud-technology offerings of the last year, we should smile about the trajectory of many of the companies that have launched in that time. That's because these stocks have been incredible performers: LinkedIn (LNKD), which announced a huge secondary offering Tuesday night; Zillow (Z), which just got a gigantic new shareholder; and Yelp (YELP).
First consider LinkedIn. Here's a company that came public in May of 2011 at $45 and immediately went to $94, as the social-networking site had a ton of buzz about it. At the time, the opening was widely criticized as a throwback to the dot-bomb days, when people lost fortunes chasing dubious Internet companies without track records or even opportunities for profitability -- or, in some cases, even sales. Sure enough, the stock dropped to $60 six months later, and the chatter was that the site was just a fad -- and that there really wasn't any hope for long-term growth.
Two years later and you have had a four-fold increase in earnings -- not revenue, but earnings -- and the stock isn't done yet. In fact, I bet its $1 billion offering will be snapped up without any problem, and that it will be put away by growth-seeking money managers who recognize that earnings could conceivably double again next year.
Then there's Zillow, the real-estate-listing company. Here's one that is absolutely despised by many short sellers, and there's high-quality research out there that's been saying it is very overpriced. But was it? The stock had its initial public offering at $20 on July 20, 2011, and immediately opened at $35.77 amid calls of Internet over-exuberance. After all, wasn't this just a company that helped you find the price of your house? Sure enough, it came to earth fast, or at least almost back to its IPO price, trading to $22 six months later amid suggestions that the competition had gotten too great.
When I mentioned this stock positively just a week ago, I was bombarded by people who thought it was overvalued. Among them was a fellow who was all over me with top-notch research about what a joke Zillow was, including this gem: "It doesn't even own its own content!" Maybe someone should tell that to Australian billionaire James Packer. We learned last night that he bought 9.4% of the company. No wonder its secondary offering -- 5 million shares price at $82, a 3% discount to the last sale -- worked so well.
Finally, there's Yelp, the Internet-listings company with a great deal of mobile momentum. Here's one that came public at $15 in March of 2012 and flew up to $24 on opening day. A few months later, as part of a broader June swoon, it traded below the offering price, sinking to $14. But a series of spectacular revenue-growth quarters have now powered the stock up to $52, as it is clear the company can go profitable any time it wants. The international rollout, though, is so strong that every penny should go to it. Smart, smart company.
All three of these stocks have been gigantic winners, and I think they'll continue to be so, given how well they dovetail into the trinity of social, mobile and cloud. I have to believe that LinkedIn, even as it has more than doubled this year, will be able to find buyers right at these levels for the billion offering. That's how starved managers are for the shares of fast-growing companies. The darned thing's worth $27 billion already.
I know it's chic to be jaundiced and jaded. But these three stocks have defied numerous short calls and have continued to triumph. Those who felt burned during the last Internet go-around, and even felt vindicate on the blow-ups of Groupon (GRPN) and Zynga (ZNGA) -- or the Facebook (FB) IPO and its aftermath, for that matter -- have to be smarting this time around. Because this time around, for the most part, they worked. They seem to continue working, too, even at these admittedly exalted levels.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long FB.
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"More to Come" We have done this for three straight days!! Still not going to make a big move. Congress or someone will remind these traders that an attack is on the way. Refugees will need our assistance as always and we will respond when our main objective is taking out the arsenal of the Syrian goverment. Not that hard to understand right! Refugee assistance 200 million. Each missle 75 million. Rebuilding afterwards because it is expected of us after 100 targets are hit 600 million. that leads us too what about 100,000 troops on the ground. Destroyers circling, another 200 million above what is allocated already. 12 billion in not entering into a conflict, priceless.
Trade deficit used to be enough news to drop 50 points but instead we are up! Ceiling will fall, so go buy facebook and let it ride. Jim last night said raise money, that means buy FB. I am going with the raise money bit.
Housing on the rise, how long can that sustain its growth. Short the market slump of September and play the long side afterwards. Wait until the taper then hop back on the train(wreck) ride for 8% then run till January.
Thought this upside would have happened yesterday, after Foreign Indices going up nicely for a couple of days...Then all we did was rout the Markets last night.
This Syria thing must be effecting Russia's pocket book also, otherwise don't believe they would be buying into anything U.S. has to say...
It would be interesting to be a "fly on the wall" at the G-20 Summit...Maybe others are applying pressure there too.
As far as support to the "refugees" leaving Syria, yeah I think we are doing more then our "fair share" as usual, but many there seem to want us to bomb the hell out of Asaad..
But I'm not really sure that we (US), have figured out who all the enemies are there yet...?
And could we end up helping the wrong sides....Without more Intel.??
Markets are doing fine as expected...
But tired of running over "molehills" 2-3 times a week...
That's not investing...It's frequent trading by the big guys.
Gotta make their numbers and 2% seems to be the ticket.?
Seems to me MSN....Had their share of "glitches" this morning spent most my time on yahoo and kitco getting the straight skinny, market reports and other well written articles...
Where is Fatazz, I want to whip him like the red-headed, unwanted, stepchild that he is...
Miss Lilly can take care of his box-cleaner Mr. Brucey. with one quick broom handle.
I figure him and CGT share space under the same bridge out near the 101...
And Ms. Bambi (the cat lady) is across the way in a different crate or box, hers is bigger.
"Another glitch on the Nasdaq, hey here's an idea, get your sh@tt together Nasdaq. People lose money because of these glitches and they are inexcusable."
"Mark Cuban, the billionaire owner of the Dallas Mavs, says he is 100% positive this was no glitch but a planned attack."
Come to realize the vulnerability of our Modern Day. Major universities report MILLIONS of attacks on such a regular basis that they are dedicating more and more resources to the Tech Train Wreck and less toward actual education. The part that should sober you quickly from your Kool Aid stupor is- that you sign a new Disclaimer every quarter about the integrity of your online accounts. They specifically defer responsibility BACK TO YOU. If your account is cross-tethered to your other accounts, hackers are fully capable of taking you completely down to zero without you having ANY form of protection or recourse. Wake up- idiots. If my generation was the last to actually do things with paper trails and records, then Gen X & Y are fully incapable of it. So... who's employed and who is-- clueless? Disagree? Look up- fractional education and see how much of any full process you actually know.
Linked-in... Jim supports a criminal-level exclusion-clique machine that deems competence by where and how much you spent on your college degrees and absolutely nothing on your experience. Better we dump this prejudice machine and put the onus on management to be management and rate them again on recruiting selecting hiring training and supervising... that should clear 99% of existing losers out of those roles and free them up for competence.
Zillow-- the wanna-be replacement for the multi-list. We don't need it.
Yelp-- another clueless site to fill with banner ads.
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The otherwise all-male board will now include former Pearson CEO Marjorie Scardino, but women directors remain a rare sight at Silicon Valley tech companies.
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