This validates my theory that gift cards are not really worth gifting!!

You are much better off gifting direct cash instead of gifting gift cards.. Which only provides profit to issuer of the gift cards.. first in the way of surplus cash and even more importantly.. in pure profit for unused or lost gift cards.. As per conservative estimates one fourth to one third gift cards are never used.

This is really ridiculous.. In order to look fancy or cool.. we gift something which is highly uncool and has big potential for being pure waste of money. Where as Cash, on other hand, in all probability will never be unused or lost..

This so called cool factor gives birth to IPOs of gift card unit!!! though not bad for my local economy.. but in general, the business practice which is not good for anyone.. can never be good for a company or even for a society in general..

my 2 cents..

BRIGHT SPOT FOR GROCER

IPO for Safeway gift-card unit

Supermarket operator says stock offering will be forminority stake in lucrative sector

By George Avalos

gavalos@bayareanewsgroup.com 

PLEASANTON — Safeway said Wednesday it will spin off its gift-card subsidiary, Blackhawk Network Holdings, through an initial public offering of Blackhawk’s stock.

If the offering proceeds as planned, an IPO could occur during the first half of 2013, the supermarket operator estimated.

“Blackhawk is doing very well,” said David Livingston, a Milwaukee-based retail consultant. “That has been one of the bright spots for the company. Safeway has not done that well with selling groceries.”

The potential IPO would be for a minority stake in Blackhawk, Pleasanton-based Safeway said. Blackhawk Network Holdings is a subsidiary of Safeway and operates Black­hawk Network. A cash infusion from an IPO, were it to occur, would come at an opportune time for Safeway. “The grocery end of the business has been pretty tough,” Livingston said. “Safeway faces an onslaught from Walmart markets in most of their major regions. The cash could also help keep Safeway in the black. And they can keep paying a dividend.” 

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Safeway is planning to spin off its gift-card subsidiary via an initial public offering slated for 2013. The division has been a bright spot for the company.
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Blackhawk Network sells gift, phone, sports, ticket and prepaid debit cards through a network of more than 80,000 retailers. The company offers more than 300 brands of prepaid cards from firms such as iTunes, Barnes & Noble, Visa, Starbucks and the NBA. People can buy the cards online or at racks in participating retailers. The cards can be found in grocery, big-box, convenience, pharmacy and specialty stores, and at Internet retailers including GiftCardMall.com. “People are more enthusiastic about giving gift cards, as well as receiving gift cards,” said Patty Edwards, chief investment officer with Trutina Financial, a Seattle-area investment firm. “Gift cards are considered a great store of value. They are almost like a second currency.” Earlier this year at an investor conference, the supermarket revealed that the value of the money stored on the cards totaled $6.9 billion in 2011. That was up 25 percent from 2010. 

The Blackhawk unit produced pretax income of $62 million in 2011. The firm’s adjusted earnings before interest, taxes, depreciation and amortization, also known as EBITDA, was $78 million. “Safeway has done well with how they display the gift cards,” Edwards said. “They are very prominent. I know that I can stop at Safeway, get a gift card, buy it, and be done with it.” Shares of Safeway rose 4.2 percent, or 66 cents, and finished at $16.48. The grocer’s stock continued to rise in after-hours trades. 

The timing and scope of the IPO will depend on “market conditions,” Safeway said in a prepared release. 

“I think the Blackhawk IPO will do very well, especially with the growth Blackhawk has been able to get,” Edwards said. “You don’t want another Facebook. Half the battle is to price it right and market it well.” 

Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos. 

Silicon Valley IPO machinery chugs along..

Good to see my favorite Kayak going public.. Honestly, I didn't realize that it could be such a big business that will go IPO.. Well.. this statement tells about my bullishness on it.. isn't it.. ;-)

All the best.. Keep getting money for our Bay Area!! As long as you get more money and jobs.. I am fine ;-)

Cheers!!

GOING PUBLIC

Palo Alto Networks, Kayak file for IPO

Pair of tech firms price shares as freeze following Facebook’s bungled debut begins to thaw

By Jeremy C. Owens

jowens@mercurynews.com 

A lull in stock market debuts for technology companies after Facebook’s record-breaking initial public offering has faded, as two tech companies made filings Monday for IPOs expected to occur this month.

Palo Alto Networks, a Silicon Valley network- security startup, and Kayak Software, a Connecticut-based company that runs a popular consumer travel website by the same name, filed prospective pricing for shares in their IPOs Monday, one of the final steps on the road to a public debut.

The IPO market has been stagnant for more than a month, as Facebook’s bungled Wall Street debut and unstable price — along with concerns about the macroeconomic situation and general stock instability — have kept startups on the sideline.

Facebook debuted May 18, and the inability of Nasdaq to handle the volume of trades, along with whispers of falling revenue projections, led to the stock falling hard in its first two weeks of public availability. 

The resulting fallout was seen in June, when only four companies went public, the lowest total for any month since the deepest point of the recession, in 2008, according to financial analysis firm PrivCo. Before that, an average of more than 13 companies were moving to the U.S. market every month in 2012, which was still below the pace set last year. 

However, companies that target big businesses as customers, like Palo Alto Networks, have proved strong this year — Silicon Valley enterprise software companies Splunk, Jive Software, Proofpoint and Infoblox are among those that have gone to market in the past year and have share prices higher than their IPO prices. 

Palo Alto Networks, which is actually based in Santa Clara, makes computer firewall and security software, and last year named former VeriSign CEO Mark McLaughlin to its top job. It is headed for its first year of profitability, showing a net gain of $5.3 million in the first nine months of its fiscal 2012, which ends July 31. In fiscal 2011, the company lost $6.5 million, its best performance up to that point. 

Revenues have been building quickly for the company, however, as they have risen from $13.4 million to $48.8 million to $118.6 million in the past three fiscal years, and the company raked in just shy of $180 million in the first nine months of this fiscal year. 

The only substantial tech IPO since Facebook was a similar company — San Diego-based ServiceNow, which provides cloud-based IT software services — and the company’s stock priced above its initial range and still increased 37 percent in its debut June 28. “ServiceNow shows that the appetite for fastgrowing tech companies in their growth cycle will be massive. I expect there to be good demand for Palo Alto,” Morningstar analyst Jim Krapfel said. The company will seek a price of $34 to $37 a share in its IPO, according to Monday’s filing, while selling 6.2 million shares, with 75.8 percent of the proceeds going to the company and the rest to early investors. The offering could bring in as much as $229.4 million. Kayak is a different kind of company, focused on Web consumers, who can be fickle, but competitors Priceline and Expedia have been two of the most successful stocks on the market in the past three years. Co-founders of rivals Expedia, Travelocity and Orbitz joined together to launch the company in 2005, and the Norwalk, Conn., company has increased revenues and profits the past three years in a row, all of which showed a net gain. 

Kayak plans to price its IPO stock from $22 to $25 a share while offering 3.5 million shares, all from the company, for a possible total take of up to $87.5 million, according to its filing with the Securities and Exchange Commission. 

“They don’t have too many value-added services and most people would rather go directly to the airlines’ websites for the same deal, which is cheaper,” said Scott Sweet, managing partner at IPO Boutique, an IPO research firm. Palo Alto Networks and Kayak are set to announce their final pricing July 19, Bloomberg News reported, after their roadshows. Morgan Stanley will be lead underwriter on both IPOs, after facing criticism for the same role in the Facebook IPO. 

“Their only possible solution is to hit the ball out of the park on their next couple of launches, and the onus is on them to succeed,” said Bahl & Gaynor’s Matt McCormick, who helps oversee $6.2 billion at the firm in Cincinnati. “Expectations are going to be high and people are going to be looking for issues, and if they can compete positively, that’s a win.” 

Mercury News staff writer Peter Delevett, Reuters and Bloomberg News contributed to this report. 

FB Bloodbath continues..

Sad but there is no stopping to bloodbath stemming out of FB IPO fiasco...These type of smaller losses are going to come up more in next couple of days or weeks..

I hope FB is able to recover from this and continues to growth part..

FACEBOOK

Citigroup reportedly loses $20M on IPO

Citigroup’s Automated Trading Desk had trading losses of about $20 million stemming from Facebook’s botched initial public offering on Nasdaq OMX’s U.S.

exchange, a source with knowledge of the situation said Friday.

ATD’s losses come on top of claims at market makers Knight Capital and Citadel Securities of $30 million to $35 million each in losses. UBS was the other large market maker involved in the Facebook IPO on May 18.

FB IPO - Illustrates fundamental Character differences between Mark & Larry/Sergey

Though it is too early to predict about long-term future of Facebook but the way IPO was handled clearly shows extreme greed as the key driver in Facebook founder/s. This is simply case of extreme greed. Which is fine but definitely buy a big question mark on future of FB. It is truly great product and I have personally love it. But as Investor, I would be seriously skeptical of investing in it even if they consistently perform well on stock market.

I think there is way too much personal ambitions and pride in top management of FB, there should be some but at the same time there has to be due respect for others. It is important to treat average investor as now perception is big thing.

Whereas if we look at Google's IPO, they were the first one to open up IPO to general public and now looking back, it was fairly prices. They didn't kept on raising offering price till the last moment and kept on off-loading founder's stocks..

I am not expert in Finance or legal matters.. but this definitely leaves bad taste and will result in further cutting of my Facebook's face time :-(

Here is the link for full story..


http://www.siliconvalley.com/ci_20705548/facebook-could-face-huge-damage-claims-from-ipo

FACEBOOK STOCK SALE

Tipoff at root of IPO uproar

Social media giant could be at risk if its bankers got alert that others didn’t

By Troy Wolverton and John Boudreau

Staff writers

Facebook could be on the hook for $1 billion or more in damages if plaintiffs lawyers can prove allegations that the company and its bankers misled investors in its initial public offering.

The Menlo Park-based social networking company and its banking partners face a slew of lawsuits in the aftermath of its bungled IPO last week, which raised $16 billion for Facebook and company insiders.

The suits accuse the company of misleading investors by failing to share with them information it passed on to select Wall Street analysts — a warning that its current quarter financial results weren’t going to be as rosy as expected.


“There appears to be a good argument that it is misleading,” said Mercer Bullard, a securities law professor at the University of Mississippi. “That’s definitely a potential problem for Facebook and the underwriters.”

If plaintiff’s lawyers can show that the warning wasn’t included in the offering documents Facebook filed with the Securities and Exchange Commission and that it was “material” — meaning it could have a significant impact on a company’s stock price — then Facebook could face huge damages, said John Coffee, a securities law professor at Columbia University.

Securities experts say the company could be liable for investors’ losses on the stock after it plunged on the second and third days of trading. One of the lawsuits asks for damages of $1 billion or more, but the potential payout could be much bigger.

“Facebook has plenty to fear,” Coffee said. “It’s up to a jury to determine what’s material, (but) if the case survives a motion to dismiss, it’s likely to settle — and to settle at a dear price.”

Facebook has vowed to defend itself against the charges. Morgan Stanley, its lead underwriter in the IPO, also denies any wrongdoing.

At the heart of the controversy are alleged discrepancies between what Facebook said in a document filed May 9 with the SEC and what company officials told select analysts soon afterward.

Buried deep within that filing was a warning to potential investors that Facebook’s number of average daily users was continuing to outpace the number of advertisements it was delivering to them.

That potential revenue problem had first come up in the previous quarter’s results and was due in part to a growing number of users accessing Facebook through its mobile site and applications, which generally don’t include ads. Elsewhere in the document Facebook vaguely warned that the shift in usage to mobile devices might “negatively affect” its financial results, but didn’t acknowledge that it already was affecting revenues or say by how much.

After Facebook published the document, one or more company officials contacted a select number of Wall Street analysts, according to published reports. According to those reports, the officials warned analysts, including at least some who worked for the banks underwriting Facebook’s offering, that they needed to cut their forecasts for the company’s current quarter.

Analysts at Morgan Stanley and those from at least three of the other underwriters of Facebook’s IPO followed that advice, according to Reuters. It’s highly unusual for a company’s underwriters to cut their forecasts in the run-up to an IPO, and apparently that information was shared with only a small number of their major clients.

The updated forecasts led at least some of those in the know either to not participate in the IPO or to dramatically scale back their purchases, according to the reports.

Despite the flagging demand from some big investors, the IPO not only went forward, but the initial price and the number of shares sold were raised in the days immediately before the offering, reportedly on strong demand from individual investors.

Under a regulation that was put in place during the dot-com boom, public companies are generally prohibited from sharing material information with some investors but not others. However, there’s a loophole in the regulations for nonpublic companies, even those that are about to go public, securities law experts said. So even though investors may feel mistreated, such selective disclosure probably wasn’t illegal.

“In every roadshow there tends to be information revealed that’s likely material but that does not get given to the ordinary investor,” Coffee said.

The key question for Facebook, the banks and its investors is whether the information company officials shared with the Wall Street analysts was significantly different from what the company was telling investors in the documents, securities law experts said.

Under the securities laws, companies don’t always have to disclose material information to investors or potential investors, Bullard said, but they do have to make sure that what’s in their regulatory documents isn’t misleading.

Facebook and its partners could face other problems as well. Congress, the SEC and the Financial Industry Regulatory Authority have all said they plan to investigate the IPO, which was also marred by glitches in the Nasdaq’s trading system. Such investigations could lead to civil charges by the SEC. Although the SEC tends to levy only minor fines against security law violators, a settlement with the SEC can often aid plaintiffs who have filed private lawsuits.

“Given the high-profile nature of Facebook, and given the massive number of small retail investors investing in it, the regulators would like nothing more than to make a high-profile example out of Facebook” should they find wrongdoing, said Andrew Stoltmann, a securities attorney.
Contact Troy Wolverton at twolverton@mercurynews.

com or at 408-840-4285.

“Facebook has plenty to fear. … If the case survives a motion to dismiss, it’s likely to settle — and to settle at a dear price.”

— JohnCoffee, securities law professor, Columbia University 

Silicon Valley's IPO momentum continues..

Even though we are waiting for most prized IPO of the decade (yet), smaller start-up continues their march and momentum towards IPOs.. making it close to dot.com boom time.. 

Which is good and can be seen in local economy. This is one of the best example, what rest of the US should be doing.. Innovate!!! and just create atmosphere for Innovation.. rest of the things will fall in place automatically.. 

That is much more easier said than done though. Many countries/states have tried to replicate and boot strap their local silicon valley or its equivalent.. but with hardly any major success But this doesn't mean that they should stop.. Ultimately, it is going to benefit them and rest of the world.. It will never backfire for sure.. 

So another question.. what is next big thing for silicon valley or high tech. Currently, it is era of Cloud, mobile, Social Collaboration (almost peaked, or may be not), Big Data and "Internet of Things" are most hot commodities in Valley.. What is next? 

Valley IPOs exceed expectations

Hot but Kwel Silicon Valley!!

Investors show faith in profitability of emerging startups

By Jeremy C. Owens

jowens@mercurynews.com 

Two Silicon Valley companies found success on Wall Street in their initial public offerings Thursday, with a Mountain View-based company that makes processors for Apple’s iconic iPhone bringing in the most capital.

Audience, a 12-year-old company that makes processors that improve audio quality on mobile devices, priced its initial offering of shares higher than expected, but still found investors willing to pay more for the stock. Meanwhile, San Mateo-based WageWorks priced its stock lower than expected, then saw the price bounce above the range it expected to reap. Audience derives a large part of its business from Cupertino tech giant Apple, which uses the company’s technology in its popular mobile products. In Securities and Exchange Commission filings ahead of its IPO, the company said that 85 percent of its revenue in 2010 came from Apple; that percentage dropped to 75 percent in 2011, when Samsung stepped up its purchases from the company and accounted for 20 percent of its business. Many recent Silicon Valley IPOs have found success on Wall Street despite failing to post profits, with investors betting that revenue growth can push the startups to profitability. Audience, however, has shown revenue growth and profit recently. The company posted profits of $4.8 million and $8.3 million in 2010 and 2011, respectively, and made $4.2 million in the first three months of 2012. Annual revenue grew from $5.7 million in 2009 to $47.9 million in 2010 to $97.7 million in 2011, the company reported, and revenue for the first quarter of 2012 was $31.1 million.

The company sold 5 million shares at $17 apiece after initially filing at a range of $14 to $16 a share; existing shareholders sold another 270,000 shares at the same price. The sale netted a total of $89.6 million, with $85 million of that going to the company, before expenses, which it will use for general business purposes, according to the SEC filing.

Once the stock reached the Nasdaq under the ticker symbol ADNC, investors pushed the price up higher. Shares began selling Thursday morning for $19 apiece and never fell lower than $18.96 on the open market while rising as high as $20.20. The stock closed its first day of action at $19.08, 12.2 percent higher than the IPO price.
“Audience is really alone out there within a very good market niche and that’s what has been required in past tech offerings that have really worked well,” Scott Sweet, senior managing partner at IPO research firm IPO Boutique, told Reuters on Wednesday.

San Mateo-based software company WageWorks also had a strong first day of trading Thursday, with its stock rising 40 percent from the IPO price after the company dropped the price just before the offering. The company had planned to go public more than a year ago, but put off the process due to market uncertainty.

WageWorks, which offers cloud software to manage employee benefits, sold 6.5 million shares at $9 apiece after originally aiming for a range of $10 to $12, bringing in $58.5 million before expenses. The stock then debuted Thursday on the New York Stock Exchange under the ticker symbol WAGE for $9.99 and began to rise. Shares traded in a range from $9.75 to $12.60, with that high price coming at the very end of the session and representing the closing price.

While the stock closed at $12.60, a 40 percent increase from the IPO price, it was trading for less than $11 a share just 5 minutes before the market closed and dipped back sharply in after-hours trading, when shares were selling for closer to $11.

The two successful IPOs continue a strong run for Silicon Valley stock debuts in the run-up to Facebook’s highly anticipated public stock launch, expected May 18.

An official with the Nasdaq stock exchange said Thursday that he doesn’t expect the rate of successful Silicon Valley IPOs to end any time soon.

“Facebook is obviously the most anticipated IPO in history and once that IPO comes out, I’m sure we’ll see several companies look to take advantage of that market,” Bruce Aust, executive vice president of Nasdaq’s Global Corporate Client Group, said in a New York presentation to analysts, according to Reuters.

“I go (to Silicon Valley) pretty much every other week because it is a huge opportunity when we look at what’s going on with social media, what’s going on with Apple and the applications and the ecosystem that is being created by that, and the gaming industry that is being created by social media. There is just tremendous opportunity and we’re meeting with 20 or 30 companies a week,” he said.
Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.