The year has been tough for tech IPOs, that is, until recently. Some of the blow-out offerings include DivX and Riverbed.
Today there was another tech deal: Shutterfly. True, the stock increased only 3.7%. But, then again, the stock was priced at the top of its $13-$15 range.
Shutterfly was founded in April 1999 and even has a dot-com legend as its Chairman, Jim Clark. He founded Netscape, Healtheon/Web MD Corp, and Silicon Graphics.
As for Shutterfly, it is a Web-based consumer property that allows users to share, print and preserve their pictures. It is also possible to turn these pictures into physical photos and even books.
But unlike many dot-coms, this one has morphed into a real business. Over the past year, sales have been roughly $108 million. In fact, revenues are growing at 30%+.
There are certainly risks. After all, the company has lost money this year. Also, the current valuation is hefty – at 3X revenues.
Yet, with the Christmas season coming, there is probably some momentum left in this stock. But definitely do not expect a smooth ride.
Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.
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Reader Comments (Page 1 of 1)
9-29-2006 @ 5:06PM
Plan said...
It's like flickr? Hm, I hear first time about Shutterfly... Wh so?
9-30-2006 @ 1:08AM
mrmike said...
While I appreciate your links to the specific companies, it would also be helpful to include the stock symbols. DIVX and RVBD have offered a few setups to trade already. Both have been impressively strong. SFLY held it's offering price by pennies today at 15. An entry near there offers decent reward/risk as underwriters will USUALLY not let the stock breach the offering price during the first day of trading.
9-30-2006 @ 8:46AM
Mr Wave Theory said...
In my previous post on ShutterFly, Inc. (Nasdaq SFLY), I posed the question: "Will the ShutterFly IPO Fly?." Today, the question was answered. Shutterfly debuted at $15, went as high as $16.73 and closed at $15.55. It closed up 3.67%.
By the looks of it, the IPO sold off right after the stock open at 10:30 am and underwriters were understandably trying keep it afloat. You can see that around 2:45 pm, there was a large spike in volume. It looks like somebody was trying to bail - understandable and highly likely that it was a fast money hedge fund that had bought it hoping for a quick flip that never materialized. After all, what venture capitalists hope to be able to accomplish in 7 years (that is the amount of time that it took for ShutterFly investors to get an exit), hedge fund managers hope to do in minutes , hours, and at most months! More about ShutterFly Inc IPO
9-30-2006 @ 8:47AM
Mr Wave Theory said...
More about the ShutterFly IPO
http://mrwavetheory.blogspot.com/2006/09/analyzing-shutterfly-inc-post-ipo.html