Big IPO's to Look for in 2012

While Facebook will certainly be the biggest and most buzz-worthy IPO of 2012, investors should also keep an eye out for some other big IPOs, all slated to go public this year. Here are five big IPOs generating lots of excitement among investors. However, not all that glitters is gold, and investors should realize that although these companies offer growth potential, few of them have yet to be profitable.

Yelp

San Francisco, California-based Yelp, a popular Internet site that has amassed over 22 million reviews of restaurants, salons, dentists and other businesses nationwide, is set to go public in 2012.
However, the site, which has found many of its review features imitated by search giant Google (GOOG), has yet to produce a profit. For the first three quarters of 2011, the company posted a net loss of $7.6 million on revenue of $58.4 million - a moderate improvement over the loss of $8.6 million on revenue of $32.5 million during the same period in 2010. The company plans to raise up to $100 million in its market debut, but has been mum regarding other details.

Living Social

While online deal site Living Social hasn't filed for an IPO yet, analysts believe that a 2012 IPO is in the works. The company, which boasts over 34 million U.S. members and 46 million global users, competes directly with Groupon (GRPN). Living Social's financials are not public, but it plans to raise up to $400 million, which will give the company a market cap of $6 billion. The company, like many of these new Internet names, isn't yet profitable. Similar to Yelp, competitive barriers are low, and large companies such as Microsoft (MSFT) or Google are an immediate threat. Memories of Groupon's awkward IPO are also likely to keep the response to Living Social's IPO muted.

Gogo Inc.

Many frequent flyers in America are familiar with Gogo Inc., which offers in-flight Internet services on several major airlines, including American, Delta, U.S. Airways and Virgin America. The company's services are currently available on 1,177 aircraft worldwide. The company filed for its IPO before Christmas, expecting to raise $100 million. Revenue in the first three quarters of 2011 rose 89% to $114.8 million. However, the company isn't profitable, posting three years of consecutive losses. In addition, further declines in the airline industry may adversely impact the company's financials.

Kayak Software

Travel website Kayak.com is also set to go public in 2012. The company, which was founded in 2004 by the co-founders of Orbitz, Expedia and Travelocity, is still an underdog in the industry, failing to breach the top ten travel websites on the Internet. However, the past success of travel website stocks, especially Priceline.com - which recovered from under $10 per share in 2000 to over $500 in 2012 - is likely to pique investors' interest. However, Google's acquisition of IATA, which has shaken up the travel search industry, is likely to keep pressure on the site's growth prospects. Kayak is set to offer up to $50 million of its common stock. The company has been steadily growing both revenue and profits, and is currently profitable. In the third fiscal quarter of 2011, the company posted net income of $12.7 million on revenue of $61.16 million.

The Carlyle Group

The Carlyle Group, one of the best-known private equity management firms in America, filed to go public in September 2011. The company currently manages over $150 billion in assets over 84 funds and is considered a major market mover in its four main business segments - corporate private equity, real assets, market strategies and fund-of-funds. The company is spread over 20 countries in the Americas, Europe, Asia and Australia. The company is also highly connected politically - both former president George H.W. Bush and his Secretary of State James Baker III served as advisors to the firm. The Carlyle Group is set to raise up to $100 million in its IPO. In its most recent quarter, the company posted a net profit increase of 61% on revenue growth of 60%.
These five companies are just a small sampling of 2012's public offerings. While many of these IPOs will only be offered to large investors - such as those with over $1 million in assets - others may be offered to smaller ones through electronic brokerages. Investors should do their due diligence and thoroughly research these companies before investing.
Published on Feb 14, 2012
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

Copyrighted 2016. Content published with author's permission.

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