Surgery Partners (SGRY) IPO: Should I invest?

Our newest series, 3-up, 3-down takes a look at new IPOs and offers up three reasons to invest in them and three reasons to avoid them. Then, you decide. Let’s take a look.

3 reasons to invest in the Surgery Partners (SGRY) IPO

1) Rapid growth. Surgery Partners operates 99 surgical facilities – five of which are surgical hospitals – across 28 states. 200,000 surgical procedures were performed in their surgical facilities last year. Surgery Partners managed that feat in the 11 years since the company was founded in 2014.

That growth has helped the company achieve “industry leading same-facility revenue growth of approximately 9% during 2014, and an average of approximately 8% annually on a pro forma basis from 2012 to 2014.”

“Our pro forma revenue for 2014 was $871.2 million, which represents a compound annual growth rate of approximately 83% compared to revenue of $260.2 million for the year ended December 31, 2012,” the company writes in its S-1 filing. “For the six months ended June 30, 2015, our revenue was $457.0 million, compared to revenue of $147.3 million for the same period during 2014.”

2) Acquisitions. Surgery Partners has a proven track record of acquisitions. “Acquiring facilities has been a core component of our strategy since inception,” the company writes. They focus specifically on how they can create synergies between their company and their target acquisitions. The right acquisitions allow them to reduce head counts, close offices and pay less for supplies thanks to bulk ordering. “As a result of our recent acquisition of Symbion, as of June 30, 2015 we have achieved annualized cost and revenue synergies in an aggregate amount of approximately $8 million. … We expect this acquisition to drive significant cost and revenue synergies over the next two to three fiscal years, which we estimate will ultimately exceed $30 million in the aggregate (an amount that includes the approximately $8 million of synergies realized as of June 30, 2015).”

Surgery Partners also acquired NovaMed, Inc. in 2011. That acquisition led to a $5.2 million reduction in expenses and generated $9.3 million in incremental revenue.

3) The right sector. Healthcare is outperforming the S&P 500 Index this year. It’s up 2.9 percent YTD vs. -2.92 percent for the S&P. Biotech’s taken a pounding recently, but healthcare staples like AMN Healthcare Services, Inc. (AHS), whic offers healthcare workforce solutions and staffing services to healthcare facilities, have performed better.

3 reasons NOT to invest in the Surgery Partners (SGRY) IPO

1) Gobs of debt. Between Surgery Partners’ two business units – Surgery Center Holdings and Symbion – the company’s holding nearly $1.8 billion in long-term debt. That’s greater than the combined revenues of both entities.

2) Thin margins. In the past few years, Surgery Partners has largely been operating in the red. That’s thanks to its acquisitions, but it’s also due to fierce competition in the healthcare space. Surgery Center Holdings “more than doubled revenue from 2011 to 2014, exceeding $400 million,” per Fool.com. “But across that stretch it was positive on the bottom line only once, and posted an attributable net loss of $66 million last year. As for Symbion, in its last stand-alone fiscal year (2013) its revenue grew by 9% annually (to $536 million), but attributable net loss dipped to almost $13 million.”

Fool.com points out one of Surgery Partners’ competitors, AmSurg (NASDAQ:AMSG), demonstrated a similar pattern over past few years: substantial revenue growth and very thin top-line growth.

3) Regulatory risk. Government regulations are increasingly worrisome for healthcare companies – a risk Surgery Partners is well aware of. “The amount that we receive in payment for our services may be adversely affected by market and cost factors that we do not control, including Medicare, Medicaid and state regulation changes, cost containment decisions and changes in reimbursement schedules of payors, legislative changes, refinements to the Medicare Ambulatory Surgery Center payment system and refinements made by CMS to Medicare’s reimbursement policies. For instance, cuts to the federal budget caused a 2.0% reduction in Medicare provider payments in 2013.”

DISCLOSURE: I do not have a position in SGRY, and I do not plan to initiate one in the next 72 hours.

Photo credit: Adam Ciesielski

Killer Infographic: Twitter vs. Facebook IPO by the numbers

Facebook makes more than $472,000 a day while Twitter loses $71,000 a day. Here’s a closer look at the numbers behind Twitter (TWTR) and Facebook’s (FB) IPOs.

Here’s a look at the math behind Twitter (TWTR) and Facebook’s (FB) IPOs:

Feel free to share this graphic anywhere and everywhere. Here are the same numbers in text:

Twitter vs. Facebook Day 1 stock price appreciation:

  • Twitter: +72.6%
  • Facebook: +0.6%

Twitter vs. Facebook current market capitalization:

  • Facebook: $115 billion
  • Twitter: $22.6 billion

Twitter vs. Facebook total number of active users:

  • Facebook: 1.19 billion
  • Twitter: 232 million

Twitter vs. Facebook value per user (per Forbes):

  • Twitter: $110
  • Facebook: $98

Twitter vs. Facebook Q3 2013 Revenue:

  • Twitter: $168 million
  • Facebook: $2.016 billion

Twitter vs. Facebook Q3 Net income:

  • Facebook: $425 million
  • Twitter: -$64 million

That means Facebook makes more than $472,000 a day while Twitter loses $71,000 a day!

Top 10 Upcoming Tech IPOs of 2013 and 2014

From Dropbox to Hubspot, here’s our speculative preview of the Top 10 Tech IPOs of 2013 and 2014.

The coming year should prove to be a very active time for tech IPOs. There are numerous online companies that have recently experienced substantial growth and they seem to be gearing up to go public within the next twelve months, so without further ado here’s our speculative preview of the Top 10 Tech IPOs of 2013 and 2014:

Dropbox IPO

Dropbox is considered one of the world leaders in cloud-based data storage. It is a free service that allows you to access your documents, photos, and files from anywhere with internet access. Dropbox was originally popular with design professionals and consumers who needed to transfer and store large files, but they announced several new features in February that are aimed more at business clientele. Dropbox has already established a solid base of active users which currently exceeds a hundred million people. It also boasts that 95% of the top Fortune 500 companies are using Dropbox daily. This tech company has recently experienced around $4 billion in growth and is expected to be headed towards IPO in 2013.

Square IPO

Square creates applications that can transform smartphones into payment-processing devices. The company allows participants to accept credit cards through their mobile phone, and they can easily turn an iPad into a register that will also accept credit card payments. This is an ideal solution for businesses that conduct deals outside of a regular office space. A Square IPO is predicted to be one of the largest Initial Public Offerings in 2013. This relatively new company has experienced approximately $4 billion in growth, and their recent partnership with Starbucks has amplified its end-of-the-year valuation to an estimated $5.5 billion.

Twitter IPO

Twitter is a leading social media platform that has experienced some significant growth in the past few years. Users can express themselves, promote their businesses, or comment on current events publicly using 140 characters or less. Well-known tech leaders like Google, Dell, and Comcast use Twitter regularly to launch new products and advise customers on technical issues. Twitter has over 500 million registered users, although approximately only 200 million are actively Tweeting every day. There are clear signs that Twitter will be going public in the beginning of 2014, and this initial offering would value the company at more than $10 billion dollars.

SurveyMonkey IPO

SurveyMonkey is a cloud-based survey development company that assists customers in collecting over 1.5 million online survey responses every day. Last year there were 14 million users, approximately 360,000 customers who paid extra for enhanced features, and 65 million monthly online visitors. SurveryMonkey’s revenue last year was an impressive $113 million, and that is estimated to increase by more than 40% this year. The CEO, Dave Goldberg, claims he is against going public and recently received funding from Google to prevent it from happening, but insiders insist that it is only a matter of time before SurveyMonkey goes public.

Eventbrite IPO

Eventbrite is a website that assists organizers in planning large events. It allows users to setup ticket sales, promote events on social media sites, and even offers post-event reports for organizers to reference. Eventbrite currently has 20 million users and are expected to reach $1 billion in event ticket sales this year. The company is growing quickly and actually doubled their ticket sales since last February. The company decided in April to postpone an IPO, but many analysts feel it is inevitable. Eventbrite is currently valued between $600 and $700 million and recently raised $60 million in growth funding from T. Rowe Price and Tiger Global Marketing.

SugarCRM IPO

SugarCRM is a software company that produces a customer relationship management (CRM) system available for both open-source and commercial applications. The program currently has sold 11 billion downloads and recently announced the introduction of a more social version called Sugar 7. Sugar 7 was designed with better activity news feeds that are fully CRM integrated. This will offer businesses real-time information about every deal, account, and contact. SugarCRM has benefited from a 67% increase in customers and currently has $79 million in funding, which includes a $33 million dollar boost in April. Their CEO, Larry Augustin, announced at the end of 2012 that their goal was to become a public company and many investors forecast this will take place within the next few months.

Spotify IPO

Spotify provides streaming music on your computer or tablet, your mobile phone, and your home entertainment system. It allows you to download songs for offline use, share songs and playlists with your friends, and even lets people work together to create collaborative playlists. At the end of 2012, Spotify had 20 million active worldwide users, which was up 33% in less than six months. It also has 5 million paid subscription users that can listen to the music without any interruptions from commercials. The company has recently signed a partnership agreement with Ford to provide its music services in their vehicles. Spotify has also recently revamped its iOS and Windows 8 apps to inspire further growth. These are all solid signs that IPO will occur in 2013.

Zendesk IPO

Zendesk is web-based software that offers customer service solutions for big businesses. It raised sixty million in September of 2012 and provides online customer support to approximately twenty-five thousand enterprises. It is estimated that through these businesses, Zendesk currently serves around seventy-five million different clients across the world. Zendesk recently announced an iPad app with a new reporting dashboard and customer history feature that allows performance to be monitored from anywhere. Based on Zendesk’s growth and innovation, it should come as no surprise that they have been dropping several hints that an IPO could happen in 2013.

Hubspot IPO

Hubspot is comprehensive and integrated marketing software that combines social media, blogging, analytics, email, and automation into one convenient package. There are currently over 8,000 companies in fifty-six countries that use Hubspot to create inbound marketing to attract, nurture and convert leads into revenue. This tech leader has also developed the popular website analysis tool, MarketingGrader.com, which has over three million users and grades more than a quarter million companies each month. HubSpot benefited from 82% growth in 2012 and has an estimated valuation of $52.5 million. Hubspot recently raised $35 million in new funding and many people feel it is a likely candidate for IPO in 2013.

Box IPO

Box offers cloud-based file sharing and content management services for many large global companies like Skype, Pandora, Panasonic and LinkedIn. In fact, it is currently being used by more than 150,000 companies across the world to connect online workspaces and simplify their online file storage process. Earlier this year, Box agreed to acquire Crocodoc which is another web-based document sharing and embedding service. This is a clear sign of growth and the potential to go public. Box is valued at approximately $1.2 billion, and it is expected to pursue IPO valuation once it reaches closer to $3 billion.

Five reasons to invest in the 360Buy.com IPO

We don’t have a 360Buy.com IPO date yet, but when we do, the offering will probably generate a lot of media. Here are five reasons to consider investing in the 360Buy.com IPO.

-Posted by Alejandro Guillú Mendoza

We don’t have a 360Buy.com IPO date yet, but when we do, the offering will probably generate a lot of media. Here are five reasons to consider investing in the 360Buy.com IPO:

1) Mr. Liu Qiandong.

Liu Qiandong is currently No. 93 in the list of the Top 400 Richest Chinese with a net worth of over a billion dollars at just 37. He started his own business in 1998 with just $12,000 CNY and six years later he started jd.com. After only 6 years, the company grew to 10 billion yuan in sales. He’s No. 25 on the list of Asia’s Hottest People in Business compiled by Fortune. If somebody from ICBC and the China Construction Bank is reading this, then please LEND THIS MAN TEN BILLION DOLLARS. It is unlikely that you will lose your money with him.

2) Alibaba sells over $170 billion.

I don’t need to explain this one.

3) They want to compete with DHL.

Most people see Jingdong as the next Amazon, but I prefer to see them as the next DHL.

Only 4 companies in the whole world remain in the Air Courier industry: Deutsche Post (Frankfurt: DPW), Federal Express (FDX), United Parcel Service (UPS) and Expeditors International (EXPD).

Together they turn a massive profit of at least $5.1 billion each year. The United States of America dominates this industry with 75% of the companies. At the end of the day, China must pay these companies to move their products from the factories to the stores.

They are very busy building half a dozen distribution centers in China. It is only a matter of time before they expand to the 14 countries that share borders with China.

4) Digital Sky Technologies believes in them.

This Russian company invests only in the Internet, and they had the vision to invest $100 million in Facebook (FB) when the company was valued at just $10 billion in 2009. That same year they also invested in Zynga (ZNGA).

In 2010 they invested $135 million in Groupon (GRPN), when the company was valued at just $1.35 billion. In 2011, they invested in Airbnb, which is now valued at $2 billion.

As you can see, they have a very strong track record of picking the right companies at the right time. If they are investing $1.5 billion in this company, then that means they believe this company will have a market value of $15 billion in 2016.

5) Rakuten is the fourth leading Internet & Catalog Retail Company in the world.

Rakuten of Japan is only behind eBay (EBAY), Liberty Interactive (LINTA, LINTB) and Amazon (AMZN) according to Forbes. This company currently has a market value of over $13 billion and annual sales of $5.6 billion. This company was founded in 1997 and it is now one of the largest companies in the world. They have grown to 10,000 employees. I think they already proven to the world their business model works and 360Buy is doing the same thing in China.

Conclusion

I don’t think this company will file for an IPO anytime soon. If they run out of cash, they can always give a call to Al Waleed Bin Talal and very nicely ask him for another couple of billions.

Three reasons to invest in the Shutterstock IPO

Shutterstock may not be the most glamorous tech company vying for investor dollars, but I still think buying shares makes sense. Here are three reasons why.

While you might not be familiar with Shutterstock, you’ve probably seen their wares on the internet, book covers or posters hundreds of times. Shutterstock operates a stock photo site which lets subscribers download pictures to print or post online next to news articles, and/or as part of a Web site’s design. All told, Shutterstock has some 19 million photographs and graphics available to license for online and print use.

While the company may not be the most glamorous tech company vying for investor dollars, but I still think buying shares makes sense. Here are three reasons why:

1) The subscription model. Unlike some of its competitors, Shutterstock really pushes its subscription model. That means customers keep ponying up as much as $250 a month to use the service. Not only does a subscription model breed long-term business relationships, it’s a more reliable revenue stream than the advertising dollars that most websites compete for. The proof is in the pudding. For the year ended 2011, Shutterstock earned 21.8 million on a revenue of $120.2 million (per the company’s S1 filing).

2) Powerful growth. Revenue at Shutterstock grew 44.5 percent in 2011 – not just in the U.S. but around the world:

And the company is in an industry that’s experiencing tremendous growth. BCC Research estimated the online image marketplaces would grow 51 percent a year between 2008 and 2013 to a total of $2.0 billion in 2013. With more than 32 percent of U.S. businesses still without a web site (and millions of potential customers in countries like China), Shutterstock should be able to sustain double-digit growth for years to come.

3) Consolidation, anyone? While Getty Images dominates the stock photo industry thanks to its strong ties to newspapers, Shutterstock could give the company a run for its money by acquiring some of its competitors. Indeed, that could be exactly what Shutterstock execs have in mind.

“We may use all or a portion of the net (IPO) proceeds to acquire or invest in complementary companies, products or technologies, although we currently do not have any acquisitions or investments planned,” Shutterstock writes in its S1 filing. If it can acquire one or two key competitors, the company will be able to quickly ramp up profits – and look to establish itself as a long-term player in the stock photo business. I’d be nervous if I were Getty.

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A ZocDoc IPO? Could it be the next big thing in tech?


A ZocDoc IPO? Could it be the next big thing in tech?

If backing from Digital Sky Technologies and Goldman Sachs isn’t enough, here are three reasons why a ZocDoc IPO would probably be a good buying opportunity.

Every now and then, a Web site comes along that makes you wonder why it didn’t exist years ago. That’s how I felt when I learned about ZocDoc.com – an online booking system that lets you search for a doctor nearby who can see you right away.

Calling your doctor and scheduling an appointment three days in the future could be a thing of the past. Of course, it also means you might need to see a doctor who doesn’t know your name. Does that matter, though, when you’re sick and eager to get better?

Here are three reasons why a ZocDoc IPO (if there’s even one on the horizon) might be a good buying opportunity:

1) Investors are already knocking on ZocDoc’s doors. ZocDoc’s one of several companies that were identified as “rising stars” on SecondMarket – a site where users can buy shares in private companies (see our post How to buy stock on SecondMarket for more). While ZocDoc doesn’t have any shares available on SecondMarket yet, it’s one of the top three social sites SecondMarket users want the opportunity to invest in (behind only Pinterest and Practice Fusion).

2) Rapid growth. ZocDoc’s already got 1.2 million users a month in 17 markets (per CNBC), and the company plans to roll out nationwide next year. ZocDoc’s pushing for rapid growth (rather than an early IPO) to try to get a head start on copy-cat entrepreneurs, CEO Cyrus Massoumi told CNBC. An IPO would presumably come after the nationwide rollout.

3) Big backers. ZocDoc has already raised $95 million since launching in 2008. $50 million came from well-known venture capitalist firm Digital Sky Technologies. What’s really interesting, though, is the source of another $25 million. Apparently, it came directly from Goldman Sachs (per Beta Beat). That’s an nontraditional move that shows Goldman really likes what they see at ZocDoc.

4) A viable business model. Unlike a lot of tech start-ups, ZocDoc has a well-defined, easy-to-understand business model: the company pulls in $250 a month for every doctor that’s listed on its site. Should ZocDoc firmly establish itself as the online leader in its niche, it would have the sort of steady cash flows most websites dream about.

One of my favorite parts about the company is that Massoumi – the company’s co-founder – seems to understand that it needs to stay laser-focused on doing one thing and doing that one thing very well.

“We have one of the best lists of practicing physicians in the country right now,” Massoumi told Venture Beat. “That is an incredibly valuable rolodex, and people are always asking us to partner with them on that data. But we believe our success comes from our single minded focus, and we’re sticking to that.”

Ignoring short-term gains at the expense of doing one thing very well is the key to success that we’ve seen at companies like Instagram and Pinterest. ZocDoc understands that, and my guess is it’ll help them make the transition from start-up to a company with true staying power.

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3 reasons to invest in a Pinterest IPO

Now that Facebook and Twitter are maturing, it’s natural for investors to start searching for the next big thing. Here’s why Pinterest should be at the top of the list.

Now that Facebook and Twitter are maturing, it’s natural for investors to start searching for the next big thing. Pinterest is – or should be – at the top of the list. The invite-only “pinboard” site lets users create collections of photos and text to share with others. The idea has caught on, and Pinterest is growing faster than any other standalone Web site in the history of the Internet, according to comScore.

Just nine months after launching, Pinterest hit more than 10 million unique visitors a month (and the site did it in January of 2012). In March of 2012, Compete reports that the site hit 18 million visitors. It’s not just growth that has investors excited about Pinterest’s future. Here are three more reasons why a Pinterest is tantalizing:

1) Pinterest isn’t like Twitter. One of the biggest complaints about Twitter is its lack of a viable revenue model. That’s not the case with Pinterest.

“It’s so commerce and goods driven,” an investor told BusinessInsider. In essence, the site’s community is creating perfect marketing mini-sites. They save pages and pages of photos and descriptions that are tightly tied to an idea, product or piece of merchandise. Pinterest could later leverage those pages for profit through partnerships, affiliate deals and paid ad placements.

The site’s serious about finding the right revenue model, too, as it recently hired Facebook’s former director of monetization, Tim Kendall.

2) Businesses and marketers love Pinterest, too. As the site’s notoriety has grown, businesses, bloggers and marketers have started wading onto Pinterest and creating their own pinboards. Businesses can use their pinboards to channel traffic to their Web site, Facebook page or Youtube channel, and if other Pinterest users like what they see, they can pin a business’s posts to their own pinboards (drumming up even more interest in the process).

Big brands have already started building formidable followings on the site. Whole Foods, for instance, has 26,000+ followers and Nordstrom has 14,823.

Much like LinkedIn offers premium services for recruiters, Pinterest could do the same with promoted pinboards. However, they’ll have to carefully tread the line between marketing and alienating their enthusiastic fanbase.

3) Investors see Pinterest’s potential. Secondmarket is an online marketplace where wealthy investors can buy and sell stock in private companies. While Pinterest doesn’t have any shares on the exchange, yet, Secondmarket’s community of investors is clearly excited about the site. The number of “watchers” on Secondmarket (investors who want to know when they can get access to Pinterest shares) shot up 641 percent in Q4 2011. Pinterest is clearly the new darling of the VC community – even outshining exciting sites like Kickstarter:

If only we could get our hands on some shares in the start-up… That would definitely be worth pinning.

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A new way to invest in private companies with CircleUp

A new way of investing: CircleUp could prove to be the leader in crowdfunding if the SEC gives it its blessing.

It’s tantalizing to imagine getting shares in a start-up that might go on to become the next Google. That’s part of what draws us to sites like Kickstarter.com where everyday people can pledge cash investments in start-up projects in exchange for recognition and swag.

Still, it’d be nice to get more than swag for laying hard-earned cash on the line. That’s the idea behind crowdfunding – fundraising for private companies in exchange for a stake in the company. Unfortunately, wide-scale crowdfunding is yet to materialize due to complex regulatory issues set by the SEC and other securities agencies.

At the moment, investing in private businesses is limited to what the SEC calls “accredited investors.” That includes banks, investment companies and wealthy investors. The idea is that since private companies don’t have to publicly disclose their earnings information, retail investors could get duped into dumping cash into a bottomless pit. By setting rules for accredited investors, the SEC limits investing in private companies to savvier investors and institutions since they should be more familiar with the unique risks that start-ups bring.

Whether or not that’s true, it seems like the onus should be on the buyer, not the government to tell us what we can and can’t investment in. Passage of the JOBS Act has crowdfunding fans hopeful things are about to change, too.

And there’s one company in particular that’s leading the charge: CircleUp.com. CircleUp vets consumer and retail start-ups that are looking to raise up to $1 million. If that start-up meets CircleUp’s criteria and has $1 to $5 million a year in revenue, CircleUp opens up investment opportunities in that company.

Right now, CircleUp is limited to accredited investors, but “the site may open to unaccredited investors,” per reports from AllThingsDigital. Expect a big surge in interest if that happens.

CircleUp’s model differs from that of competitors like SharesPost and SecondMarket in that it limits offerings to companies that are actually generating revenue. Companies listed on SharesPost and SecondMarket might not have made a dime in the past, and perhaps they won’t ever generate cash in the future.

“Private investments in small businesses are the next step in the evolution that began fifteen years ago with simple consumer transactions on eBay, and have continued with very personal matchmaking for housing and dating on sites like Craigslist and financial transactions through investment brokerage firms and online banking,” CircleUp said in a recent statement.

Gartner Research estimates that crowdfunding will be a $6.2 billion market by 2013. If things go well, expect CircleUp to capture a fair chunk of that pie.

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When is Pinterest’s IPO date?

What are the odds that we’ll see a Pinterest IPO? And if we do when will we see it?

Now that Facebook’s IPO is in the works, investors have started casting around for the next big tech IPO, and Pinterest is one of the names that keeps cropping up. What are the odds that we’ll see a Pinterest IPO? And if we do, when will we see it?

“Big-name social networks like Twitter and Pinterest are months, if not years, from needing to go public, most experts say, given the gobs of money venture capitalists have been throwing at them,” writes Peter Delevett of the Mercury News.

In Pinterest’s case, the company has already raised $30 million in venture capital. Rumors are they’re casting around for more, too, with some sites claiming VCs are valuing Pinterest north of $1 billion. That’s the sort of valuation where an IPO starts looking imminent. And it could help Pinterest raise the warchest it’ll need to bring in the right execs, law firms and bankers to transition from a start-up to a public company.

It’s in Pinterest’s best interests to go public sooner rather than later – especially as competitors like PinView (an app that lets Facebook users use the social network just like they use Pinterest) start nipping at their heels.

So, let’s speculate on when we might see a Pinterest IPO. The first and largest hurdle is the fact that Pinterest isn’t generating revenue. Potential investors would want to see the company roll out a platform for ads, or – at the very least – have future revenue plans in the works.

We can safely assume Pinterest is investigating revenue models. Until they launch one, expect them to “pull a Twitter” and delay going public for as long as possible. Once they’ve started generating income, the next steps on the road to an IPO should come quickly.

After revenue kicks in, they’ll need advisors and (potentially) a seasoned CFO. The company will also need lawyers, auditors and a investment bank. With those pieces in place, Pinterest will file a Form S-1 with the Securities and Exchange Commission. That form will give the public its first look at Pinterest’s finances, and it will need to be approved by the SEC, NASD and state securities organizations – a process that can take anywhere from 20 to 60 days.

After that, we’d likely see a two-week roadshow during which Pinterest will try to drum up investor interest in the company. A few days after the roadshow ends, shares in Pinterest stock would officially start trading.

To use Facebook as an example, the social network filed it’s Form S-1 on Feb. 1, 2012. Per the latest rumbling on the Web, the company will officially go public on May 17, 2012, three-and-a-half months later. Taking that into account, here’s a rough, shot-in-the-dark formula for when we might see a Pinterest IPO:

Development and rollout of a revenue model + Hiring a CFO and lining up finances/investment banks + Filing and approval of an S-1 + Investor roadshow = IPO date

Given that formula, my best guess is we’ll see a Pinterest IPO within a year of the introduction of a revenue model. That would give Pinterest at least three quarters of financial growth to show off in their S-1 filing.

Now, the question becomes, when will we see a revenue model on the site? Considering the fact that they’re growing faster than just about any other Web site in history, I suspect they’re predominantly focused on user and system support right now. Perhaps we’ll see revenue models roll out this fall, then an IPO just over a year later. That puts my tentative guess somewhere around January 2014. I just wish I could get my hands on shares before then…

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5 reasons to invest in the Empire State Building IPO

Investors will soon get a chance to own a piece of the most famous building in America, and, hopefully, make some cash in the process. Here are five reasons to consider investing in the Empire State Realty Trust (Ticker….

The crown jewel of the Empire State Realty Trust’s portfolio is quite possibly the most famous building in America: the Empire State Building. Investors will soon get a chance to own a piece of the building following the IPO in the coming months. Here are five reasons to consider buying stock in the Empire State Realty Trust (Ticker: ESB):

1) The Empire State Building. Obviously, the Empire State Building serves as more than just office space; it’s a tourist mecca that draws more than 3 million visitors a year. Those visits aren’t free, either. “The average ticket revenue per admission for each of the 11 years from 2000 through 2010 increased at a compound annual growth rate of 9.9% and the growth rate during each of those years, on a year-over-year basis, has never been negative,” ESB writes in their S-1 filing. Today, the average visitor shells out $18.61 to journey to the top of the Empire State Building. Those tourists alone generated $156.7 million in revenue for the nine months ended Sept. 30.

2) Dividends. Because the Empire State Realty Trust is a REIT, the company will be required to distribute at least 90 percent of its taxable income in the form of dividends. That means investors will get a nice payout every three months (although be aware that these payouts will be subject to higher taxes than normal dividends).

3) More than one office. All told, ESB operates 12 office buildings with a total of 7.7 million rentable square feet of office space. The bulk of that property is located in the heart of Manhattan, and 79.9% of the company’s office space is currently leased.

4) Metro Tower. ESB owns land in Stamford, Conn., that they plan to turn into a 340,000-square-foot office building and garage dubbed Metro Tower. The swanky corporate space will be part of a planned mixed-use “Metro Green.” When the Green’s complete, the 17-story Metro Tower will be surrounded by three residential buildings. That should help draw commercial tenants to Metro Tower. And if it doesn’t, the amenities at Metro Tower should. “In-building services and amenities will likely include on-site building management; concierge; 24/7 security; multi-media conference center; fitness center; dining facility; sundry shop; and access to landscaped rooftop gardens and its garage,” ESB writes.

5) Green leaders. A big driver behind ESB’s upcoming IPO is the need to raise capital for further improvements to the Empire State Building. Many of these changes are designed not just to drive up rents and rentable space, but also to improve energy efficiency at the building. That should lead to stronger profits for ESB and longer-duration tenants.

Photo by linder6580.

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