IPOs, Initial Public Offerings: pre & post IPO

Google Trends Suggests AMZN misses Target Earnings Over Holiday Season

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Can you believe it? There are shoppers already camping out to be first in line for Black Friday Deals at many retailers. Folks like Jarvis Johnson, who is waiting at Best Buy to snag a Toshiba large screen TV, illuminate the anticipation, consumer madness that defines the day after Thanksgiving.

While many laugh at or are appalled by annual videos of consumers slugging it out, investors are scratching for clues to see who the holiday retailer winners will be. Fortunately, internet tools can help diligent Wall Street shoppers find hints.

Perhaps the most useful tool is Google Trends. It provides a snapshot of daily Google searches for specific keywords. In this case, we decided to review Amazon.com, Inc.’s
(NASDAQ: AMZN) trends heading into Black Friday.

If the numbers pre-Black Friday 2016 relative to 2015 are any indication, Jeff Bezos and crew might hear Elvis’ Blue Christmas looping over HQ’s intercom.

We identified 11 Amazon related search terms that could provide insight into AMZN’s holiday fortunes: Amazon.com, Amazon Black Friday, Amazon Black Friday Deals, Amazon Kindle, Amazon Prime, Amazon Products, Amazon Fire, Amazon Fire TV, Amazon Echo, Amazon Alexa and Amazon Cyber Monday.

Queries for nine of eleven keywords declined in the week before Black Friday 2016 compared to 2015; ranging from a decline of -6.82% (Amazon.com) to -83.33% (Amazon Alexa, Amazon Echo isn’t much better at -72.15%). Amazon Kindle is the lone green excel entry, up 11.39% year-over-year and Fire TV is flat.

What do the trends mean? While Amazon.com is sure to be busy Thanksgiving Day and Black Friday, it is possible sales figures are less than hoped for. In 2015, online shoppers spent a whopping $4.45 billion during the two day spree, according to Fortune. The good people at techcrunch.com report AMZN accounted for 36 cents out of every dollar, or roughly $1.6 billion.

For this year, Adobe Digital Insights is predicting an 11.5% sales increase. That would put the two-day total sales in the range of $4.96 billion.

Now, let’s try to work backwards to see what the A to Z web-retailer’s 2016 take might be. Since Amazon.com is the most used keyword, we will work with a YoY decline of -6.82%. In 2015, AMZN captured 36% of the Black Friday pie; this year could be closer to 33.2%. If that’s the case Amazon.com could post sales of $1.65 billion: up 3% compared to 2015.

If that trend holds throughout the 4th quarter, Amazon’s revenue would ring the register at $36.82 billion. Our Cost of Revenue estimate is $23.9 billion leaving gross profit of $12.9 billion. Take out $11.78 billion for Selling, General and Administrative expenses (SG&A), and we predict Q4 Operating income of $1.1 billion, flat YoY.

These numbers are substantially lower than Wall Street’s forecast of 25% revenue growth, estimating sales of $44.72 billion.

While we don’t pretend Google Trends are perfectly correlated with revenue growth, they do tend to be predictive in the right direction. With that caveat out of the way, our revenue estimate may prove to be too conservative; however, we do believe there is a strong likelihood Amazon.com, Inc. (NASDAQ: AMZN) might fall short of analysts’ 4th quarter predictions, starting with Black Friday.


KDMN (Kadmon Holdings) Tuesday Night

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While there was a lot of initial hype on this IPO 2 years ago demand in the biotech IPO market has waned considerably. Sam Waksal founded the company in 2010 but has recently sold his stake for 25mm. We are hearing of no demand with in the 16-20 range and the large biotech funds are currently not in the books.

 

 

Admin-


Dec 14wk IPO, YRD

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Yirendai Ltd. (YRD) NYSE
Internet loan platform in China


Dec 7wk IPO, TEAM

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Software collaboration
Atlassian Corporation Plc (TEAM) Nasdaq


Nov 16wk, 8 new IPOs

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Ranked by size of IPO

Dating products
Match Group (MTCH), Nasdaq
Payment processing
Square (SQ), NYSE
Mid-stream master limited partnership
Noble Midstream Partners LP (NBLX) NYSE
Pickup truck accessories
Truck Hero (TRUK), NYSE
Casual wear, workwear
Duluth Holdings (DLTH), Nasdaq
Cloud security
Mimecast Ltd. (MIME), Nasdaq
Embedded computing
congatec Holding AG (CONG), Nasdaq
Clinical stage biopharma
Axsome Therapeutics (ASXM), Nasdaq

 


Nov 9wk, 6 new IPOs

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Ranked by size of IPO

Consumer lending platform
loanDepot (LDI)
Preclinical biopharma
Wave Life Sciences Pte Ltd. (WVE)
Clinical stage gene therapy
Voyager Therapeutics (VYGR)
Cloud-based learning mgt
Instructure (INST)
Radiopharma
Advanced Accelerator Applications S.A. (AAAP)
Bank holding
Equity Bancshares (EQBK)
Uplisting
Mesoblast Limited (MESO)
ordinary shares currently trade on the Australian Securities Exchange under the symbol “MSB.”

 


Oct 26wk: 2 IPOs; 32 IPOs filed since Oct 1

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Ranked by size of IPO

  • Biopharma:  MyoKardia (MYOK)
  • Disposable serviceware:  Fuling Global (FORK)

Oct 19wk, includes Ferrari

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Ranked by size of IPO

Luxury sports cars
Ferrari N.V. (filed as New Business Netherlands N.V. ) (RACE) NYSE
Specialty packaging
Multi Packaging Solutions International (MPSX) NYSE
Gene therapy platform
Dimension Therapeutics (DMTX) Nasdaq
Plus holdovers AFCO, IOTS, OASM
and some bank check companies which have no operations,
and therefore there is nothing to analyze.

Oct 12wk: 5 IPOs

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Ranked by size of IPO

  • Global electronic commerce:  First Data (FDC) NYSE
  • Food & drug retailer:  Albertsons Companies (ABS) NYSE
  • Farmland REIT:  American Farmland (AFCO) NYSE
  • Memory products:  Adesto Technologies (IOTS) Nasdaq
  • Medical tech:  SynCardia Systems (TAHT) Nasdaq
  • Biopharma:  Cerecor (CERC) Nasdaq

Oct 5th week: 9 IPOs

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Ranked by size of IPO

  • Communication services:  Digicel Group Ltd (DCEL) NYSE
  • Data storage:  Pure Storage (PSTG) NYSE
  • Financial payment cards:  CPI Card Group (PMTS) Nasdaq
  • Biopharma:  CytomX Therapeutics (CTMX) Nasdaq
  • Specialty pharma:  Aclaris Therapeutics (ACRS) Nasdaq
  • Regional bank holding:  Allegiance Bancshares (ABTX) Nasdaq
  • Disposable serviceware:  Fuling Global (FORK) Nasdaq
  • Biopharma:  Cerecor (CERC) Nasdaq
  • Medical tech:  SynCardia Systems (THAT)

 

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