Blog

A Lesson in the Cost of Capital: $13 Million in ’13 Becomes $4 Billion in ’14

By Timothy J. Keating – A small software company virtually unknown outside of Silicon Valley—Castlight Health (NYSE: CSLT)—priced its IPO on March 13, 2014, and ended its first day of trading up 149%. The sound bite version of this story is: $13 million (in revenue) in ’13 becomes $4 billion (in market cap) in ’14. Let’s investigate. Castlight Health is Read More…

U.S. House of Representatives Passes the Small Cap Liquidity Act

By Timothy J. Keating – As a member of the Equity Capital Formation Taskforce, I am pleased that the House passed the Small Cap Liquidity Act (H.R. 3448), sponsored by Congressman Sean Duffy (R-WI), earlier this week. The bill calls for a pilot trading program for small cap companies. Similar to the JOBS Act, the bill had overwhelming bipartisan support Read More…

Letter to SEC Investor Advisory Committee – Decimalization and Tick Sizes

By Timothy J. Keating – We submitted a comment letter to the SEC in support of “Alternative Recommendation #1″ (submitted by Stephen Holmes) regarding the Market Structure Subcommittee’s recent “Recommendation #1 – Decimalization and Tick Sizes.” We believe that the Subcommittee has completely failed to grasp the central role of equity research in the small-cap public equity capital formation process Read More…

2013: The IPO Year in Review

By Timothy J. Keating – The 222 companies that went public in 2013 eclipsed the 217 IPOs that priced in 2004, and was the most since 2000. For a more recent comparison, there were 128 IPOs priced in 2012, and 125 in 2011. We have at long last broken the post-2000 bubble period IPO record—though an uninspiring hurdle, to be Read More…

Blockbuster Year for IPOs: 218 IPOs and Beyond

By Timothy J. Keating – 218 and beyond. With the six IPOs that priced last night (including the Hilton Worldwide $2.4 billion offering), the total number of IPOs completed in 2013 is now above and beyond the 217 IPOs that priced in 2004, and the most since 2000. (Note: Except where noted, all IPO data in this article are sourced Read More…

Progress and More Progress in Capital Markets Reforms

By Timothy J. Keating – Earlier today, the Equity Capital Formation Task Force (ECF Task Force), for which I serve as a member, published an important new report: From the On-Ramp to the Freeway: Refueling Job Creation and Growth by Reconnecting Investors with Small-Cap Companies. (To access the report, visit the Equity Capital Formation Task Force’s website.) I urge anyone Read More…

Potbelly Joins the “Double” Club

By Timothy J. Keating – Just when everyone can’t stop talking about the forthcoming Twitter IPO, a sandwich shop steals the limelight. Yes, another fast-casual restaurant is making news in IPO land… Potbelly (Nasdaq: PBPB) priced a $105 million IPO on Thursday, October 3rd, and then promptly more than doubled on its first day of trading on Friday. To be Read More…

All Eyes on the IPO Market

By Timothy J. Keating – Benjamin Graham famously described IPOs as the “shiny objects” of the investment world, and he cautioned against investing in new issues. And Fortune columnist Dan Primack recently asked rhetorically whether “we once again [are] being sold shiny piles of garbage?” (His answer: no.) But it’s getting increasingly difficult to remain blinkered to what’s going on Read More…

Equity Research Review

By Timothy J. Keating – Articles in recent New York Times and Wall Street Journal publications reported that a securities regulator was investigating pre-IPO meetings between analysts and companies planning to pursue IPOs. The essence of the stories was that there is concern in some circles that Wall Street might be slipping back toward the unsavory ways of the Henry Read More…