Jun 7, 2011

Posted by in Penny Stock | 0 Comments

Nasdaq Penny Stocks

Opportunities in Nasdaq Penny Stocks

Nasdaq Penny Stocks are on every investor and traders mind these days. I must say, it sure feels similar to stepping up to a game kiosk at a carnival lately when it comes to debuting as a new initial public offering these days. Question is will these quick-to-market social networking solution companies become a fan-favorite that end up morphing into a “Tech-Titan” or will they take the road less traveled and transform into the investor-dreaded “Portfolio-Anchor”.

We feel many of these Internet wannabe-bee start-ups should stay in school for at least another year, graduate properly using the method of becoming profitable first rather than forcing the issue now and being labeled before you know it on the “Nasdaq Penny Stocks” list down the road.

With the rapidly congested market within the new issue arena that has been hotter than the Arizona heat in August comes yet another heavyweight new arrival this week: Groupon, the high tech coupon clipping operation. It provides exactly what many investors are yearning for…astronomical revenue growth even if it comes at the expense of booking profits.

nasdaq-penny-stocks-groupon

 

Groupon, based in Chicago, will trade under the ticker “GRPN” describes itself as a local e-commerce marketplace offering goods and services at a discount filed for an initial public offering to raise $750 million, although we here know the final cut will most definitely be much greater. The company founded in 2008 offers subscribers coupons via email, indeed a great concept especially in this trying economy.

Many of which provide daily deals for things such as half off the price for a night out towards a dinner or a hair salon visit. Groupon turns the coming transaction into the main event by requiring a certain amount of subscribers buy the deal within a specific time table or the deal merely becomes no deal. Groupon gets about 40% of the dollar value of the purchase price, on average, with the merchant then taking the remainder.

Make no mistake, there are plenty of nasdaq penny stocks out there now that offer some tremendous growth potential based on there revenue stream after turning a profit coupled with their share price getting halved but nothing along the likes of the great Groupon business growth which seems eye popping. With approx. $45 million in the first quarter of 2010, their top-line has grown almost a 15 fold, to a whopping $650 million in the three months ended March.

Due to this type of enormous growth, it is quite difficult to determine how the IPO will end up pricing, personally, I for one can not wait. What many folks are not aware of is the fact that the shares have traded for months on the secondary, private stock exchanges such as Sharespost.

Speculating give or take 300 million shares outstanding, at a recent privately traded price of $35, the implied market cap. is within the lines of $10 billion. Amazingly enough the whisper numbers have flown in already raising the offering at two to three times that much!

As outlandish as it may seem this young company may jump out of the gate carrying a $30 billion in market value. Many investors in such start ups have been speaking up as of late that many investment bankers are too quick to leave money on the table.

Two examples come to,

1) LinkedIn (NYSE:LNKD) went public at $45 several weeks ago and doubled in value on the first day of trading. Problem was most of the value created went to friends of the bankers hence now there is pressure on the underwriters to set the offering at a price-tag, for lack of a better term,more reflective of unlimited demand for web-related shares.

2) Yandex N. V. (NasdaqGS:YNDX) many calling it the “Russian version of Google” which has just launched less than 2 weeks ago with success in the early goings.

Nasdaq Penny Stocks Yandex

 

 

 

 

 

 

 

 

 

 

As we have learned during the dot-com days of the late 1990′s after which many companies fell into the category of “Nasdaq Penny Stocks” it takes a lot of money to build an online business. The subscription costs are apt to keep piling up.

Bottom line is this, even if Groupon itself thinks they can tighten the spending faucet the market in general may not let it do so. Many investors and traders alike these days realize what it takes to capture market share in vast new markets hence spend and spend some more. A few examples would be Amazon.com Inc. (NasdaqGS: AMZN) and NetFlix, Inc. (NasdaqGS:NFLX) both companies have made it clear that they would indeed sacrifice profit to spend on growing their respective business.

Nasdaq Penny Stocks in Summary

In summary, in the land of nasdaq penny stocks or when discussing newer Internet startups…the song remains the same. Companies MUST spend while always creating new innovative ideas or channels to drive sales ahead or it may find itself chasing its tail as losses may continue to build. I think I can speak for the investment bankers and venture capitalists when I say they will not need to print any Groupon coupons towards savings to utilize in their household anytime soon in the near term after this Monster comes to market!

Groupon, based in Chicago, will trade under the ticker “GRPN” describes itself as a local e-commerce marketplace offering goods and services at a discount filed for an initial public offering to raise $750 million, although we here know the final cut will most definitely be much greater. The company founded in 2008 offers subscribers coupons via email, indeed a great concept especially in this trying economy.

Many of which provide daily deals for things such as half off the price for a night out towards a dinner or a hair salon visit. Groupon turns the coming transaction into the main event by requiring a certain amount of subscribers buy the deal within a specific time table or the deal merely becomes no deal. Groupon gets about 40% of the dollar value of the purchase price, on average, with the merchant then taking the remainder.

Make no mistake, there are plenty of nasdaq penny stocks out there now that offer some tremendous growth potential based on there revenue stream after turning a profit coupled with their share price getting halved but nothing along the likes of the great Groupon business growth which seems eye popping. With approx. $45 million in the first quarter of 2010, their top-line has grown almost a 15 fold, to a whopping $650 million in the three months ended March.

Due to this type of enormous growth, it is quite difficult to determine how the IPO will end up pricing, personally, I for one can not wait. What many folks are not aware of is the fact that the shares have traded for months on the secondary, private stock exchanges such as Sharespost.

Speculating give or take 300 million shares outstanding, at a recent privately traded price of $35, the implied market cap. is within the lines of $10 billion. Amazingly enough the whisper numbers have flown in already raising the offering at two to three times that much!

As outlandish as it may seem this young company may jump out of the gate carrying a $30 billion in market value. Many investors in such startups have been speaking up as of late that many investment bankers are too quick to leave money on the table.

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