Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?


Playing the IPO Market: What Chances Does This Niche Retailer Have?

By  +Follow June 10, 2013 9:43AM
Tickers Mentioned:


In this week's interview with Francis Gaskins, Equities.com discussesthe fall and current state of the Chinese IPO market, companies going public this week, and one niche retailer that is planning to do so in the near future. Gaskins has been recognized by major financial media outlets such as Forbes, CNBC, Bloomberg, and many othersas one of the best resources for the IPO industry available today. Gaskins is a highly sought-after expert for his insights and opinions as an IPO analyst. Readers can see his previous weekly interviews with Equities.com here.

EQ: This week, LightintheBox (LITB) debuted on the Nasdaq on Thursday. Shares jumped considerably from the offering price of $9.50 per. What were your thoughts on this IPO?
Gaskins: If LITB has a good June quarter after its first profitable quarter, which was March ’13, then the stock should do well.  It’s trading like it wants to go higher, which suggests the June quarter may show a profit.  And by now the IPO flippers are all out of their stock.

EQ: LITB was also the first Chinese IPO this year, which underlines just how much that market has dried up the last two years. But the last three or four Chinese IPOs have fared well. Does this help to remove the stigma that hurt this market over the past several years?

Gaskins: The stigma is because all Chinese IPOs have to IPO using a shell type structure, typically in the Cayman Islands, while the actual operating companies are ‘protected’ back in China.  Also, there have been numerous accounting issues with Chinase IPOs.

A lot of the stigma came because smaller investment banker firms brought questionable Chinese companies public, without regard to quality.

Now, it’s very important to look at the lead underwriters, because they are putting their reputation on the line by underwriting Chinese IPOs.   I think the market is gaining confidence in the bigger underwriting firms that are doing the Chinese IPOs.  At this stage, we’d shy away from any Chinese IPO underwritten by a non-major investment banking firm.

EQ: There are three IPOs scheduled for next week with Coty (COTY), Gigamon (GIMO), and Aratana Therapeutics (PETX). What are you expecting here?
Gaskins: COTY is a smaller competitor to L'oreal S.A (OR), Estee Lauder (EL) and Avon Products (AVON).  COTY’s financial record shows spotty profitabilty trends.  They do intend to IPO at  a P/E discount to segment competitors.  COTY has a negative price-to-tangible book value, which suggests it’s been stripped of cash by its leverage buy-out owners.
100% of the proceeds are going to selling shareholders, which isn’t a positive.   We expect COTY to be OK, not great, in the IPO aftermarket.

Gigamon, on the other hand, is our IPO pick of the week because of increases in top line revenue.  GIMO has identified a specialized niche in switch traffic management & reporting, and appears for the time being to have a niche jump on its larger competitors, which include Cisco Systems (CSCO), Juniper Networks (JNPR) and Brocade Systems (BRCD).
GIMO was profitable in 2010, 2011 and 2012.

For Aratana Therapeutics, since its founding in 2010, it has licensed three compounds, and is  developing into six products for use in pets in the United States and Europe.
Potential competitors include large animal health companies, such as Merck Animal Health, the animal health division of Merck & Co., Inc.; Merial, the animal health division of Sanofi S.A.; Elanco, the animal health division of Eli Lilly and Company; Bayer Animal Health, the animal health division of Bayer AG; Novartis Animal Health, the animal health division of Novartis AG; Boehringer Ingelheim Animal Health, the animal health division of Boehringer Ingelheim GmbH; and Zoetis, Inc.

Aratana is currently conducing clinical studies, and then plans to conduct clinical trials, so it appears that revenue generation is a long way off.  We believe PETX will price below its initial range.

EQ: There are also reports that retailer The Container Store is planning to do an IPO soon. Does this niche company have much potential to grow?

Gaskins: The Container Store is a specialy reatailer that created the storage and organization retail category in 1978.  They have 64 stores now, and several years ago had 49 stores, so the annual store opening growth rate isn’t very high.

They have only 10 stores in California and 13 in Texas, where they are headquartered.  They are in 22 states plus D.C., so it looks like they’ve cherry picked their locations (makes sense).  
Their stores are about 25,000 square feet, which is a little more than half an acre.    If they are going to grow meaningfully, then they may have to downside their store size to get to smaller communities.   And once their S-1 is filed it will be interesting to see what percentage of revenue is generated from online activity.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.

Signup for our daily newsletter and get our best articles emailed right to you!

Results for LITB
29 Sep 14 11:34:14
Gaining Stocks: $VTNR, $LITB, $FARM, $ITCI - - http://t.co/n8Ug9YAhya
US Banking News
29 Sep 14 11:16:06
Lightinthebox Holding Co Ltd-ADR Upgraded to Outperform by Zacks $LITB http://t.co/WEtEVhTR5Z
Consumer Services
29 Sep 14 10:56:37
Lightinthebox Holding Co Ltd-ADR Rating Increased to Outperform... $litb #consumerservices http://t.co/epFHNBMmCH http://t.co/6RmTXfFTvx
Catalog Distribution
29 Sep 14 10:56:37
Lightinthebox Holding Co Ltd-ADR Rating Increased to Outperform at Zacks (LITB) $litb http://t.co/lcfoctCVPd http://t.co/IpA77uYWTh
29 Sep 14 10:56:31
Lightinthebox Holding Co Ltd-ADR Rating Increased to Outperform at Zacks $LITB http://t.co/wu6qsUwypK
29 Sep 14 10:50:08
Lightinthebox Holding Co Ltd-ADR Lifted to Outperform at Zacks $LITB http://t.co/sbESxKxIY5
Media Sentiment
29 Sep 14 10:35:12
$LITB received a new alert. Find out why at http://t.co/5udYd0Ofs6 #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 344
US Consumer News
29 Sep 14 10:33:18
Lightinthebox Holding Co Ltd-ADR upgraded by Zacks to outperform. $7.10 PT. http://t.co/Fcpj8mzF7B $LITB #LITB
Analyst Ratings
29 Sep 14 10:32:51
Lightinthebox Holding Co Ltd-ADR upgraded by Zacks to outperform. $7.10 PT. http://t.co/uTmEGdSkGg $LITB #LITB
Alì Tarrab
29 Sep 14 06:55:26
With all the geopolitical tension in Asia & markets down: $LITB is strong today continuing yesterday's rally! #LONG still holding
28 Sep 14 05:40:31
http://t.co/nOVmHhxb7P Monday Watch List- $JRJC $yhoo $baba $cybr $psdv $alim $stv $rsh $vimc $cnet $creg $tkmr $drl $litb $dgly $nete $nxtd
27 Sep 14 07:21:29
Bullish ADX Crossovers 2/3 $EDU $ENLC $FNF $FNHC $FORM $GEO $HCC $HTH $HTLD $INN $KOS $LITB $LLL $LM $LYB $MDW $MU http://t.co/lbdmWmn5JI
Gussner Garell
27 Sep 14 02:01:53
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Danny Vota
27 Sep 14 02:01:06
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Kyle Maurer
27 Sep 14 02:00:33
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Jeffrey McDaniels
27 Sep 14 01:59:47
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Jeff Blackman
27 Sep 14 01:59:11
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Diana Bernstein
27 Sep 14 01:58:37
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Drew Cohn
27 Sep 14 01:58:02
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Charlie Rahilly
27 Sep 14 01:57:29
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Jack McCurley
27 Sep 14 01:56:57
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Nick Carey
27 Sep 14 01:56:23
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
The Practice LA
27 Sep 14 01:55:44
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Margo LaCroix
27 Sep 14 01:55:12
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Fan of Ashok Gamer
27 Sep 14 01:54:39
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Mark Davis
27 Sep 14 01:54:08
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Eric Pincus
27 Sep 14 01:51:17
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Robert Manthey
27 Sep 14 01:50:40
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Griffin Cooper
27 Sep 14 01:50:10
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Chareth Cutestory
27 Sep 14 01:49:38
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Barry Sabin
27 Sep 14 01:48:14
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Lionel Hutz, Esq.
27 Sep 14 01:47:45
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Lionel Hutz, Esq.
27 Sep 14 01:44:17
RT @Bentley4585: #ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Bentley Mulsanne
27 Sep 14 01:38:37
#ChartsToWatch: $LITB MT @RaginCajun @chessNwine http://t.co/6CiTHq6DvL http://t.co/Xz4dIj9dJ9
Stocks News&Markets
26 Sep 14 17:05:47
$LITB - ADR Shares End Higher; Petrobras Shares Trade Actively http://t.co/Kgm5aGS8Ey
26 Sep 14 17:05:44
$LITB - ADR Shares End Higher; Petrobras Shares Trade Actively http://t.co/bynico1USi
tom of the sea
26 Sep 14 13:02:26
glad $LITB got some love today....with volume
26 Sep 14 08:07:03
$LITB - Report of Foreign Issuer (6-k) http://t.co/sWBAD312fc
Stocks News&Markets
26 Sep 14 08:07:02
$LITB - Report of Foreign Issuer (6-k) http://t.co/Rosa43KrRc
Large Void Bot
26 Sep 14 08:00:22
Popular: $AGIO, $OPK, $LNKD, $KPTI, $LITB, $GTIM, $BRK.B, $TUP, $NE, $CLVS
TheStreet Alerts
26 Sep 14 07:39:18
Why Lightinthebox $LITB Stock Is Spiking Today http://t.co/w1NVVN0R0L
Stocks to Buy
26 Sep 14 07:28:03
Top #Stocks Friday - $JNS $DGLY $CNET $RSH $NAII $SSY $AGIO $CRRS $KPTI $CCRN $NKE $GTIM $CEMP $DLIA $DMND $LITB - http://t.co/iN13ltOlmW
Alex Galan
26 Sep 14 07:06:45
RT @Briefingcom: $LITB: LightInTheBox Holding raises Q3 rev guidance to $94-96 mln from $92-94 mln http://t.co/s7nCblx9yc
26 Sep 14 07:05:52
$LITB: LightInTheBox Holding raises Q3 rev guidance to $94-96 mln from $92-94 mln http://t.co/s7nCblx9yc
26 Sep 14 07:03:38
LightInTheBox +9.4% on Q3 guidance hike http://t.co/sALVTV1zqM $LITB
26 Sep 14 06:57:18
Potential Intraday Runners | Momentum Trading with RaginCajun http://t.co/ZOsBLQdkXE $PEIX, $TRUE, $SCTY, $BITA, $LITB, $EVRY, $KPTI
Leopoldo Sanchez
26 Sep 14 06:55:08
longed $LITB
dimi prophete
26 Sep 14 06:33:37
Bought $LITB
Leopoldo Sanchez
26 Sep 14 06:24:42
@JLiu1986 I have special focus at the open $MAGS $CNET $NXTD, also watching $LITB $SCOK $ICLD $ISNS $HPJ $MACK $JRJC
26 Sep 14 06:19:33
$LITB +10.23% $6.25 premarket The online retailer raised its 3Q revenue forecast after posting better-than-expected quarterly revenue.
By  +Follow June 10, 2013 9:43AM



blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.