Mercator Capital has once again come up with a brilliant analysis (I might have to move them up on my "Most Under-rated' list) as to why Veraz's IPO went bust and Acme's IPO was a huge success even though they are in a similar space and the difference in months between the two IPOs was just months.
Mercator talks about three main reasons,
1) They were running at a loss at the time of IPO.
2) They are against the big names like Cisco, Nortel etc.
3) Most of their revenues are from the Legacy TDM solutions rather than from IP.
The third one is arguably, the most important reason why the IPO failed. The first two, though they are challenges, can be addressed and if the company has future-proof solutions, investors tend to overlook the fact that they are not profitable or against the big names. Being niche and being next-gen is definitely the way to go.
The above are the reasons why I think the likes of Nextone, Soundbite will have great IPOs.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment