Although 2011 was a tough year for the markets, and one in which the major indexes made little progress, investors were still willing to tip into the initial public offering (IPO) pool. Well-known companies like LinkedIn (NYSE:LNKD), Pandora (NYSE:P) and Groupon (Nasdaq:GRPN) made their debuts as publicly-traded companies, while HCA Holdings (NYSE:HCA) returned to the market. (For more, read How An IPO Is Valued.)


As we now turn to the end of year and look ahead, there are a number of companies intending to go public at some point in the next year. While a bad start to the new year in the markets could lead some (and potentially all) of these names to postpone their offerings, these IPOs are most likely "when, not if" events. Before leaping into the IPO pool, though, investors should remember that playing IPOs can be tricky; not only is it difficult to get access to the low-priced IPO shares, but many of these stocks fall from their initial first-day closing prices.

There is arguably no other company on this list that gets as much attention as Facebook. A leading company in social media (and the leading company by some metrics), Facebook has the relatively rare distinction of appealing to huge swaths of society. Just as important, the company has built a savvy business model wherein most of its users do not realize that they are, in fact, the product that the company sells.

Facebook could well be a $10 billion IPO, valuing the company at about $100 billion or just a bit more than half the current market capitalization of Google (Nasdaq:GOOG).

Univision was once a publicly-traded company and if anything, the company has gotten even stronger in the interim. Not only is Univision the largest Spanish-language TV channel in the United States, it often beats major networks like Disney's (NYSE:DIS) ABC and News Corp's (Nasdaq:NWSA) Fox, in prime time ratings. (For related reading, see The Winner And Losers Of Recent IPOs.)

Gilt Groupe
Gilt Groupe definitely has the DNA to be a successful online retailer, with its founders coming from Doubleclick, eBay and Louis Vuitton. In its short life, Gilt Groupe has already shown a capacity to adapt and alter its model. What was first an invitation-only site is now open to all comers, and the company is experimenting with sales that lasts longer than its original one- to two-day flash sale model. People still love bargains and still love luxuries, so a company that makes it convenient to buy luxury brands for as much as 70% off retail, certainly has a fighting chance.

Local is the next battleground in search and social media, and Yelp is an early leader. Google, Yahoo (Nasdaq:YHOO) and Microsoft (Nasdaq:MSFT) have all targeted local searches as an important growth market. However, Yelp's large user base and the stickiness of services like online peer reviews are a valuable competitive factor.

Carlyle Group
The world of private equity is becoming increasingly public and investors may soon be able to buy shares in one of the best-known names in the space – Carlyle Group. Based on recent data, Carlyle Group is the third-largest private equity manager by assets under management, and will be the largest such company to be publicly-listed (though Goldman Sachs (NYSE:GS) is a public company and owns the second-largest private equity business).

Carlyle is famous not only for its investments in markets like aerospace/defense, healthcare and energy, but also its real estate holdings and portfolio holdings like Dex Media, Dunkin' Brands (Nasdaq:DNKN) and PPD. Carlyle is also famous for employing a who's who of the political world as advisors including former President George H.W. Bush, former British Prime Minister John Major and former Thai Prime Minister Thaksin Shinawatra. (For more on Hedge Funds, read Taking A Look Behind Hedge Funds.)

Ally Financial
Formerly the finance division of General Motors (NYSE:GM) and known then as GMAC, Ally Financial is now 74% owned by the U.S. government. Like so many financial companies a decade ago, Ally stretched beyond its initial mandates and got involved in residential mortgages. Ultimately, GMAC/Ally's losses became more than the company could withstand, it could no longer support its efforts in providing automobile financing, and the company had to depend upon multiple federal bailouts to a total exceeding $16 billion.

The new Ally Financial is still involved in most of its prior lines of business, including auto financing, insurance, mortgage products and online banking.

The Bottom Line
Investors should remember to approach any and all IPOs like any other type of equity investment. Due diligence is vital, and the S-1 filings with the SEC can be invaluable sources of information. Investors should also realize, though, that IPOs typically underperform once the initial frenzy and enthusiasm is over, so readers would be well-advised to approach these names with caution if and when they reach the public market. (For some disappointing past IPOs, check out The Biggest IPO Flops.)

Related Articles
  1. Stock Analysis

    Moderna Therapeutics: An IPO Candidate in 2016?

    Find out the reasons why 2016 may be the year when highly valued biotech company Moderna Therapeutic files for an initial public offering (IPO).
  2. Stock Analysis

    Domo Inc: An IPO Candidate in 2016?

    Learn about key information on Utah-based technology startup Domo Inc. and how the Domo dashboard differentiates itself in the world of business intelligence.
  3. Stock Analysis

    Tech Stocks Vs. Financial Stocks in 2016

    Consider the arguments for allocating more of your investment portfolio to either the technology sector or the financial sector for 2016.
  4. Stock Analysis

    The Top 5 Financial Penny Stocks for 2016 (CPSS, ASRV)

    Learn about some of the most promising penny stocks in the financial services sector that investors can consider adding to their portfolio for 2016.
  5. Stock Analysis

    GoDaddy Inc: How It's Fared Since the 2015 IPO (GDDY)

    Evaluate GoDaddy's stock performance since its April 2015 IPO, and determine how you would have fared had you invested in the company on day six.
  6. Stock Analysis

    If You Had Invested Right After Comcast's IPO (CMCSA)

    Evaluate how Comcast's stock has performed since the company's 1972 IPO, and learn how you might be a millionaire today had you invested a small sum in the IPO.
  7. Stock Analysis

    TransUnion - How It's Fared Since the 2015 IPO (TRU)

    Learn about the business of financial services company TransUnion and how the company's stock fared after its initial public offering in 2015.
  8. Stock Analysis

    AppNexus - An IPO Candidate in 2016?

    Find out the reasons why 2016 may be the year when the hot ad tech company, AppNexus, finally files for an initial public offering.
  9. Investing News

    Predicting the Biggest IPO of 2016

    Find out which tech startup company will bring life back to the struggling IPO market with the biggest initial public offering in 2016.
  10. Stock Analysis

    Shake Shack: How It's Fared Since Its 2015 IPO (SHAK)

    Learn about the performance of Shake Shack's stock and how you would have fared if you had purchased shares a week after the initial public offering (IPO).
  1. What is securitization?

    Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming ... Read Full Answer >>
  2. When did Facebook go public? (FB)

    Facebook, Inc. (NASDAQ: FB) went public with its initial public offering (IPO) on May 18, 2012. With a peak market capitalization ... Read Full Answer >>
  3. How can insurance companies find out about DUIs and DWIs?

    An insurance company can find out about driving under the influence (DUI) or driving while intoxicated (DWI) charges against ... Read Full Answer >>
  4. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
  5. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  6. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
Hot Definitions
  1. Presidential Election Cycle (Theory)

    A theory developed by Yale Hirsch that states that U.S. stock markets are weakest in the year following the election of a ...
  2. Super Bowl Indicator

    An indicator based on the belief that a Super Bowl win for a team from the old AFL (AFC division) foretells a decline in ...
  3. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  4. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  5. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  6. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
Trading Center