The IPO market can be the wild west for investors, a venue for great gains, and unfortunately great losses. I recently did an article where I looked at a few recent initial public offerings which hit the market last week, you can find that article here. In this article, I would like to take a look at a few offerings over the last couple months which have performed exceptionally poorly since making their public debuts. Some of these names you may be familiar with, while others may less visible.
Going nose first
I first wanted to take a look at a name many of use are familiar with, especially the travelers out there. Gogo Inc (NASDAQ:GOGO) is the leading provider of wireless internet in the airlines market with an impressive number of partnerships. Since pricing at $17 per share in late June, shares have tumbled 22.5% to $13.20. The company has aligned itself with the industry leaders including Virgin, American, Delta, United, airTran, and Frontier to name just a few. These great partnerships have allowed the company to gain a monopolist like market share of 81%.
The FCC helped create this monopoly through an exclusive ATG connectivity agreement with the company. In 2006, Gogo Inc (NASDAQ:GOGO) won the auction for the rights to the 3 MHz license for the ATG spectrum which will expire in 2016. However, the road looks rocky in the years ahead as competitors seek market share via additional spectrum and satellite connectivity. Should the company want to maintain its high price structure and market share, management would need to spend heavily on additional spectrum licences. I would avoid the company at this time as the clouds overhead should create a turbulent ride.
No one’s watching
Next up, Tremor Video Inc (NYSE:TRMR), an advertising company specializing in offering its clients engaging video advertisements across an array of devices. The company’s software enables its customers to use past data to maximize the results of future video campaigns. Since being priced last month at $10 per share, shares have declined over 20%. I have been a fan of video advertising for a variety of reasons, including higher brand recognition, purchase intent, and message association when compared to traditional television advertising.