Technology IPO’s are picking up steam

After a drought in the technology IPO arena, things are picking up. Several IPO’s took place last month and others are lined up to take the plunge. MaxLinear, Calix, and Meru Networks led the flock and received a strong reception in the market.

According to the Wall Street Journal, last month 13 companies went public; 5 or nearly 40 percent, of these were in the technology sector. In the past twelve months, 16 companies have filed with the SEC [Securities Exchange Commission], so stay on the lookout for more opportunities to get in on the ground floor. Those that went public retained their stock value after the initial day’s frenzy. If you are looking for a new tech stock for your portfolio, read on.

MaxLinear, provides metal oxide semiconductor [CMOS]-based highly integrated radio-frequency analog and mixed signal semiconductor SoC solutions for broadband communication applications. Their products are available for TV’s, set-top boxes, PCTV, DVD players and automotive media, cellular phones, PDAs, and personal navigation devices.

MaxLinear closed its initial public offering of more than 6.4 million shares at a price of $14 per share, and closed yesterday at $17.12. The company is building a strong board of directors which includes Donald Schrock who brings 35 years experience in the semiconductor industry to the table. His executive background includes positions at Motorola and Applied Micro Circuit. He was group president of Qualcomm’s CDMA Technologies Group. A.J. “Bert” Moyer delivers financial guidance having been CFO of Allergan, Western Digital, and National Semiconductor. If you aren’t able to invest, but are job hunting instead, MaxLinear’s website lists more than 25 job openings in operations, engineering, sales and marketing.

Calix also went public. They provide North America with broadband communications access systems and software for copper- and fiber- based network architectures that enable communications service providers [CSPs] to connect to their subscribers. They focus specifically on the portion of CSP access networks that govern available bandwidth and determine the range of service available to subscribers. Calix considers Alcatel-Lucent to be their direct and largest competitor.

Gross margin at Calix was 33 percent for 2009, while net loss was $22.4 million. That means they made money, but had more expenses than income. They will use money generated from selling stock to, among other things, fund R&D. Investors must approve of their plans, because prices are going up since March 29. Tuesday, April 6 closed at $14.42.

Meru Networks got off to a great start, raising $65.8 million. Their new found money will also be used for R&D, as well as technology acquisition, and other purposes. Gross margin was 60 percent in 2009 with net loss at $17.4 million.

Mount Meru in Hindu and Buddhist cosmology is considered to be the center of all the physical, metaphysical and spiritual universes. Mt. Meru in Tanzania is a volcano, dormant since a century ago that challenges climbers with a steep ascent. A Narrow, barren ridge takes one to the summit overlooking a crater several thousand feet below. One could draw parallels between the mountain’s history and the challenges facing Meru Networks.

The company says they provide a virtualized wireless LAN solution enabling enterprises to migrate their business-critical applications from wired networks to wireless networks, Meru acknowledges that they face stiff competition from well established companies such as Cisco Systems, Aruba Networks, Motorola because of its acquisition of Symbol Technologies, and HP through its acquisition of Colubris Networks. Meru contends that it does for wireless connectivity what virtualization has already done to disk drives in RAID and processor cores in a modern server. It erases the boundaries that other systems impose between different access points’ coverage areas, making each channel available network-wide.

The management team is impressive. President and CEO Ihab Abu Hakima, was an executive at Proxim and Silicon Graphics. Anurug Lal Senior Vice President, was the former Director of the United States National Broadband Taskforce VP of business development. Sarosh Vesuna was Wi-Fi Alliance co-founder and co-author of the original 802.11 protocol.

Nexsan, an enterprise storage system vendor, which also serves small businesses, is expected out April 7, with a NASDAQ symbol NXSN. Nexsan is the first storage vendor to IPO since 2007. We’ll have to wait and see whether that bodes well, or is a warning sign for the company that supplies disk-based storage systems for the long-term storage of digital information. Customers can archive and retrieve medical images, email, business documents, video images, research data, and digital media of all types.

Founded in 2000, Nexsan booked $63 million in sales for the 12 months ended December 31, 2009. However, analysts wonder how well it will compete with peers who typically have a gross margin of 50-60 percent, while Nexsan garners only 41 percent.

Company hype says Nexsan storage technologies are optimized for capacity, energy efficiency and cost. Their innovations are in de-duplications, secure archiving software, and storage encryption, and refinements of RAID, ATA and SATA disk technologies. Nexsan claims to offer solutions that are up to one-tenth the cost of traditional disk-based storage solutions. They pride themselves on being the first to offer AutoMAID [Automatic Massive Array of Idle Disks], a policy-based intelligent “green” energy saving technology.

A couple years ago, some companies, whose fortunes took a downturn, or just due to the general economic climate, backed out of the idea of trying a public offering. However, with things looking up, several are getting back in the game. Convio, a software developer, Glass House Technologies, a data center consultancy that offers careers in the UK and Israel , and Magnachip, another semiconductor company, are vying for dollars in the IPO marketplace.

In January, Convio, a software company out of Austin Texas refiled an IPO offering. Convio, develops software geared to the non-profit world. They offer Software as a Service over the Internet so their clients do not have to install or maintain a software package themselves. Their tools are geared to help increase donations via good marketing, fundraising, and a donor data base.

Also hoping for IPO money is Magnachip Semiconductor Corp, a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products that’s been in business for 30 years. They lay claim to almost 7,000 registered and pending patents. The company provides advanced display technologies, such as low temperature polysilicon [LTPS], and active matrix organic light emitting diode [AMOLED], as well as high volume display technologies such as thin film transistor [TFT]. The benefits to the consumer are brighter displays, enhanced image quality, smaller form factor and longer battery life.

MagnaChip offers manufacturing services to providers of analog and mixed-signal semiconductors, all under strict environmental, safety and health guidelines. Staff work in a safe and ergonomic workplace where a Code of Business Conduct is outlined and followed. Infractions are frowned upon and any whistleblower is protected by relevant laws of the Republic of Korea and the United States. Sounds like a good place to work if they live up to the promises on their website.

In mid March, BroadSoft filed for an IPO offering. It deploys Voice over IP [VoIP] applications in more than 425 telecommunications service providers’ networks covering 65 countries, in 25 languages. The company which officially started in September 1998 with the name iKnow, restated their corporate charter in 1999 with the name Broad Soft. They achieved their first patent in Sept 2003.

BroadSoft has its own Korean connection. Samsung Networks uses BroadSoft’s BroadWorks VoIP application platform to deliver hosted PBX and SIP trunking to enterprises and small and medium-sized businesses in South Korea. BroadWorks’ communication solutions integrate video, fax, voice and email communications worldwide. They can integrate with any type of network architecture: fixed line operators, mobile wireless, converged operators, cable networks and Class 5 migration. Service providers can remotely assess, verify, monitor, and diagnose problems in both the LAN and WAN. Additionally, BroadSoft offers consultants to help business deploy, train, and promote communications services.

IPOs always generate lots of excitement. However they don’t always generate sales, or profits, or even good will for the hopefuls. Most of the latest tech IPOs come from long lived companies, not fly-by-night start ups. Theoretically, therefore, they should do well. If you are planning to invest, though, remember: Caveat Emptor.

Original Author: Darleen Hartley

Webmaster’s note: This news article is part of our extensive Archive on gadget news that have been happening in the past 10 years. For up to date stuff we would recommend a visit to our homepage. Additionally, we take great pride in our user manual section, as well as our VPN Troubleshooting guide, so be sure to check them out as well.