I don’t want this blog to become about investing, but I write about IPOs for three reasons:
- The stock market has been a personal interest of mine since I was a kid. (My dad taught me about stocks starting at about age nine. He owned one share of the Cubs–which was weird for a White Sox fan–but it allowed us to go to the annual meeting and meet a few “lovable losers”.)
- Prospectuses provide unique information on business models and history that later reports do not provide.
- Most important, if B2B platforms are truly successful, they should be great companies to own in the long-run. They should have pricing power, moats, stickiness, throw off cash, etc. Watching and learning from them is part of my job.
This past year was a big one for enterprise software IPOs, including some large platforms. This year, I wrote about 12 stocks, mostly before they went public. Now it’s appropriate to see what they have been up (or down) to since.
This table lists the stocks, how they have performed and what call, if any, I made about them (in chronological order):
| Company | Symbol | IPO Date | Subsequent Performance (as of 11/4/14) | Bob’s Call at the time | Verdict on Bob’s Call |
| Tungsten | Lon:TUNG | 10/16/2013 | 40% | Fun to Watch/Skeptical | Snarky/Dead Wrong |
| Liquidity Services | LQDT | NA | -40% | Wait | Good call, bought at $12.50, let’s see how it does! I’m nervous. |
| Care.com | CRCM | 1/24/2014 | -53% | Stay away and stay away from ANGI. Take Care.com, please! | Right on both counts. Rare, but gratifying. |
| Castlight Health | CSLT | 3/14/2014 | -25% | Did not make one | NA/Wimp |
| Paylocity | PCTY | 3/18/2014 | 49% | None, not a network | NA |
| Amber Road | AMBR | 3/21/2014 | 8% | Said it was likely to be more reasonably priced, but non-committal | NA/Wimp/Meh |
| The Rubicon Project | RUBI | 4/2/2014 | -33% | No. Out of my circle of competence and priced too high | Better to be lucky, than good. |
| Sabre | SABR | 4/16/2014 | 10% | Did not make one | NA/Wimp |
| Travelport | TVPT | 9/24/2014 | -7% | Non-committal, but I went for the biggest one, Amadeus | Amadeus is down nicely since I bought it. Spank you very much. |
| Yodlee | YDLE | 10/2/2014 | 19% | Cautious optimism, but did not buy! | Wimp |
| Yodle | NA | NA | NA | Negative | Correct. But they pulled IPO, what good did it do me? |
| Hubspot | HUBS | 10/9/2014 | 46% | Positive, but too cheap to buy | Big missed opportunity so far. |
What conclusions should we draw from this?
- IPOs are volatile creatures (no charge for this earth-shattering insight)
- I’m a wimp. I usually sniff out the obvious stinkers, but being a value and index-oriented investor does not mix with my professional career in enterprise software platforms, which are rarely cheap by conventional measures–and yet may still may be good buys.
- It really is good to stay away from things you do not understand. I’m sticking with enteprise software, and within that, true networks.
A reminder: for those investors among you, in mid-September, I created two stock indices for B2B platforms, one for enterprise software commerce platforms generally, and one for vertically-focused platforms. More information can be found here:
- https://www.motifinvesting.com/motifs/b2b-e-commerce-Q7vzcgUQ
- https://www.motifinvesting.com/motifs/industry-clouds-cJxvb3SK
If you are reckless with your money, you can actually invest in these indices or modify them and then invest. It’s a really fun way to gamble away your hard-earned money.
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