This Week’s IPO to Watch
Web Editor, "Mad Money"
If you followed Cramer’s advice on Tesla Motors’ public offering, which was to get in on the deal and sell the stock’s initial pop, you could have made some mad money. The stock skyrocketed 79% to $30.42 from its $17 pricing in a matter of about 24 hours.
Well, this week there’s another IPO he wants investors in on: Qlik Technolgies, with will trade under ticker symbol QLIK.
This software licensing company offers an easy-to-use platform that helps businesses analyst data so that they can make better, faster decisions. And unlike Tesla , Qlik is profitable. Revenues grew 33% in 2009, and for the first three months of 2010, they jumped 66% year-over-year. The customer count has increased to 14,000 as of March 31 this year from just 2,000 in 2005. And the company operates in 100 countries across the globe, with 75% of its business coming from overseas. Cramer said this international exposure, to Europe specifically, could hold down the IPO’s price, but that’s just an opportunity for investors.
As for the offering itself, Morgan Stanley, Citigroup and J.P. Morgan comprise a great underwriting team, and there are no key insiders using the IPO to dump their shares and run. Plus, the price is right: Qlik is expected to price at between $8.50 and $9.50. The middle of that range, $9, carries the same valuation as other companies in the industry that have been taken over, such as what SAP paid for Business Objects in 2007 or Sybase this year, and what IBM paid for Cognos in 2007.
So how do you play it?
Cramer said you could pay up to $9.50 for Qlik, but “not a penny more because it’s already getting a premium valuation.” And don’t chase this stock in the aftermarket. People who did that for Tesla got burned, and burned badly. So if you can’t get shares in the IPO itself, take a pass.
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