Trader Talk

Cloud Computing: Hot, Hot Hot!

Another cloud computing IPO today, and it, too, blew the doors out.

Bazaarvoice provides an online customer review platform to brands and retailers, priced at $12, way above the $8-$10 price talk, and is trading over $16 in mid-afternoon.

Two other cloud computing related IPOs have held onto big gains:

1) Brightcove priced last week at $11, now at $15;

2) Greenway priced three weeks ago at $10, trading near $15.

Coming next Thursday night: local business review website YELP (ticker: YELP), looking to price 7.15 m shares at $12-$14. With a market cap of $778 million, they're only floating 12 percent of the company.

A small float may be the smart thing to do, says David Menlo at, if only for the company. "If you have a hot commodity, it primes the pump for higher premiums," he notes. Besides, they can always float more later.

Revenues are tiny: $83 million in 2011, with a loss of $16.9 million. Really. That's it. What's the valuation model? Well, you can use a multiple of revenues (about 10 times), but hey, didn't they do that in the dot-com era?

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