March of the Profitless IPOs

There was a time when big profitless IPOs were at the end of an IPO cycle, signalling some kind of market top.

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Yet the march of the profitless IPOs continues. Two that caught my attention from next week's calendar, in no particular order:

Intralinks Holdings. This company lets businesses securely exchange data in the cloud. This is its third swipe at going public since 1999.

It's coming out just three years after private equity got involved and three areas concern:

It's making no money. It has a bunch of debt. A ton of competition.

And in my humble opinion, it's trying to capitalize on anything remotely cloud-related before that window closes.

The second is NXP Semiconductor, which makes chips used for all sorts of products. It's backed by KKR, Bain and Silverlake, among others.

Like IntraLinks, it has a history of losses. And tons of competition,including Freescale, which is rumored to be looking to IPO soon.

And, like many private equity deals, it has billions in debt—five billion, to be precise. It's so much debt, in fact, that any use of the $600 million or so in proceeds will be a drop in the bucket to help repay the debt.

My take: Expect to see more of these highly leveraged, profitless deals as private equity looks to exit into a market that appears interested mostly in the trade, not the company.

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