9th July 2012  Kayak, Palo Alto and Fender to Offer Shares.

Travel information website Kayak is set to become the first major online company to IPO since the tumultuous Facebook (FB) offering and are joined by Palo Alto and musical instrument maker Fender.


These three companies will be the first big test of investor appetite since Facebook's IPO in May whose shares opened on the NASDAQ at $38 and are now trading at $32.17, up from a low of $25. Facebook's underwriter Morgan Stanley (MS) came under criticism for the way it handled the IPO as did the NASDAQ itself for technical difficulties that marred the opening day of the stocks trade. However, both Kayak and Fender have chosen to debut on the NASDAQ while Palo Alto has gone with the NYSE who lost out on the battle for Facebook. Morgan Stanley will also lead Kayak and Palo Alto's IPO.


Kayak Software Corp was set up in 2004 and allows users to compare travel and hotel costs from hundreds of websites, generating revenue by sending referrals to online travel agencies and from advertising. In the first three months of the year Kayak saw its revenue grow to $73 million. For the quarter ending March the company processed 310 million requests for information, an increase of 45% from the same period a year beforehand. Kayak intends to offer 9% or 3.5 million of its stock for IPO and declared a price range of between $22 to $25, valuing the company at just under $1 billion at the top estimate. Kayak will trade on the NASDAQ under the ticker KYAK.


Palo Alto Networks Inc. provides computer-network security hardware and software. Its firewalls allow companies or institutions to control what their employees and members can access through the internet and their products are currently installed by more than 5,300 companies. In the nine month period ending April 30th Palo Alto doubled its revenue to $179 million compared to the same period the previous year. The company is yet to experience a profitable fiscal year since shipping its first product in 2007. Intending to trade on the NYSE as PANW they will also be offering a 9% stake, roughly 6.3 million shares, pricing at between $34 and $37 which gives them an upper valuation of $2.46 billion.


Fender Musical Instruments Corp is one of the most well know guitar manufactures, producing the iconic Telecaster and Stratocaster guitars played by the likes of Jimi Hendrix, Bob Dylan and Bruce Springsteen. Fender will trade under the ticker symbol FNDR and in a deal much larger than that of Kayak or Palo Alto intends to offer 10.7 million shares, equitable to 40% of the total outstanding. At a price range of $13 to $15 a share it gives the company a valuation of just under $400 million. First quarter sales increased 2.2% to $174 million but net income declined 73% to $1.9 million on the same period a year earlier, dragged down by higher labour costs and increased advertising expenses. Fender believes there is opportunity to grow sales by increasing its presence on the global market. Currently only 43% of its sales are generated outside of the US and it sees potential in emerging markets such as China and India.


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