A comparative study of the state of recent IPO companies – lessons learned
| Date | 01 January 2004 |
| Pages | 5-15 |
| DOI | https://doi.org/10.1108/02635570410514052 |
| Published date | 01 January 2004 |
| Author | Sameer Kumar,Jonathan Beattie |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
A comparative study of
the state of recent IPO
companies ± lessons
learned
Sameer Kumar and
Jonathan Beattie
Introduction
In today's volatile market environment, the
number of initial public offerings (IPOs) has
slowed somewhat as the economy has slowed
down. While a lot of these companies offering
IPOs are presented in an attractive manner and
may appeal to investors initially, companies can
lose their appeal and the stockholders' trust if
they do not live up to all the hype generated
with an IPO. This is even more apparent in a
downturn in the market and a wary investor
market. The risk associated with a ``new''
company, meaning a newly publicly held
company, is not appealing when the market is
soft and investors tend to move their money
into more stable companies or investments
(Holden and Schmidt, 2001). So what can a
new company do to keep investor confidence?
In looking at many IPOs over the last five
years, five companies are chosen from different
industries for closer examination. The purpose
is to analyze what kinds of things each company
has done right and what they have done wrong
in their brief histories as publicly held
companies. In examining each company, a
better understanding is hoped to be gained of
what it takes for a company to be successful and
what are some of the things a new company
needs to watch out for so they can be successful
when it is time to go public.
The five companies chosen for examination
are: Cabot Microelectronics (CCMP),
manufacturer of consumables for the
semiconductor industry; Alliance Fiber Optic
Products (AFOP), manufacturer of fiber optic
components for the telecommunications
industry; Adams Golf, Inc. (ADGO), a retailer
of golf equipment; King Pharmaceuticals (KG),
manufactures, markets and sells branded and
generic prescription pharmaceutical products;
and Gadzooks Networks, Inc. (ZOOX), a
leading provider of hardware and software
products for storage area networks.
Company profiles
In this section, a brief profile of various
companies examined is presented[1].
The authors
Sameer Kumar is a Professor and Qwest Endowed Chair in
Global Communications and Technology in the College of
Business, University of St Thomas, Minneapolis, Minnesota,
USA.
Jonathan Beattie is a Process Engineer at Seagate
Technology in the Recording Heads division, Bloomington,
Minnesota, USA.
Keywords
Market value, Public companies, Small enterprises,
Stock markets, Stock prices
Abstract
Examines five companies from different market segments
with initial public offerings in the past five years,
representing a wide range of products. The companies were
Cabot Microelectronics, Alliance Fiber Optics Products,
Adams Golf, King Pharmaceuticals, and Gadzooks Networks.
The companies' stock price trend, revenue, and net gain or
losses were evaluated to determine how each of them was
performing financially. In addition, each company's product
offerings market trends, product innovations, and market
success were examined to determine what factors aid in a
company performing well financially. A small perspective
was given on the future outlook for a typical company and
its products.
Electronic access
The Emerald Research Register for this journal is available at
www.emeraldinsight.com/researchregister
The current issue and full text archive of this journal is
available at
www.emeraldinsight.com/0263-5577.htm
5
Industrial Management & Data Systems
Volume 104 .Number 1 .2004 .pp. 5-15
#Emerald Group Publishing Limited .ISSN 0263-5577
DOI 10.1108/02635570410514052
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