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IPOFinancial.com President David Menlow on the long-term outlook for Dunkin Donuts’ stock.
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-- what we've got investors getting long Duncan donuts Dunkin' brands up 43%.
Officially began trading this morning.
My next guest says it has Wall Street on a sugar high.
The NASDAQ might be running on Duncan today but how will it perform long term David Manilow president of IPO financial dot com joining me now good to have you here -- we -- thank you.
Let's let's pull us apart first go micro vs macro let's start with Dunkin' Donuts sugar highs this is this for real -- you look at a nice move to the upside 43% everybody in the eastern seaboard had a -- -- Duncan in their lives.
The market has basically said through the investors that they're working with the scalpel edge as far as the stocks they want to be involved.
And when you see a stock that has the ubiquitous nature of the brand idea -- Dunkin' Donuts lease in the northeast.
Everybody's gonna pile on because they don't need an explanation of what the companies about.
So on that basis people say I want -- and I'm not really.
Too concerned about what I is that -- stickers -- the right way to go.
In this particular stock it is the right way to go because I'm very and type private equity sponsored IPOs and that's what this is that's what this is and people really have to understand that this company still has about one point 35 billion dollars worth of debt.
And they're going to have to come out with additional secondary offerings issuing more stock.
-- do you average company.
Let's explain this to people -- private equity spins off something to go public there are a lot of insiders who put a lot of money up they wanna get rid of their shares at a profit there itching to do that will be inside -- quickly Duncan.
In this case they are the exception because He insider's own their stock at an average of ten dollars and nineteen cents a share a key and they elected not to be part of this IPO but.
They do have a six month period by which have to be locked up with their shares now before they can sell.
And it's conceivable they'll start to -- out a little.
So mark your calendar all right let's get to the IPOs that have done well that have launched OK obviously Linkedin is something that's amazing but we picked out the top three.
And then we'll flip over to the bottom three that have launched with with also interesting names that haven't done well but here's Linkedin and -- site zillow zillow up 82%.
And aside up 80s97%.
And Linkedin since it went public up a 128%.
These are all moon shots anything worry about this.
I'm a little concerned because the valuation modeling that is being talked about on the street is really a very open subject you know people say it's X number of times this metric.
That metric.
It really doesn't make any sense and and so we have more -- these stocks in the actual public market trading then we're gonna come together.
You and I were around for the whole dot com implosion and the preceding explosion -- and you look at that and you say.
Boy this social media thing does anything -- you about that until we're waiting on groupon were waiting on a couple of other big names -- Or yes I think probably the talk about FaceBook is really where we -- facing because the last transaction that they did on FaceBook was with an 83 billion dollar valuation.
And I put it to every investor out there now that if if that company came public today with an 83 billion dollar valuation is there any doubt that it wouldn't open double that.
So the valuation models -- are there are just superfluous this thing is being this entire market and that everything run by the investors.
Be careful everybody else that we we remember let's go to the worst performers this year so far -- and look when you see a name like for example kept Spain medical.
That's -- different from the hyped up excitement of social media but then there's friend finder which was a social media player as well.
That was just a disaster before you came -- marketplace because it was appealing to a different type of social networking again there's some some adult energy out of have -- much more delicate about and then I look at porn that that and so.
In any case that's not what the market wants to see it was like well we also have a social networking platform and the investors said that's not what we want.
I don't understand that -- they actually do have a massive what Christian social networking that were -- mean -- did they do have way more in the other parts but let's get to what's in the pipeline.
Names we have all heard of things like Dave and busters as we said group -- Toys 'R' Us that's another private equity -- right they're spending a back out to the public a bias Zynga -- Anything jump -- -- you do have a have one in here that you say you know what that is a good one.
I think the the Internet related issues like dizziness for example those are the ones that are gonna get the bulk of the attention.
Those are the ones that have the potential for almost a geometric growth curve and investors are already keyed up on that realizing that they missed out on the others and they want some of us.
Just surprise -- that this is the busiest week for IPOs in years twelve of them in a single week yet we're facing this drama in Washington DC.
It's almost seems to be a total bifurcation of of thought process it it.
It is initially you could make an argument for the fact that the deals are trying to get public before the door completely closes.
But I think it's more the issue that there is such pent up demand.
And the markets are trying to stabilize away from the debt ceiling issues they're basically saying we gotta come public now because if we don't.
Someone else is gonna come public before us and we'll lose market share.
We got ten seconds these Chinese IPOs don't not for me up or any investors not right now.
David is the one who knows everything about IPO as it always has thank you so much for joining us David -- low of IPO.
