Reuters Insider - Trading at Noon: GoPro shares jump; Bullard rattles market

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26/06/2014 21:26

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 http://insider.thomsonreuters.com/link.html?cn=share&cid=1256536&shareToken=Mzo2OTM4ZjRlOS1mYzBiLTRiYTItYWE2YS1kYTI3MDZmMjc3NTQ%3D&playerName=ReutersNews 
                                                                       
 Source:             Thomson Reuters                                   
                                                                       
 Description:        Shares of action camera maker GoPro rose as much  
                     as 26 percent in its debut on the Nasdaq.         
 
 
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 Short Link:  http://reut.rs/1omciBE  
 
 
Transcript (May be auto-generated)

 Alright. I'm sorry. I don't think that any CEO should be that rich and that 
good-looking. GoPro going public. Bobbi Rebell, Reuters Anchor, is here to talk 
about it. Alright. The World Cup is starting, folks, but maybe just want to put 
a GoPro on your head and film yourself playing soccer. Alright, Bobbi, this 
priced at $24 a share, right? Take it away. Where are we now? Top of the range, 
so we had a good feeling about this coming in. They're having a great day. They 
are very enthusiastic over there at the NASDAQ. They started out at the gate, up
about 26% right away; now, they're something like 33% up. This offering was 20x 
oversubscribed so there's so much interest in this deal. 

No wonder they're a very profitable company. They made something like $1 billion
in revenue last year. That's not always the case with these IPOs. So that's one 
reason to be enthusiastic. They also have the top-selling video camera in the 
country last year, another reason they've got an amazing brand name. And now, 
they're talking about expanding into being a media, a content company. So 
there's a lot of enthusiasm there and a lot to cheer about over there at the 
NASDAQ today. Alright. A lot to cheer about, but what about the risks or the 
potential downside here? Yes. Well, I brought in Kathleen Smith from Renaissance
Capital to talk about this among other things and she did talk about it being a 
one-product company and also that media business I mentioned not yet a proven 
revenue model. Alright. Let's take a listen exactly to what she had to say. The 
media angle is interesting but I think most analysts are looking at that, did 
not really putting too many numbers on that. The risks here are certainly 
one-product company and how do you model the growth for this company, and the 
competitive nature of this business is huge. Garmin is in there. 

Every single camera company has to be targeting at this product, knowing how 
successful GoPro has been. Alright. So she's saying that it's a one-product 
company as you mentioned. And I guess also he wants to create a sort of 
lifestyle brand out of this too. I mean he mentioned this morning on CNBC that 
Red Bull is a company that he really admires, that they've created this whole 
sort of aura. So maybe that's something would help sustain this and that he's 
out of the gates so fast. Yes, absolutely. I mean he talks also about not 
comparing them to the flip camera and those things because this is a different 
era where they're complementary to cell phones and smartphones and that kind of 
thing. So, we'll see how it goes. 

I mean they started out selling this on I think QVC Home Shopping Network, etc. 
He has taken it a long way over more than a decade. So now, he's got his great 
day to celebrate. Right. Nick Woodman, right, that's the incredibly good-looking
CEO. Yes. Alright. So let's pull back now and take a look at the IP market as a 
whole because it's really been hot, right. It is, it is very hot and that is 
something I also talked about with Kathleen Smith. She says this has been the 
busiest June since 2000. 142 IPOs priced this year so far. That's up 58% from 
last year. They're paying off for investors. The average IPO returning more than
18% from its offering price. We've got a lot happening in this space. We've got 
Alibaba in the pipeline. Of course, the biggie there that everybody's been 
waiting for, yes. We also have Michaels coming. That's expected to price 
tonight. 

There's a lot of interest there because that's a real test as a retailer talking
about consumer confidence and how they feel about the market. Sure. But there's 
a big sexy name like GoPro. But didn't Kathleen Smith also say to you don't 
necessarily look to the kind of sexy names, right? Right, she said look under 
the radar. Yes. Let's take a listen. The star companies often attract maybe a 
little bit of froth and it's actually the ones that may not be such stars that 
are doing well. You might be interested to know that, so far this year, the most
profitable IPOs for investors, particularly after the first day of trading, had 
been energy companies. So energy is off the radar. It's not a wearable camera 
and it's not Alibaba, and yet that is a sector doing well. So IPOs, the ones 
that maybe come under the radar screen can be some of the better IPOs that are 
done. Alright. So she mentions energy. So what should we look to next? The name 
she says to watch is a company called NextEra. They're a clean energy company. 
They operate wind and solar energy projects. They just increased the deal size. 
They're going to be listing on the New York Stock Exchange. 

The ticker: NEP. Alright. She's a pro, talking about GoPro. Alright. Bobbi 
Rebell, thank you so much. Let's look at some other stocks that are on the move 
starting with Bed Bath & Beyond, down 9% today. Five brokerages cutting their 
price targets on the stock after the company had weaker results and a weaker 
forecast than expected. Let's move on. Talk about energy, right? Kathleen Smith 
mentioned energy. Energy's sexy. Oil field services provider Nabors Industries 
– it's up about 6% today. It's merging its well maintenance business with C&J 
Energy Services for $2.9 billion. Nabors will now own 53% of the combined 
company which will list as C&J Energy Services. And this ended the business. 
It's exactly that - well maintenance over the lifetime of a well, plugs out 
abandoned wells, and that kind of stuff. Somebody's got to do it. They're 
apparently quite big at it. Alright, let's move on. Follow up on Elizabeth Arden
from yesterday that, when the stock dropped, it said that it was not going to 
sell itself; it was going to restructure instead. So South Korea's LG Household 
said it had previously mauled a bid for the company; it's not going to anymore 
since Elizabeth Arden says we're not going to sell, we're going to restructure. 
Investors apparently really wanted a sell here. The stock's down about 18% today
on that. 

Alright, let's take a look at the broader markets. We're down - you can see the 
Dow's down almost 70 points, the NASDAQ down about 15, S&P down about 7. St. 
Louis Fed President James Bullard came out today and said that he thought that 
interest rates should come up sooner than later, citing the jobless rate and 
inflation rate as kind of stabilizing the economy. So perhaps the market's a 
little bit shaken by those words today. Also, financial stocks – biggest 
decliners with the New York State Attorney General filing a lawsuit against 
Barclays for high-frequency trading. And the financial- S&P Financial Index is 
down about 0.5% today too. You take a look at all the banks that are down today.
Alright. That does it for us here at Trading at Noon. Follow us on Twitter: 
@ReutersInsider and get more videos at www.Reuters.com. I'm Lisa Bernhard. This 
is Reuters