The 20-plus companies that are looking to go public this week hope to collectively raise about $6.7 billion dollars, with about half of it for General Electric’s consumer lending firm Synchrony Financial.
"That's going to be a $3 billion IPO, the biggest we've seen since the May, 2012 IPO of Facebook," says Kathleen Smith, a principal with the IPO fund manager Renaissance Capital. She labels Mobileye another one of this week’s "shiny objects." The company makes the technology that tells you when your car might hit the one in front of you. "It has about a 50 percent share of that market, very high growth and very profitable, so all investors are looking at that."
Smith cautions that this week’s batch of potential IPOs is a big one for the market to digest.
It’s also the right kind of market, says John E. Fitzgibbon, Jr. of IPOScoop.com.
"You’ve got to have the bull running down the street and you’ve got to have the wind at its back," he says.
Fitzgibbon thinks this year might even be the biggest one for IPOs since the dot-com bubble, but he points out that a lot of the offerings are fetching discounted prices. This week's IPO frenzy is an "End of Summer sale" that he predicts is just getting started.
"It’s like Macy’s department store; if it doesn’t sell, mark it down and drop it to the basement."
Who are all these companies, anyway? We rounded up the most notable IPOs from this record-breaking week and grouped the companies up according to their business.
Synchrony Financial's IPO is not only the biggest offering of the week by far, but at about $3 billion it's poised to raise more than any IPO this year. Synchrony is GE's consumer finance arm, facilitating store-brand credit cards and financing programs for big-name retailers like Amazon and Wal-Mart.
Of the this week's huge group of IPOs, more than half are for biotechnology and pharmaceutical firms. The biggest player is Catalent, a multi-armed drug development and delivery company that's expected to offer 42.5 million shares at $19-$22 a share, according to Renaissance Capital. Catalent's nearly $1 billion deal dwarfs about a dozen other companies focused on everything from gene therapy to medical imaging to epilepsy treatment.
Mobileye is certainly a "shiny object" this week as it looks to raise half a billion dollars. The Israeli firm is the leading supplier of sensors that detect a potential collision. Investors are keeping a special eye on the company amid rumors of a potential partnership with Tesla to build self-driving cars.
It's no secret mobile gaming is big business, and developer IDreamSky has become a leader by adapting existing titles like "Fruit Ninja" and "Temple Run" for Chinese markets. That model has earned IDreamSky 100 million active users and $65 million in the year ending last March. They are looking to raise a little more than $100 million this week.
There are a handful of energy companies up for offering next week, but the largest is another big spin-off. Transocean Partners, LLC is a small portion of oil rig giant Transocean, which hopes to sell $350 million in shares. Spinning off Transocean Partner's three rigs in the Gulf of Mexico will reportedly offer Transocean more financial flexibility, but the Wall Street Journal notes this practice can be a tax dodge.
Graphic by Shea Huffman/Marketplace
Tech companies are growing up. And, like a lot of teenagers, they want more control over how they’re treated. Now, those companies are taking steps to make sure they’re heard.
Last month, drivers for ride-sharing companies Uber and Lyft flooded the California Capitol building. They were there to protest a bill that would toughen regulations on their industry. Senator Alex Padilla noted the discussion was one that wouldn’t have happened a few years ago.
“The wonderful challenge that we have on complex issues like this is, in large part, driven by technology and innovation and things that 50 years ago people wouldn’t have imagined, forcing important public policy questions,” Padilla said.
Now tech companies want to influence how these questions are answered.
Robert Callahan is the Executive Director of the California branch of the Internet Association. That’s a relatively new lobbying group that represents many large tech companies such as Google, Amazon, Facebook, eBay, Twitter, Yahoo, Yelp, Uber and Lyft.
The Association also lobbies on issues at the federal level. Callahan said there’s plenty to work on, like net neutrality and patent reform.
“But also just issues that you would never have thought about,” he said. “Like, what are the decedent rights to a social media account after the account holder passes away?”
But as tech companies start to pay expensive lobbyists, some are asking what that will ultimately cost their customers.
Timothy Karr is with Free Press, a group that works for what it calls a “free and open Internet.”
“You know, in general, I don’t think corporate lobbyists are serving the interest of consumers,” Karr said.
He’s especially concerned with how media use is being regulated.
“People are listening to music, they are sharing video files. And because it’s become much more prominent in the way people use, share, and consume media, it also has a much higher profile in policy discussions,” he said.
And the growing clout of tech companies means they’ll likely have a larger role in future legislative discussions.
There’s a contest underway you may not know about. The Transportation Security Administration is offering $15,000 in prize money to anyone who can help it come up with a faster check-in system.
Some 1.8 million passengers fly daily across the U.S., and as the TSA knows all too well, many of them complain about long security lines and time-consuming pat-downs.
So, for three weeks, anyone can submit a proposal to help solve expected problems with TSA’s fast lane or “PreCheck” program, which the TSA "allows low-risk travelers to experience expedited, more efficient security screening." It seems to be doing well so far at Raleigh-Durham International Airport, says spokesman Andrew Sawyer.
“We’ve noticed that since PreCheck came to RDU a little over a year ago, we do see a lot of our customers using it,” said Sawyer.
As more people register for the pre-check system, it’s bound to get as clogged as the regular one that leaves travelers with no shoes and open laptops.
Duke University Professor David Schanzer is director of the Triangle Center on Terrorism and Homeland Security. He says getting ideas from the public could be a winning strategy.
“While $15,000 seems like a lot to win in a contest, in the scheme of federal contracting if you come up with some really good ideas and solutions, it could be a bargain,” said Schanzer.
It’s a bargain for the federal government which, by the way, charges $85 just to apply for that pre check-in program.
This isn't the TSA's first time reaching out online. While airport security might be crowded and brusque, the TSA's web presence is affable, helpful, and surprisingly self-aware.
Their blog (yes, they have a blog) features tips for any kind of traveler imaginable.
Pregnant? Transporting gun parts? Got bear repellent in your carry-on? All three? They have a guide for you. There's also a kids section, wherein an adorable dog family shows youngsters how to go through a checkpoint — or at least gives them a picture of a checkpoint to color while mom and dad put their shoes, belts and jackets back on.
But the best thing about the TSA's online footprint, by far, is its Instagram account. There, under the hashtag #TSACatch, the organization documents the strangest confiscated items. Each photo contains a detailed and sometimes irreverent explanation for the confiscation and how you can avoid having your own lipstick taser taken away. Ditto for grenades, two (2!) different sets of Batarangs, novelty alarm clocks that look like bombs, and more.
All the photos are culled from the TSA's comprehensive week-in-review blog posts, which are interesting reads themselves. The TSA also realizes the importance of pets on Instagram, and regularly features its K-9 unit. Check out some of our favorite posts below:[&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;a href="//storify.com/Marketplace/the-tsa-s-amazing-instagram" target="_blank"&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;View the story "The TSA's amazing Instagram" on Storify&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;]
Firefighters are making good progress on a number of destructive wildfires burning in the West. In Washington, fire crews are hoping to contain the largest fire in that state's history within the next week.
A federal judge struck down the city's ban on carrying handguns in public. The latest ruling follows a Supreme Court decision in 2008 that overturned the city's blanket ban on handgun ownership.
Washington Post reporter Liz Sly tells Renee Montagne that U.S. arms may be flowing to moderate Syrian rebels, but the aid seems to be too little too late to affect the course of the civil war.
The ex-military photographer known only as Caesar took some of the images, which show thousands of dead regime opponents. Syria says they're fake; U.S. officials say they may be proof of war crimes.
House and Senate negotiators reached a compromise, $17 billion agreement to improve medical care for veterans. The deal comes in the final week before Congress leaves town for a monthlong recess.
Giving Capitol tours to constituents is a primary duty of Hill interns. They provide a great deal of information, but sometimes they're a little short on actual history.
Zillow has agreed to buy Trulia for $3.5 billion in stock. The two websites represent more than 60 percent of the total Internet traffic for real estate listings.
The taxi and hotel industries are pressuring Spain to crack down on popular "share economy" apps and websites. Airbnb was recently fined $40,000 for failing to list rentals with a local tourism board.
Calling the matter "very serious," an Obama administration official says Russia violated the pact by testing a ground-launched cruise missile.
A California judge gave the green light to the sale of the team, which Donald Sterling's estranged wife had arranged in May.
For this week's Sandwich Monday, we try a sandwich with a cult following. It's the Korean steak from Rhea's Market and Deli in San Francisco.
Detroit threatened residents behind on their water bills in March: Pay up, or we’ll shut you off. The story has been building up ever since.
Here's what you need to know:
The threat applies to about half the city's water customers. Before declaring a 15-day moratorium last week, the city did turn off the taps on thousands of households, setting off protests, official condemnation from human-rights experts at the U.N., and grumbling from the judge overseeing the city’s ongoing bankruptcy case that the city already has enough public-relations problems.
It's a scare tactic, but it's working. Latimer says the residential shutoffs were always intended as a scare tactic, to combat what he calls "a culture that’s developed: 'Since you’re not cutting me off, I’m not going to pay you.' And what we’ve found when we shut residents off is that 60 percent are coming in and paying."
It's not just private citizens. Corporate customers— including both private companies and branches of the government— have also fallen behind on their bills, to the tune of millions of dollars. Why didn’t the city shut them down first? Officials say they have turned off close to 19,000 residential accounts, but could not provide a number for corporate customers.
Darryl Latimer, the Water and Sewage Department’s deputy director says he’s been going after corporate deadbeats, too. Often, they’re disputing part of their bill, and negotiating takes time. He says that paid off with Chrysler Group: The company gave Detriot a check for $2.9 million— and the city recognized that Chrylser no longer owns some of the properties that were in dispute. The Detroit Public Schools, he says, have paid off about three quarters of a $12 million tab.
Customers are reporting difficulties in dealing with the water department. Shea Howell, a volunteer with the People’s Water Board Coalition, says residential customers do not get similar treatment. "Many, many resident also have problems with their bills," she says. "They also have problems they’d like to talk with the water department about, and they can’t even get through on the water department’s service lines." She says customers report wait times of up to four hours on hold.
What makes this unique? The scale of Detroit’s problems make it unusual, says Janice Beecher, director of the Institute for Public Utilities at Michigan State University. "What we don’t have in the water sector is a really clear policy for coping with something like this, so in some ways it’s a learn-as-you-go process," she says. "I do think it will go down as a case study in this sort of problem."
Residential shutoffs are due to resume next week.An interesting campaign spawned from Twitter. Detroit’s water shutoffs also prompted some Twitter users to create an online platform where donors can directly pay off the water bill for a Detroiter in need.
If you know someone who could use assistance w/a water bill of $250 or less, we want to connect them to a donor here http://t.co/CEu7jojx51— Tiffani Ashley Bell (@tiffani) July 18, 2014 July 22, 2014 July 23, 2014
Detroit threatened residents behind on their water bills in March: Pay up, or we’ll shut you off. What made the threat especially noteworthy was that it applied to about half of the city’s water customers. Before declaring a 15-day moratorium last week, the city did turn off the taps on thousands of households, setting off protests, official condemnation from human-rights experts at the U.N., and grumbling from the judge overseeing the city’s ongoing bankruptcy case that the city already has enough public-relations problems.
Meanwhile, one question has come up repeatedly: Corporate customers— including both private companies and branches of the government— have also fallen behind on their bills, to the tune of millions of dollars. Why didn’t the city shut them down first? Officials say they have turned off close to 19,000 residential accounts, but could not provide a number for corporate customers.
Darryl Latimer, the Water and Sewerage Department’s deputy director, says the residential shutoffs were always intended as a scare tactic, to combat what he calls "a culture that’s developed: 'Since you’re not cutting me off, I’m not going to pay you.' And what we’ve found when we shut residents off is that 60 percent are coming in and paying."
Latimer says he’s been going after corporate deadbeats, too. Often, they’re disputing part of their bill, and negotiating takes time. He says that paid off with Chrysler Group: The company gave Detriot a check for $2.9 million— and the city recognized that Chrylser no longer owns some of the properties that were in dispute. The Detroit Public Schools, he says, have paid off about three quarters of a $12 million tab.
Shea Howell, a volunteer with the People’s Water Board Coalition, says residential customers do not get similar treatment. "Many, many resident also have problems with their bills," she says. "They also have problems they’d like to talk with the water department about, and they can’t even get through on the water department’s service lines." She says customers report wait times of up to four hours on hold.
The scale of Detroit’s problems make it unusual, says Janice Beecher, director of the Institute for Public Utilities at Michigan State University. "What we don’t have in the water sector is a really clear policy for coping with something like this, so in some ways it’s a learn-as-you-go process," she says. "I do think it will go down as a case study in this sort of problem."
Residential shutoffs are due to resume next week.
There's really only one reason consumers shop at the dollar store.
Joe Feldman, Senior Managing Director and Assistant Director of research with Telsey Advisory group, says Family Dollar played around with its raison d'etre more than was wise: “One would think that a dollar store would be at an everyday low price." But, Feldman notes, its name notwithstanding, Family Dollar has been embracing a multipricing strategy - which wasn't a hit with consumers.
“Maybe they’re not shopping at Family Dollar, they may be shopping at Dollar General,” he says, referring to one of the store's competitors.
The entire dollar store industry has slowed down this year. One reason — middle and upper middle class consumers can now afford to shop somewhere else.
Robert Campagnino, head of consumer research at SSR, says dollar stores have started selling higher-margin discretionary items which can prove to be problematic. If there is a recovery, says Campagnino, lower income consumers are not feeling it.
“So what’s happened when their consumer has been under pressure is that higher margin category has been where the sales weakness has been,” he says.
Even some staples are a hard sell. Like food, which Sandeep Dahiya, a professor of finance at Georgetown University’s McDonough School of Business, says dollar stores have been increasingly getting into.
“The operations involved in selling something that has low shelf life is very different than selling soap. Soap doesn’t go bad... If that three pound chuck doesn’t get sold today tomorrow it will be thrown out,” he says.
Family Dollar says its sale means a good deal for shareholders, employees and shoppers. Joe Feldman says Dollar Stores, all of them, need to continue to make sure they have the right price.
During the housing bubble, websites focused on the real estate sector sprung up like "for sale" signs in a hot neighborhood. Over the past couple of years, out of sight of the headlines, those companies have been merging and buying each other out. It's called "a roll-up," and it happens when a sector begins to mature.
In the last couple years, Zillow snapped up New York apartment site StreetEasy and HotPads. Trulia bought Market Leader and last month was rumored to be close to buying Realtor.com. Today came the biggest deal yet: Zillow said it agreed to buy rival Trulia for about $3.5 billion. The pair will create the proverbial 800-pound gorilla for online real estate. Part of the reason for the merger-mania is that when it comes to online real estate, bigger is pretty much always better.
"In internet-based economies, scale matters a lot," says Nic Retsinas, a professor of real estate at the Harvard Business School. "And as the two largest players in this marketplace, the possibility of them coming together gave them advantages of scale."
Together Zillow and Trulia will command more than 60 percent of online real estate traffic. That mega-market share is a big part of the reason we’re seeing this deal.
"As one company takes a leadership position, it amasses enormous capital," says Glenn Kelman, CEO of real estate site Redfin. "So you see Wall Street really rewarding the number-one player in the space and that gives them the capital to buy other companies."
The real estate market is recovering slowly, but the online real estate space is booming. Redfin is growing by 50 percent a year.
Growth is likely to continue as more people get online and the internet generation comes of home-buying age. "People do love to look at what their house is worth," says Richard Green, director of the USC Lusk Center for Real Estate. "And, let’s face it, they want to look at what their neighbor’s house is worth."
Still, Green doesn’t think we’ll see many more mergers of this kind. He says most of the deals that could be done have been done.
One-click online shopping is changing how we shop. Stores with leases as short as a day are proliferating — meaning a storefront can be a designer clothing store one day and a test kitchen the next.
From October 2013 to June 2014, more than 57,000 unaccompanied minors have migrated to the United States, most from El Salvador, Guatemala and Honduras. One solution for dealing with these children is to send them back home, a plan both President Obama and congressional Republicans endorse.
But with that many kids and toddlers being juggled around the system, that simple-sounding solution could actually create an even bigger strain on resources.
"Money would help deal with the influx now," says Esme Deprez, U.S Border Reporter for Bloomberg Businessweek. "We’re seeing shelters overwhelmed, we’re seeing processing centers that are run by border patrol agents completely overwhelmed, courts overwhelmed as well. The system is being stretched at every turn."
The White House has asked Congress for $3.7 billion in emergency funds, but Deprez says there is not a lot of hope that Congress will act.
"They’re going on break for five weeks on July 31," says Deprez. "So, even if they do pass separate bills in the House and Senate, we don’t know if they’re going to come to an agreement and reconcile the two."
If Congress were to approve the emergency funds requested, it would include $879 million to pay for the minors’ prosecution, deportation and to help expedite their court hearings.
"The bulk of the money would go to care for the newly-arrived children and the shelters," says Deprez.
Listen to the full conversation in the audio player above.