The recent and dramatic downturn in the stock market could spell bad news for Impinj’s bid to go public. According to an AP report, eight IPOs have been cancelled this week alone, with one more reducing its price as a turbulent stock market has caused many investors to flee stocks.
Only one company has gone public this month after eight IPOs were launched in the last week of July. The Impinj deal has yet to be priced. However, the company hopes to raise about $100 million from the IPO.
Financial experts say that it often takes between six months and a year to complete an IPO. The general consensus is that the Impinj offering will be priced between mid-August and the end of September. Impinj and online real estate firm Zillow both filed their S1 statements on the same day; Zillow went public two weeks ago.
A cancelled IPO would certainly disappoint investors who have sunk more than $150 million into the leading producer of tag and reader ICs for the burgeoning EPC market. However, it wouldn’t have an entirely negative impact on the industry. For starters, the current market conditions are out of Impinj’s control and do not reflect the overall strength of the RFID sector and Impinj’s market leading position.
Just the same, a successful IPO “would definitely show that the core component of the industry – the tag and the reader — is a growing market and that there is a growing demand for it,” says one industry insider.
To draw a parallel between a cancelled Impinj IPO and the failed Alien IPO from four years ago would be unfair. Alien was a victim of untimely market conditions, but that was only half the story. Investors also had serious concerns about Alien’s business plan and the overall acceptance of RFID back in 2008. Today’s market, however, features strong orders and growing momentum. Impinj grew sales from $20.8 million in 2009 to $31.8 million last year. First quarter revenue for 2011 came in at $12.2 million, compared with $5.1 million for the same period last year.
Impinj has sold over two billion of its Monza tag ICs since the product line was introduced in 2005, including 940 million tags in 2010 alone. VDC Research projects the number of UHF Gen2 ICs shipped will grow from 1.6 billion in 2010 to 41 billion in 2015, a compound annual growth rate of 92.2 percent. Investors drool over such growth numbers, and such explosive growth should also push Impinj to a profit.
Click here to view RFID 24-7’s previous coverage of the pending Impinj IPO.