Delineating Predictions For An IPO
By Chris on April 29, 2010
Predictions about events are hard. However, most (all?) events have some early indicators. You just need to know what to look for and where to look. Sometimes you can find answers in what other people are saying (e.g. market analysts predicting who will win a market), sometimes you can find answers in what people are doing and (e.g. predict what China is up to based on where Hu Jintao is travelling and what he’s saying while travelling to different parts of the world), and sometimes you need to look at subtle signals in noisy data (e.g. people co-occuring in certain data sources during certain time frames).
In a series of blog posts here we’ll be looking at what precedes events. Today we’ll take a look at the Amadeus IPO that just happened today. Amadeus was taken private four years ago when BC Partners and Cinven bought them out, and since then they have gone through a series of events leading the company back to the public market.
In Recorded Future we pose the query IPO Amadeus and see the following time line visualization – which shows chatter going back to beginning of 2009.
In the Details view we can see individual data points leading up the actual IPO. The examples below are from September-October, 2009. At that time the rumour was that Amadeus had hired bankers and planned an IPO for “next year.”
In October Amadeus ran into trouble with debt buybacks neccessary to pull off its IPO.
But by December the company had updated its loans to pave way for IPO.
By April 16th, 2010 things are much firmer with number of shares, etc. specified in the actual IPO prospectus.
By April 27th shares are sold and by April 28th the book is closed – IPO done.
The point of this reasoning is not to define that this is the exact path to an IPO; not by any means. But events have precursors: subtle hints that lead up to the event. In the case of Amadeus we’ve been looking at a company which was taken private by a group of private equity firms. Anyone familiar with private equity knows that it’s a good bet that these investors will want to sell the company or take it public. Predicting the timing and likelyhood of activities around this timeline has real value. Could you build a model that predicts the re-emergence of companies taken private into the public markets?
Enjoy! Looking forward to your comments.