Posts Tagged ‘Impinj IPO’

Stock market collapse could jeopardize Impinj IPO

Wednesday, August 10th, 2011

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.

U.S. debt ceiling debate could impact Impinj IPO

Thursday, July 28th, 2011

A report from Credit Suisse this morning and carried by CNNMoney states that if the U.S. fails to raise the debt ceiling and defaults on its loans next week, the result could be a stock market tumble of one-third or more, and a contraction in the economy of five percent.

That’s bad news for everybody, but especially for companies like Impinj that are on the doorstep of going public. If the infighting over the U.S. debt continues, it’s entirely possible that capital for IPOs could dry up if the debt ceiling debate is not resolved quickly.

So you can’t blame the folks at Impinj for being a bit anxious as they prepare for the EPC solution provider’s IPO. Until recently, technology, social media and Internet IPOs were buzzing, with Internet high-flyers LinkedIn and Zillow seeing big gains on their opening day of trading. What’s to think that a hot RFID play with a great growth story wouldn’t have the same kind of debut?

If successful, Impinj would represent the first RFID pure play in the public markets. “Specifically, it would be the first EPC pure play, so the message clearly would be that the EPC market is coming on board quickly,” says one industry insider. 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.”

But the stalemate in Washington, and the possibility of a U.S. default on Monday, could impact all IPOs going forward. As Washington continues to try and iron out a solution, the stock market endured losses this week until a modest turnaround today. Yesterday, ADS Tactical, Inc. (ADS) announced that it has terminated its IPO due to adverse market conditions. The company provides logistical services, mainly to the federal government.

“It’s a very dangerous situation right now, and anything remotely connected to the government, and the possibility of a temporary or perhaps permanent reduction in revenues, is turning people off,” says Scott Sweet, Senior Managing Partner at IPO Boutique. “That will be the case until there is a plan that seems workable, but at the moment it doesn’t seem as they are getting anywhere.”

Impinj might luck out in that its IPO is likely still six to eight weeks away, during which time the debt ceiling debate could be put behind us. Impinj filed its IPO in April, and its S1 was filed on the same day as Internet real estate firm Zillow, which went public this week. So that means Impinj could be getting close.

A successful Impinj IPO would be a stellar sign for the industry. Impinj is a relatively small company with sales of just under $32 million in 2010. However, the firm has a strong IP position and a very strong market position, and a successful IPO would enable Impinj to further advance the overall RFID marketplace through increased funds for R&D and marketing to develop new applications. Impinj has been very supportive of industry-wide application development, and a successful IPO would only enhance that.

 

Impinj IPO will ignite investment in RFID sector

Wednesday, April 27th, 2011

In late 2005, I predicted in another publication that a young upstart company called Impinj would some day file for an IPO. Six years later that time has arrived. In case you missed this week’s coverage of the Impinj IPO announcement, we have included it on our blog page.

Four years ago, Alien Technology created a buzz in the industry by filing for an IPO. Buzz quickly turned to bust because of poor market timing, a balance sheet that didn’t please investors, and orders that never materialized.

How is last week’s announcement by Impinj to pursue an IPO possibly worth $100 million any different? Like Alien, Impinj has never turned a profit. Impinj lost $11.4 million in 2010, and $1.8 million in Q1 2011.

Well, the losses are the only similarity, and they carry an asterisk, since tag sales are exploding, something that was not true four years ago. Today’s market features real orders and strong 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.

“There is a different story here,” notes Drew Nathanson, Auto-ID practice director at VDC Research. “When Alien announced its IPO, the market wasn’t there yet. This is real money coming in.”

“And even though Impinj is not profitable, it is clear they will be eventually because they own so much share in a lot of these core markets that are growing at huge rates.”

Impinj will not comment on the IPO because of SEC regulations, but the company will not be profitable in the near-term. However, explosive growth is occurring in the apparel item-level sector, an industry Impinj is a big player in. And Impinj execs see item level tagging spreading quickly into non-apparel sectors like electronics, cosmetics, tires and jewelry. In fact, it is highly believed that Walmart is ready to extend its item level-tagging program to electronics and tires and possibly other non-apparel product lines before year-end.

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 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.

Impinj focuses exclusively on UHF RFID solutions, which is the fastest growing segment of the RFID market. UHF Gen2 systems are ideally suited for high-volume, item-level applications that require low-cost, consumable tags, such as retail inventory management, pharmaceutical authentication and airline baggage tracking. From 2009 to 2010, unit sales of the Monza UHF Gen2 tag ICs increased by 279 percent. Impinj is the market leader in UHF Gen2 tag ICs, reader ICs and stationary readers. According to VDC, Impinj owns 60 percent of the tag IC market, 86 percent of the reader IC market and a 25 percent share of the stationary reader market.

Impinj estimates that its technology enables more than 70 percent of the UHF Gen2 reader market when you combine the share of its Speedway reader with that of other readers based on its Indy reader ICs.

“Their innovation rate is aligned and they seem to have a very good understanding of how their markets are evolving and the constantly changing end user requirements,” says Nathanson.

Impinj will use the proceeds of the IPO to pay down debt, including venture firms that have financed the company to the tune of at least $160 million since it was founded in 2000. Published reports say that venture capital firms own about half of the company. Intel holds a stake worth about 6 percent.

A successful IPO would drive further investment in the industry, resulting in the potential for more IPOs and increased M&A activity. A year ago, RFID 24-7 reported that ODIN could be 12-18 months away from filing an IPO. Privately held ODIN has never commented on its sales, although industry estimates place revenue at $25-30 million annually. That puts ODIN at about the same size sales-wise as Impinj. ODIN CEO Patrick Sweeney said this month that first quarter sales increased by 30 percent in 2011, indicating continued solid growth.

Is ODIN on track for an IPO too? All you have to do is read into Sweeney’s blog post regarding the Impinj IPO: “The big winner will be the second company to IPO, because everyone who is sitting on the sidelines during Impinj’s road show is about to see a very successful tech company emerge and will wish they got in on Impinj; and they will climb all over themselves to get in on the second IPO in the RFID sector. If Impinj is successful, and I believe they will be, and I owned an RFID company I would be doing everything I could to be the second company out in the IPO market.”

ODIN, which acquired Reva Systems late last year, is also a potential takeover target, as are companies like GlobeRanger, Tego, Omni-ID, and Intelleflex, especially if momentum behind cold chain tracking continues.

The Impinj IPO places a spotlight on a pure-play RFID star. A successful IPO means investors will take note that the technology is finally mature and that they can invest in the industry and reap gains in the short term, instead of waiting years for payback.

“The call volume coming in from the investment community, especially the larger investment firms, indicates that they are really looking at this market in a big way,” says one industry expert. “They are looking to dump more money in, so expect a lot of acquisitions happening going forward.”