Orbitz books itself an IPO.
As our IPO Filings list makes clear, there are plenty of nine-figure IPOs on the agenda these days, but not many valued as high as $750 million — the price tag on the IPO that Orbitz Worldwide filed on Thursday.
My high-level verdict on this IPO, which might be summarized as “Ehh . . . ,” is offered in this BusinessWeek story by Olga Kharif and Aaron Pressman. (I’m quoted on page two of the article.)
I’ve used the Orbitz service in the past, and I respect the acumen of the folks who run Blackstone Group, which now owns Orbitz (or, techically, its parent company, Travelport). But the best IPOs are grounded in a company’s operations. Ideally, a company going public bases its IPO on a profitable history as a private company (or corporate division), and then uses proceeds from the IPO to fund future profitable expansion as a public company. That’s not happening in this case, since (1) Orbitz has years of sizeable losses, and (2) proceeds of its IPO will go to pay down Travelport’s debt.
I have absolutely no doubt that Blackstone will make money off of this deal. Orbitz seems to have some pretty good product offerings. But to my eyes (and, if it need be said, I’m not a financial or investment adviser, and you should not take this as financial or investment advice) . . . the Orbitz IPO bears the hallmarks of a dud.
Category: IPOs, Technology2 Comments so far
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