This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

RealD IPO: A Bet on 3D's Future

By IPOfinancial.com

Was Avatar the start of a new 3D viewing experience, or part of a trend that may fizzle before there is time to release a sequel? As a global licensor of stereoscopic 3D technologies, the success of RealD -- RLD's upcoming IPO hinges on the "right" answer to that question -- that 3D is the wave of the future.

Similar to Tesla (TSLA - Get Report), investors will once again be asked to look into their crystal balls to determine future consumer trends and evaluate a company on its growth potential rather than its current fundamental performance.

Timing is everything. By scheduling RLD's IPO the week after Universal releases its first RealD film, Despicable Me, last Friday, JP Morgan (JPM - Get Report) may be assuming the hype will boost the opening premium when it prices 10.75 million shares between $13 and $15.

RLD should be able to support a mid-range pricing, followed by an opening premium, but with continuing bottom-line losses, the stock price may level off in the aftermarket.

Additionally, insiders will be selling 4.75 million shares, or 44% of the total offering, as there is a minimal amount of private equity involvement. Investors will be expected to look past these "flaws" and focus on the big picture as 3D attempts to take over the movie-going experience and transition into consumer's living rooms.

    RealD -- RLD
  • Lead Underwriter -- JP Morgan
  • 10.75 million shares
  • Current Price Range $13 to $15
  • Deal size to the mid-range -- $150.5 million
  • Market cap to the mid-range -- $667.3 million
  • Sector -- Radio & TV Communications Equipment

The limited 3D release of Disney's (DIS - Get Report) 2005 Chicken Little earned RLD the distinction as the first to enter the market. Continued branding efforts have led to a close association between RLD's brand and the overall 3D experience, nearly making them one and the same.

Management has stressed the importance of achieving this level of branding, viewing its product as "second to none." By building relationships with retailers and consumer product manufactures, RLD hopes to integrate its 3D technology in upcoming merchandise such as LCD televisions, game consoles and laptops, all of which are expected to hit the market in upcoming months.

Unfortunately, there is still the looming question of whether this technology will generate widespread acceptance or simply develop a cult following among techies. Regardless of the immediate outcome, RLD remains an innovator in the industry and is expected to adapt its services to propel 3D beyond the "gimmick" phase.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BBY $35.39 0.00%
DIS $109.53 0.00%
JPM $62.60 0.00%
TSLA $218.42 0.00%
AAPL $130.28 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs