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