RealD, Qlik rally IPO market
Sunday, 18 July 2010
NEW YORK, July 17 (Reuters): Shares in RealD Inc, whose 3D technology was used to help make the movie "Avatar", opened more than 22 per cent above their initial public offering (IPO) price Friday and shares of business software maker Qlik Technologies Inc opened 20 per cent higher.
Shares in California-based RealD opened at $19.55, 22.2 per cent above their IPO price, and rose to $20 in late morning trading on the New York Stock Exchange.
Qlik, whose customers include BP Plc, Campbell Soup Co, Kraft Foods Inc and Qualcomm Inc, shares opened at $12 and were at $13.05 in early trading on the Nasdaq.
Some analysts warn that costs and competition still make these companies speculative investments, prone to volatility.
"This (RealD) is interesting and sexy technology. 3D is one of the hottest things right now in consumer entertainment and for that reason you get a lot of investor interest. Maybe this is the next big thing, but a more staid perspective forces a broader view," Morningstar IPO analyst Michael Gaiden said in a telephone interview.
"Operating losses have been growing. That leads us to have substantial concerns about the company's ability to regularly generate a profit," Gaiden said. Gaiden's Morningstar team rates RealD "low interest".
RealD collects a license fee from theater owners and is dependent on Hollywood continuing to produce 3D films. The company's net loss grew to $39.75 million in the year ended March 26 from $16.36 million a year earlier.
Net revenue spiked 278 percent to $149.85 million in the same period.
RealD is the No 1 installer of 3D technology in theaters, which must convert their screens to 3D to show the movies.
So far, 5,300 US screens have been converted to digital. Converting the remaining 35,000 US screens could cost upwards of $2.6 billion, according to the National Association of Theater Owners.
Globally, about 10,000 movie screens are 3D enabled and more than half carry RealD technology.
Shares in California-based RealD opened at $19.55, 22.2 per cent above their IPO price, and rose to $20 in late morning trading on the New York Stock Exchange.
Qlik, whose customers include BP Plc, Campbell Soup Co, Kraft Foods Inc and Qualcomm Inc, shares opened at $12 and were at $13.05 in early trading on the Nasdaq.
Some analysts warn that costs and competition still make these companies speculative investments, prone to volatility.
"This (RealD) is interesting and sexy technology. 3D is one of the hottest things right now in consumer entertainment and for that reason you get a lot of investor interest. Maybe this is the next big thing, but a more staid perspective forces a broader view," Morningstar IPO analyst Michael Gaiden said in a telephone interview.
"Operating losses have been growing. That leads us to have substantial concerns about the company's ability to regularly generate a profit," Gaiden said. Gaiden's Morningstar team rates RealD "low interest".
RealD collects a license fee from theater owners and is dependent on Hollywood continuing to produce 3D films. The company's net loss grew to $39.75 million in the year ended March 26 from $16.36 million a year earlier.
Net revenue spiked 278 percent to $149.85 million in the same period.
RealD is the No 1 installer of 3D technology in theaters, which must convert their screens to 3D to show the movies.
So far, 5,300 US screens have been converted to digital. Converting the remaining 35,000 US screens could cost upwards of $2.6 billion, according to the National Association of Theater Owners.
Globally, about 10,000 movie screens are 3D enabled and more than half carry RealD technology.