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April 17, 2006
Alien Tech Drops an S-1
As Deal Flow told you over year ago, Alien Technology Corp. has been cooking up an IPO. Now the soup's on--the company filed to go public last week. Not many companies that have never turned a profit, have reported negative gross margins for the past two years, and lost $53 million on revenues of $20 million last year can go public these days--especially when they've already raised over $220 million in venture capital and may require more capital after the IPO. Just how much cash does Alien need to get into the black? (Shades of Vonage?) Nevertheless, I predict this IPO will be a scorcher. Why? Alien will be the first pure-play provider of radio frequency identification (RFID) chips on the public markets, and a lot of mutual-fund portfolio managers believe in the future of these little tags, which retailers use to track the movement of merchandise wirelessly (think LoJack for supermarket items). A lot of tech stocks are looking long in the tooth, and fund managers are keen to get their hands on shares of some futuristic, up-and-coming tech names. For insight into how Alien will market this deal, consider the ticker symbol it chose: RFID. For those who are skeptical, you might wait and see how Alien's IPO does. If it's a hit as I suspect it will be, other RFID offerings are sure to follow. I predict the next one will come from Impinj, Inc.
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