Today: The IPO market's big 2013 closes out with one of its biggest deals of the year and more action in Silicon Valley. Also: Facebook gains after S&P inclusion, Cisco (CSCO) and Oracle (ORCL) decline amid pessimism.
The Lead: Hilton, Nimble Storage close out big year for IPO market
A big year for initial public offerings is closing out with a bang, with one of the largest offerings of the year and yet another Silicon Valley tech IPO arriving just as expectations for 2014 begin to bubble.
On Thursday, hotelier Hilton made its market debut after its IPO surpassed Twitter to become the second largest of the year, raking in $2.35 billion at a valuation of $19.7 billion. Trading on the New York Stock Exchange under the symbol HLT, shares moved as high as $21.92 in their debut before closing with a 7.6 percent gain at $21.51.
Joining Hilton in market debuts Wednesday were a Silicon Valley pet-medicine company and another firm that had previously been taken private in a leveraged buyout only to return to Wall Street. Burlingame-based Kindred Biosciences raised $53 million and saw its shares gain 60.9 percent to $11.26 despite a recent downturn in the market for biotech companies, and Aramark raised $725 million and shares gained 14.2 percent to $22.84.
This week's action is not done, either: San Jose-based Nimble Storage is expected to price its IPO Thursday night and begin trading Friday, after boosting its projected pricing range Wednesday. The company now expects to offer its initial shares at a price as high as $20, which would produce a total take of $160 million and a valuation of $1.4 billion; for updates on Nimble's IPO, check www.siliconvalley.com.
With just two full weeks left in 2013, Renaissance Capital reports that there have been 218 IPOs in the United States this year, the highest total since 2000, including big-name debuts from Silicon Valley such as Twitter, FireEye and Rocket Fuel. According to CB Insights' annual report, the upward trend could continue, as more tech companies in the U.S., and Silicon Valley in particular, are primed for an IPO.
The company, which tracks venture-capital investment, said Thursday that as many as 590 technology companies in the U.S. are believed to sport valuations of more than $100 million, with more than half -- 308 -- based in California. That's a big boost from the 472 companies with the same designation heading into 2013, 57 of which went public or were acquired this year.
"There's a lot of money sloshing around pursuing these tech companies," CB Insights CEO Anand Sanwal told the San Francisco Business Times. "There's a lot of competition for those later stage companies that look to be potential winners."
In addition, 25 companies have perceived values of more than $1 billion, up from 15 last year, and the majority are Bay Area-based, such as AirBnB, Square, Pinterest, Box and Dropbox.
In a bit of good news for legendary Silicon Valley VC firm Kleiner Perkins Caufield & Byers, which has been reportedly dealing with an internal shake-up, CB Insights ranks the Menlo Park as the top firm in terms of companies primed to go public in 2014, with 50 including Square. Kleiner ranked fifth on that list last year, and switches places with rival Sequoia Capital, which dropped from first to fifth.
"Kleiner has been known historically for its ability to see around the corner for the next big thing. The jury is still out on whether they got their mojo back, because they have mostly been investing at the mid- to later stage," Sanwal told Bloomberg News.
SV150 market report: Facebook and Twitter jump, Cisco and Oracle fall
Wall Street slipped Thursday despite strong early returns from retailers at the beginning of the holiday shopping season, and Silicon Valley also trailed despite healthy gains from Facebook and Twitter, as Cisco and Oracle struggled.
Facebook jumped 5 percent to $51.83 after Wednesday's afternoon's announcement that the Menlo Park social network would be added to the Standard & Poor's 500 and 100 indexes. Instagram, the San Francisco photo-sharing app that Facebook acquired last year, announced Thursday that it would begin allowing users to send photos and videos to each other privately, similar to the popular Snapchat app, for which Facebook reportedly offered $3 billion. The move also opens up another front in Facebook's battle with Twitter, which introduced a similar service earlier this week. Twitter gained 5.7 percent to $55.33, establishing a new closing high as it has in every session so far this week; the San Francisco company began integrating its MoPub acquisition, offering a mobile marketplace for advertising, another revenue-generating move similar to its targeted advertising initiative that some believe sparked the recent rally.
Cisco fell 1.8 percent to $20.51 after the San Jose company's chief financial officer said at its analysts day in New York that long-term revenue growth was going to be less than previous estimates. After disappointing investors by predicting the networking giant's first year-over-year quarterly revenue decline last month, Cisco now says that annual revenue growth will by 3 percent to 6 percent, instead of earlier projections of 5 percent to 7 percent, and CFO Frank Calderoni acknowledged that Wall Street projections of a 4 percent decline in revenues in fiscal year 2014 was accurate. Oracle declined 2.8 percent to $33.60 after Morgan Stanley downgraded the Redwood City software company's stock from the equivalent of a "Buy" to a "Hold." "With its recent run, Oracle looks fairly valued given our lack of conviction around forward catalysts," analyst Keith Weiss wrote.
Yahoo (YHOO) increased 0.5 percent to $39.35 as it began to clear an outage affecting its email customers, but the Sunnyvale company then experienced another outage with its Flickr photo service. Netflix (NFLX) gained 2.6 percent to $373.33, the Los Gatos company's highest closing price of the year, and Tesla Motors (TSLA) increased 5.6 percent to $147.47 as an executive revealed the Palo Alto company hopes to unveil its lower-priced electric sedan at the 2015 Detroit auto show. Headed the other way were Juniper, which suffered the loss of another top executive and fell 3.2 percent to $20.64; Google (GOOG), which fell 0.7 percent to $1,069.96 as it diversifies its retail offerings; and Apple (AAPL), which fell 0.2 percent despite a positive report from the Fair Labor Association.
After the bell, Adobe (ADBE) announced quarterly earnings, revealing profits of $65.3 million, or 16 cents a share, on revenues of $1.04 billion in the San Jose software company's final quarter of its 2013 fiscal year. Adobe stock fell 1.2 percent to $53.99 amid concerns about dissatisfaction among subscribers to its cloud-software offering, but shares spiked to $58 in after-hours trading.
Up: Twitter, Tesla, Facebook, Netflix, SolarCity, Zynga, Yelp, Splunk, VMware, Workday, Yahoo, Symantec
The SV150 index of Silicon Valley's largest tech companies: Down 4.94, or 0.34 percent, to 1,435.47
The tech-heavy Nasdaq composite index: Down 5.41, or 0.14 percent, to 3,998.4
The blue chip Dow Jones industrial average: Down 104.1, or 0.66 percent, to 15,739.43
And the widely watched Standard & Poor's 500 index: Down 6.72, or 0.38 percent, to 1,775.5
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.