GoDaddy IPO Joins Crowded Tech Field in 2014

The 2014 IPO market keeps churning out newly public companies, and this time it's the GoDaddy IPO that's grabbing headlines. A Wall Street Journal report last week citing multiple unnamed sources close to the company states that GoDaddy is in the process of hiring underwriters. That would position the company for an initial public offering toward the end of 2014. The post GoDaddy IPO Joins Crowded Tech Field in 2014 appeared first on Money Morning - Only the News You Can Profit From .

The 2014 IPO market keeps churning out newly public companies, and this time it's the GoDaddy IPO that's grabbing headlines.

A Wall Street Journal report last week citing multiple unnamed sources close to the company states that GoDaddy is in the process of hiring underwriters. That would position the company for an initial public offering toward the end of 2014.

GoDaddy is an Internet company that helps clients design and build their own websites. The company also offers web-hosting services and domain-name registration.

GoDaddy IPO

GoDaddy touts more than 12 million customers worldwide in its web-hosting business, and the company manages more than 57 million domain names.

Back in 2011, GoDaddy was purchased for $2.25 billion by KKR Co., Silver Lake, and Technology Crossover Ventures. Three years later, the company should reach a much higher valuation in its initial public offering.

The company has not released financial information yet, but Standard & Poor's Rating Services reported in January that it expects GoDaddy's cash profits to grow by a "high-single-digit percentage rate" this year. The same report also states that cash profits will grow at a slower rate, because the company will be investing in its growth.

GoDaddy is reportedly opening additional offices in the United States along with a technology center. The company also plans to expand its international offerings.

This is the second IPO attempt for the company that first gained notoriety for its Super Bowl ads featuring bikini-clad models. Back in 2006 the company had an IPO filed, but withdrew the deal, blaming unfavorable market conditions.

There's still plenty of information to come regarding the GoDaddy IPO, but for now, here are some factors for investors to watch...

GoDaddy Joins Crowded Tech IPO Field

While it has yet to officially file for an initial public offering, GoDaddy should join one the most crowded IPO markets in recent memory. According to research firm Renaissance Capital, 45 IPOs have already been priced. That's up 96% from this time last year.

And many of the companies that have filed for IPOs in 2014 are from the tech industry.

China's largest e-commerce company, Alibaba Group Holding, is preparing for what may be one of the biggest IPOs in U.S. history. Online game maker King Digital Entertainment is one of the biggest names on the list, as it could reach a market valuation of $7.6 billion. Tech companies like Box, Dropbox, and Spotify are all eyeing initial public offerings this year.

This week alone, six tech companies are making their public debut in the United States.

The companies that purchased GoDaddy in 2011 appear ready to ride the IPO wave that has hit the United States this year. The 45 companies that have gone public this year have averaged a 38% gain from their initial offer price.

GoDaddy has the 2013 IPO of its competitor Endurance International Group Holdings (Nasdaq: EIGI) to compare itself to. By most metrics, the IPO was a flop. It raised just $252 million, well below the $400 million the company expected.

While GoDaddy offers similar services to EIGI, it trumps its competitor in brand recognition. GoDaddy's provocative marketing campaign in the early 2000s may have seemed gauche to some, but it essentially made the company a household name.

Hosting more than 57 million domain names and 12 million web-hosting customers doesn't hurt either. When GoDaddy goes public toward the end of the year, it should be valued much higher than its 2011 price tag of $2.25 billion.

Investors will also want to keep a close eye on GoDaddy's growth figures. Figures that are in line with the S&P's report estimate should encourage potential shareholders. Slowing growth in cash profits will be acceptable as long as the company invests in itself.

Until then, investors will wait and see what promotional tactics the web-hosting giant employs.

Have you ever used GoDaddy? Would a GoDaddy IPO interest you as an investor? Let us know on Twitter @moneymorning using #GoDaddy.

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The post GoDaddy IPO Joins Crowded Tech Field in 2014 appeared first on Money Morning - Only the News You Can Profit From.

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