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Thread: Stocks...IPO

  1. #1
    GAME TIME
    Anyone have any experience in IPO's? I have a friend who is offering IPO's on a green energy company (bio diesel mixing facility). I have a small stock portfolio but have never done an IPO. Obviously there are risks, but how risky are they? Any experiences here? Good or bad.

  2. #2
    dunaholic
    IPO's can be risky and can also make you a lot of money. Just like buying any other stock really. Is the company a viable company? does it have debt? Does it have assets? What's the name of the company and when are they looking to go public?

  3. #3
    GAME TIME
    IPO's can be risky and can also make you a lot of money. Just like buying any other stock really. Is the company a viable company? does it have debt? Does it have assets? What's the name of the company and when are they looking to go public?
    It is called Fox Fuel Farms. The owner purchased the facility from Shell (who out grew it) and it was appraised at $40 million. They are looking to go public within the next two months. Apparantly they will be getting a tax credit from the government of $.32 a gallon for blending ethanol and $.03 a gallon for blending bio diesel. I mean it sounds good but I just haven't done an IPO before.

  4. #4
    sdpm
    Is this company anyway involved with Willie Nelson? I saw a show a few weeks ago that he was involved in something like this. You never know. Fuel is a hot topic right now. As far as stocks go, I have never seen reward without taking a little risk. Do some homework. Try and find out as much as you can like others here have said and try and make the best educated decision you possible can. Good luck. Keep us posted!

  5. #5
    GAME TIME
    Is this company anyway involved with Willie Nelson? I saw a show a few weeks ago that he was involved in something like this. You never know. Fuel is a hot topic right now. As far as stocks go, I have never seen reward without taking a little risk. Do some homework. Try and find out as much as you can like others here have said and try and make the best educated decision you possible can. Good luck. Keep us posted!
    Not sure if he is involved. Not only fuel but green energy seems to be a hot topic right now. I saw an article in the paper yesterday and Ted Turner is getting involved in it. He is backing some solar power company.

  6. #6
    INSman
    Projected earnings and share float would be good to know, so a EPS could be calulated and factored into the stock price and the multiple.

  7. #7
    acatitude
    also find out if there is a manatory holding period before you can sell stock you buy as IPO.....

  8. #8
    GAME TIME
    Projected earnings and share float would be good to know, so a EPS could be calulated and factored into the stock price and the multiple.
    This is from the the package I was sent...
    Fox Fuel Farm, LLC.
    VALUATION
    The terminal facility, prior to its closure less than two years ago, did an average daily load out
    volume of 36,000 barrels of fuel per day based upon a 365-day year. Our planning and
    projections are based upon attaining less than one half of that volume within the first year, and
    approximately 75% of the historical volume by the end of the second year. As we base our
    projections on less than historical utilization, we realize that it is entirely possible to attain those
    past, and exceed our projected volumes, within a much shorter time.
    The company’s financial plan is based upon the herewith-submitted pro forma data. The principal
    assumptions used in the pro form include: beginning with zero business, growing to 90 truckloads
    per day as a medium volume for the year; then increasing volumes through the second year to a
    median of 150 loads per day, so the facility is operating at approximately 35% of its load-out
    capacity.
    The pro forma is based upon volume distributed and terminal fees charged per gallon that passes
    through the facility. This is calculated as flat rate throughout the period of the pro forma.
    It is assumed that ten percent (10%) of total gallonage of gasoline distributed will have been
    ethanol after January 1, 2008, however with the advent of E85 burning vehicles, that percentage
    could be slightly higher.
    For planning purposes, the debt service requirements shown in the pro formas overstate an
    “interest only” amount due by approximately $50,000 per month. This was done purposely to
    allow for a debt-service reserve if required by the Company’s lender(s).
    At the Company’s entry into the public market, there will be 30,000,000 shares outstanding with
    7.5 million in the float, with the remainder restricted from sale for two years since the
    management of the Company owns it. The brokers of the Company anticipate opening the stock
    for trading between $2.50 and $3.00 per share, with a substantial increase in stock price
    immediately after the opening due to expressed demand for the stock from the brokerage
    community, due to the uniqueness of the Company’s business.
    We have analyzed the value of the Company based upon traditional multiples of projected
    earnings as is the standard valuation of the Company upon sale.
    The company projects achieving gross revenues in year 1 of $11,287,406; year 2 of $30,845,625;
    and year 3 of $34,854,200. After tax profits are projected to be $5,629,406 in year 1; $25,187,625
    in year 2; and $29,196,200 in year 3.
    Based upon the fuel transportation multiple for emerging growth companies of 17.5 times
    projected earnings, we have concluded that a reasonable multiple in analyzing the value of Fox
    Fuel Farm in the public marketplace is 17.5 times projected earnings. Based upon the Company’s
    projections of $29,196,200 earnings in year 3 or $0.97 earnings per share, we have concluded that
    the fair valuation of the Company is $510,433,500 or $17 per share.

  9. #9
    GAME TIME
    also find out if there is a manatory holding period before you can sell stock you buy as IPO.....
    It is free trading.

  10. #10
    dunaholic
    I want some!!! When is this happening? I killed it on Pacific Ethanol about two years ago.

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