Tag Archives: IPO

Lessons From the Past: What Alibaba Can Learn From the Google IPO (Part 2)

This is a continuation of my previous blog post about the Google IPO. There has been a lot of talk in the media recently about the upcoming Alibaba IPO, so I thought it would be interesting to analyze another very publicized IPO that happened about ten years ago– the Google IPO. Tech IPOs as big as Alibaba’s or Google’s don’t happen often, so Alibaba could learn some valuable lessons by looking to the past. The previous blog post described the structure of the Google IPO and this blog post will discuss the result + some of the successes and shortcomings of the IPO.

The Result of the Google IPO

In traditional book-built IPOs, large financial service providers (usually banks) partner with the company wanting to pursue an IPO and assess its worth in order to determine a share price for the IPO. These banks (referred to as underwriters) have an incentive to underprice the IPO offering price in order to guarantee that all shares will be sold.

Google, at least within the public eye, wanted to eliminate this tendency to underprice by using the auction format (discussed in previous post). Some good evidence for this exists in Google’s initial S-1 filings which read, “Buyers hoping to capture profits shortly after our Class A common stock begins trading may be disappointed” (Google Form S-1, note 238).  Ultimately however, the results of the Google IPO auction were not analogous with Google’s stated goals. After uncertainty about the IPO grew due to concerns brought up by the SEC, Google adjusted its original price range of $108-$135 to $85-$95 per share, and later established a final price of $85 per share. Rather ironically, after the first day of trading had completed, Google’s share price rose from $85 to $100.34. Despite its unique structure, the results of the Google IPO seemed very similar to what would have occurred if Google had simply pursued a traditional book-built IPO.

Possible Alterations

After seeing the somewhat disappointing results of the Google IPO it is natural to ask what could have been done differently. Traditional game theory asserts that an auctioneer’s aims in an auction are five-fold: (1) to extract as much revenue as possible, (2) to allocate ‘prizes,’ or shares efficiently, (3) to gather accurate information about bidder’s valuations, (4) to encourage new bidders to participate in the auction, and (5) to attract attention to the auction. Based off of the results observed, it seems that Google only succeeded in achieving the fifth goal.

One possible improvement that could have been made is electing to enlist one experienced underwriter to lead the underwriting syndicate, rather than two inexperienced underwriters. Google chose Credit Suisse First Boston LLC and Morgan Stanley & Co. Inc., two of the leading investment banks in the U.S., to lead their underwriting syndicate. Unfortunately, neither of these banks had any experience with auction-based Internet IPOs. Electing one leading underwriter with more experience could have led to better communication between Google and the underwriter as well as increased efficiency in Google’s attempts to increase the pool of potential investors.

Conclusion: Same Result, More Hype

In conclusion, I think that Google’s goal for the IPO was to create more public excitement for the company. By using an untraditional IPO auction structure, Google was able to generate increased media attention and use its IPO as not only a catalyst for company revenue, but also as a largely effective marketing tool. Despite achieving similar results to traditional book-built IPOs, Google may have profited more from its IPO in the long run by generating new potential users and customers.

Furthermore, it is worth noting that Google did succeed in two of its initial goals: one, offering the shares to a larger group of people including private investors versus just financial institutions, and two, Google succeeded in paying a lower percentage to underwriters than experienced in traditional book-built IPOs. For a big tech company like Alibaba it may be wise to follow in some of Google’s footsteps as it prepares to hold its own IPO within the next month.

Lessons From the Past: What Alibaba Can Learn From the Google IPO (Part 1)

There has been a lot of talk in the media recently about the upcoming Alibaba IPO, so I thought it would be interesting to analyze another very publicized IPO that happened about ten years ago– the Google IPO. Tech IPOs as big as Alibaba’s or Google’s don’t happen often, so Alibaba could learn some valuable lessons by looking to the past. This blog post will be dedicated to describing the structure of the Google IPO and the next blog post will discuss the result + the things Alibaba can learn from the Google IPO.

Introduction and Context

Google filed for its initial public offering on April 29, 2004. The goal of going through with an IPO is the same for practically any company—to raise capital from the sale of shares in the company ownership. Google’s goal was no different, but after seeing how technology companies had faired using standard book-building IPOs, especially during the dot-com boom of the nineteen nineties, Google’s executives decided to change things up and use what is known as an auction IPO. In theory, an auction IPO is supposed to limit the underpricing of and restricted access to initial stocks typically experienced in a standard book-building IPO.

Structure of Google IPO Auction and Comparison to a Pure Dutch Auction

From the outside, the structure of the Google IPO auction seemed very similar to that of a standard pure Dutch auction. The general public had an opportunity to bid on shares in Google before the shares actually got released, and the auction format was used to determine which bidders actually got to buy the shares. Because an initial public offering is done once, this auction is an isolated occurrence. The auction is run once, allocating the company shares to specific bidders. After, these bidders can trade these shares amongst each other. Google can, in principle, sell more shares of its company in the future, however this sale would not be considered an IPO anymore.

In a standard Dutch auction (as related to an IPO) a company initially determines a price range and a maximum number of shares that can be sold during the IPO. Bidders then submit bids based on their localized demand, stating a price within the established price range and the number of shares they want to purchase at that price. The company then evaluates all the submitted bids and establishes what is known as a clearing price. The clearing price is the maximum price within the established price range at which all the designated amount of shares can be sold. After the clearing price is established, all winning bidders are sold their desired amount of shares at the clearing price. This bidding structure allows the company to maintain more control over price and allocation than in a standard book-built offering, in which the ‘clearing price’ is determined by an underwriter’s evaluation of the worth of company shares. It also is supposed to limit the underpricing of shares and establish a fairer offering price because the clearing price is a direct result of bidder competition. The larger the demand for the shares, the greater the clearing price, and vice versa.

There was one significant characteristic of the Google IPO auction that made it different from a traditional Dutch auction. Unlike the Dutch auction, in which the clearing price is determined solely by the bids submitted, Google executives maintained the option to rule out or ignore bids they deemed speculative. This essentially meant that the actual clearing price of the auction would not necessarily be the ultimate offering price. Google executives could adjust the price upwards or downwards depending on their own or their underwriter’s judgment. Thus, the main characteristic of the Dutch auction that allowed it to establish a more accurate or fair market price than the traditional book-building method was thoroughly undermined by Google.

Tempering an IPO bubble

Earlier this year, I wrote about many investors shying away from the “app” scene, in favor of sure profits.  In many ways, this mirrored what was going on in January with a “flight to quality”  and many investors chased after safe returns which would ostensibly be hardware.

Ultimately the flight to quality in tech companies didn’t catch as much steam as the general market.  Undeterred by this slight blip, many major tech companies are launching IPOs this year.  According to CNBC there have been 53 this year that have raised $8.5 billion, far more than in any other year and many investors believe that the volume of companies going public is a bit dangerous and almost bubble like.

Which probably explains why recent filings have fallen short.  The reasoning being for many, that the next early stage drug developers, or the next big cloud computing firms do not offer as much promise and many models are not sustainable or worth getting burned on if things go south quickly which they can.

Should we be worried though by a reluctance to invest in Tech?  Typically growth stocks such as those early stage drug developers or cloud computing firms are lapped up and quickly rise in a strong economy and for many hedge funds and large investors to avoid the risks can’t bode well.  However, this might not be all bad.  After all, the Wall Street Journal believes that many of these hedge firms and investors are just investing “defensively” rather than staying fully averse.

This kind of logic is fairly understandable given that the market has been in some turbulence and many companies that are listing themselves as of late either have been in very specific markets or have merely caught on.  Weibo is a unique microblogging site in China and opened up with fairly underwhelming results.  Alibaba is about to announce the date for PO and while they are very diversified in terms of services, how they will change direction or specialize has some United States investors concerned that perhaps the IPO market is overplaying its hand and other indicators in and around the market aren’t strong enough to support blindly going after the biggest tech stocks.

That’s not to say defensive investing is a bad thing, nor is it a sign of worse things to come.  We’ve seen fears of bubbles pop up quite a few times over the past year.  When it was rumored that the Fed’s QE programs were creating an asset bubble, but ultimately stocks corrected somewhat and expectations tempered appropriately without going overboard.  Likewise in tech, now is just not the best time, especially with so many IPOs, investors would expect a few to fail or produce underwhelming results.  By pursuing this strategy, investors and hedge funds are managing to remain fairly optimistic about the market as a whole, and temper the rise in tech.

Weibo’s IPO Debut: Celebration of China’s Most Influential Social Network

Shares of Weibo jumped 19% in its trading debut at Nasdaq this Thursday. The company ended the first day at $20.24, a significant rehearsal of the lackluster initial pricing of $17, which was at the bottom line of the projected range of $17 to $19.

So what exactly is Weibo? It is an affiliate of the Internet giant Sina Corp. and one of the most popular social-media sites in China. People can publish posts, comment on others’, and discuss over hot topics on its platform. Considering the fact that a great many celebrities are active users of Weibo and have thousands of millions followers, it is widely acknowledged as the Chinese version of Twitter.

Some facts

China has the largest number of internet users of around 570 million (42% of the entire population) in the world, and Weibo said that it had grown to 144 million of monthly active user as of March. The company reported a net profit of $3.38 last year with sales of $188 million, against $38 million in losses. In addition, its revenue in the first-quarter this year grew 161% from a year earlier, reaching $67.5 million.

Ongoing challenges

In spite of the brilliant achievement, I think the company still has to face three main challenges for sustainable growth.

First, the model of profitability is yet to stabilize. Like other major social-media sites, Weibo has obtained a broad user base but is still struggling to be profitable. An interesting fact is that many small and medium businesses have been taking advantage of the platform for effective advertising and revenue growth, but the platform itself is cautious when rolling out advertisements on concern that users will be annoyed and abandon its services.

Second, the level of user activity is yet to stimulate. The number of 144 million active users is a little bit inflated because the measure includes everyone who has “logged in and accessed Weibo” during a given month. According to a research at the University of Hong Kong, only 40% of those “active” users actually publish posts and 5% of them—roughly 10 million users—contribute to 95% of the posts on the platform.

Third, it also has to deal with political pressure from government regulation. The censorship somewhat refrains the level of discussions on the platform and even poses potential shutdown risk. So a smart balance between dynamic posts and government commands is certainly a continuous task on the senior management’s top list.

In conclusion, I am bullish about Weibo’s future because of its increasing influence on ordinary Chinese people’s lives, as well as the emerging collaboration with Alibaba, through which Alibaba merchants will be allowed to advertise to Weibo users.

New IPOs Could Signal Future of Tech Stocks

If all goes well, this week has the potential to mark the biggest week in IPO’s since November of 2007. With the current market conditions of a strong S&P 500 and a continued demand for US stock mutual funds, many companies have pushed to expedite their listings to occur before the holiday breaks. The significant take away from this week will not only be the $4.8 billion raised, but rather the reaction that Wall Street has to high growth tech company IPOs. (WSJ – US IPO Market Expects Busiest Week Since 2007)

I have been writing a lot recently about the absurd valuations and acquisitions occurring in Silicon Valley and it appears that this view has caught on in Wall Street. This past month multiple high growth tech companies that have business models based off the “cloud,” “social media,” or “big data” dropped significantly in share price.

According to Wall Street Journal writer Dan Gallagher, “The Nasdaq Composite is down about 5% over the last month, but has seen short-term drops of about 10% on at least four occasions over the last five years. In those instances, the losses were erased in a matter of weeks.” (WSJ – Opening the Box on Tech Stocks Next Move) Despite this recent correction, many of these companies that fell in share value are still trading at valuations much higher than their peers. For example, cloud based software provider Workday (WDAY) fell over 20% this month yet today was still trading at 17.6 times forward sales, whereas its biggest competitors Oracle and SAP are only trading at four times forward sales.

It appears that Wall Street is finally reaching an inflection point where they are forced to question whether or not the premiums attached to these high growth tech companies are warranted. Many of these companies have shown the ability to increase revenue rapidly. But with this being said, many still operate net losses as their sales and marketing expenses increase in order to fuel revenue growth.

An example of such a company that has been successful at increasing revenue but not fending off losses is cloud-based data storage company Box. Box has seen year over year revenue growth of more than 100%, but has also increased its net losses just as quickly. Box plans to initiate its public offering later this month. The degree of success of Box’s IPO will be a good signal to the street of how the market is currently perceiving high growth tech companies. A failure in Box’s IPO will inevitably slump the market for all high growth tech companies.

In my opinion, as these new Silicon Valley tech companies are undergoing a consensus check a safe market play would be to move out of these companies and place money in proven tech giants such as Cisco and IBM. The drop in share prices of high growth tech companies this past month may prove to be a great entry point for speculative investors, but as long as these companies have valuations exceeding their proven competitors by four to five times I believe that they are far too risky for investment.

So, Is It Really ’99 All Over?

Having been thinking about the lessons from Burton Malkiel’s, A Random Walk Down Wall Street, over the last couple of weeks, one of the more interesting conversations in the book has to do with his analysis of bubbles, more specifically the 1999 “Dot-Com” Bubble and how it was essentially the summation of all of the other irrational bubbles that had existed before it. Malkiel takes the position that again and again the market has recognized these bubbles and corrected them before too long. This stance got me thinking about where the markets are right now amidst a glut of IPO’s in the recent weeks, some of which are just not very profitable.

Business Insider’s Joe Weisenthal came to my rescue and completed an interesting analysis between last weeks big IPO: King Digital Entertainment or to everyone in the non-finance world– the maker of Candy Crush. KING made its debut last week with an IPO with a $22.50 book price; after the opening of trading the stock fell a combined 18% in its first two days of trading. KING makes money on its in app purchases and advertising in the games as well and made some $560mm in profit last year. (WSJ) The issue critics debate about is whether or not they will be able to repeat this type of performance in other games or whether or not they are a one hit wonder type of company.

Weisenthal strikes the comparison between KING and the wild 1999 IPO of Sycamore Networks (SCMR). SCMR opened up trading between $200 and $250 during the day and closed with a price of $184.75 which equated to a $14.4bn market cap. With that type of price one might think that this was a decently profitable company– this was far from the case– the company had $11.3mm in revenue the year before and posted an operating loss of $19.5mm. SCMR had… (prepare yourself)…. one contract which made up the entirety of their business operations. This equates to a a price to sales ratio of 1274x. In comparison KING only has a price to sales ratio of 3x with a market cap of $5.7bn against $1.8bn in revenue.

Obviously this is a very minute sample of amongst all of the IPO action in cloud based software, biotech, etc today, but I think it makes a couple of important points. First off, while companies may be trading at pretty large multiples today, There are not many examples of price ratios of over 1000. Secondly I think the markets that these companies are debuting in are much better defined today than they were in the dot-com era; people have a good idea of what cloud computing and software is as well as making money from e-marketing (see FB and GOOG). I do agree the the market will correct the prices of some of these names that are not making money, but for the moment I think the trend is more geared to these companies trying to make some money while their markets are hot, but this time investors are asking them to show them the money.

Further more I do think that Burton has things right when he says that the market will correct these prices eventually, I think this is true in any market you look at. The question just comes down to a matter of time.

Alibaba: Countdown to U.S. IPO

Alibaba Group Holding Ltd, China’s Internet giant, has decided to launch its IPO in the U.S. rather than in Hong Kong. The company is expected to raise as much as $15 billion in the listing, making it one of the largest ever in the U.S.

Currently, the two major U.S. stock exchanges, NYSE and Nasdaq, are competing for the high-profile listing by offering discounts on certain fees and increasing visibility. It is widely believed that the exchange that “wins Alibaba will have bragging rights and momentum” for other technology IPOs, leading to greater financial impact and trading revenues.

So here comes the question: Who is Alibaba?

The company is like as a mix of Amazon, eBay and PayPal, with a dash of Google thrown in, all with some uniquely Chinese characteristics.

Phase 1 – The Legendary Inception

Alibaba was created in 1999 by Jack Ma, an English teacher in the eastern Chinese city of Hangzhou. Internet was like a UFO to most Chinese at that time, so when Jack tried to promote Alibaba.com, a trading website that connected Chinese manufacturers with overseas buyers, many people considered him as a fraud. “How can you sell things in the virtual world of Internet? That is impossible!” Jack was rejected repeatedly. Instead of giving up, he was persistent and embraced a breakthrough by obtaining funds from Softbank, a major angel investor in Japan. Through Jack’s continuous concept pitch of Internet and online business, the company achieved profitability in late 2001.

Phase 2 – The Era of E-Commerce

Initially, Alibaba was focused on the B2B marketplace (Businesses to Businesses). Starting 2003, the company began to diversify its portfolio by creating Taobao.com, a C2C marketplace (Consumers to Consumers), and Tmall.com, a B2C marketplace (Businesses to Consumers).

Taobao is mostly for small businesses, on which they don’t pay to sell products. Instead, they pay Alibaba for advertising and other services to allow them to stand out from the crowd. Comparatively, Tmall was designed for bigger merchants, including many well-known brands such as Nike and Apple, on which they have to pay a deposit and an annual fee, as well as a commission on each transaction, for sales.

In 2012, the combined transaction volume of Taobao and Tmall topped one trillion yuan ($163 billion), more than Amazon and eBay combined.

Phase 3 – Go Beyond: A Conglomerate across Various Sectors

Alibaba’s huge success in e-commerce allowed it to break into sectors other than Internet for even larger impact on China’s economy.

1) Logistics

The company claimed that Taobao and Tmall account for more than half of all parcel deliveries in China. Following that, Jack has integrated the company’s advantage in transaction volume, data mining, and extensive networks to create a logistics firm called Cainiao. The vision is to facilitate infrastructure development by teaming up with other major players in the private sector as well as the Chinese government for more efficient online orderings and parcel deliveries.

2) Finance

One of the key determinants for the company’s success is the initiative of Alipay, an electronic payment system that protects buyers if sellers don’t deliver. This effective tool has been leveraged for the development of lending and financial products. On one hand, the company created an affiliate called Small and Micro Lending Group to address the financing problem facing China’s small and medium businesses. On the other hand, it launched a money-market fund for the general public, which became one of the world’s largest in just eight months. Furthermore, Alibaba was selected as one of the five private banks in a pilot program aimed at breaking the state-dominated banking monopoly in the country. As a result, the Internet giant will be capable of running businesses of corporate finance, investment management, venture capital, and even more.

Probably no one can accurately predict the size of Alibaba in the future, but what we can say for sure is, its magic will continue.

Alibaba V.S. Tencent

It’s big news recently the fancifully named Chinese e-commerce company Alibaba Group said Sunday it will begin the process of an initial public stock offering on the New York exchange soon. Analysts say it could raise $15 billion.  (Chinese e-commerce giant Alibaba sets U.S. IPO)

According to WSJ, Alibaba: A Mix of Amazon, eBay and PayPal With a Dash of Google, Alibaba Group Holding Ltd.— which is preparing to launch perhaps the largest U.S. stock listing ever of a Chinese company. It might be a little bit hard for Americans to understand the composition and functioning of Alibaba, perhaps the best way to understand Alibaba is as a mix of Amazon, eBay and PayPal, with a dash of Google thrown in, all with some uniquely Chinese characteristics. Alibaba’s revenue is about one-tenth of Amazon’s because the Chinese company doesn’t sell products on its site. But Alibaba is far more profitable. Alibaba’s third-quarter revenue rose 51% from a year earlier to $1.78 billion. Net profit was $792 million, giving the company a profit margin of 44.6%, according to shareholder Yahoo Inc., which owns a 24% stake in Alibaba. Amazon posted revenue of $17.09 billion and a loss of $41 million in the same quarter.

It seems really a success that Alibaba sets IPO in US. But in indeed, it might be a “desperate” choice for Alibaba. We have to mention another Chinese Giant company Tencent here. If we regard Alibaba as the mixture of Amazon, eBay and Paypal, Tencent is the mixture of Facebook、Twitter、Tumblr and Zynga. Isn’t it incredible?

Tencent is known as the first competitor of Alibaba in China. In this month, to further bolster its e-commerce capabilities, Tencent announced a deal to buy a 15% stake in JD.com Inc., China’s second-largest e-commerce firm (Which has 18.3 percent share in China while Alibaba has more than half). However, Alibaba lost to Tencent as smartphone and tablet usage surged over recent years. WeChat, known as Weixin in China, had 272 million monthly active users as of September and has quickly grown from a messaging app to a full-fledged platform, letting users play games, book taxis, make online payments and even invest in wealth management products. Smart marketing systems, like a gift-giving service that was rolled out for Chinese New Year, were highly successful in drawing new users onto the WeChat Payment system. (Tencent-JD.com partnership goes straight for Alibaba’s throat) The cooperation of Tencent and JD is really a threat to Alibaba since they now can both be in the Smartphone and Website markets in China.

We are guessing now, is the IPO in US as a fight back to Tencent?  Who’s the winner? Still unknown.

 

 

 

Why Do So Many China’s Network Companies Plan U.S. IPO?

According to today’s WSJ, another Chinese web. company Sina is planning U.S. IPO recently. (China’s Sina Plans U.S. IPO for Weibo) China’s Weibo social-media service has transformed discourse in the world’s second-largest economy, giving a generation of young Chinese a way to reach millions outside traditional government-controlled media channels. Now its owner hopes to take it public in the U.S.—at the same time that Weibo faces its biggest challenge to its four-year reign as China’s top online forum.

Sina Corp. Sina is aiming to raise roughly $500 million in a second-quarter U.S. initial public offering of the Twitter -like service, according to two people with direct knowledge of the deal. Sina—which is already listed in the U.S.—has hired Credit Suisse AG and Goldman Sachs Group Inc. to handle the U.S. listing, one person said. The Financial Times reported the Weibo IPO plans earlier Monday.

This is not the first time that China’s network company planning IPO in the United States. And it seems there are more and more China’s companies willing to join this trend. So why do they want to enter U.S. market but not China’s own stock market? I’ll explore the reasons regarding this situation.

From macro perspective, IPOs in US are more attractive than China’s domestic IPOs due to the buoyed stock markets and increasing risk appetite. And IPOs with a US domicile have naturally benefited foreign IPOs, like Chinese firms, in particular IPOs in specialty industries such as internet, consumer related deals. Thus it’s an opportunistic move by the company to capitalize on the increasing demand for China-linked IPOs in the US. (Is a wave of Chinese IPOs on the horizon?) 

On the other hand, obviously the respective IPOs are obviously highly risky deals. Good performance eventually has to come in line with strong earnings, to justify valuations. Because of the market sentiment toward the Chinese IPOs after the accounting scandal, both investors and Chinese firms are cautious more than ever about the environment.

According to Timothy J. Keating: “the US equity market is built on trust, and many Chinese issuers have destroyed trust among US investors,” CEO of Keating Capital, a business development company that specializes in making pre-IPO investments. “It will take a long time for this damage to be repaired, and rightfully so,” he added.

In conclusion, I think the most important reason for China’s firm to join US IPOs is because of a more healthier and mature investing environment. But I do think the heavy rely on “relations” in China’s society is another cause for firms to join the “easier” oversea market.

next IPO: GoPro

Coming out of a strong 2013 for Initial Public Offerings, when over 200 companies went public, GoPro is next in line file an IPO. The company, who makes durable cameras often used in sports, has been ramping up their advertising recently, including a Super Bowl ad featuring Felix Baumgartner’s famous skydive.

Due to the Jumpstart Our Business Act (or JOBS Act) companies like GoPro (who have less than $1 billion in revenue in the previous year) are eligible to begin the proceedings for an IPO confidentially. The JOBS Act also allows them to start the process without certain pieces disclosing financial information.

While they don’t have to disclose all of their financial information, they have said that they plan to raise around $400 million for a valuation well over the $2 Billion dollar estimated value they were given back in 2012. Unlike the value investors who may tell you to steer clear of stocks like Facebook or Twitter with relatively low revenue compared to their price / market valuation, GoPro reached $500 million in revenue in 2012 so it is easier to justify such a high valuation.

Given that this company has a relatively straightforward business model; to manufacture and sell quality, durable video cameras that are ideal for sports such as skiing, biking, snowboarding, etc, I thought it could be an interesting exercise to treat this like an Econ 101 problem and analyze their potential to continue to be a successful company. My first thoughts on this are that it probably is relatively easy to manufacture durable cameras, and given that there aren’t any groundbreaking technologies in the GoPro, I doubt they have any patents to ward off competition. However, they have done an excellent job of distinguishing themselves as a household name with their advertising. While I am sure that they paid millions for their super bowl ad, much of their attention is free. If you go on youtube and watch any amateur videos of skiing, there’s a good chance it was filmed on a GoPro. Additionally, the Olympics will likely fuel demand for GoPro. Although they aren’t an olympic sponsor, they sponsor some athletes who are participating in the Sochi Winter Olympics. And after watching some of the amazing feats on skis and snowboards at Sochi, who doesn’t want to go out and make an awesome video of themselves riding down a mountain or off some jumps?

In short, I am confident that given their revenue, GoPro may be a very strong IPO for 2014. If they can continue to ward off competition through strong branding, effective advertisement, and a quality product I have no doubt they will be around as a strong company for many years to come.