An article by Mike Robbins in Microsoft Investor on IPO's states that : "it's a little secret: new stock prices often slump exactly six months after they're issued - and that could open a buying opportunity. - The reason is "lockups - the agreements between an IPO's underwriters and its insiders that prohibit those insiders from selling for 180 days after the initial public offering." DOES THIS SOULD FAMILIAR?? - look at the chart for TIER, and you will see the 6 month effect. Author goes on to state that these are "buying opportunities."
Bingo. There are a fair number of investors who are trading out of a triple-bagger, and of course there is some management selling in the name of "diversification," etc. I am long term bullish as long as they can manage to continue delivering on the nuts and bolts of their business plan (managing organic growth and doing small bolt-on acquisitions). As far as I can tell, they have seen their multiple come into line with industry averages, and now need to deliver the "E" part of the equation. Of course, they now have a nice pot of cash to do more acquistions, which with any luck will continue to be accretive to "E," and recharge the momentum after the six-month effect has been digested by the market. Do bear in mind that institutions can only buy issues which are liquid, so increased float may increase the potential investor base. Cheers.
P.S. For the more risk tolerant folks out there, you might want to check out CGIX, roughly similar business as TIER, but undermanaged and trading at a *huge* discount to the market (<20x this years earnings, <2x revenues). They have a bad record of disappointing, but management may be sand-bagging here in order to beat "managed" expectations. At $3.50 this company is a bargain. FWIW.
I agree completely. Especially now that the secondary and the over allotment are complete I think we'll see some positive things from TIER. Hopefully the Company will make some more acquisitions with the cash from the secondary. Mike