What to Watch This Week: New IPOs, IMAX, Tablets
There's never a dull moment on Wall Street, especially when you add holiday shopping season to the mix. Let's go over some of the items that will help shape the week that lies ahead.
1. Make way for another tablet: Last month's new tablet releases, the Kindle Fire and Nook Tablet, are finally giving Apple (AAPL) a run for its iPad money.
This week's anticipated debut is for the ASUS Eee Pad Transformer Prime tablet, which raises the bar with NVIDIA's (NVDA) powerful Tegra 3 video chip and other head-turning specs.
The challenge for ASUS in marketing the Android-propelled tablet is making a dent in this realm by simply matching the iPad 2's entry-level price point of $499. Gadgets with beefier guts than Apple's iPad have hit the market since last year, only to flop on price.
The arrival of Kindle Fire at $199 and Nook Tablet at $249 won't make things any easier for the non-iPad devices costing more than twice as much. The rub here is that consumers don't sense a need for a tablet the way they crave computers or mobile phones. A tablet is a leisurely luxury, and the ASUS Transformer Prime won't change that.
However, ASUS' docking station may be a game changer since it gives the Transformer Prime a laptop-sized keyboard complete with a touchpad. In other words, it can legitimately serve as an Android laptop that can be taken apart when a more portable tablet is preferred.
Last year, the original iPad was the undisputed tablet champ. This holiday season is going to be a lot more competitive and interesting.
2. This tape will self-destruct in five multiplex days: Mission: Impossible -- Ghost Protocol doesn't hit traditional exhibitors until the middle of next week, but you can grab an early glimpse if you're willing to pay up for IMAX (IMAX).
IMAX will begin screening a super-sized version of the fourth installment in Tom Cruise's action series on Friday, five days before regular theaters begin their screenings.
The early nod makes sense since a half hour of film footage was shot using IMAX cameras.
3. Down on the FarmVille: Social gaming giant Zynga is wrapping up its investor road show this week. Everything is pointing to an IPO pricing on Thursday night, meaning that retail investors will get their first crack at owning a piece of the company shortly after Friday morning's opening bell.
Zynga is certainly magnetic. Between Empire & Allies, Words with Friends, and more Facebook and smartphone diversions, Zynga is drawing 227 million active monthly players, serving up 2 billion minutes of game play a day.
There's also real money here. The games may be free, but ad revenue and the ability to upgrade the experience with in-game purchases led to a juicy profit of $90.6 million on $597.5 million in revenue last year. Revenue is already at $828.9 million through the first nine months of this year.
There will likely be a pop at the open on Friday, so make sure you know what you're paying if you do want to play this game as an investor.
4. Bye-bye, Best Buy: Things haven't been going well for Best Buy (BBY) lately. The consumer electronics giant has spent the past year posting year-over-year declines in earnings and store-level sales. That trend is likely to continue when Best Buy reports its quarterly results on Tuesday.
There's really not a whole lot of mystery here. Best Buy's prices are too high relative to online competitors, and ironically enough, the retailer has spent the past few years arming consumers with the smartphones, tablets, and computers to make them realize that Best Buy isn't the only game in town when it comes to gadgetry, appliances, and media.
Best Buy has been gaining traction by rolling out smaller kiosks that sell only wireless phones and related accessories. Maybe the retailer will have good news on that front.
5. Bring in the rookies: It's not just Zynga going public over the next few trading days.
A total of 11 companies are set to IPO this week. If successful, it would be the largest number of Wall Street debutantes to hit the market at once in four years.
Jive -- a maker of social networking platforms for corporations wanting more interconnectivity -- is one of the more interesting companies likely to join Zynga in going public later this week. Fashion designer Michael Kors, tech specialist FusionStorm, and several energy companies are hoping to take off this week.
You've already been warned about chasing IPOs, but now's a good time to start the due diligence so you know just how far you're willing to go if you do wind up chasing one or two.
Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Best Buy and Apple. Motley Fool newsletter services have recommended buying shares of NVIDIA, Apple, and IMAX. Motley Fool newsletter services have recommended writing covered calls in Best Buy. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended writing puts in NVIDIA.