Apr 12, 2006This article was originally published by RFID Update.
April 12, 2006—Many industry watchers have speculated that 2006 will be the year Alien Technology goes public. That speculation has been recently fueled by rumors that Alien is preparing to file an S-1 form, the document companies present to the U.S. Security and Exchange Commission to formalize their IPO plans. Kevin Starke, senior analyst at Weeden & Co., said that he is "hearing a lot of chatter about an imminent S-1 filing from Alien." Once the S-1 is filed, the actual offering can follow shortly thereafter, probably within four to six weeks. "If Alien were to file an S-1 tomorrow," said Starke last week, "it could commence with an offering in mid-May." How close Alien is to filing the S-1 is of course a matter of further speculation. The company representative with whom RFID Update spoke declined to comment when asked about the rumored S-1 filing, citing company policy.
Alien Technology has long been expected to go public. A young, aggressive company in a nascent industry with high growth potential, Alien has received over $200 million in private financing. While the company has historically touted its proprietary Fluidic Self Assembly tag production process, it also sells RFID readers and services. Indeed, some in the industry see the company positioning itself more as a full-blown RFID solutions provider rather than simply a tag manufacturer. One industry source predicted that, assuming it goes public and emerges flush with cash, Alien might snap up a real-time location system (RTLS) provider. Doing so would fill out its portfolio of solutions that enable enterprise asset visibility and tracking.
A wildly successful IPO could be a generous assumption, however. While the Silicon Valley-based company has elicited a lot of attention and will see interest from top-tier institutional brokers eager to participate in its IPO, Starke noted that it would probably be considered a speculative investment. While many on Wall Street agree that RFID's long term potential is assured, the timeline remains hard to predict. "There is a big question mark about how the market will receive a registration statement from Alien, given that there is no consensus that RFID will really ramp up in the next 12 months," said Starke.
Optimism about near-term RFID growth is building, however, a trend which would positively influence investor perception of the market and Alien's role therein. If the company goes public right as the RFID industry emerges from the "trough of disillusionment" that characterized 2005, the timing could prove excellent. Recall that on Monday, RFID Update reported on the Strong RFID Optimism from ABI Research, and last month Manufacturing Insights analyst Mike Witty contributed a guest column about the Renewed Buzz around RFID.
