Nielsen, Demand Media IPOs Expected Wednesday

NEW YORK -- Two IPOs with media and entertainment industry tie-ins are on tap for this week. And given that this is the first week of 2011 with new stock market entrants, their pricings and early trading trends could help set the tone for this year's market debuts.

Media measurement giant Nielsen, the former parent of The Hollywood Reporter best known for its TV ratings data, and Internet media firm Demand Media, which creates cheaply produced evergreen content for its own and other media companies' sites, are expected to set the final price for their respective IPOs on Tuesday, then start trading Wednesday.

Nick Einhorn, research analyst at Renaissance Capital, an investment management firm that specializes in IPOs, said that any single IPO rarely says much about market trends.

"But both of these are high-profile IPOs," he said. "If they do well, it will be a positive sign for the IPO market."

Nielsen is the biggest private equity-backed firm to go public in several years. PE firms KKR, Blackstone Group, Thomas H. Lee Partners and Carlyle Group bought the company in 2006 for $9.7 billion.

Nielsen is expected to price its stock at $20-$22 per share. At the midpoint of that range, it would have a market value of $7.4 billion.

Since it will offer 71.4 million shares in the market debut, the deal would raise about $1.5 billion.

Under ticker symbol NLSN, the company's stock will trade on the New York Stock Exchange. IPO proceeds will go to the repayment of debt and to general corporate purposes.

Nielsen filed for its IPO in June, then waited for the right market conditions.

John Fitzgibbon of IPOScoop.com predicts strong market interest in Nielsen, but he's noticed some investor concerns as well.

"They are this week's flagship, and they have an established and recognizable name," he said. "But they have a lot of debt," and some critics say the company hasn't moved fast enough to update its research methods in the digital age.

Demand Media, whose CEO is Richard Rosenblatt -- who famously sold MySpace to News Corp. -- filed for its IPO in August and has announced a price range of $14-$16.

CNBC recently pointed out that as part of a partnership with Lance Armstrong for livingstrong.com, the cycling star received a good number of stock warrants in Demand Media, and he and other insiders are looking to sell 3 million shares. An IPO with 7.5 million shares priced at the midpoint of its range would value Demand Media at about $1.3 billion. The deal would raise $113 million, with net proceeds excluding underwriters' stock sales pegged at $58 million.