The IPO Buzz: Here Comes the IPO Sun

This week’s IPO calendar lists eight names, which might be a warming trend after the slim calendars of the past few weeks. A technology IPO – a supplier in the solar energy business – is attracting attention.

But the descriptions of several other deals on tap this week are sprinkled with Wall Street jargon. You’ll see “best efforts” offerings and others claiming to be “IPOs,” yet their shares are already being traded somewhere in the world. (More on these deals later.)

Now let’s take a walk on the sunny side of the Street.

Hello, Sunshine

SolarEdge Technologies (SEDG – proposed) provides intelligent inverters for solar photovoltaic (PV) systems. Based in Israel, the company specializes in electronics that increase the electricity output of solar panels. Its system consists of its power optimizers, inverters and a cloud-based monitoring platform. SolarEdge serves residential and commercial solar installations as well as small utility-scale solar installations. The company’s customers include Solar City, the largest U.S. installer of residential solar systems. Since 2010, when SolarEdge began commercial shipments, it has shipped about 1.2 gigawatts (GW) of its DC optimized inverter systems. Its products have been installed in solar PV systems in 73 countries.

The numbers tell a story.

Note: For the six months that ended Dec. 31, 2014, SolarEdge reported net income of $5.9 million on revenues of $140.3 million versus a net loss of $13.1 million on revenues of $58.1 million for the same period a year ago.

“Best Efforts” Boomerang

Let’s move on to the rest of this week’s calendar and its Wall Street jargon.

The IPO Buzz looked at “best efforts” offerings last week. To save flipping back to that story, let’s reiterate the main point: In a “best efforts” offering, bankers act as agents – not as underwriters. They agree to do the best they can to sell the shares. If they can’t, the offering might not get out the door.

This week the calendar has two such offerings: Tantech Holdings Ltd. (TANH – proposed), a China-based provider of bamboo-based charcoal products for industrial energy applications and household cooking, heating, purification, agricultural and cleaning uses, and Wowo (WOWO – proposed), a China-based operator of third-party e-commerce platforms focusing on local entertainment and lifestyle services for restaurants, movie theaters and beauty salons.

Both have been on the calendar in past weeks.

From Paris to Nashville

Next come companies offering shares in deals that are called initial public offerings, but they are not. Basically they are follow-on offerings. This week has two such creatures and you can be the judge. They are Cellectis S.A. (CLLS – proposed) and Franklin Financial Network (FSB – proposed). Let’s take a look.

Cellectis S.A. is a Paris-based gene-editing company. Cellectis uses its core proprietary technologies to develop best-in-class products in the emerging field of immuno-oncology. The company said it aims “to harness the power of the immune system to target and eradicate cancers.”

Its prospectus states that this is an initial public offering of American Depositary Shares (ADS) and each ADS represents one ordinary share. Note: The ordinary shares have been listed since Feb. 7, 2007, on the Alternext market of Euronext in Paris under the symbol “ALCLS.” Bottom line: You can buy all the stock you want before its “IPO” gets priced in the U.S. capital markets.

Franklin Financial Network is Franklin, Tennessee-based bank holding company. Its flagship is Franklin Synergy Bank, which operates 11 branches in Williamson and Rutherford Counties within the Nashville metropolitan area.

Its prospectus states, “Before this offering, there has been limited public market for our common stock, with only very limited trading of our common stock on the OTCQB.” The company’s stock has been listed since Aug. 22, 2014, on the OCTQB under the symbol “FRFN.” Bottom line: You can buy all the stock you want before its “IPO” gets priced.

This brings us back to this week. This week’s calendar has eight offerings, with bankers expecting to raise about $612.1 million. Looking into the week of March 30, two deals are on tap with the aim of raising about $495 million. But there is a brand-name deal topping next week’s calendar. It is GoDaddy (GDDY – proposed).

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.