So far, the Alibaba IPO has been more traditional.

An IPO of this size attracts a lot of talk, the latest being: The “book” accepting indications of interest is said to be closing early; the deal is reportedly well oversubscribed; investors can expect Alibaba to be priced above the high end of its range; various research providers rate the stock as a “buy” and some see an evaluation of US$100 per share for the stock.

 

The buildup to Facebook’s IPO was one of optimism marked by numerous updated amendments.

The Google IPO came to market in what is called a Dutch auction. This method is used by the U.S. Treasury in offering debt securities to raise money. In the IPO market, qualified investors submit the number of shares they wish to buy and at what price. The underwriters or agents collect bids and the clearing price is determined by the highest price it takes to sell all the shares. Under these circumstances, the IPO should trade around its initial offering price. The reason is simple: If all the investors willing to pay more for the IPO in the aftermarket get their orders filled in the Dutch auction, there will be no orders to bid up the stock in the aftermarket.

Google’s clearing price was never reported nor was the size of allocations for the winning bids. The word around the Street was winning bids got about 75 percent of their indications of interest. That left about 25 percent of the orders on the table to be filled in the open market once the IPO started trading.  

 

This leads to deeper research for an explanation. Underwriters left wiggle room to “adjust” the offering price below the clearing price. Here is a clip from Google’s final prospectus: “The initial public offering price will be determined by the underwriters and us (Google) after the auction closes. We intend to use the auction clearing price as the principal factor to determine the initial public offering price and, therefore, to set an initial public offering price that is near or equal to the clearing price. However, we and our underwriters have the ability to set an initial public offering price that is below the clearing price.”

 

In Europe, the IPO Dutch auction has been used for decades. They call this tactic a “dirty Dutch auction.”

 

Looking into the week of Sept. 22, 2014, the calendar has five deals with bankers planning to raise about $4.8 billion. But more names could pop onto the calendar by the time that Monday, Sept. 22, rolls around.

 

Stay tuned.

 

 

The moment of truth will come on Friday morning, Sept. 19, when Alibaba is expected to start trading on the New York Stock Exchange.

 

The Alibaba offering – estimated at $20 billion – would be the largest IPO to come to market in the United States, according to the SEC filings. It would top the Visa (V) IPO of March 2008, when Visa sold 406 million shares at $44 each to raise $17.9 billion.

 

Here is what we know from the amendment to the prospectus:

The number of shares being offered: 320.1 million American Depositary Shares. Each ADS represents one ordinary share.

*The company will offer about 123.1 million ADS and selling shareholders will offer about 197 million ADS.

**Note: Yahoo will offer about 121.7 million ADS. Yahoo will own about 401.8 million ADS after the IPO.

The offering price: US$60 to US$66 per share (subject to change)

The amount expected to be raised: About US$20.2 billion, based on the mid-point of its price range

2,465.0 million ADS

Market capitalization: $155.3 billion, based on the mid-point of its price range

The bankers: Six joint-lead managers – Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and Citi;

14 co-managers (all listed on the cover of the prospectus) and 15 other underwriters (Complete list on page 310 of the prospectus, found here.)

The expected pricing date: Thursday, Sept. 18, to trade on the New York Stock Exchange on Friday morning, Sept. 19.

 

Passing note of interest: The Visa offering was a winner from the get-go. After Visa was priced at $44 per share, the IPO opened for trading on March 19, 2008, at $59.50, sold as high as $66 and closed its opening day at $56.50, UP 28.4 percent from its initial offering price. Visa closed on Friday, Sept. 5, 2014, at $214.21 – UP 279.1 per cent from its first day’s close.

 

Analysts still like the stock.

 

Research services report about 30 analysts rate Visa as a “Buy” to a “Strong Buy” with a mean average price target of $250 per share.

 

Since Alibaba filed to go public on May 6, 2014, the IPO parade has never stopped.

 

The calendar has produced 91 IPOs from May 6 to date. As of the close on Friday, Sept. 5^th, a total of 68 IPOs were in the winner’s circle and 23 were losers; the average gain was 29.5 percent. Over that same time, the S&P 500 Index has gained 7.5 percent.

 

 

Turning to this week, the calendar has two offerings: Affimed Therapeutics and ReWalk Robotics.

 

 

ReWalk Robotics (RWLK – proposed) is an Israeli medical device company. ReWalk is developing exoskeletons that allow wheelchair-bound individuals to stand and walk. The offering is expected to be priced on Thursday evening, Sept. 11, and to trade on Friday morning, Sept. 12. (For more information, please click here: ReWalk Robotics)

 

This time next week, it’s showtime for Alibaba.

 

Stay tuned.

 

 

Hold on. There’s more.

 

On top of this traffic, countless other companies filed amendments updating their financials for the three months ended June 30, 2014. Note: People just don’t incur those enormous legal and accounting fees to file amendments, which can total over a million dollars, if they aren’t planning on jumping on the calendar in the near future.

 

Three companies filed amendments updating their proposed pricing terms and one became the first IPO on September’s calendar. That was ReWalk Robotics (RWLK – proposed), an Israeli medical device company. ReWalk is developing exoskeletons that allow wheelchair-bound individuals to stand and walk. The offering is expected to be priced on Thursday evening, Sept. 11, and to trade on Friday morning, Sept. 12. (For more information, please click here: ReWalk Robotics). There’s still more.   

 

The Dow Jones Industrial Average and the S&P 500 Index hit new record closing highs this past week and the NASDAQ Composite Index cruised to a 14-year high. Note: You don’t have an IPO market without the wind of a bull market at its back.

 

And finally the new-issues market has its own three-ring circus coming to town. It is the Alibaba Group Holdings (BABA – proposed) IPO. (For more information, please click here: Alibaba Group Holdings)

 

Guess what? On Thursday, Aug. 28, 2014, Alibaba filed an amendment updating its financials.

 

For the three months ended June 30, 2014, Alibaba reported a net income of RMB12.4 billion (US$1.99 billion), up from RMB4.4 billion, or up 179 percent, from the same period of a year ago. Alibaba reported revenues of RMB15.8 billion (US$2.54 billion), up from RMB10.8 billion, or up 43.6 percent, from the same period of a year ago.

 

The media reaction to that filing was like tossing kerosene on a roaring fire. That set the stage for the next shoe to drop in the Alibaba drama: the filing with Alibaba’s expected pricing terms. Only then will a trading date be announced. The gossip has the filing date as Tuesday, Sept. 2. If it happens, just wait for the media blitz.

 

Stay tuned.

 

 

 

The latest scuttlebutt: Expect Alibaba to file its pricing terms on Tuesday, Sept. 2; launch its road show and price its IPO at $25 per share on or about Tuesday, Sept. 16. There’s talk that the deal will raise $20 billion. If all this is true, then the size of the offering would be 800 million American Depositary Shares. The back story: Bankers reportedly want to get the deal out the door ahead of the Jewish holidays.

 

Hold on. There was more scuttlebutt.

 

Bankers are said to be gearing up for a big September IPO market and the technology sector is in play. Of course, the multibillion-dollar Alibaba offering would tip the scales to size and technology.

 

It’s hard to imagine most transactions in modern life without plastic – yes, that card in your wallet or the one connected to your smartphone.

 

The largest initial public offering in the U.S. capital markets was the 2008 Visa (V) IPO, according to the U.S. Securities and Exchange Commission filings. On March 18, Visa offered 406 million shares at $44 each to raise $17.9 billion. The IPO closed its opening day at $56.50, UP 28.4 percent from its initial offering price.

 

Fast forward to Friday, Aug. 15, 2014, Visa closed at $210.19, UP 377.8 percent from its initial offering price and UP 272 percent from its first day’s close.

 

Note: Investment research providers say that about 33 analysts follow Visa. The current rating on the stock ranges from a “Buy” to a “Strong Buy” with a mean price target of $250.

 

It was 10 years ago today, on Aug. 18, 2004, that the Google (GOOGL) IPO was priced. Google came to market with all the fanfare of a three-ring circus, like Alibaba. It was the talk of the town. Google lived up to all the hype – then and now.

 

Google offered 19.6 million shares of Class A common stock at $85 each to raise $1.67 billion. (That size ranks Google as No. 62 on a list of 102 blockbuster IPOs that raised $1 billion or more in the U.S. capital markets.)

 

Now here is where it gets complicated.

 

On April 3, 2014, Google did what it called a “2-for-1 stock split.” In reality, it was a stock distribution of a new class of non-voting common stock. The shareholders of Class A common stock (GOOGL) received 0.998 share of Class C common stock (GOOG) for each share of Class A common stock held. That made the Google IPO’s adjusted initial offering price $42.54 per share. The IPO closed its opening day at $100.34 ($50.22 adjusted), UP 18 percent from its initial offering price.

 

Fast forward to Friday, Aug. 15, 2014: Google’s old Class A common stock closed at $583.71 per share and its new Class C common stock closed at $573.48 per share for a combined worth of $1,157.19, UP 1,261.4 percent from its initial offering price and UP 1,053.3 percent from its first day’s close.

   

Note: Investment research providers say that about 47 analysts follow Google. The current rating on the Class A common stock is a “Buy” with a mean price target of $672.

 

Looking into the week of Aug. 25, 2014, the calendar remains “clean and green.” Vacation time is arriving in the land of IPOs and we will not be publishing next week. We will be back for the week of Sept. 2, 2014.

 

The staff of IPOScoop.com wishes everybody a wonderful late- summer siesta and a great Labor Day holiday weekend.

 

Stay tuned.

 

August’s calendar has been a struggle. To date, 11 IPOs have been priced, according to the U.S. Securities and Exchange Commission filings. Of that number, investor demand was so lackluster that five were priced below their original filing ranges. Four were priced within range and two came to market after they were priced above range.

 

That’s the bad news.

 

Now for the good news: Bankers mostly got the prices right. Seven of the 11 IPOs closed their opening day in the winner’s circle, two did not, and the other two finished unchanged. The average gain for all 11 was 11.8 percent. And thanks to the stock market’s rebound from recent selloffs with Friday’s sharp rally, the major U.S. stock indexes finished the week with modest gains. The NASDAQ Composite Index gained 0.4 percent for the week and the S&P 500 rose 0.3 percent, while the Dow Jones Industrial Average advanced 0.4 percent.

 

This sets the stage for mid-August.

 

The IPO calendar lists five deals this week. Bankers expect to raise $240 million. That’s not much traffic, but vacation time is just around the corner.

 

One deal is a carryover from past weeks; two are small-cap offerings looking to raise $20 million each, and the other two are coming from the banking and pharmaceutical sectors.

 

 

Looking into the week of Aug. 18, 2014, the calendar is “clean and green.” So vacation time is arriving in the land of IPOs.

 

Stay tuned.