A strong Nasdaq Composite Index blew the storm clouds away from Wall Street. The Nasdaq closed at a five-year nine-month high on Wednesday, Nov. 22 at 2,465.98. The last time it closed higher was on Feb. 15, 2001, at 2,552.91.
Even though investment bankers had what amounted to a three-day work week, they were able to price four of the five IPOs on the calendar. The one that didn’t make it out the door was pushed into this week.
But pricing deals wasn’t the only activity that took place in last week’s IPO market.
Five companies filed plans to go public. They expect to raise $727 million. Another eight companies set proposed offering terms to price their IPOs. They expect to raise $1 billion.
A groundswell of filings has been growing since October. Consider the following:
From Oct. 1 through Friday, Nov. 24, 2006, 51 companies filed plans to go public, according to available reports. They expect to raise $8 billion. That was busier than the same period a year ago.
From Oct. 1 through Friday, Nov. 25, 2005, 47 companies filed plans to go public. They expected to raise $6.99 billion.
From Oct. 1 through Nov. 24, 2006, 72 companies filed plans setting proposed pricing terms. They expect to raise $13.6 billion. That was busier than the same period a year ago.
From Oct. 1 through Nov. 25, 2005, 65 companies filed plans setting proposed pricing terms. They expected to raise $12.8 billion.
And the 2006 filings produced results.
From Oct. 1 through Nov. 24, 2006, 53 companies priced their IPOs. They raised $11.7 billion.
From Oct. 1 through Nov. 25, 2005, 37 companies priced their IPOs. They raised $5.14 billion.
And from Nov. 28 through Dec. 31, 2005, 23 companies went public. They raised $3.1 billion.
Last week’s filing traffic confirmed 2006’s IPO cannons were being primed for December.
This brings us back to the present.
In the shortened Thanksgiving week, bankers priced four IPOs. They raised $2.1 billion. Here were the highlights:
— Spirit AeroSystems Holdings (NYSE: SPR), a Wichita, Kansas-based manufacturer of fuselage and propulsion structures for aircraft, priced 52.1 million shares at $26 each to raise $1.4 billion. That was above its filing range of $23 to $25 per share.
When the previous week closed on Friday, Nov. 17, the consensus of IPO professionals gave the deal a “flat to up a quarter” opening shot. On Monday, rumors circulated that institutional demand was heating up, the call was moved up to “up a half to a point.” Confirmation came when the deal was priced above range.
On Tuesday, the IPO opened at $27.55, ran up to $29.30 and closed its opening day at $27.48, up $1.48 per share, or up 5.7 percent from its initial offering price.
AerCap Holdings N.V. (NYSE: AER), an Amsterdam-based provider of aircraft and engine leasing services, priced 26.1 million ordinary shares at $23 each to raise $600.3 million. That was at the mid-point of its $22- to $24-per- share filing range.
The consensus of IPO professionals gave the deal a “$1 to $2” per-share opening premium.
On Tuesday, the IPO opened at $25 per share -– up $2 — and dropped dead. It closed its opening day at $23.02, up just 2 cents per share.
By Friday’s close, 2006’s IPO aftermarket results show the win-loss ratio was nearly two winners to each loser and an aftermarket gain of over 25 percent — better than twice the performance so far of the Nasdaq Composite Index. For the year to date, the Nasdaq was up 11.6 percent.