At the same time, the overall IPO market is thriving. This week, the calendar lists 11 deals. They are expected to raise over $1 billion. That’s not too shabby. However, a couple of sectors are struggling: the limited partnerships and health-care companies.
Through the window, the light is shining on the IPOs of overseas companies and specialty retailers. China is in play again. And fashion names are turning the IPO launching pad into a runway.
First, let’s look back at sectors that have lost some luster.
From mid-October through Friday, Nov. 15, five limited partnership IPOs had been priced, according to the U.S. Securities and Exchange Commission filings. At Friday’s close three were marginally above their initial offering prices, two below and the average loss for all five was 0.8 percent. And last week, we saw the withdrawal of a limited partnership that had been in the IPO pipeline almost a year.
The health-care sector – notably the biotech/biopharma companies or the bio-IPOs – has been having a rough time lately. From mid-October through Friday, six bio-IPOs had been priced. At Friday’s close, three were above their initial offering prices, two were unchanged, and one was a loser. Their average gain was 10.6 percent.
Those gains were not bad, but three of the six had so little investor demand that they had to be marked down from their original filing range to get out the door. That gave them their “dead cat bounce.” Three others were postponed “due to market conditions.”
It wasn’t stock market conditions.
Two of the three major U.S. stock market indexes closed on Friday at all-time record highs and the other at levels it hasn’t seen since April 2000. The market conditions were in reference to the health-care (biotech/biopharma) sector.
This brings us to the present. There are no limited partnership IPO on the calendar, but five of this week’s 11 IPOs are from the health-care sector. But no worries – God does open a window.
The IPOs of foreign-based companies have been making an impact lately. Here are a few of those odd-sounding names that made their debuts:
· voxeljet AG (VJET), UP 353.8 percent from its initial offering price at Friday’s close. It was priced on Oct. 18.
There’s more. Three foreign-based companies plan to price their IPOs this week. They are 500.com (WBAI – proposed), GFI Software (GFIS – proposed) and Sungy Mobile (GOMO – proposed).
Out of China
500.com is a China-based online sports lottery service provider. The company believes it has the largest market share in the six months ended June 30, 2013, and the second-largest market share in 2012 in terms of the purchase amount of sports lottery products. Founded in 2001, 500.com has about 353 employees. Bankers plan to offer 5.79 million American Depositary Shares of 500.com at US$9 to US$11 each to raise US$57.9 million. The IPO will be priced on Thursday evening to start trading on Friday on the New York Stock Exchange. The lead manager is: Deutsche Bank Securities. The co-managers are: Piper Jaffray and Oppenheimer.
Sungy Mobile is a China-based global provider of mobile Internet products and services. The company’s focus is on applications and mobile platform development. Sungy believes it was one of the top three publishers worldwide on Google Play as measured by the number of downloads in the Applications category for the nine months ended September 30, 2013. Founded in 2005, Sungy Mobile has about 776 employees. Bankers plan to offer 7 million American Depositary Shares of 500.com at US$9.50 to US$11.50 each to raise US$73.5 million. The IPO will be priced on Thursday evening to start trading on Friday on the NASDAQ Global Market. The joint-lead managers are: Credit Suisse and J.P. Morgan. The co-managers are: Oppenheimer and China Renaissance Securities (Hong Kong) Limited
From Luxembourg With Love
GFI Software is a Luxembourg-based global provider of collaboration, IT infrastructure and managed service provider software solutions designed for small and medium-sized businesses. GFI reports its customer base has grown from over 89,000 customers as of Dec. 31, 2008, to over 300,000 customers in over 180 countries as of Sept. 30, 2013. The company also launched its GFI Cloud platform in 2012. Founded in 2009, GFI Software has about 749 employees. Bankers plan to offer 6.1 million shares of GFI Software at $12 to $14 each to raise $79.3 million. The IPO will be priced on Thursday evening to start trading on Friday on the New York Stock Exchange. The joint-lead managers are: J.P. Morgan Securities, Credit Suisse Securities and Jefferies. The co-managers are: Stifel, BMO Capital Markets, Needham and Oppenheimer.
Note: Investment funds affiliated with Insight Venture Management, GFI Software’s majority shareholder, have indicated an interest in purchasing up to 610,000 of the common shares in this offering at the initial public offering price.
Cashmere and Comfort
Now let’s turn to the United States and what some think could be “the pick of the week.”
Apparel Holding (to be renamed Vince Holding Corp. with proposed symbol VNCE) is a New York City-based diversified apparel company that designs, manufactures and markets a collection of fashion brands that include Vince, Rebecca Taylor, David Meister, Sag Harbor, My Michelle and XOXO, along with numerous private-label businesses for major retailers. After the IPO, the company’s sole business will be the Vince business, according to the prospectus. The Vince brand is known for its women’s cashmere and luxury knits sold online and by upscale retailers, including Nordstrom and Neiman Marcus. Leather, denim, menswear, shoes and accessories round out the Vince line. Founded in 2008, Apparel Holding has about 1,514 employees.
Bankers plan to offer 10 million shares of Apparel/Vince at $17 to $19 each to raise $180 million. The IPO will be priced on Thursday evening to start trading on Friday on the New York Stock Exchange. The joint-lead managers are: Goldman Sachs and Baird. The co-managers are: BofA Merrill Lynch, Barclays, J.P. Morgan, UBS Investment Bank, KeyBanc Capital Markets, Stifel and William Blair.
Note: Ten of this week’s 11 IPOs are expected to start trading on Thursday and Friday. Next week is shortened by the Thanksgiving Day holiday. There is nothing on the IPO calendar for the week of Nov. 25.
But don’t go away.
The IPO market is normally open for business through mid-December. Dating back to 1980, over the last 33 years, the median number of IPOs priced in December was 24.5. In December 1983, bankers priced 99 IPOs, and in December 1993, a total of 93 companies went public. So it’s not just Santa’s workshop that hums as the year ends. December’s pace can be brisk for IPOs.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.