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.
Just One Word: Plastic
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.
Google’s 10th Birthday
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.
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.