During the week ending June 2, bankers offered four IPOs. One was priced on May 31, which falls into that month’s traffic, and the other three were in June.
All of the June offerings started trading on Friday and closed with mixed results. They were: Town Sports International Holdings (Nasdaq: CLUB) (gained 25 cents per share), Luna Innovations (Nasdaq: LUNA) (closed unchanged) and Alphatec Holdings (Nasdaq: ATEC) (lost 2 cents per share).
But here’s the backstage story. It didn’t get much coverage, if any.
Nine companies filed to go public last week. They hope to raise $1.9 billion. (See IPOScoop.com’s IPO Traffic) That was well above the weekly average for 2006’s IPO filings.
Before last week, 130 companies had filed to go public this year, according to available reports. They hoped to raise $21.3 billion. That would make an “average” week consisting of 6.2 filings, hoping to raise $1 billion. And last week was a four-day work week. On Monday, the securities markets were closed in observance of the Memorial Day holiday.
Added to last week’s new filings were 12 amendments where companies set new proposed offering terms or changed existing terms. They hope to raise $1.6 billion.
There was more.
Three IPOs that filed amendments jumped on the new-issues calendar with pricing dates. Another deal was pulled off the “postponed” pile and -– guess what -– got priced! That was the Town Sports deal.
Last week, the stock market rained on the IPO parade. The Nasdaq Composite Index was coming off its 2006 low set on May 23, about 10 days ago. Added to that were the aftershocks from Vonage’s well-publicized swan dive into disaster and controversy. And then there was the holiday-shortened work week.
The drizzle is to carry over into this week, which starts on June 5. There is just one deal is on the calendar. (See the Free IPO Calendar or, if you are a subscriber, go to the IPO Rated Calendar for the SCOOP ratings.)
Then the sun comes out.
The IPO traffic picks up with the week of June 12. Six deals are on the IPO calendar. This time a week ago, the week of June 12 was clean and green –- nothing was on the calendar.
Even with such a dismal start, it’s much too soon to give up on June. Consider this:
- For the week ending June 3, 2005, bankers priced two IPOs.
- For the week ending June 10, 2005, bankers priced two IPOs.
- Then the IPO market came to life like a crackling summer thunderstorm. Bankers went on to price 25 IPOs for all of June 2005.
Now let’s take a look back at the IPO Theater and see what got priced last week.
It started with the May 31st pricing of CTC Media (Nasdaq: CTCM), a Russian television network. Bankers offered 24.1 million shares at $14 each, below its filing range of 29.4 million shares at $16 to $18 each. The IPO opened at $14.75 and closed its opening day at $17 per share, up 17.6 percent from its initial offering price. It closed on Friday at $18.20, up 30 percent from its offering price.
Here’s what happened. Bankers pulled 5 million shares off the table and cut the offering price. The IPO closed its opening day at $17, the mid-point of its $16- to $18-per-share filing range.
What the pricing terms told us was there was a strong book for 24.1 million shares at $14, but not for more shares at a higher price.
However, the other offerings did not meet with the same success.
Alphatech Holdings, a Carlsbad, California-based manufacturer of products for surgical treatment of spinal disorders, priced 9.3 million shares at $9 each. The deal had been cut in size to $11 to $12 per share, down from $13 to $15 per share and then priced at $9 per share — below the reduced price range. It closed on Friday, its opening day, at $8.98 per share – down 2 cents.
Luna Innovations, a Roanoke, Virginia-based developer of molecular technology solutions, priced 3.5 million shares at $6 each. The deal had been cut twice. The first was to 4 million shares at $6 to $8, down from $11 to $13, and then it was cut again to 3.5 million shares. There was an apparent delay coming from the Securities and Exchange Commission as trading didn’t start until well into Friday afternoon, its opening day. It closed at $6 per share.
Town Sport International, a New York City-based operator of about 140 fitness clubs, priced 8.95 million shares at $13 each. That was well below its original filing range of 10 million shares at $16 to $18 each. The deal had been scheduled to make its debut during the week of May 22, but it was postponed. It was priced on Thursday night at $13 and closed on Friday, its first day of trading, at $13.25 per share.
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