The IPO Buzz: Before and After Facebook

But the die had been cast earlier.
To re-cap: Facebook’s IPO was priced at $38 per share. It opened with a pop at $42 and narrowly avoided a flop by closing at $38.23. The entire day was hounded by reports of major execution problems.
The deal: Facebook and its inside shareholders planned to raise $10.6 billion by offering 337.4 million shares at $28 to $35 each. In the end, they raised $16 billion by offering 421.2 million shares at $38 each. The size was increased by slightly more than 50 percent. That’s when ECON 101 kicked in – supply versus demand.
Judging by Facebook’s close – up just 23 cents per share from its initial offering price – it seems as if the supply side was increased enough to satisfy the demand side.
Blind Hysteria
One thing got overlooked in all the hysteria. The stock market was not in great shape.
The three major U.S. stock market indexes have suffered sharp pullbacks from their recent highs. That didn’t help matters.
On Friday, May 18, the Dow Jones Industrial Average closed down 6.85 percent from its recent closing high set on May 1. At Friday’s close, the S&P 500 was down 8.72 percent from its most recent closing high on April 2 and the Nasdaq Composite Index quietly slipped into a correction mode. It was down 11 percent at the close on Friday, May 18, at 2,778.79 – down from 3,122.57, its recent high of March 26.
This raises a question: “Is there IPO life after Facebook?”
The answer: It all depends on the stock market’s strength.
Now that the Facebook IPO circus has left town, let’s take a sober look at the market.
Waiting in the wings are about 185 IPOs in registration that have been filed within the past 12 months. Two industrial sectors – cloud computing and restaurants – have drawn investors’ interest, but more on that next week.
Games and Beauty
It’s going to be pretty dull around the IPO water cooler this week. The calendar lists three deals. One is a carryover from the last two weeks.
The new faces are Corsair Components (CRSR – proposed) and Tria Beauty (TRIA – proposed).
Corsair Components plans to price 6 million shares at $12 to $14 each on Wednesday evening. The IPO is expected to start trading o Thursday morning on the NASDAQ Global Market under the proposed symbol “CRSR.” The joint-lead managers are Stifel Nicolaus Weisel and RBC Capital Markets. The co-managers are William Blair and Needham.
Note: On April 23, 2010, the company filed for an IPO to raise $86.3 million. Fast forward two years later: On April 26, 2012, Corsair Components replaced the original underwriting team.
Based in Freemont, California, Corsair Components designs high-performance components and peripherals for the personal computer gaming market. Formed in 1994, the company has about 800 employees.
Corsair Components plans to offer about 4.1 million shares and selling shareholders plan to offer about 1.9 million shares. The company expects to have about 17.2 million shares outstanding after the offering.
Tria Beauty plans to price 4.6 million shares at $13 to $15 each on Wednesday evening. The IPO is expected to start trading on Thursday morning on the NASDAQ Global Market under the proposed symbol “TRIA.” The joint-lead managers are Morgan Stanley and Piper Jaffray. The co-manager is Wells Fargo Securities.
Based in Dublin, California, Tria Beauty offers medical devices for laser hair removal and acne treatment at home. It is developing a third device to reduce facial wrinkles. Formed in 2003, the company has about 102 employees.
Tria Beauty plans to offer all of the shares in the underwriting. The company expects to have about 19.3 million shares outstanding after the offering.
Looking ahead, the following week will be cut short by the Memorial Day holiday on Monday, May 28.
Stay tuned.
Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.