The IPO Buzz: Chips and Cash

Qimonda AG (NYSE: QI proposed), of Munich, Germany, is the week’s blockbuster deal. The semiconductor memory products maker is being spun off from its parent, Infineon Technologies AG, which once was owned by Siemens AG, Germany’s engineering powerhouse. Qimonda plans to price 63 million American Depositary Shares at $16 to $18 each to raise about $1.1 billion.
If Qimonda’s dreams come true, it will price its deal within range and raise the lion’s share of the coming week’s IPO bounty. For the week of August 7, bankers plan to price five deals and aim to raise $1.77 billion. (Yes, that includes Qimonda.)
But don’t hold your breath. The semiconductor industry isn’t having a banner year. The Dow Jones Semiconductors Index was down 16.7 percent over the last 52 weeks. And the Nasdaq Composite Index, the barometer of the IPO market, hit its low for the year on July 21. There hasn’t been enough time yet for the Nasdaq or the IPO market to fully recover from that blow.
That brings us back to cash. Yes, the color of money is the only color that counts on Wall Street.
Evercore Partners (NYSE: EVR proposed) is a New York City-based financial services firm providing advisory services for mergers and acquisitions. Evercore’s IPO is the “most wanted” deal on this week’s calendar, according to the IPO professionals whose input is reflected in the SCOOP ratings.
Bankers plan to price 3.95 million shares at $18 to $20 each -– or about $76 million, if the IPO is priced at $19 a share, the mid-point of that range.
Evercore’s offering is small (3.95 million shares) compared with Qimonda’s (63 million shares). Which do you think will have a better opening-day pop?
Looking back, last week’s IPO market was a different story. August’s new-issues calendar got off to a stumbling start.
On Monday, July 31, bankers were looking to price five deals. Three made it to market. None drew rave notices.
Security Capital Assurance (NYSE: SCA), a Bermuda-based surety insurance company, eked out an opening-day gain of 25 cents per share. Bankers priced 22.4 million shares at $20.50 each, down from a filing range of $21 to $23 per share. The deal started trading on Wednesday, and closed Friday at $20.75 per share, up a whopping 1.22 percent from its initial offering price.
By the way, that was the week’s only winner, up a quarter of a dollar. In New York City, that’ll get you 20 minutes on a parking meter. In Bermuda, a U.S. quarter won’t even pay for the swizzle stick in your Dark N’Stormy.
Osiris Therapeutics (Nasdaq: OSIR), a Baltimore-based developer of stem-cell therapies, finished its opening day unchanged from its initial offering price. Bankers priced 3.5 million shares at $11 each, on the low end of its $11- to $13-per-share filing range. The deal started trading on Friday and closed at $11 per share.
Buckeye GP Holdings (NYSE: BGH), an oil and gas pipeline limited partnership, lost 77 cents per share by week’s end. Bankers priced 10.5 million shares at $17 each, down from 14.1 million shares at $19 to $21 each.  The deal started trading on Friday and closed at $16.23 per share, down 4.53 percent from its initial offering price.
Coincidence or not, the price of a barrel of crude oil also fell in Friday’s New York trading and settled just below $75 a barrel after a tropical storm no longer threatened to become a hurricane.
The rest of last week’s calendar faded off into oblivion.
Asset Capital (Nasdaq: ACCI proposed) was postponed “due to market conditions” and Alien Technology (Nasdaq: RFID proposed), which has been on the IPO calendar since the week of July 24, was withdrawn late Friday afternoon.
To sum up, bankers postponed one deal (Asset Capital), withdrew Alien Technology and two other deals, yet they  filed plans for seven new deals looking to raise $1.7 billion. (Please see “IPO Traffic” column.)
In short, there was some wing flapping, but not much flying in last week’s IPO market.