The Web hosting service provider plans to price 22.2 million shares at $17 to $19 each Tuesday evening to trade Wednesday morning on the New York Stock Exchange under the proposed symbol “GDDY.” The buzz is that the books will close Monday, giving players little time to get in their indications of interest.
GoDaddy’s big date takes place during a four-day week on Wall Street because of the Easter and Passover holidays. This Friday, April 3, the New York Stock Exchange will be closed for Good Friday. Passover will begin at sundown on Friday.
Revisiting Alibaba, Facebook and Google
How GoDaddy’s stock will perform in the aftermarket remains to be seen. There are no clues from other high-profile IPOs that have come to market. Consider the following:
Alibaba Group Holding (BABA) priced its IPO of 320.1 million shares at $68 each on Sept. 18, 2014, UP from its original filing of 320.1 million shares at $60 to $66 each. On Sept. 19, Alibaba opened at $92.70, sold as high as $99.70, hit a low at $89.95, and closed its opening day at $93.89, UP 38.1 percent from its IPO price. The stock closed Friday, March 27, 2015, at $84.58.
The deal was a monster. It raised $21.8 billion. But that didn’t stop the stock from being volatile once the opening bell rang.
Current Outlook: About 37 analysts reportedly rate Alibaba a “Buy” to a “Strong Buy” with a median price target of $110 per share, UP about 30 percent from its close on Friday.
Facebook (FB) priced its IPO of 421.2 million shares at $38 each on May 17, 2012, UP from its original filing of 337.4 million shares at $28 to $35 each. Facebook raised $16 billion. On May 18, Facebook opened at $42.05, sold as high as $45, hit a low at $38, and closed its opening day at $38.23, UP 23 cents from its IPO price. The stock closed Friday, March 27, 2015, at $83.30.
There was a major snafu when it was time for Facebook to start trading on the IPO’s opening day. It was a mess, which wound up in the courts. That caused a lot of confusion and affected its trading. The IPO fell from a high of $45 to its close of $38.23, squashing the dreams of many. And that was only the beginning. By Sept. 4, 2012, Facebook sold at an intraday low of $17.55, DOWN 53.8 percent from its initial public offering price.
Current Outlook: About 50 analysts rate Facebook a “Buy” with a median price target of $92 per share, UP about 10 percent from its close on Friday.
Google (GOOGL) priced its IPO of 19.6 million shares at $85 each on Aug. 18, 2004, DOWN from its original filing of 25.7 million shares at $108 to $135 each. Google raised $1.7 billion with its IPO. On Aug. 19, Google opened at $100.01, sold as high as $104.06, hit a low at $95.96, and closed its opening day at $100.34, UP 18 cents from its IPO price.
The stock had a 2-for-1 stock split on April 3, 2014. Google’s stock closed Friday, March 27, 2015, at $557.55.
The Google IPO came to market in what is called a “Dutch auction.” This procedure allows any qualified investor with the right bid to get shares at the IPO’s offering price. An investor places a bid for the number of shares he or she wants and how much he or she is willing to pay. The underwriting agents collect the bids and the IPO’s offering price is determined by the highest price it takes to sell all of the shares. It is called the clearing price. As a result, there should be no aftermarket pop – all the buyers bidding higher prices would have been filled at the lower clearing price.
Not so with the 2004 Google IPO.
The Google clearing price was not revealed, but the media reported winning bids were about 75 percent filled. This indicated the clearing price was higher than the $85 per share and accounted for the pop of $15 per share.
Current Outlook: About 38 analysts rate GOOGL a “Buy” to a “Strong Buy” with a median price target of $625 per share, UP about 12 percent from its close on Friday.
Digital Prints, Glorious Prints
This week’s calendar is rounded out with three other deals. Two are carryovers from previous weeks. One is a new face on the IPO calendar. Headquartered in Israel, the company is a digital printing service provider that serves fashion and sports apparel companies.
Kornit Digital Ltd.(KRNT – proposed) designs and markets digital printing solutions for the global printed textile industry. The company, based in Israel, focuses on the rapidly growing high throughput, direct-to-garment segment of the printed textile industry. Kornit Digital’s solutions include its proprietary digital printing systems, ink and other consumables, associated software and value-added services that permit large-scale printing of short runs of complex images and designs directly on finished garments. Its customers include companies that specialize in printing logos and brands on clothing.
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.