The IPO Buzz: Pause and Effect

The three major U.S. stock market indexes closed Friday at all-time highs. The IPO calendar should be flying. It isn’t – and there are no deals in sight. But this is not the end of the world.

Let’s turn back through the history book’s pages for an answer.

When Congress passed the Jumpstart Our Business Startups Act of 2012, it changed the issuance of IPOs to a three-week affair – down from a three-month cycle. Under the JOBS Act, a privately owned company can file confidential papers with the U.S. Securities and Exchange Commission for an IPO. That lets its bankers do whatever it takes to get the deal ready for an S-1 filing to go public. At a later date, usually on a Monday morning, the company will file an amendment, called an S-1/A, giving the number of shares to be offered and a pricing range. The pricing date is usually set for the following week, typically in mid-week or late in the week.

There you have it: Last week is in the books, this week is coming, and next week is waiting to be announced. That’s a three-week cycle.

The Numbers Game

Now let’s shift back to the present.

The question is: Where is the IPO market? In a poll of IPO professionals, most thought about that for a minute and came to a general agreement. Wall Street is in an earnings season and those IPOs in today’s pipeline are no different. People are waiting for their numbers.

Last week, three deals got priced. The IPO calendar’s other name was taken over by a buyout. All three were priced Thursday evening and traded in Friday’s market: Clipper Realty (CLPR), a REIT, priced 5.7 million shares at $13.50 each, down from 7.1 million shares at $13.50 to $15.50. It closed Friday at $13.50, unchanged from its IPO price. Foundation Building Materials (FBM), a specialty distributor of wallboard and suspended ceiling systems, priced 12.8 million shares at $14 each, down from 12.8 million shares at $17 to $19. It closed Friday at $15.50. Sachem Capital (SACH), a REIT, priced 2.6 million shares at $5 each, down from 3 million shares at $5. It closed Friday at $5.04.

The buyout took Mauser Group N.V., a supplier of rigid packaging products and services for industrial use, out of the IPO game. Stone Canyon Industries bought Mauser for $2.3 billion in cash. The company was valued at $1 billion, based upon its IPO filing. (Note: For company profiles, pricing information and trading dates, please check IPOScoop.coms website.)

The only thing the pros were talking about was Snap (SNAP – proposed) and its IPO filing to raise $3 billion. The company – known for its Snapchat camera app – hasn’t filed terms yet.

Looking ahead to next week, the IPO calendar is clean and green. There is nothing on it. But that could change when the SEC’s filing window opens on Monday morning.

Stay tuned.

Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinion.