The IPO Buzz: Ride a White Horse

The IPOs we all love and hate are filed under the SEC’s S-1 form, which are used by companies to register their securities with the SEC under the Securities Act of 1933.
Based in Miami, WhiteHorse Finance is a closed-end management investment company so it came under an N-2 filing. The company’s investment objective is to generate risk-adjusted returns by originating secured loans to small-capitalization, or small-cap, companies.
WhiteHorse plans to price 6.7 million shares at $15 each on Tuesday night. The offering is expected to start trading on Wednesday morning on the NASDAQ Global Market under the proposed symbol “WHF.” The joint-lead managers are Deutsche Bank Securities, J.P. Morgan, Citigroup and Barclays. The co-managers are Baird, RBC Capital Markets, Stifel Nicolaus Weisel, BB&T Capital Markets, Sterne Agee and Wunderlich Securities.
Decembers Thick and Thin
With just one deal scheduled this week, that raises a question about the outlook for December.
When December rolls into the Land of IPOs, its new-issues calendar can be plentiful, as in 1983, or barren, as in 2008. The volume depends upon market conditions. Whenever the Nasdaq has declined from a recent high, the IPO market tends to slow down or go into hibernation. Today’s betting is that this December will be closer to 2008 than 1983.
In December 1983, bankers priced 99 IPOs, according to the SEC filings. And 1983 was a good year for stocks. The Nasdaq Composite Index, the barometer of the IPO market, scored a 19.8 percent gain. In case you are wondering, the 1983 IPO calendar turned out 685 deals.
Fast forward to December 2008: Not a single IPO was priced during the month. Its scorecard was “zero.” And 2008 was a train wreck for stocks. The Nasdaq Composite lost 40.5 percent for the year. The 2008 IPO calendar turned out 50 deals.
Passing point of interest: There have been only two times that 100 or more IPOs were priced in a single month. The first was in November 1993, when 100 deals made it out the door (pre-Internet bubble) and the other was in October 1996, with 109 deals (again – pre-Internet bubble.)
Now let’s look at today’s market conditions and 2012’s December IPO calendar.
The Nasdaq Composite Index closed on Friday, Nov. 30, at 3,010.40 – UP 15.6 percent for the year. That’s good, but the Nasdaq does not have the wind at its back moving into December. It is still down 5.4 percent from 3,183.94, its previous closing high set on Sept. 14.  
And that is what’s making the IPO calendar light.
Next week’s IPO calendar also has just one offering. This one is an S-1 filing – and it is drawing attention. It is SolarCity (SCTY – proposed).
Based in San Mateo, California, SolarCity is a provider of alternate energy. The company installs solar panels in homes and businesses in 14 states. SolarCity believes it installs more solar energy systems than any other company in the United States, but more on this IPO next week.
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.