This answers the age-old question that comes up in mid-January: “Where’s the IPO market?” This year’s answer is: “It’s here!”
Leading this week’s IPO offerings is a manufacturer of unmanned aircraft or drones called AeroVironment (NASDAQ: AVAV proposed). The deal is on everybody’s “most wanted” list. It is reportedly being touted on late night TV. Enough said?
The fertilizer IPO is the unit offering of Converted Organics (NASDAQ: COINU proposed).
And the blank checks?
The last IPO to make its debut in 2006 was Freedom Acquisition Holdings (AMEX: FRH-U), a Specified Purpose Acquisition Company, or SPAC, otherwise known as a “blank check” company. On Dec. 21, bankers priced 40 million units at $10 each to raise $400 million. That made it the largest SPAC ever. The size of the deal had been increased from its original filing of 37.5 million units at $8 each to raise $300 million.
Since being priced, Freedom has traded as high as $10.40, as low as $10 and closed on Jan. 19 at $10.30, UP 3 percent from its initial offering price. That’s better than the underlying stock market, as measured by the Nasdaq Composite Index. It was up 1.49 percent over the same time span.
And 2005’s largest SPAC was the Dec. 15 pricing of Endeavor Acquisition (AMEX: EAD-U) of 15 million units at $8 each to raise $120 million.
Fast forward to December 2006.
On Dec. 19, American Apparel agreed to be acquired by Endeavor for $244 million. Based in Los Angeles, American Apparel operates about 143 retail outlets in the United States and in 14 countries. The company is known for its racy advertising campaigns.
On Friday, Jan. 19, 2007, Endeavor’s common stock closed at $10.75 per share. But don’t go away.
The December 2005 deal was a unit offering consisting of one share of common stock and one warrant at $8 per unit.
On Jan. 19, Endeavor’s units closed at $14.98, UP 87.3 percent from its initial offering price.
Bankers plan to price three “blank check” deals this week and another three for the week of Jan. 29, 2007.
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