The first items will be left to various world leaders to resolve. And under the JOBS Act, there is no real answer as to what looks good in the IPO pipeline. The issuance of IPOs has undergone a major change in recent months.
The Jumpstart Our Business Startups Act – or JOBS Act – was signed into law in April 2012 to encourage funding of small businesses by easing various securities regulations.
Basically, any company qualifying under the definition of an “emerging growth company” that wishes to go public can submit papers with the U.S. Securities and Exchange Commission without releasing a public announcement.
Later, if the company decides to move forward with its IPO, the S-1 registration is filed and the deal can jump onto the calendar in a matter of weeks. In the past, it could take months to get an IPO out the door.
Today’s new guidelines under the JOBS Act have shortened the trip to the IPO calendar to about three weeks. That does not produce much of an IPO pipeline.
Revisiting ManU
Let’s take a look at a recent high-profile IPO that took the new path to going public. It is Manchester United (MANU), the 134-year old British football/soccer club.
On July 7, 2012, Manchester filed for an IPO to raise $100 million. And yes, the company qualified as an “emerging growth company,” according to its prospectus.
On July 30, Manchester filed an amendment to offer 16.7 million shares at $16 to $20 each, and the IPO went on the calendar to be priced on Aug. 9.
On Aug. 9, Manchester priced 16.7 million shares at $14 each. The IPO opened the following morning at $14.05 and closed its opening day at $14 on a trading volume of 32.4 million shares. Its IPO closed on Friday, Nov. 9 at $12.79, DOWN 8.6 percent from its initial offering price.
Raising a Ruckus
This week’s IPO calendar lists four deals expecting to raise about $470 million. The week’s top pick, according to the IPO players, is Ruckus Wireless (RKUS – proposed) – another company taking advantage of the JOBS Act.
On Oct. 5, 2012, Ruckus Wireless filed for an IPO to raise $100 million. The company qualified as an “emerging growth company,” according to its prospectus.
On Nov. 5, Ruckus filed an amendment to offer 8.4 million shares at $13 to $15 each, and the IPO went on the calendar to be priced – just 10 days later – on Thursday, Nov. 15.
Ruckus Wireless is expected to start trading on Friday morning on the New York Stock Exchange under the proposed symbol “RKUS.” The joint-lead managers are Goldman Sachs, Morgan Stanley and Deutsche Bank Securities. The co-managers are Needham, Oppenheimer, William Blair and Craig-Hallum Capital Group.
Based in Sunnyvale, California, Ruckus is a provider of carrier-class Wi-Fi solutions for use by service providers and enterprises to solve network capacity for users of wireless networks. Ruckus was formed in 2002. It has about 600 employees.
For the nine months ending Sept. 30, 2012, Ruckus reported net income of $30 million on revenues of $152.5 million, compared with net income of $1 million on revenues of $79 million for the same period a year ago.
Ruckus plans to sell 7 million shares and selling shareholders plan to sell 1.4 million shares. The company expects to have about 73.7 million shares outstanding after the offering.
Next week will be cut short by the Thanksgiving Day holiday. Nevertheless, there are two deals on the IPO calendar. One is an “emerging growth company,” which is out of China, but more on this later.
Stay tuned.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.