The IPO Buzz: Snap to Attention

This week belongs to Snap (SNAP – proposed) and its blockbuster $3 billion IPO.

Bankers plan to offer 200 million shares of Snap at $14 to $16 each. The deal is expected to be priced on Wednesday evening, March 1 – to trade Thursday morning, March 2, on the New York Stock Exchange under the proposed symbol of SNAP.

A $3 billion IPO offering is significant, but barely makes it into the top 25 U.S. new-issue offerings. The first on the U.S. blockbuster list came on June 21, 1998, when Alstrom priced its IPO of 109.1 million American Depositary Shares at $34.22 each to raise $3.7 billion, according to the U.S. Securities and Exchange Commission filings. (The company was acquired in 2003.) The last blockbuster was earlier this year. On Jan. 31, 2017, Invitation Homes (INVH) priced its IPO of 77 million shares at $22 each to raise $1.54 billion.

Billion-Dollar Babies’ Scorecard

All told, there have been 114 companies that have tapped the U.S. capital markets with an IPO to raise $1 billion or more. These billion-dollar babies’ IPOs have been mostly successful.

Their opening-day scorecard stands at:

  • 68 up,
  • 21 down,
  • 5 unchanged.

The average opening-day gain for all 114 IPOs was UP 14.4 percent above their initial public offering prices.

This brings us back to the present and the two deals on this week’s IPO calendar.

Listening to the Snap Chatter

The IPO buzz around the Street on Snap is much the same as last week. It remains a two-sided story and no real change from previous media chatter. The financial press is still giving the deal its lumps, focusing on such things as the stock being offered to investors has no voting rights, the company’s slowing growth rate, its continued losses and so forth.

The professionals, however, like the deal within its current price range. The word out there is that the books are closing Tuesday on a Wednesday evening pricing and the deal is reportedly a few times oversubscribed.

Following the Private Money

Nevertheless, the Street is not living by one IPO alone to usher in the month of March. This week’s calendar has two deals – the $3 billion Snap offering and a $190 million Hamilton Lane (LHNE – proposed) IPO.

Hamilton Lane, based in Bala Cynwyd, Pennsylvania, is a 10-year-old investment advisory firm. The company’s services are to conceive structure, build out, manage and monitor portfolios of private markets funds and direct investments. Hamilton Lane’s clients include six of the world’s 20 largest pension funds, the prospectus says.

Hamilton Lane plans to offer 11.88 million Class A common stock at $15 to $17 per share. Pricing is expected on Tuesday, Feb. 28, to trade Wednesday, March 1.

Worth noting: Hamilton Lane has two classes of common stock. The company is offering Class A common stock, which has one vote per share, in the IPO. Hamilton Lane’s Class B common stock has 10 votes per share. The Class B stockholders will control 94.7 percent of the combined voting power of the common stock immediately after the IPO.

Tabula Rasa

For the week of March 6, the IPO calendar is clean and green. There is nothing on it. But that could change when the SEC’s filing window re-opens for business 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.