The IPO Buzz: Under the IPO Big Top

By Friday’s close, bankers had priced seven deals that raised $1 billion.
Thrills and Spills
The three Chinese IPOs dominated the spotlight last week:
Nobody had any comment on the wind power company’s poor performance, other than shock and disappointment.
The week’s blockbuster deal turned out to be a “no show.”  Liberty Mutual, the 98-year-old insurance company, was looking to raise $1.2 billion in last week’s IPO market. But the deal was postponed “due to market conditions,” according to published reports.
Signals from the Sideshow
The IPO market’s sideshow sent a couple of strong signals last week, which could be worth noting for the weeks ahead. One message came through loud and clear about real estate investment trusts, or REITs: They’re “out.” The other message zeroed in on price: Reducing the pricing terms of a deal could produce a “dead cat” bounce.
Campus Crest Communities, a Charlotte, North Carolina-based REIT, was expected to be priced last week. But the IPO has been pushed into this week and it’s being carried on the calendar as “day to day.”
Legacy Healthcare, an Orlando, Florida-based REIT, has also been carried on the IPO calendar on a “day-to-day” basis. This offering has been trying to make it out the door since August.
To move the merchandise, even Bergdorf Goodman sometimes has to cut a price or two. But not all discounted items are created equal.
Amyris (AMRS), an Emeryville, California-based biology technology company, priced its IPO last week at $16 per share — DOWN sharply from an $18- to $20-a-share filing range. From the discounted price, the deal closed the week at $17.23, UP 7.69 percent from its initial offering price. Nevertheless, that was still below its filing range.
Elster Group SE (ELT), a provider of gas, electricity and water meters based in Germany, priced its IPO at $13 per share — DOWN sharply from a $16- to $18-a-share filing range. That worked. The IPO closed the week at $14.15, UP 8.85 percent from its offering price. Once again, that was still below its filing range.
Bad News, Good News
This week’s IPO calendar has five new faces waiting to make their debuts in the market. Judging from a consensus taken from investment professionals, there’s nothing on the “most wanted” list. That’s the bad news.
Now for the good news: A couple of deals might be cut in price just to get them out the door. If these get priced below their filing ranges, we might see a “dead cat” bounce.
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.