If the deal is priced within its current filing range, it would be by far the largest U.S. IPO ever.
Visa (NYSE: V proposed) plans to price 406 million shares at $37 to $42 each. The deal could raise $15 billion if priced on the low end of its filing range — and $17.1 billion if priced on the high end. A pricing at the high end and the exercise of the greenshoe (the over-allotment allocation of 15 percent) would mean that the Visa offering could raise $19.6 billion. Any of these scenarios would put the dollar amount well above the previous largest U.S. IPO, according to Securities and Exchange Commission filings.
That would be AT&T Wireless Services. On April 27, 2000, AT&T Wireless offered 360 million shares at $29 each to raise $10.6 billion. On May 16, 2004, AT&T Wireless was acquired by Cingular for $15 per share — DOWN 49.2 percent from its initial offering price.
(Note: The largest IPO ever filed in the United States was Enel Societa per Azioni (PK: ENSTY), an Italian electric utility. On November 2, 1999, Enel priced 363.7 million shares at $45.23 each to raise $16.45 billion. Enel closed on Friday, Feb. 29, 2008, at $53.85 — UP 19.1 percent from its initial offering price.)
A Household Name Helps
On July 1, 1998, the first blockbuster -– a billion-dollar baby -– made its debut in the U.S. capital markets. It was Republic Services (NYSE:RSG), a Fort Lauderdale, Florida-based waste-management company. Republic priced 55 million shares at $24 each to raise $1.32 billion. Its stock closed on Friday, Feb. 29, 2008, at $30.13 — UP 88.1 percent from its adjusted initial offering price of $16 per share. On March 19, 2007, Republic Services had a three-for-two stock split.
The last blockbuster was Och-Ziff Capital Management (NYSE: OZM), a New York City-based asset management company. On Nov. 13, 2007, Och-Ziff priced 36 million shares at $32 each to raise $1.15 billion. The stock closed on Friday, Feb. 29, at $23.14 — DOWN 27.7 percent from its initial offering price.
From the first big deal to the last, bankers have priced a total of 76 blockbuster IPOs in the U.S. capital markets. Of those, 46 were American-based companies.
One thing that most had in common was a household name. But not all made money for their initial investors.
The best aftermarket performance, as measured from its issuance date through Feb. 29, 2008, was Goldman Sachs Group (NYSE: GS). On May 4, 1999, Goldman Sachs priced 69 million shares at $53 each to raise $3.66 billion. Its stock closed on Friday at $169.63 — UP 220.1 percent from its initial offering price.
The poorest aftermarket performance was Charter Communications (NASDAQ: CHTR), a St. Louis-based provider of cable video programming, high-speed Internet access and broadband cable services. On May 4, 1999, Charter Communications s priced 170 million shares at $19 each to raise $3.23 billion. Its stock closed on Friday at 96 cents — DOWN 95 percent from its initial offering price.
Roll Call of the Blockbusters
Let’s hear the drum roll for the 10 largest U.S. IPOs and how they have done since going public:
1. AT&T Wireless raised $10.6 billion. (See above.)
2. Kraft Foods (NYSE: KFT): On June 13, 2001, Kraft priced 280 million shares at $31 each to raise $8.68 billion. Kraft Foods closed on Friday at $31.16 — UP 0.6 percent from its offering price.
3. United Parcel Service (NYSE: UPS): On Nov. 10, 1999, UPS priced 109.4 million shares at $50 each to raise $5.47 billion. UPS closed on Friday at $70.24 — UP 40.5 percent from its offering price.
4. CIT Group (NYSE: CIT): On July 2, 2002, CIT priced 200 million shares at $23 each to raise $4.6 billion. CIT closed on Friday at $22.22 — DOWN 3.39 percent from its offering price.
5. Conoco: On Oct. 22, 1998, Conoco priced 191.5 million shares at $23 each to raise $4.4 billion. On Aug. 30, 2002, Conoco merged with Phillips Petroleum to become ConocoPhillips (NYSE: COP). Each share of Conoco received 0.4677 shares in the new company. ConocoPhillips closed on Friday at $82.84 — UP 68.4 percent from Conoco’s initial offering price.
6. The Blackstone Group (NYSE: BX): On June 21, 2007, Blackstone priced 133.3 million shares at $31 each to raise $4.13 billion. Blackstone closed on Friday at $16.50 — DOWN 46.8 percent from its offering price.
7. Travelers Property Casualty (NYSE: TPK): On March 22, 2002, Travelers priced 210 million shares at $18.50 each to raise $3.89 billion. Travelers closed on Friday at $24.50 — UP 32.4 percent from its offering price.
8. Goldman Sachs raised $3.67 billion. (See above.)
9. Agere Systems: On Feb. 28, 2001, Agere priced 600 million shares at $6 each to raise $3.6 billion. On April 2, 2007, LSI Corp. (NYSE: LSI) acquired Agere Systems for 2.16 shares of LSI for each share of Agere System. LSI on closed Friday at $5.04 — UP 81.3 percent from Agere’s adjusted initial offering price.
10. Charter Communications raised 3.2 billion. (See above.)
And the scorecard: As of the closing bell on Friday, Feb. 29, 2008, six of the 10 largest U.S. IPOs were trading ABOVE their initial offering prices, albeit one of those was up only 17 cents per share, and three were losers, while the other one had been acquired for a loss of nearly 50 percent for its original investors.