After the recent listing of The Fresh Market Inc. (TFM), the Greensboro, North Carolina-based grocery chain, posted this year’s second biggest first-day gain for an initial public offering by a U.S. company and as many as eight companies seeking to raise a combined $855 million in the pipeline, all seemed fine for the US IPO market with analysts expressing that with the long awaited GM (GM) IPO is the pipeline as well, the sun was truly coming out for IPOs as investors. Just a week after GM IPO however, things have changed to the downside with Semiconductor company Aeroflex Holding Corp.'s (ARX) shares ended their first day of trading Friday flat, while three other initial public offerings failed to materialize.
GM IPO: General Motors Co. was able to launch its $15.8 billion IPO Thursday, raising far more money than originally expected, investors didn't reap great gains, with the stock closing up only 3.6%. On Friday, GM shares made little additional headway, closing seven cents higher.
Aeroflex Holding Corp: Aeroflex Holding Corp. was incorporated in Delaware in May 2007 and commenced operations in August 2007 upon the acquisition of Aeroflex Inc. and the consummation of transactions that resulted in Aeroflex becoming its wholly owned subsidiary. Aeroflex Inc. was a public company for 46 years and traded in the Nasdaq National Market System under the symbol "ARXX" before it was acquired on August 15, 2007 by affiliates of or funds managed by Veritas Capital, Golden Gate Capital, GS Direct, and certain members of management.
Meanwhile Shares of Aeroflex, which provides radio frequency and microwave integrated circuits for wireless communication systems, opened 6.1 percent below their initial public offering price. The shares opened at $12.67. Aeroflex on Thursday raised $232.9 million by selling 17.25 million shares for $13.50 each.
Caesar's Entertainment Corp: Casino operator Harrah's Entertainment Inc., which planned to raise $532 million under its new moniker of Caesar's Entertainment Corp., instead postponed the deal, citing market conditions. The casino operator has struggled with declining room rates and spending by guests during the economic downturn, and warns that it is especially sensitive to any economic hiccups. The company also carried a lot of debt on its balance sheet.
Thomson Reuters quoted analysts as saying that a chillier reception to private equity-backed offerings. In a week bustling with IPOs, particularly the $20.1 billion offering by GM, the biggest in U.S. history, Harrah's stood out for its heavy leverage. Harrah's loans slipped after the company pulled the IPO. Its largest, a $3 billion term loan, was trading at 87.25 cents to 88 cents on the dollar, down 0.75 percent, according to Thomson Reuters LPC. Harrah's, controlled by Apollo and TPG Capital, filed for the IPO in August.
Both Anacor Pharmaceuticals and Zogenix failed to price this week while automaker General Motors stole the headlines with its $20 billion IPO, an offering that could become the world's largest initial offering if underwriters exercise their option for all of the over allotments.
Anacor Pharmaceuticals Inc: The Palo Alto company was expected to pull the trigger on an expected $86.3 million offering last week but hadn't priced its shares by the end of Friday. Anacor originally announced the intention to raise $57.5 million in a public offering in August 2007 but withdrew that filing at the end of 2008. Anacor Pharmaceuticals (ANAC), which is developing treatments for nail fungus and psoriasis using boron-based chemistry.
Zogenix Inc.: Zogenix (ZGNX), a recently launched Sumavel DosePro, a needle-free injectable migraine treatment, was planning to raise $78 million by offering 6,000,000 at a price range of $12.00 to $14.00. Both Anacor and Zogenix's offerings were moved to next week.
Meanwhile Chinese ADRs continued to flood the US market with BitAuto Holdings (BITA) listing on the NYSE on Wednesday. While Chinese companies have accounted for 13 percent of the $19.2 billion raised by IPOs in the U.S. this year, according to data compiled by Bloomberg, that excludes closed-end funds and investment companies. What's more, as many as eight companies are seeking to raise a combined $855 million next week. Non-U.S. companies account for five of the ten best-performing IPOs on New York exchanges this year. “The sun’s coming out for IPOs as investors have tended to take the possibility of a double-dip off the table,” said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees about $55 billion.
Disclosure: No positions