Thunder and lightning rolled through the canyons of Wall Street last week and the forecast is for more of the same, but not for this week’s IPO calendar. Last week was explosive as issuers, bankers and customers made bank deposits and went home happy. (More on that later.)
Wall Street is not looking for an opening-day moonshot from this week’s calendar. There is only one deal on it. It’s a real estate investment trust, or REIT. Traditionally, REITS are not strong aftermarket performers.
AG Mortgage Investment Trust (NYSE:MITT), a New York City-based REIT, plans to invest in, acquire and manage a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets. The company expects to price 12.5 million shares at $20 each on Thursday evening, April 28, to trade Friday morning on the New York Stock Exchange.
The REITs’ Report Card
The opening-day performance by REITs over the last 52 weeks is nothing to cheer about. A Bronx cheer may be more in order.
A total of nine REIT IPOs have been priced since April 22, 2010, according to the U.S. Securities and Exchange Commission filings. Here’s where it gets ugly. Five of the nine had to be cut in size to get out the door and each flopped in the aftermarket. All five finished their respective opening days in the loss column.
The average opening-day performance for all nine REIT IPOs was a minus 0.59%. That’s right – a minus 0.59%.
Last week’s calendar produced five IPOs. The demand was so great that all were priced above their initial filing ranges. Each turned in a better-than-expected opening-day gain.
The five IPOs raised over $1.66 billion (including exercising the overallotment allocation, or “green shoe,” of 15%). That was 40.7% more than the $1.18 billion that was originally planned.
Investors had a field day as well:
21Vianet Group (VNET), a Chinese “cloud computing” company, priced 13 million American Depositary Shares (ADS) at $15 each. Shares increased from 11.5 million ADS at $10 to $12. The IPO started trading at $20.26 per share on Thursday morning and closed at $18.80 -- UP 25.3% from its initial offering price.
Air Lease (AL), a Los Angeles-based commercial aircraft leasing company, priced 30.3 million shares at $26.50 each. Shares increased from 25 million shares at $25 to $28. The IPO started trading at $27.25 per share on Tuesday morning and closed on Thursday at $29.05 -- UP 9.6% from its initial offering price.
Responsys (MKTG), a Los Angeles-based provider of marketing software and services, priced 6.62 million shares at $12 each. Shares increased from $8.50 to $10 per share. The IPO started trading at $16 on Thursday morning and closed at $15.40 -- UP 28.3% from its initial offering price.
Sagent Pharmaceuticals (SGNT), a Schaumburg, Illinois-based provider of generic injectable products, priced 5.75 million shares at $16 each. Shares increased from 5 million shares at $14 to $16. The IPO started trading at $18.25 per share on Wednesday morning and closed Thursday at $20.10 -- UP 25.6% from its initial offering price.
Tesoro Logistics LP (TLLP), a San Antonio, Texas-based limited partnership formed to own and operate crude oil gathering, transportation, and storage facilities, priced 13 million shares at $21 each. Shares increased from 12.5 million shares at $19 to $21. The IPO started trading at $23.25 per share on Wednesday morning and closed Thursday at $23.51 -- UP 11.9% from its initial offering price.
Get this. The Street thinks the following week -– the week of May 2nd -- could produce even more fireworks than last. Consider a couple on tap:
Boingo Wireless (NASDAQ:WIFI) is a Los Angeles-based provider of software to access the mobile Internet through high-speed, high-bandwidth Wi-Fi networks. It’s a fast-growing company. And profits are soaring – bingo, Boingo.
Now you may be wondering why this week is so colorless. The answer is religion.
Last week started with Passover and ended with Good Friday. There was nobody around to attend an IPO’s road show.
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 or have plans to initiate any positions within the next 72 hours. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.