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November’s IPO market opened with a pop and two flops. What’s more, the first week of November included eight companies unveiling proposed IPO pricing terms and six jumping onto the new-issues calendar. That’s not too shabby.

In contrast, September’s IPO market was a whitewash with nothing priced. And October produced just two deals.

This week’s calendar has five companies looking to raise $820 million. Four are new faces at the IPO window and the other is a carryover from past weeks. Two of the four new deals are “yield plays,” which are companies that make cash distributions.

Black Gold and High Yields

The “yield plays” this week have one thing in common. Both are in the energy sector – or as Jed Clampitt from “The Beverly Hillbillies” would have put it - both are involved in black gold, bubbling crude, oil, that is:

Chesapeake Granite Wash Trust (CHKR) based in Austin, Texas, is a recently formed trust to own royalty interests in horizontal oil wells located in Washita County in western Oklahoma. Bankers plans to offer 23.4 million common units at $19 to $21 each to raise $767.5 million.

The IPO is expected to be priced on Thursday evening, Nov. 10, and to trade on Friday morning on the New York Stock Exchange under the proposed symbol “CHKR.” Joint-lead managers are: Morgan Stanley (MS) and Raymond James (RJF).

(Note: Chesapeake Granite announced quarterly target distributions, starting with Sept. 30, 2011, to total $2.17 per unit over the coming 12 months. That would yield 10.8 percent at the mid-point of its price range.)

LRR Energy, L.P. (LRE) based in Houston, is a limited partnership formed to operate, acquire, exploit and develop producing oil and natural gas properties in North America. Bankers plans to offer 9.48 million common units at $19 to $21 each to raise about $189.6 million.

The IPO is expected to be priced on Thursday evening, Nov. 10, and to trade on Friday morning on the New York Stock Exchange under the proposed symbol “LRE.” The lead manager is Wells Fargo Securities (WFC).

(Note: LRR Energy plans to establish a minimum quarterly distribution of $0.475 per unit, or $1.90 per year, to yield 9.5 percent.)

Cancer Rx and Data Security

The other two new names on this week’s IPO calendar are in two distinct fields. One is a biopharmaceutical company involved in research on new drugs to treat cancer and the other is a technology company focused on data security.

NewLink Genetics (NLNK) based in Ames, Iowa, is developing novel immunotherapeutic products to improve cancer treatment options for patients and physicians. Its product pipeline includes treatments for pancreas cancer, lung cancer and melanoma, the most deadly form of skin cancer.

The company, founded in 1999, has about 78 employees. As of June 30, 2011, it had an accumulated deficit of $71.7 million. Bankers plan to offer 5.5 million shares at $10 to $12 each to raise about $60.5 million.

The IPO is expected to be priced on Wednesday evening, Nov. 9, and to trade on Thursday morning on the NASDAQ Global Market under the proposed symbol “NLNK.” Joint-lead managers are: Stifel Nicolaus Weisel (SF) and Canaccord Genuity.

Imperva (IMPV), based in Redwood Shores, California, is a provider of data security solutions. The company is focusing on providing visibility and control over high-value business data across critical systems within the data center. The company was founded in 2002. It has about 375 employees.

Imperva reported a net loss of $2.7 million on revenues of $19.7 million for the three months ended Sept. 30, 2011, compared with a net loss of $2.8 million on revenues of $13.6 million for the same period a year ago.

Bankers plan to offer 5 million shares at $14 to $16 each to raise about $75 million.

The IPO is expected to be priced on Tuesday evening, Nov. 8, and to trade on Wednesday morning on the New York Stock Exchange under the proposed symbol “IMPV.” Joint-lead managers are: J.P. Morgan (JPM) and Deutsche Bank Securities (DB).

Regrouping from Last Week

Looking back, there were a couple of classic lessons from last week’s IPO calendar:

* When a deal is priced above its original filing range, one can generally expect a good opening-day performance.

Groupon (GRPN) priced 35 million shares at $20 each on Thursday. That was above its filing range of 30 million shares at $16 to $18 each. The IPO opened on Friday at $28, sold as high as $31.14, and closed at $26.11, UP 30.6 percent from its initial offering price.

* When a deal is priced below its original filing range, one can generally expect a poor opening-day performance.

Enduro Royalty Trust (NDRO) priced 13.2 million unit trusts at $22 each on Wednesday. That was below its filing range of $23 to $25 per unit. The IPO opened on Thursday at $21.75, sold as high as $21.85, and closed at $21.26, DOWN 3.36 percent from its initial offering price.

When this week’s deals are priced, investors will keep a gimlet eye on whether the IPO price is above or below the filing range.

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. The author and IPOScoop.com staff do not issue advice, recommendations or opinions.


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