Thanksgiving turkeys arrived early on Wall Street as four IPOs laid eggs in last week’s new-issues market. This holiday-shortened week has just two deals on the calendar. Investment professionals expect a sleepy time in the Land of IPOs.
One deal, in fact, is not what the crowd at Harry’s at Hanover Square (Wall Street’s hot spot of yesteryear) would call an IPO. It is a closed-end fund.
Memo to Wall Street’s young Turks: Harry’s was once a popular watering hole in Lower Manhattan where bankers would meet bankers to discuss what bankers discuss over a drink or two, or maybe more.
A Lean Holiday Menu
For the record, the closed-end fund is BlackRock Utility & Infrastructure Trust (BUI), a newly formed non-diversified, closed-end management investment company. The expected offering price is $20 per share and the number of shares to be offered is not yet determined. The joint-lead managers are Morgan Stanley, Citigroup, BofA Merrill Lynch, UBS Investment Bank, Wells Fargo Securities, Ameriprise Financial Services and RBC Capital Markets.
The other is a small-cap offering looking to raise a little more than $16 million.
WhiteSmoke (WHSM) is an Israeli-based software provider offering comprehensive tools for improving the grammar, spelling, structure and style of English texts for both native and non-native English speakers – a dream tool that editors wish their charges would use.
The company, formed in 2002, has more than 60 employees. It reported a net loss of $1.7 million on revenues of $8.7 million for the nine months ended Sept. 30, 2011, compared with a net loss of $1.4 million on revenues of $1.4 million for the same period a year ago.
Bankers plan to offer about 1.9 million shares at $8 to $10 each to raise about $16.8 million. The IPO is expected to be priced on Monday evening, Nov. 21, and to trade on Tuesday morning on the NASDAQ Global Market under the proposed symbol “WHSM.” Joint-lead managers are Aegis Capital and EarlyBirdCapital.
Let’s look back at last week’s traffic and the results of reading IPO tea leaves.
These tea leaves are not found in the bottom of a cup, but on the cover of an IPO’s final prospectus. Compare those pricing terms with the terms on the preliminary prospectus for a clue on how the IPO might perform in the aftermarket.
Angie’s List (ANGI) – Bankers priced 8.8 million shares at $13 each, on the high end of its $11 to $13 per share filing range. The IPO opened Thursday at $18, closed its opening day at $16.28 and ended on Friday at $15.80, UP 21.5 percent from its initial offering price.
Mattress Firm Holding (MFRM) - Bankers priced 5.6 million shares at $19 each, on the high end of its $17 to $19 filing range. The IPO opened Friday at $22 and closed its opening day at $22, UP 15.8 percent from its initial offering price.
Four Turkeys and a Surprise
Clovis Oncology (CLVS) - Bankers priced 10 million shares at $13 each, on the low end of its $13 to $15 filing range. The IPO opened Thursday at $13.05, closed its opening day at $12.56 and ended on Friday at $12.58, DOWN 3.23 percent from its initial offering price.
Delphi Automotive PLC (DLPH) - Bankers priced 24.1 million shares at $22 each, on the low end of its $22 to $24 filing range. The IPO opened Thursday at $21.25, closed its opening day at $21.33 and ended on Friday at $21, DOWN 4.55 percent from its initial offering price.
Intermolecular (IMI) - Bankers priced 9.65 million shares at $10 each, below its 10 million shares at $10 to $12 filing range. The IPO opened Friday at $10 and closed its opening day, at $9.50, DOWN 5 percent from its initial offering price
Digital Domain Media Group (DDMG) - Bankers priced 5 million shares at $8.50 each, below its 5.5 million shares $10 to $12 filing range. The IPO opened Friday at $8.50 and closed its opening day, at $7.15, DOWN 15.9 percent from its initial offering price.
Naturally about the time you think you’ve figured something out, along comes nature to bring you back to reality.
InvenSense (INVN) - Bankers priced 10 million shares at $7.50 each, near the low end of its $7 to $8.50 per share filing range. The IPO opened Wednesday at $8.30, closed its opening day at $8.90 and ended on Friday at $10.30, UP 37.3 percent from its initial offering price.
The only comment investment professionals had was, “When was the last time you saw Goldman Sachs price an IPO at about $7 per share?.”
The staff of IPOScoop.com wishes everybody a Happy Thanksgiving.
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.