The 2012 IPO market is emerging as one that's split between the "haves" and the "have nots." Last week's filings and this week's calendar show examples of each.
Facebook (FB) filed for an IPO of $5 billion last Wednesday. To call this one a "have" is a major understatement. The Facebook filing answered some questions, such as the IPO's size - over a billion dollars - plus everybody got a look at the company's financials and the company disclosed that Mark Zuckerberg owns over 538 million shares of Class B common stock representing 28.2 percent voting power before the offering.
What was not determined was the number of shares that will be offered and at what price. Without this information, the market capitalization of Facebook remains to be determined.
Caesars Entertainment (CZR) announced proposed pricing terms and named seven managers for its $16.3 million offering last Thursday - yes, $16.3 million. The company plans to sell 1.8 million shares at $8 to $10 each. The deal jumped onto the calendar to be priced Monday evening, Feb. 6, to trade on Tuesday.
Note: This is not a small-cap company. Caesars expects to have 125 million shares outstanding after the offering, which makes its market capitalization over $1.1 billion.
The reason for such a tiny offering is to establish a market for its stock for future financing by the company. After all, Caesars reported debt of about $19.6 billion and interest expenses of about $1.5 billion, according to its prospectus.
The last time Caesars tried to go public was in November 2010. It planned to offer 31.3 million shares at $15 to $17 each, but withdrew the offering on Nov. 15, 2010. The reason reportedly was investor concerns about its debt.
It's hard to imagine anyone or anything with "Caesar" as part of its name as being a "have not" - not by a long shot. But the company, at the moment, appears to be in that category, based on its filing for such a small IPO to test the waters.
A Pair to Watch
This brings us to this week. Nine deals are on the calendar. They are expecting to raise about $745 million. None are expected to produce an opening-day moonshot, according to IPO experts. Nevertheless, the experts are reportedly looking at a couple of potential "haves":
EPAM System (EPAM) plans to price 7.4 million shares at $16 to $18 each on Tuesday evening. The IPO is expected to start trading Wednesday morning on the NASDAQ Global Market.
The company is a global IT services provider of software product development services, software engineering and vertically-oriented custom development solutions to independent software vendors and technology companies. Based in Newtown, Pennsylvania, EPAM was formed in 1993. It has about 6,168 employees.
For the three months ending Sept. 30, 2011, EPAM reported net income of $14.6 million on revenues of $86.4 million, compared with net income of $6.1 million on revenues of $59.1 million for the same period a year ago.
EPAM plans to offer 1.5 million shares and selling shareholders plan to offer 5.9 million shares. The company expects to have about 40.7 million shares outstanding after the offering.
Roundy's Parent Company (RNDY) plans to price 18.2 million shares at $10 to $12 each on Tuesday evening. The IPO is expected to start trading Wednesday morning on the New York Stock Exchange.
The company is a Midwest supermarket chain. It believes it is the largest grocery retailer in the state of Wisconsin. As of Nov. 1, 2011, the company operated 158 grocery stores in Wisconsin, Minnesota and Illinois under the names of Pick'n Save, Rainbow, Copps, Metro Market and Mariano's. Roundy's was formed in 1872. It has about 17,761 employees.
For the 13 weeks ending Oct. 1, 2011, Roundy's reported net income of $12.4 million on revenues of $976.9 million, compared with net income of $9.5 million on revenues of $939 million for the same period a year ago.
Roundy's plans to offer 11.3 million shares and selling shareholders plan to offer 6.9 million shares. The company expects to have about 41.5 million shares outstanding after the offering.
The rest of this week's IPO calendar is not stirring that much excitement, according to the IPO professionals. In other words, they appear to be potential "have nots."
But remember: This is Wall Street, where anything can happen - and it often does.
There were no IPOs on tap for next week at press time. Not to worry. Several companies in the pipeline have started reporting their 2011 year-end results. You can start looking for more of them to move onto the calendar.
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.