The Initial Public Offering market remains red hot with the much anticipated offering of Facebook (FB) just weeks away and equity markets trading around four-year highs. This week I will review the initial public offerings for the week of 26th till 30th of March 2012.
Last week's IPO's
Some 8 companies decided it was time to go public last week. Enphase Energy (ENPH), Gaslog (GLOG), CafePress (PRSS), Merrimack Pharma (MACK), Millenial Media (MM), Rexnord Corp (RXN), Annie's (BNNY) and Vocera Communications (VCRA) took the jump and got their listing.
On average the IPO's were a great success with an average first day return of over 27%. This was largely driven by the success of Millennial Media and Annie's, both almost doubled on their first trading day. Gaslog and Merrimack Pharma saw a disappointing debut, shares in these companies ended their first day below the offer price.
In total the sample above managed to raise some $1.3 billion in order to finance their business objectives and growth plans.
The developer and seller of micro-inverter systems for the solar photovoltaic industry saw its offering go well. The company has seen high growth in recent years as it grew revenues from a mere $1 million in 2008 to $150 million by 2011.
The success of the public offering might come as a slight surprise as German-based Q-Cells filed for bankruptcy on Monday and prominent US-based solar company FirstSolar (FSLR) trades at multi-year lows.
The owner and operator of liquid natural gas carriers had a disappointing debut. Despite the fact that the company and its underwriters lowered the initial offering price from an earlier range of $16-$18 per share to $14, demand remained weak.
Shares fell right of the gate and never saw the $14 mark again. Shareholders participating in the offering have seen a decline of 16% already.
The operator of its own e-commerce platform which enables customers to buy and sell customized and personal products went public last Thursday. Over 2011 it shipped almost 8 million products on its platform. Investors are not convinced and fear competition from larger internet platforms such as Amazon. Shares trade at a small loss compared to their offering price.
The pharmaceutical company focusing on the discovery and developing of cancer related medicines had a disappointing debut. The company which ran losses of $87 million in 2011 managed to raise $100 million.
To raise this money it had to lower the offering price to $7 a share, down from an initial target range of $8-$10 earlier this year. Shares continued to fall after the opening and investors are left with a 13% loss.
The company operates a mobile advertising platform helping developers to maximize their revenues. Its MYDAS platform reached over 300 million users in February 2012 alone and some 30,000 applications have been enabled on the platform. The company has seen astonishing growth from a mere $6 million revenue in 2008 to over $100 million by 2011. Although shares have seen a little pullback, the IPO is an enormous success with shares up 62% compared to the offer price.
This is the largest IPO of last week. The multi-platform industrial company focusing on Process & Motion Control and Water Management focuses on a range of industrial applications. Shares saw a strong debut and continued their upward trend, resulting in a decent 20% profit for participating investors.
Annie's, the producer of natural and organic food had a very successful IPO. Shares rallied out of the gate and almost doubled on their first trading day. This came after the company revised its offering price upwards to $19 a share from an initial offering range of $14-$16 per share. With shares approaching the $40 mark, investors should stay away.
The provider of mobile communication solutions for hospitals saw a successful public offering. The company operates in the intersection of healthcare and communication devices, both of which are long term growth markets. Despite the attractive prospects, valuations are still reasonable.
The initial public offering market ended an already strong quarter with a very strong week. Not only did eight companies go public, the offerings were on average a great success. The window of opportunity has not been closed yet and the strength of the market promises a lot for Facebook's rumored $10 billion offering.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.