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, despite a recent pullback. This week I will review the initial public offerings for the week of April 16 - 20.
Last week's IPO's
Some 5 companies decided it was time to go public last week. Infoblox (BLOX), Midstates Petroleum Company (MPO), Proofpoint Inc. (PFPT), Splunk (SPLK) and Tumi Holdings Inc. (TUMI) took the jump and got their listing.
On average the IPO's were a great success with an average first day return of 42.5%, driven by the successful offering of Splunk which more than doubled on its opening day. Infoblox and Tumi Holding also saw their offering become a great success.
In total the sample above managed to raise some $1.1 billion in order to finance their business objectives and growth plans, or provide existing shareholders with a cash out.
The company focuses on Internet protocol, device configuration, compliance and security solutions raised $120 million in its public offering. For 2011 the company generated $133 million in revenue on which it lost $5 million. The company held some $50 million in cash for a roughly net cash position of $170 million after the public offering. This values the operating assets at some $770 million or almost 6 times annual revenues.
The public offering is a great success as the company priced its IPO at $16 per share, far above the previously indicated price range of $12-$14. A first day return of 33.1% to $21.30 completed the success.
Midstates Petroleum Corp.
At first sight the public offering of Midstates seems a success after the company closed its first trading day 15.4% above its offering price, ending the day at $15 per share. However recently the company sought to sell its shares somewhere in the $16-$18 offering range.
The company itself sold 18 million shares thereby raising some $230 million with selling shareholders offering another 6 million shares.
The oil company produced 7,500 barrels per day throughout 2010 which generated $209 million in revenue on which it net earned $17 million, valuing the company at 5 times annual revenues.
The data protection company raised some $80 million which will be used to finance an acquisition based strategy focused on small technology-oriented companies.
The company previously guided for an offering range of $10-$12 per share, but underwriters and the company decided to fix the offering price at $13 per share. Shares rallied 30% right out of the gate, but eventually closed the day 8.3% higher.
The company operates software platforms which collect data and enables users to analyze the data in various ways. The public offering of Splunk is one of the most successful this year so far.
The public offering price of $17 is almost double the previously indicated range of $8-$10 earlier this year. Shares more than doubled on their opening day ending the week at $36.20, some 300% above the indicated price range of $8-$10.
The company has some 3,700 corporate customers using the data analyzing products. For the fiscal year of 2012 the company reported a net loss of $11 million on revenue of $121 million. At a valuation of $3.3 billion the company trades at 27 times annual revenues!
Shares in high-end luggage maker Tumi increased 47% in their market debut as investors' appetite for luxury product makers has been high amidst the highly successful public offering of Michael Kors (KORS), which has more than doubled since its public offering at the end of 2011. Growth in emerging markets and affluent Asian shoppers boost demand for luxury products.
Shares ended the week at $26.20, far above the offering price of $18 per share after revising the offering range from $15-$17 per share. In 2011 the company generated sales of $330 million on which it net earned $17 million.
The initial public offering market has seen a strong week, as some offerings have seen impressive first-day returns and a number of companies managed to set the official offering price above the previously indicated offering ranges.
The public offerings were a great success, which will come as a great relief to shareholders of Facebook who feared that a "soft" public offering market in recent weeks, as well as a modest market correction in equity markets might have lowered investors' demand for the offering.