Moonshots and blockbusters conjure up excitement in IPO Valley. An IPO moonshot is an opening-day gain of 100 percent or more, while a blockbuster is an offering that aims to raise $1 billion or more. Facebook (FB) is a blockbuster. It remains to be seen if it will be a moonshot.
There have been 248 opening-day IPO moonshots, according to available records.
The granddaddy of them all was the VA Linux Systems offering. On Dec. 8, 1999, VA Linux priced its IPO of 4.4 million shares at $30 each and closed its opening day at $239.25, UP a whopping 697.5 percent from its initial offering price.
The most recent moonshot was Splunk (SPLK). On April 18, 2012, Splunk priced its IPO of 13.5 million shares at $17 each and closed its opening day at $35.48, UP 108.7 percent.
There have been 83 companies that have gone public in the U.S. capital markets that raised a $1 billion or more. The largest was the Visa (V) offering of $17.9 billion in 2008.
The most recent super-blockbuster was the General Motors (GM) offering of $15.8 billion in 2010.
Despite their huge sizes blockbuster IPOs usually are able to score opening-day gains. Of the past 83 deals, 65 closed above their initial offering prices, 16 were losers, and two finished unchanged. The super-blockbusters did well their opening days.
- Visa priced its IPO of 406 million shares at $44 each and closed its opening day at $56.50, UP 28.4 percent from its initial offering price.
- General Motors priced its IPO if 478 million shares at $33 each and closed its opening day at $35, UP 6.1 percent from its initial offering price.
For Facebook, It's Show Time
And now it's Facebook's moment: Time to stand and deliver.
Facebook plans to price its IPO of 337.4 million shares at $28 to $35 each to raise about $10.6 billion. The deal is expected to be priced on Thursday evening, May 17, to trade on Friday morning, May 18.
So much for history. Now let's tune in to the present and this week's IPO calendar. It lists five deals.
Another New Face
Besides Facebook's IPO, there is one other new face at the new-issues window. It is Cancer Genetics (CGIX), a Rutherford, N.J.-based early-stage diagnostics company focusing on genomic tests and other services to detect and treat cancer. It is expected to be priced on Thursday evening and start trading on Friday morning. The other three IPOs are carryovers from last week.
But the only story of the week is Facebook, Facebook and more Facebook.
Interestingly, the media blitz has been giving the company and the deal mixed reviews. On the one hand, there are reports saying the deal is oversubscribed. On the other hand, there are reports saying some investors will be avoiding it. And then there are reports saying that Morningstar set a "fair-value estimate" price for Facebook at $32 per share on a $28-to-$35 proposed offering price … and the printer's ink flows on.
Nevertheless, all the above will become a moot point on Thursday evening. That's when bankers will announce the final number of shares to be offered and at what price. Then comes Friday morning - the IPO opens for trading on the NASDAQ Global Market and all the speculation will be over.
Passing point of interest: Expect Facebook's trading to start later rather than earlier on Friday morning.
The NASDAQ Market is a negotiated market. As such, it takes longer for the market makers to come together on a price than for the buyers and sellers on the floor of the New York Stock Exchange. The NYSE is an auction market. All it takes is a ballpark bid or offer to trigger trading.
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.