Billion-Dollar IPO Circus

The IPO marketplace blows in to locale this week similar to a three-ring circus. The monthly calendar has 4 deals seeking to elevate over $1 billion – yes, a billion dollars – and the superstar is the ample hyped Groupon ( GRPN ) IPO.
Everyone has an viewpoint on this firm and investment recommendation on its stock. The financial media is having a margin day stating these opinions/recommendations – for whatever they are worth. But there is a organisation of experts out there not nonetheless listened from – Groupon’s investment bankers. They are muzzled by the “quiet period.”
The Securities Act of 1933 prohibits those entangled in the underwriting and placement of bonds in registration from compelling the company. The statute is an tusk of the years only before the 1929 batch marketplace collision when pump-and-dump schemes were commonplace.
Now this is where it gets tricky. The still time is a 40-day watchful time after an IPO is priced. This relates to the issuer (the firm – Groupon) and its handling underwriters, but it melts down to a 28-day watchful time for any of its other underwriters.
Groupon skeleton to offer 30 million shares at $16 to $18 any to elevate $510 million. The treat is approaching to be labelled on Thursday evening, Nov. 3, to traffic on Friday sunrise on the NASDAQ Global Select Market beneath the draft pitch “GRPN.”
Money, Oil and Fertilizer
In the Broadway low-pitched “Hello, Dolly!” a of the many unforgettable lines from the widow Dolly Levi – mainly if you were fortunate sufficient to see Carol Channing in the purpose – goes similar to this: “Money is, forgive the expression, similar to manure. It doesn’t do any great unless it’s expansion around, enlivening young things to grow.”
Dolly, of course, was on to something. Her thought has at least a mystic couple to the attention sectors – money, oil and manure – represented by the 3 other companies on the IPO monthly calendar this week:
Selway Capital Acquisition is a “blank check” gift that is being carried over from final week. The firm skeleton to offer 2.75 million units at $10 any to elevate $27.5 million. The lead managers are Aegis Capital and Chardan Capital Markets.
Enduro Royalty Trust ( NDRO ) , formed in Austin, Texas, is a certitude that was not long ago formed to own kingship interests in oil and gas prolongation properties in Texas, Louisiana and New Mexico. The firm skeleton to offer 13.2 million units of profitable fascination at $23 to $25 any to elevate $316.8 million. The IPO is approaching to be labelled on Wednesday evening, Nov. 2, and to traffic on Thursday sunrise on the New York Stock Exchange beneath the draft pitch “NDRO.” Joint-lead managers are: Barclays Capital, Citigroup, Goldman Sachs, RBC Capital Markets and Wells Fargo Securities.
Rentech Nitrogen Partners, L.P. ( RNF ), formed in Los Angeles, is a not long ago formed paltry partnership to own, run and blossom a nitrogen manure business. The firm skeleton to offer 15 million shares at $19 to $21 any to elevate about $300 million. The IPO is approaching to be labelled on Thursday evening, Nov. 3, and to traffic on Friday sunrise on the New York Stock Exchange beneath the draft pitch “RNF.” Joint-lead managers are: Morgan Stanley and Credit Suisse.
Out-running the Bear
In summary, there are 4 IPOs on the monthly calendar awaiting to elevate $1.15 billion.
With over $1 billion on this week’s calendar, that raises the question: “Is the IPO marketplace back?”
The answer: Only time will tell. Nevertheless, there are a few clues. Consider the following:
Historically, the IPO marketplace follows the underlying batch market. It is not a leader. You can look at this year as an example.
The U.S. batch marketplace strike its high is to year at the finish of April. The IPO prolongation line followed and carried over in to May. During those 5 months, the monthly calendar constructed 75 IPOs, according to the U.S. Securities and Exchange Commission filings. Then the batch marketplace took a swan dive to its October lows and the IPO marketplace dusty up. No IPOs were labelled in September.
Looking at the stream batch market, it’s value noting: Some gurus have been priesthood that stocks’ new liberation is nothing more than a bear marketplace rally.
The U.S. batch marketplace never slipped in to bear marketplace domain – it came close, but no cigar.
The clarification of a bear marketplace is a 20 percent tumble from its new high. The Dow Jones Industrial Average, deliberate from its shutting high to its shutting low, mislaid 16.8 percent. As of Friday’s close, Oct. 28, the Dow has recovered 14.8 percent from its low. The SP 500 mislaid 19.4 percent from its 2011 shutting high to its shutting low is to year, and it has recovered 16.9 percent. The Nasdaq Composite Index mislaid 18.7 percent from the year’s shutting high to its shutting low and it has recovered 17.2 percent.
No bear marketplace in those numbers.
Mark Twain once said, “If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed.”
If Mark Twain were subsequent to today’s financial news, he would may say “watch TV” instead of “read the newspaper.”
Stay tuned.
Disclosure: Neither the writer nor any person else on the staff has a location in any stocks mentioned, nor do they traffic or deposit in IPOs. The writer and staff do not situation advice, recommendations or opinions.
Disclosure: we have no positions in any stocks mentioned, and no skeleton to beginner any positions inside of the next 72 hours.