MasterCard Surges, While Vonage Tumbles

Yordanka
28 May, 2006
New York City

IPOs came in mixed last week. Internet telephone service provider Vonage lost 24% from the initial price, while shares of the world''s second largest credit-card association MasterCard rose 15% even priced below expectations.

85 initial public offerings have been priced so far this year as of May 26, 2006:

- 43 IPOs are currently trading above initial offering price;
- 39 are trading below the offering price;
- and 3 are trading at their offer price.

Three IPOs were priced during the week of May 22nd, 2006. There are four deals scheduled to be priced during the coming week, hoping to raise nearly $900 million.

IPO PERFORMANCE

ADVANCERS:

Shares of MasterCard Inc. ((MA)) were priced at $39 on Wednesday. The IPO was priced below the expected range of $40 - $43 and raised about $2.4 billion in the largest U.S. stock sale in two years. The company offered 61.5 million shares.

The long-awaited IPO was the largest U.S. stock flotation since the offering of Genworth Financial Inc. ((GNW)) in 2004 that raised $2.8 billion.

MasterCard shares closed the first day of trading on the NYSE at $46, 18% over its IPO price.

MasterCard went public with a market capitalization of about $5.3 billion, based on 135 million shares outstanding. Shareholders include J.P. Morgan, Citigroup, Bank of America and HSBC.

Citigroup and Goldman Sachs were the lead underwriters.

The company’s shares closed at $44.93 on Friday, up 15% from the initial offering price.

Mueller Water Products Inc. ((MWA)), a subsidiary of Walter Industries Inc. ((WLT)), priced an initial public offering worth $400 million on Thursday.

The 25 million share offering sold for $16 a share, at the low end of a $16 - $18 expected range.

Banc of America, Morgan Stanley and Lehman Brothers were lead underwriters on the deal.

Mueller Water manufactures water infrastructure and flow control products.

The company’s shares closed at $16.75 on Friday, up 4% from the initial offering price.

DECLINERS:

Internet telephone service provider Vonage Holdings Corp. ((VG)) priced its offering of 31.3 million shares at $17 a share on Thuesday, at the midpoint of an estimated $16 - $18 range, raising $531 million.

The shares fell $2.15 to close at $14.85 on their first day at the New York Stock Exchange.

Citigroup, Deutsche Bank and UBS Investment Bank were the lead managers on the IPO.

Vonage''s IPO is the second-largest offering from the Internet sector in five years. In 2004, Google raised almost $2 billion.

The company’s shares closed at $13.2 on Friday, down 24% from the initial offering price.

IPO CALENDAR – week of May 29th

Technology company Luna Innovations ((LUNA)) plans to offer 4.0 million shares within a price range of $11 - $13 a share, in a bid to raise $60 million. ThinkEquity Partners, WR Hambrecht and Merriman Curhan Ford will manage the deal.

Drug developer Quatrx Pharmaceuticals ((QTRX)) plans to offer 6 million shares within a price range of $11 - $13 per share, in a bid to raise $72 million. Banc of America and Cowen & Co. will be the lead managers on the deal.

Russian TV network operator CTC Media ((CTCM)) plans to offer 29.4 million shares within a price range of $16 - $18 a share, in a bid to raise $583 million. Morgan Stanley and Deutsche Bank will underwrite the offering.

Medical device maker Alphatec Holdings ((ATEC)) plans to offer 9.3 million shares within a price range of $13 - $15 a share, in a bid to raise $160 million. Deutsche Bank, First Albany and RBC Capital Markets will manage the deal.