Hard Week for IPOs

Yordanka
02 Jul, 2006
New York City

Retailer J. Crew Group, which surged 28% on its first day, was the only bright spot in the IPO market this week. Two other IPOs priced below forecast range, one was amended with a downgraded forecast range, and three others were postponed or withdrawn. Stock markets have tumbled since May on worries about inflation and interest rates.

106 initial public offerings have been priced so far this year as of July 1, 2006:

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

Six IPOs were priced during the week of June 26th, 2006. There aren’t any deals on deck for the next week.

IPO PERFORMANCE

ADVANCERS:

J. Crew ((JCG)) priced an initial public offering of 18.8 million shares on Tuesday at $20 a share. The price came above a $15 - $17 forecast range.

Shares represent about 33% stake of the company and the deal is worth $376 million.

J. Crew Group''s shares jumped nearly 30% above their initial trading price on their first day Wednesday.

The underwriters have an option to buy up to 2.8 million additional shares from the company at the initial public offering price less the underwriting discount, to cover excess demand.

Goldman Sachs and Bear Stearns are the lead underwriters on the deal.

The New York-based company reported its an increase in its first-quarter revenue to $240 million, up 14% from a year ago.

J. Crew opened six stores in fiscal 2005 and plans to open 15 to 30 stores in fiscal 2006. After that, it plans to open between 25 and 35 stores annually, according to the filing with SEC.

The company began in 1983 as a mail-order business, and is known for casual men''s and women''s clothing and accessories that it sells in stores, catalogs and online.

Texas-Pacific Group bought J. Crew in 1997 and is expected to own as much as 40% of the company after the offering, according to the filing.

The deal ranks as the second-richest apparel seller ever to go public in the U.S., right after the $619 million IPO from Gucci Group ((GUCG)) in 1995.

The company’s shares closed at $27.45 on Friday, up 37% from the initial offering price.

South Korean online retailer Gmarket Inc. ((GMKT)) priced its 9.1 million American depository shares at $15.25 each, at the top of an expected range of $13.25 - $15.25 on Thursday. Each ADS is worth one common share.

Gmarket raised $139 million in the IPO.

Selling shareholders offered about 3 million of the shares on offer, with Gmarket selling the rest.

The company, which is 10% owned by Yahoo Inc. ((YHOO)), fell 1% in its first day of trading, as investors grew less confident in new offerings.

Gmarket''s Nasdaq listing is the fourth this year for a South Korean company and it is the second-largest online retailer in South Korea after U.S. auction giant eBay Inc. ((EBAY)).

Goldman Sachs, Thomas Weisel Partners and Cowen & Co., the lead underwriters on the deal, have an option to buy up to 1.4 million additional shares to cover excess demand.

The company’s shares closed at $15.37 on Friday, up 2% from the initial offering price.

Online business software provider Omniture Inc. ((OMTR)) on Tuesday priced an initial public offering worth about $69.6 million.

The 10.7 million share offering sold for $6.50 per share, below a forecast range of $7.50 - $9.

Shares of Omniture rose less than 1% in their first day of trading Wednesday.

Omniture provides software and services that allow customers to collect and analyze information generated by their Web sites. Its customers include Apple Computer Inc. ((AAPL)), eBay Inc. and Major League Baseball.

Morgan Stanley, Credit Suisse, Deutsche Bank Securities and J.P. Morgan were the lead underwriters on the deal.

For the three months ended March 31, Omniture''s net losses widened to $3.4 million, or 24 cents loss per share, from net losses of $2.7 million, or 20 cents loss per share a year ago.

Omniture was offering 8.7 million shares and selling shareholders were offering 2 million shares.

In addition, the company has granted the underwriters the right to purchase 1.6 million additional shares of common stock to cover over-allotments.

The company’s shares closed at $15.80 on Friday, up 12% from the initial offering price.

PGT Inc. ((PGTI)) on Tuesday priced an initial public offering worth about $123.5 million.

The approximately 8.8 million share offering sold for $14 per share, below an expected range of $16 - $18.

The North Venice, Florida-based company''s products combine heavy-duty aluminum or vinyl frames with laminated glass to provide protection from hurricane-force winds and wind-borne debris.

Deutsche Bank and J.P. Morgan were the lead underwriters on the deal.

The company’s shares closed at $7.29 on Friday, up 21% from the initial offering price.

Louisville-based company Replidyne ((RDYN)) went public Wednesday selling 4.5 million shares at $10 a piece, raising $45 million.

The stock rose 10% on its first day of trading.

The company cut the price to $10 from the original range of $14 - $16 a share earlier on Wednesday and trimmed the offering size to 4.5 million shares from 5 million shares.

The company’s shares closed at $10.38 on Friday, up 3% from the initial offering price.

DECLINERS:

Ethanol provider Aventine Renewable Energy ((AVR)) made the second IPO of the week with lifted pricing after J. Crew rallied in its first day of trading.

The 9.1 million-share initial public offering, which is about 22% stake of the company, was priced at $43 per share, at the high end of a $40 - $43 forecast range, also on Wednesday.

The offering raised nearly $390 million.

The offering and price range was increased from an initial 7.8 million shares at between $37 and $41 per share.

The company sold 6.4 million shares and the rest 2.6 shares were sold by certain selling stockholders.

The underwriters have an option to buy up to 1.0 million additional shares from the company and 323,050 shares from the selling stockholders at the initial public offering price.

Aventine Renewable Energy is a leading producer and marketer of ethanol in the United States.

In the three months ended March 31, the company reported net income of $12.2 million on revenue of $314 million, compared with net income of $6.6 million on revenue of $197 million a year ago.

Banc of America Securities, Friedman, Billings, Ramsey & Co., and Goldman, Sachs & Co. acted as lead managers for the offering.

Aventine marks the second of three ethanol makers on deck this summer after Verasun Energy ((VSE)) priced at $23 a share on mid June.

Shares of Aventine fell 3.7% on their market debut on Thursday.

The company’s shares closed at $38.90 on Friday, down 10% from the initial offering price.

POSTPONED DEALS:

Gordon Biersch ((BIER)) delayed its IPO of 4.45 million shares at $10 - $12 each. Underwriters reduced the price range on the IPO from $11 - $13 earlier this month.

Wintegra ((WNTG)) also postponed its IPO. The company sited market conditions. Wintegra had planned to offer 4.89 million shares within $12 - $14 each. Earlier, the tech company had cut about 110,000 shares off the deal from its earlier size of 5 million shares.