A unicorn struts on to Wall Street’s IPO calendar of eight deals this week, when summer begins. Bankers are looking to raise nearly $2 billion. Looks exciting, but that’s the Street for you. Let’s take a closer look at the traffic.
Three of the eight deals are real estate investment trusts (REITs), while three others are carryovers from last week, one is a “blank check” or special purpose acquisition company (SPAC) and the final one is the unicorn – a billion-dollar baby.
That marquee deal is on target to raise about $1.35 billion. And by the way, by late Friday afternoon, the word on the Street was that the unicorn is starting to attract investors’ interest. (A unicorn is a private company valued at $1 billion or more.)
All eight offerings on this week’s IPO calendar are expecting to raise $1.98 billion. Now let’s move on to the roll call.
All Eyes on Altice
The unicorn is Altice USA (ATUS – proposed), based in Bethpage, N.Y. It is one of the largest broadband communications and video services providers in the United States. The company offers broadband, pay television, telephony services, Wi-Fi hotspot access, proprietary content and advertising services to about 4.9 million residential and business customers in 21 states. The prospectus says the company acquired Suddenlink on Dec. 21, 2015, and Optimum on June 21, 2016. Altice is a holding company that does not conduct any business operations of its own. It serves its customers through two business segments: Optimum, which operates in the metropolitan New York area, and Suddenlink, which operates mostly in markets in the south-central United States.
Bankers plan to price about 46.6 million shares of Class A common stock of Altice USA at $27 to $31 each to raise $1.35 billion. The IPO is expected to be priced Wednesday evening, June 21, 2017 – when summer begins – to trade on Thursday, June 22, on the New York Stock Exchange.
Note: Altice is selling about 12.1 million shares in the offering and selling shareholders are selling about 34.5 million shares. After the IPO, Altice USA’s market capitalization will be about $21.4 billion, based on the mid-point of its proposed offering terms.
(For more information, please check the profile of Altice USA found on IPOScoop.com’s website.)
REITs and Real Numbers
The three REITs on tap this week are: Four Springs Capital Trust (FSPR – proposed), Granite Point Mortgage Trust (GPMT – proposed) and Safety, Income and Growth (SAFE – proposed).
Each deal has its own story, but the opening-day performances of REITs are generally below average. Consider the following:
From Jan. 1, 2015, through June 16, 2017, a total of 16 REITs were priced, according to the U.S. Securities and Exchange Commission filings. Over those last 30 months, one was priced above its initial filing range, seven within range and eight below. On a year-to-year basis, the opening-day performances versus the year’s average read:
- 2017: Six REITs were up 2.97 percent versus a gain of 7.65 percent for all 73 IPOs priced so far this year.
- 2016: Three REITs were down 0.47 percent versus a gain of 13.0 percent for all 109 IPOs priced during the year.
- 2015: Seven REITs were up 3.46 percent versus a 17.1 percent gain for all 173 IPOs priced during the year.
Tracking the SPACs
The SPAC on this week’s calendar is Bison Capital Acquisition (BCACU – proposed). Here is the opening-day performance story on a “blank check” or special purpose acquisition company (SPAC). They generally trade around their IPO prices. On a year-to-year basis, the opening-day performances versus the year’s average read:
- 2017: 10 SPACs were up 0.93 percent versus a 7.65 percent gain for all 73 IPOs price during the year.
- 2016: 11 SPACs were down 0.26 percent versus a 13.0 percent gain for all 109 IPOs priced during the year.
- 2015: 20 SPACs were up 0.45 percent versus a 17.1 percent gain for all 173 IPOs priced during the year.
The three carryovers from last week are Avenue Therapeutics (ATXI – proposed), Mota Group (MOTA and MOTAW) and SG Blocks (SGBX – proposed).
(For more information, please check the IPO profiles found on IPOScoop.com’s website.)
June’s Finale
This brings us to the week of June 26, 2017, when the calendar has just two IPOs. But a lot could happen when the SEC’s filing window opens again on Monday morning.
Stay tuned.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.