The recent IPO show has been the billion-dollar babies. Look at what happened last week. On Tuesday, HCA Holdings (HCA – proposed) filed to offer 124 million shares at $27 to $30 each to raise $3.5 billion.
That was like hitting a long spectacular tee-shot. It drew a lot of “oohs” and “awes” from the financial media — and those reactions are still rolling in.
After the fanfare over the opening drive, the game moves down the fairway to the green and where the real money can be made – a boring tap-in putt. The big dough being made in the IPO market – down the fairway to the green and a boring tap-in putt – is in the technology sector.
Through the end of February, bankers will have priced 23 IPOs this year, according to the U.S. Securities and Exchange Commission filings. (There’s just one day left in the month. Nothing is scheduled to be priced on Monday night.) This total for 2011 so far – 23 IPOs – excludes a closed-end fund and a unit offering consisting of common stock and warrants. The busiest sector – and most profitable for investors – has been technology.
Techs vs. the IPO Universe
By the close of business on Friday, Feb. 25, 2011, six technology IPOs had been priced. There were five winners and one loser. The average gain for all six was 20.9 percent.
That was far better than the overall 2011 IPO report card.
As of the close on Friday, Feb. 25, there were 18 winners and five losers. The average gain for all 23 was 11.4 percent.
That was far better than the stock market.
The Nasdaq Composite Index, the barometer of the IPO market, closed on Friday at 2,781.05, UP 4.83 percent for the year.
But there is more to the story of the technology IPOs’ aftermarket performance. Let’s reach back over the last year.
From March 1, 2010, through the end of February 2011, 40 technology IPOs have been priced. On Friday, there were 31 winners and nine losers; the average gain for the 40 was 34.2 percent.
That was better than the 12-month IPO report card.
During that time span, 163 IPOs were priced. On Friday, there were 114 winners and 49 losers; the average gain for all 163 was 26.7 percent.
And that was better than the stock market.
The Nasdaq Composite Index closed on Friday at 2,781.05, UP 24.3 percent over the last 12 months.
To recap, the average gain for tech IPOs priced over the past 12 months was 34.2 percent – exceeding the 26.7 percent average gain for all IPOs priced in that period and the Nasdaq’s 24.3 percent gain over the last 12 months.
That’s the good news. But on this week’s calendar, there are no technology deals. There is just one IPO. Period.
Shamrocks in the Sky
Greenwich Kahala Aviation (GKH – proposed), based in Dublin, was recently formed to acquire, lease and trade commercial aircraft. It company acquired its first aircraft on Oct. 1, 2010.
The company reported a $1.2 million net loss on no revenues for the nine months ended Sept. 30, 2010.
Greenwich plans to price 15 million shares at $12 each on Thursday night to raise $180 million. All of the proceeds are going to the company to acquire its targeted assets in accordance with its objectives and strategies described in the prospectus.
The IPO is expected to start trading on Friday, March 4, 2011.
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.