But if this week goes anything like the last one, don’t expect everything on the IPO calendar to get out the door. Consider what happened.
The bulls were running on Wall Street last week. Each of the major U.S. stock market indexes posted big gains. The Dow Jones Industrial Average closed at 13,625.58, UP 253 points or 1.9 percent for the week. The Nasdaq Composite Index closed at 2,706.16, UP 45.20 points or 1.7 percent for the week, while the S&P 500 closed at 1,504.66, UP 23.52 points, or 1.59 percent for the week.
But the new-issues calendar was lackluster. It produced nine IPOs — four were “blank check” companies and four of the other five deals had to be cut in size to attract enough buyers to get them out the door. And that’s not all.
Four deals were pushed into this week’s IPO calendar. One, CardTronics (Nasdaq: CATM proposed), was labeled “tba” (to be announced) and was not “postponed,” according to its book-running manager.
On Campus and Out of China
Now it is on to the future.
Listed below are some of the highlights from this week’s IPO calendar.
Four companies are in education-related businesses:
- CampusU (Nasdaq: CMPS proposed), an online merchandiser focusing on the college student market.
- ChinaEd (Nasdaq: CEDU proposed), a provider of educational services in China.
- Classmates Media (Nasdaq: CLAS proposed), an online provider of social networking.
- K12 (NYSE: LRN proposed), an online provider of educational services to students in kindergarten through 12th grade – or what else? – K-12.
Four companies are from China. Besides ChinaEd, they are:
- CGen Digital Media Network (Nasdaq: ADTV proposed), operates in-store television advertising networks in China
- VanceInfo (NYSE: VIT proposed), an IT service provider and one of the leading offshore software development companies in China.
- Xinyuan Real Estate (NYSE: XIN proposed), a real estate developer that focuses on Tier II cities in China.
You might note what happened to last week’s Chinese IPOs.
- VisionChina Media (Nasdaq: VISN), which operates a leading digital advertising network over mass transit systems in China, priced its IPO of 13.5 million shares at $8 each, down from a price range of $9.50 to $11.50 per share. The IPO closed Friday at $8, unchanged from its initial offering price.
- WSP Holdings (NYSE: WH), a manufacturer of casing, tubing and drill pipes for oil and gas exploration, priced its IPO of 25 million shares at $8.50 each, down from a price range of $10.50 to $12.50 per share. The IPO closed Friday at $8.50, unchanged from its initial offering price.
Medicine and Money
But what’s a week without a favorite?
The IPO professionals are reportedly looking at K12 as a possibly “hot” prospect and MedAssets (Nasdaq: MDAS proposed) as another.
MedAssets, based in Alpharetta, Georgia, is a provider of solutions designed to improve operating margins and cash flow for hospitals and health systems.
On the plus side, the company has had steady revenue growth. It has experienced a compound annual revenue growth rate of 41.4 percent over our last four fiscal years. For the year ended Dec. 31, 2006, MedAssets reported net revenues of $146.2 million and $177.9 million for the nine months ended Sept. 30, 2007.
The company’s bottom line has been erratic, dipping in and out of losses, before preferred dividend payments. After preferred dividends payments, it has been a steady loss.
For the year ended Dec. 31, 2006, MedAssets reported net income of $8.8 million before preferred dividends of $14.7 million. For the nine months ended Sept. 30, 2007, MedAssets reported net income of $6.4 million before preferred dividends of $12.4 million.
MedAssets plans to use about $125 million of an estimated $182.8 million to $203 million of sale proceeds to repay outstanding debt. The rest is allocated for general corporate purposes, such as development and expansion of its technology-enabled solutions and for possible acquisitions of complementary businesses, technologies or other assets. There was no mention of repurchasing the preferred stock.
Naturally, the aftermarket performance of MedAssets’ IPO depends upon the final pricing terms and market conditions the day it starts trading.