The IPO Buzz: Sunset for the IPOs of 2012

The last IPO to come to market in 2011 was on Dec. 15, according to the U.S. Securities and Exchange Commission (SEC) filings. In 2010, it was on Dec. 20. In 2009, it was on Dec. 16. And in 2008, it was on Nov. 18. That’s right – in November – 2008 was a bad year. The Nasdaq Composite Index, the barometer of the IPO market, lost a whopping 40.5 percent in 2008. By all indications, 2012 is expected to come to an end on Friday, Dec. 14.

 

This brings us to this week’s calendar. It lists six IPOs looking to raise about $1.27 billion. The financial press has been focusing on SolarCity (SCTY – proposed). However, there was a curious development in the company’s latest SEC filings.

 

On Friday, Dec. 7, late in the afternoon, SolarCity filed an updated amendment. Another paragraph was added to the cover of its prospectus. It stated:

 

“Elon Musk, the chairman of our board, has indicated his intent to purchase $15.0 million of our common stock in this offering from the underwriters at the initial public offering price.”

 

Using the high end of its $13- to $15-per-share price range, this would amount to about 10 percent of the proposed offering, and leave fewer shares for the investing public.

 

For what it’s worth, Musk is best known as the co-founder of PayPal and the co-founder of Tesla Motor (TSLA), the electric car company.

 

SolarCity plans to price 10.1 million shares at $13 to $15 each on Tuesday evening. The IPO is expected to start trading on Wednesday morning on the NASDAQ Global Market under the proposed symbol “SCTY.” The joint-lead managers are Goldman Sachs, Credit Suisse and BofA Merrill Lynch. The co-managers are Needham and Roth Capital Partners.

 

Based in San Mateo, California, SolarCity sells, installs, finances and monitors solar panels and systems that convert sunlight into electricity. The company services residential, commercial and governmental customers in 14 states. SolarCity was formed in 2008. It has about 2,300 employees.

 

For the three months ending Sept. 30, 2012, SolarCity reported a net loss of $29 million on revenues of $32 million, compared with a net loss of $21.3 million on revenues of $18.5 million for the same period a year ago. The company reported an accumulated deficit of $108.3 million as of Sept. 30, 2012.

 

SolarCity plans to sell 10 million shares and selling shareholders plan to sell 65,000 shares. The company expects to have about 71.7 million shares outstanding after the offering.

 

It’s not as romantic as Earth, Wind & Fire. But for IPO investors, the themes of oil, land and platinum embodied by this week’s IPOs may be more appealing.

 

Rounding out the year’s final IPO calendar are:

 

PBF Energy (PBF – proposed), a Parsippany, New Jersey-based independent petroleum refiner and supplier of unbranded transportation fuels, heating oil, petrochemical feedstocks, lubricants and other petroleum products, plans to price 16.5 million shares at $25 to $27 each on Wednesday evening to trade on Thursday morning. (For more information see the prospectus.)

 

Silver Bay Realty Trust (SBY – proposed), a Minnetonka, Minnesota-based REIT, plans to price 13.3 million shares at $18 to $20 each on Thursday evening to trade on Friday morning. (For more information see the prospectus.)

 

Sprott Physical Platinum and Palladium Trust (SPPP – proposed), a Toronto-based trust created to invest and hold its assets in physical platinum and palladium bullion, plans to price 35 million units at $10 each on Wednesday evening to trade on Thursday morning. (For more information see the prospectus.)

 

This pretty well wraps up the 2012 IPO calendar.

 

Stay tuned.