It was the busiest week in the IPO market in almost two years, when five deals got done and almost $1 billion was raised. (For more on that, see below.)
This week is a three-day work week, with the U.S. financial markets closed on Thursday for Thanksgiving and many on Wall Street planning to continue the holiday on Friday. Investment bankers have an empty IPO cupboard. That’s the bad news. The good news is there will be no turkeys on the platter.
The Surprising Pop
Archipelago Learning(NASDAQ: ARCL) posted an opening-day gain of 13.8 percent.
Archipelago, based in Dallas, offers subscription-based online education services to over 8.3 million students from kindergarten through 12th grade.
On Thursday evening, Nov. 19, the company priced 6.25 million shares at $16.50 each, near the high end of its $15 to $17 per share filing range. The stock opened sharply higher at $19 and closed at $18.77, UP 13.8 percent from its initial offering price.
The IPO handicappers had given the deal poor marks, expecting the IPO to trade from flat to up a shot – a 1-Star SCOOP rating. The pros were looking at a competitor and at the Google Finance School industrial sector. Neither were barnburners in today’s stock market.
The competitor was Princeton Review (NASDAQ: REVU), which was showing a lackluster performance. Its stock closed on Friday at $4.45 per share, DOWN 9.7 percent from $4.93, its closing price on Dec. 31, 2008.
Google’s School Sector Index was down nearly 10 percent for the year.
Then the unexpected happened -– the bankers got the right price and the IPO responded by opening big at $19, UP 15.2 percent from its offering price.
The Surprising Flop
Cloud Peak Energy (NYSE: CLD), the Wyoming-based coal producer, was a “hot issue” being touted earlier in the week by a financial TV personality. By late last week, the deal turned cold before its pricing.
By week’s end, the buzz swirled around that the deal may be priced below its filing range. It was. On Thursday evening, Nov. 19, the company priced 30.6 million shares at $15 each, below its $16 to $18 per share filing range.
The expression: “Cut a deal – cancel my order” came to mind.
The stock opened at $14.50, a broken deal, and closed its opening day at $14.84, DOWN 1.1 percent from its initial offering price.
What bugged people was the company’s plan to use the proceeds from the offering to finance the purchase of assets from Rio Tinto America, (NYSE: RTP)which owned 100 percent of Cloud Peak before the offering.
Busiest Week in Almost 2 Years
Nevertheless, the week ended on a positive note.
Five of six deals got out the door and raised almost $900 million. That made it the busiest week since Dec. 9, 2007, when 11 IPOs were priced. They raised $1.58 billion, according to U.S. Securities and Exchange Commission filings.
At press time, the IPO calendar is clean and green -– nothing on it in this trading week shortened by the Thanksgiving holiday on Thursday.
But don’t go away. There are two to three weeks left to price most IPOs. And knowing Wall Street, you can expect several names on the calendar.
To check out the list of the nine new IPO filings, go to IPOScoop.com’s Home Page and click on IPOs Recently Filed.
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 and opinions.