games

banggood 18% OFF Magic Cabin Hat Country LLC HearthSong 15% Off Your First Purchase! Code: WELCOME15 Stacy Adams

Sunday, April 1, 2012

IPOs Suffer Slow Start as Facebook Readies Sale - Bloomberg

fb - Google News
Google News
IPOs Suffer Slow Start as Facebook Readies Sale - Bloomberg
Apr 1st 2012, 11:32

Enlarge image IPOs Suffer Slow Start as Facebook Readies Sale

IPOs Suffer Slow Start as Facebook Readies Sale

IPOs Suffer Slow Start as Facebook Readies Sale

David Paul Morris/Bloomberg

Facebook's new campus in Menlo Park, California.

Facebook's new campus in Menlo Park, California. Photographer: David Paul Morris/Bloomberg

Facebook's Secondary-Market Trading Halt, IPO Plan

March 28 (Bloomberg) -- Sam Hamadeh, chief executive officer of PrivCo, talks about Facebook Inc.'s plan to halt trading of its shares on secondary markets by the beginning of April, according to two people with knowledge of the matter. He speaks with Emily Chang and Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Facebook Said to Seek Partner to Enter China

March 29 (Bloomberg) -- Bloomberg Television's Jon Erlichman reports on Facebook Inc.'s expansion plans in China. (Source: Bloomberg)

In a year heralding the landmark initial public offering of Facebook Inc. (FB), share sales got off to a slow start.

While more companies tapped equity markets in March, IPOs globally raised $16.2 billion in the first quarter, the least since 2009, data compiled by Bloomberg show. That kept the backlog of deals in the U.S. near the highest in more than a decade, according to Renaissance Capital LLC.

Investors are still smarting after losing money last year on IPOs from Groupon Inc. (GRPN) to Glencore International Plc, even as U.S. stock market volatility fell to an almost five-year low in the quarter and set the stage for a rebound. Share sales in the U.S., Asia and Europe picked up in recent weeks, led by Allison Transmission Holdings Inc. and Dutch cable-television operator Ziggo NV.

"People are still waiting to see that the IPOs that are coming out now are going to work," said Joe Reece, global head of equity capital markets at Credit Suisse Group AG. "The market has definitely been improving, especially during March, but people still have a healthy degree of skepticism about the IPO market overall."

The most recent companies to hold share sales have been rewarded by investors, with about two-thirds trading above their offer price, the data show. That contrasts with Glencore, which held its IPO in May and had lost 27 percent of its value since that time, before today. Online coupon provider Groupon had dropped 12 percent since going public in November.

Facebook's IPO

More companies may be looking to take a cue from Facebook, which is planning a $5 billion IPO in early May, according to people with knowledge of the matter. A share sale by the Menlo Park, California-based company would be the biggest offering for an Internet company in history.

"It's going to push interest in the broader IPO market," said Francis Gaskins, president of Ipodesktop.com in Marina Del Rey, California. "Companies will want to IPO at that time if they can, while people are paying attention to the IPO market."

Nine companies raised $1.4 billion in U.S. IPOs this week, the most weekly initial offers in the country since December 2010, Bloomberg data show.

Michaels Stores Inc., the arts and crafts retailer owned by Blackstone Group LP and Bain Capital LLC, filed for a $500 million IPO today, while Oaktree Capital Group LLC, the distressed-debt investor co-founded by Howard Marks, said it plans to raise as much as $517.5 million in its initial share sale. Carlyle Group LP (CG) has also announced plans for an IPO, which it plans to complete this year, according to people familiar with the situation.

Economic Prospects

In the U.S., consumer-review website Yelp Inc. already raised $123 million in its IPO this month and has almost doubled since its debut. Vantiv Inc., the payment processor partly owned by Fifth Third Bancorp, sold $575 million in stock this month. The shares have advanced 18 percent since they began trading March 22.

Improving economic prospects are helping spur investor demand for new stocks, according to equity capital markets bankers. U.S. gross domestic product expanded at a 3 percent annual rate in the fourth quarter, the fastest pace in more than a year, and the U.S. unemployment rate has fallen to the lowest level in three years. That helped push the measure of U.S. stock volatility known as the VIX (VIX) to its lowest level since June 2007.

Low Volatility

"Volatility is low, and many of the forces that challenged the macroeconomic picture have eased," said John Chirico, Citigroup Inc.'s New York-based co-head of Americas capital markets origination. "We just need stability from here."

This quarter's $16.2 billion in IPOs globally compares with $28.8 billion in the previous three months and $48.4 billion a year earlier, Bloomberg data show. Morgan Stanley leads global IPO underwriting so far this year, with an 8.2 percent share of the market after working on offerings by Allison Transmission, the biggest U.S. IPO this quarter, and Ziggo, the largest sale globally, Bloomberg data show.

Ziggo and Switzerland's DKSH Holding Ltd. (DKSH) led companies to raise $3.1 billion in western European IPOs this quarter. While that's more than double the amount from the previous three months, sales have still fallen about 40 percent from a year earlier, the data show.

"It has taken some time for issuers to accept that markets are open," said Henrik Gobel, Morgan Stanley's London-based co- head of equity capital markets for Europe, the Middle East and Africa. "Ziggo and DKSH clearly show that IPOs can be done well and it should encourage more companies to move ahead with their transactions."

Asian Sales

Talanx AG, Germany's third-biggest insurer, is planning an IPO as early as the first half of 2012 to raise about 750 million euros ($998 million), people familiar with the matter said this month. Siemens AG's (SIE) lighting unit Osram AG and the Italian aerospace firm Avio SpA both delayed sales last year amid Europe's sovereign debt crisis.

Companies in Asia were also slow to return to the IPO market this quarter. While Asia accounted for 44 percent of the total funds raised worldwide in the period, Hong Kong IPO volume dropped to its lowest level in three years.

Construction-equipment makers Sany Heavy Industry Co. and XCMG Construction Machinery Co. are both seeking to revive deals pulled last year, according to people with knowledge of the situation. Graff Diamonds Ltd. may seek $1 billion in the second quarter in Hong Kong's biggest consumer IPO this year, people familiar with the matter said on Feb. 15.

Chinese Growth

Concern over slowing economic growth in China is the biggest constraint on share sales in that region, according to Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co., which oversees about $1.5 billion in assets. Chinese gross domestic product growth was the slowest in more than two years in the fourth quarter, and the government this month lowered its economic growth target, which had held steady at 8 percent since 2005.

"IPO investors are staying on the sideline, watching where China's economy is heading," Wan said. "A window may open for deals in the second quarter if China further eases its monetary policy."

In a sign of improvement, share sales in all regions raised more in March than in the previous two months combined, according to Bloomberg data. Eight of the 10 biggest IPOs in the quarter were completed in March.

"It's been a much better market over the last four to five weeks," said JD Moriarty, New York-based co-head of equity capital markets for technology in the Americas at Bank of America Corp., at a March 27 briefing. "As we head into the second quarter, we have reason to be optimistic that buyers will be more receptive."

To contact the reporters on this story: Lee Spears in New York at lspears3@bloomberg.net; Anjelica Tan in New York at atan224@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net

Please enable JavaScript to view the comments powered by Disqus.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers. Five Filters recommends: Donate to Wikileaks.

You are receiving this email because you subscribed to this feed at blogtrottr.com.

If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions

No comments:

Post a Comment