It was just in August that practically every single initial public offering was trading above its IPO price. The market had rallied significantly, and still rallied after that to just this week have a 10,000 handle on the DJIA. Investors started warming to more risk-based capital, and investment bankers were finally able to get deals done. Even waves and waves of secondary offerings were able to be absorbed merely by brokers being able to tell clients they could buy stock at an implied discount to the average price over the few days before. But suddenly, the IPO market has turned out some real dogs with fleas.
Mistra Group (NYSE: MG) priced its offering at $12.50 on October 7. While it traded as low as $12.17, it has escaped the hangman’s file of ‘busted deals’ as it is now a $13.51 stock. The one thing that may have helped was that it priced under an initial range of $14 to $16 per share. Talecris Biotherapeutics Holdings Corp. (NASDAQ: TLCR) also went into the busted category temporarily after hitting a low of $18.01 after a $19.00 pricing. Fortunately, it is up at $19.97 so is also now out of the hangman’s eyes. Still, an 8% gain and a 5% gain in this market might leave some investors feeling lonely. Banco Santander Brasil S.A. (NYSE: BSBR) was a very large IPO of over 500 million shares at an implied $13.40, and this one got out of the “busted IPO” dungeon on Thursday and closed at $13.51 on Friday. Before Thursday it had spent its 6 prior trading sessions as a busted IPO.
Emdeon Inc. (NYSE: EM) had traded above $18.00 briefly after its IPO priced at $15.50 in August. But now the healthcare revenue and payment cycle management solutions provider, which is supposed to be a healthcare winner ahead, closed down at $15.35 on Friday and had been slightly lower during the week. This was effectively a re-IPO as Emdeon had been public before after General Atlantic Partners acquired it and it also received an investment from Hellman & Friedman. It also has ties to James Clark, the Netscape founder and was part of Healtheon.
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