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.

Colony Financial Inc. (NASDAQ: CLNY) came public late in September at $20.00 per share, and it closed down at $19.69 Friday and has traded as low as $19.25.  Interestingly enough, Friday’s $19.68 close looks to be the highest price since the IPO date.   Colony is a newly formed real estate finance company (mortgage REIT) that will focus primarily on acquiring, originating and managing commercial mortgage loans, which may be performing, sub-performing or non-performing loans, other commercial real estate-related debt investments, CMBS, REO properties and other real estate-related assets.

RailAmerica Inc. (NYSE: RA) has been a busted deal after this was brought public in a re-IPO by Fortress Investment Group LLC (NYSE: FIG) after going private in February 2007.  This short line and regional freight railroad operator came public at $15.00 per share on October 12, so it hardly has much trading behind it.  But its absolute highest print this last week was $14.78 and it closed on Friday at $14.26 for a 5% loser.

Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) came public at $20.00 on September 24.  This comes out of Apollo Global Management, LLC and it intends to originate and acquire senior performing commercial real estate mortgage loans, commercial real estate corporate debt and loans and to purchase legacy and newly originated investment grade CMBS, and other performing real estate debt investments.  The highest price this one has seen since the IPO was $19.20, and it closed down at $18.57 on Friday to make the tally come to a 7% loser.

Then comes Vitacost.com Inc. (NASDAQ: VITC), which operates as an online retailer of various nutritional supplements, and health and wellness products.  Its September 24 IPO priced at $12.00 yet has been very volatile in not so much of a good way.  It has traded above the $12.00 mark at $12.25 during the first week, but then shares went as low as $9.34 and closed on Friday at $10.75 for still more than a 10% discount to its IPO price.

There are other 10% and higher losers as well.  Echo Global Logistics, Inc. (NASDAQ: ECHO), which provides business process outsourcing serving the transportation and logistics needs, came public at $14.00 on October 2, and while it did briefly hit $14.23 it closed down at $12.50 on Friday for a loss of 10.7%.

Chemspec International Limited (NYSE: CPC) was brought public in June at $9.00.  This Chinese chemical compounds company has traded as high as $10.50 and as low as $6.63.  Its closing price of $7.79 on Friday gives it a loss of over 13%.

Shanda Games Limited (NASDAQ: GAME) has all the earmarks of a forced copy-cat IPO.  Since it is out of China and a copy-cat strategy, we’ll even call it a knock-off IPO.  This was a Shanda Interactive Entertainment Ltd. (NASDAQ: SNDA) ’spin-off’ that is technically still under control of the parent and by the IPO prospectus will remain that way.  The inspiration for this was this the successful Changyou.com  (NASDAQ: CYOU) spin-off IPO from Sohu.com (NASDAQ: SOHU), which had effectively doubled when Shanda decided a knock-off strategy.  Shanda Games came public at $12.50 on September 25 and briefly hit $13.00.  Yet it also went under $10.00 and closed Friday at $10.32 to come to a 17.4% loser.

Cumberland Pharmaceuticals, Inc. (NASDAQ: CPIX) came public at $17.00 per share and its $75.2 million was to be used for potential acquisitions, the pending launch of the Company’s Caldolor(®) product for pain and fever, expansion of the Company’s hospital sales force, product development, debt repayment and general corporate purposes.  It also markets Acetadote(®) for the treatment of acetaminophen poisoning and Kristalose(®), a prescription strength laxative.  It turns out that IPO investors felt like they got too much of that powerful laxative.  This did go as high as $17.75, but then the blow-holes opened up despite 3 broker as issuing buy ratings.  Shares have gone under $13 and closed Friday at $13.40 for a loser by over 21%.  This one has some revenues and has been profitable.

Lastly, there is Omeros Corporation (NASDAQ: OMER).  This is a biotech play as a clinical-stage company committed to discovering, developing and commercializing products focused on inflammation and disorders of the central nervous system.  It came public at $10.00, already at the bottom of the $10 to $12 per share range, and its shares closed at $6.88 Friday to account for a whopping 31.2% loss for IPO buyers.  No one who bought this has made money as its highest post-IPO price looks to be $9.49.

The Blackstone Group (NYSE: BX) is weighing as many as eight IPOs or target-acquisition exits in the coming months according to multiple reports.  If it wants a smooth exit, it better consider making the deals as good for new IPO buyers as it is for Blackstone.  KKR wants to bring back the giant Dollar General as a public company despite the thought that the dollar-store investment play may have already seen its best days during the recession.

As Gordon Gecko would say, there are many dogs with fleas.  Some will do well in the future, but investors were just too shell-shocked from late 2008 into the first quarter of 2009 to buy up other peoples’ mess.  Investors feel little need to support a private equity-backed IPO where all the proceeds are going straight back to the private equity firms.  Companies that are unprofitable also have less appeal to investors.  And complicated structures also offer conservative investors much comfort.

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JON C. OGG
OCTOBER 17, 2009

ABB (ABB) Cut to Hold at Deutsche Bank.
ArcelorMittal (MT) Cut to Hold at Societe Generale,
Black & Decker (BDK) Cut to Neutral at UBS.
Borg Warner (BWA) Cut to Neutral at KeyBanc.
Goodrich (GR) Cut to Buy from Conviction Buy List at Goldman Sachs.
Kroger (KR) Cut to Equal Weight at Morgan Stanley.
Medco Health (MHS) Cut to Neutral at Goldman Sachs.
Shanda (SNDA) Cut to Sell at Deutsche Bank.

JON C. OGG

The company is offering 13,043,500 ADSs, and Shanda Interactive is selling the remaining 50 million ADSs. Each ADS represents two class A ordinary shares of Shanda Games.  This has Goldman Sachs (Asia) as the lead underwriter along with J.P. Morgan and the co-manager is Nomura Securities.

Earlier this month it had filed an SEC registration statement to raise approximately $800 million in a partial spin-out IPO.

JON C. OGG
September 16, 2009

AthenaHealth (ATHN) Started as Buy at Maxim.
Capstead Mortgage (CMO) Cut to Market Perform at KBW.
Changyou.com (CYOU) Cut to Neutral at Susquehanna.
Citrix Systems (CTXS) Cut to Hold at Needham.
eBay (EBAY) Raised to Outperform at RBC.
Logitech (LOGI) Cut to Neutral at UBS.
Network Appliance (NTAP) Raised to Overweight at Piper Jaffray.
Sanmina-SCI (SANM) Raised to Neutral at Credit Suisse.
Shanda Interactive (SNDA) Cut to Negative at Susquehanna.
VMware (VMW) Raised to Buy at Needham.

Jon C. Ogg
July 23, 2009

On April 2, 2009, the day of the Chnagyou.com IPO, Sohu.com closed at $42.31.  Shares closed today around the $58.00 mark.

Shanda Interactive closed above $52.00 today despite a 5% drop on the day, but its stock was at $42.30 on the close of April 2.  So Shanda has been an indirect beneficiary, albeit not quite as much.

Shanda noted this exploration is further development as an interactive entertainment media company, and will provide Shanda Games with a sharper focus and greater flexibility to pursue strategic opportunities in enhancing its leadership position in the online games sector.  Just as we saw in the Changyou.com spin-off from Sohu.com, Shanda expects to remain the majority shareholder after the completion of the proposed IPO.

This proposed IPO is expected to commence as capital markets conditions permit and is subject to filing a registration statement with the SEC.  All terms and dollar amounts have not yet been determined.

When you see the success of one IPO, you often see similar moves from competitors.  That is particularly the case in China.  Maybe we can even call this second effort a knock-off IPO spin-off now that this has been seen.

JON C. OGG
MAY 26, 2009

• Central European Distribution (CEDC) Cut to Neutral at JPMorgan.
• Infineon (IFX) Cut to Sell at RBS.
• OmniVision Tech (OVTI) Cut to Underperform at Baird.
• Palm (PALM) Cut to Neutral at Merrill Lynch (late yesterday call).
• Shanda Interactive (SNDA) targets cut at Citigroup and Credit Suisse.

Jon C. Ogg
December 3, 2008

What is going on is that the company recently announced it would buyback up to $200 million in common stock.  But now it is selling $155million in senior convertible notes due 2011 with terms being 2.00%semi-annual interest and an equivalent convertible price of $35.00 pershare.  It also has $20 million for over-allotments.

The entire senior convertible debt offering along withcash on hand to repurchase an aggregate of $175 million of its ADS’s issubject to minimum and maximum number of ADS’s.  This is pursuant to anaccelerated share repurchase transaction that Shanda entered into withone of the initial purchasers or its affiliates.

Issuing convertible debt to buy back shares — this is a leveragedstrategy that sometimes works and sometimes does not.  This company hasbeen awash in liquidity before, but this will change the debt to equityratios of its balance sheet.  In a more difficult stock market, this isa gutsy move that may leverage something that didn’t need leverage.

Jon C. Ogg
September 10, 2008

• Alliance Data (ADS) Started as Buy at B of A.
• AuthenTec (AUTH) Started as Buy at S&P Equity Research.
• Broadcom Corp. (BRCM) Started as Outperform at Credit Suisse.
• Excelon (EXC) Raised to Buy at Jefferies.
• Novellus Systems (NVLS) Raised to Overweight at Morgan Stanley.
• SAIC (SAI) Raised to Outperform at at Wachovia.
• Shanda Interactive (SNDA) Raised to Outperform at Oppenheimer.

Jon C. Ogg
September 4, 2008

• Kelly Services (KELYA) Cut to Sell at Citigroup.
• KLA-Tencor (KLAC) Cut to Equal-weight at Morgan Stanley.
• Lam Research (LRCX) Cut to Underweight at Morgan Stanley.
• Marvell Technology (MRVL) Started as Neutral at Credit Suisse.
• Piedmont Natural Gas (PNY) Cut to Neutral at Baird.
• Robert Half (RHI) Cut to Sell at Citigroup.
• Shanda Interactive (SNDA) has seen estimate and targets cut by Citigroup, JPMorgan, and Goldman Sachs.
• Xilinx (XLNX) Started as Neutral at Credit Suisse.

Jon C. Ogg
September 4, 2008

VS Investor

The first was for McAfee (MFE) which was hammered by analyst downgrades.

Ambac (ABK) spiked up 20% on strong volume.

The market had a strong, positive reaction to earnings from Shanda Interactive (SNDA).

Alexza Pharmaceuticals (ALXA) is posting a share price increase on good drug trial news.

Douglas A. McIntyre