Does Trident Resources' IPO Withdrawal Kill a Sector?

IPO withdrawals are always an interesting aspect of the IPO market, but these can lead to insights in the sector in which they each operate.  Yesterday there was a withdrawal of the IPO filing by Trident Resources in Canada, which was set to IPO with the ticker TRNT on NASDAQ. 

Trident is a Calgary-based natural gas exploration and development company, and the withdrawal was over a proposed $300 million IPO. It is a quasi-alternative energy provider that develops natural gas from coal.  Here is the problem: It cited market conditions as the reason for the withdrawal.  The underwriters were listed as Credit Suisse, Morgan Stanley and TD Securities; and this one had been in the hopper since its filing in mid-2006. 

This is an interesting story because it can have implications in the sector.   Trident was just formed as an operating entity in 2006, so it isn’t as though you can infer that all of these might be in trouble; but earlier last year and the year before companies like this were able to come public almost without question and without any skepticism.

Coal companies and natural gas companies have not enjoyed the same steady demand as oil companies.  This could have implications in other similar offerings that have been said to looking to come public via an IPO later in the year.

Jon C. Ogg
February 6, 2007