Investing

Secondary Offerings Run At Market Flood Rates (MPEL, GSIC, AWK, GLDD, YSI, TBBK, HMPR, SBCF, CADE, UMPQ)

It is one thing that we had two fairly large IPOs this week.  But the flood of public secondary stock offerings is almost running at alarming levels when you consider that these share sales are after such a large run-up in the markets.  Melco Crown Entertainment Ltd. (NASDAQ: MPEL) $200 million and GSI Commerce Inc. (NASDAQ: GSIC) (and holders) sold about $201 million in secondary offerings this morning.  Other stocks in offerings are scheduled from American Water Works Co. (NYSE: AWK), Great Lakes Dredge & Dock Corp. (NASDAQ: GLDD), and U-Store-It Trust (NYSE: YSI).  Then there is the flood of regional and community banks selling stock.

Details are as follows:

American Water Works Co. (NYSE: AWK) is on deck with German-parent RWE selling another 30 million shares via Bank of America Merrill Lynch, Citigroup and Goldman Sachs.  With shares close to $19.00 today, this generates a $570 million estimates take.

Great Lakes Dredge & Dock Corp. (NASDAQ: GLDD) is on deck with some 12.5 million shares being sold through Barclays Capital and Bank of America Merrill Lynch.  This should come to roughly $75 million being raised based on today’s price.

U-Store-It Trust (NYSE: YSI) is set to sell 22 million shares through  Bank of America Merrill Lynch and Wells Fargo and this deal is expected to raise close to $110 million based on today’s price.

Then there are the regional and community banks that we have seen from Dandler O’Neill.  The Bancorp Bank (NASDAQ: TBBK) is on deck to sell roughly $50 million worth of shares through Sandler O’Neill.  Hampton Roads Bancshares Inc. (NASDAQ: HMPR) is expected to sell some 32 million shares through Sandler O’Neill and should raise roughly $140 million based on today’s price.  Seacoast Banking Corp. of Florida (NASDAQ: SBCF) is expected to sell about 28 million shares also through Sandler O’Neill and will bring in close to $70 million based on today’s prices.

Two more banking deals are also on deck that will either come tonight or perhaps next week.  Cadence Financial Corp. (NASDAQ: CADE) is expected to sell 31.5 million shares through FBR Capital Markets in an effort to raise roughly $55 million based upon today’s price.  Be advised, Cadence is extremely think trading volume.  Umpqua Holdings Corp. (NASDAQ: UMPQ) is expected to sell some $175 million in common stock via JPMorgan and others including KBW.

When we tally all of this up, it comes to more than $1.6 billion in secondary offerings just between today and what may come tomorrow.  That cash has to come from somewhere and generally has to stay in the stock for at least a little bit of time.

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JON C. OGG
AUGUST 13, 2009

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