How many IPOs last week? Zero. That’s right. Nothing.
Then again, Nasdaq continued to plunge and investors continued to be
risk-averse. Although, by Friday, Nasdaq did stage a small come-back – as
rumors swept the Street that Greenspan would surprise us again with another
rate reduction.
But, last week there were two companies that had their quiet periods expire.
The quiet period is the 25-days following an IPO when the underwriters are
forbidden from publishing research reports
First of all, there was Peet’s Coffee
, which is a small chain of coffee houses. The IPO was
priced at $8 using the OpenIPO Dutch auction system of WR Hambrecht (the
co-manager was Pacific Growth Equities). The stock hit a high of $17-3/4.
And, yes, both underwriters published bullish reports on the company last week.
The stock traded at $8-1/2 by the close on Friday.
Next, there was Align Technologies
, which develops clear braces for misaligned teeth. The
IPO was priced at $13 and hit a high of $19-7/16.
Of course, the company’s underwriters – Bear Stearns, Deutsche Banc, JP
Morgan, and Robertson Stephens – all put either “buy” or “strong buy”
recommendations on the stock. But it was not enough to get the stock above
its former offering price. The stock ended the week at $11-1/16.
Bad News
The telecom sector has undergone a tremendous beating this year – and it is,
of course, affecting IPOs. Last week, Motorola withdrew its registration
statement for its
Propel spin-off.
The company is a wireless service provider.
The company planned to offer 23.5 million shares at $17-$19. The lead
underwriter was Goldman Sachs. The IPO was filed in June.
This Week
So any IPOs for this week? Actually, there are. But there are none that
even come close to being considered high tech.
There is AFC Enterprise.
Haven’t heard of them? Well, it is a holding company for well-known
restaurant franchises, such as Church’s Chicken, Cinnabon, Seattle’s Best
Coffee and Popeye’s Chicken & Biscuits.
Such a company – with real brand names and revenues – is something that
investors are willing to bet on. For example, the venerable restaurant
California Pizza Kitchen went public last summer at $15
per share. The stock is now trading at $29-3/8.
In fact, AFC has strong sponsorship; that is, the underwriter is Goldman
Sachs. Also, in the past year, the company had $725 million in revenues and
$26.8 million in earnings.
In all, the company intends to sell 9.3 million shares between the price
range of $15-$17. The proposed ticker symbol is AFCE.
So, expect many more such deals in the future. High-tech? I think we’ll
need to wait quite a while for that.
