The Banking and Strategy Initiative

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This week’s investment banking buzz and inspiration | Deal insight

YELP IPO priced this week

The one IPO that could tell us how Facebook will be received , is also priced between $12-$14 with 7.1 mln in supply coming in though without a second market quote turning it above $100 bln, making fo with $100 mln of fresh shares. Many media and even stock brokerage companies have bombed in IPO from to and ETrade with virtually no returns for their investors, but apparently for every Groupon like failure, there is a Linked In that could be rewarded.

Zynga still trades above $13.25 getting to its highest $15 as Facebook completes the countdown to the IPO. Once the response is known, the bankers’ can take a call by  Thursday and the new YLP stock starts trading on the last day of the week ( March 2) testing YELP’s market value at the proposed $848 mln mark. YELP is the only one with heavy underwriters for its $83 mln in Sales , the IPO this week getting Goldman and Citi with Jefferies behind the deal.

Six IPOs lined up this week

Even as deal fees are down from the smaller size of IPOs this year, smaller issues are bunched together to hit the markets this week. ANDAU finances and lists its Colombian blank check business with $63 mln value on NASDAQ, while another Cancer and HIV drug play in Argos (ARGS) offers 5.4 mln shares for $15 to get a 33% equity listed on NASDAQ. Two mortgage and REIT businesses including Ocwen Financial acquirer Hoam Loan Servicing Solutions and the REiT Provident Mortgage ( no relation to the Empire State REIT) raise $200 mln and $125 mln each. The lesson, the IPO market , once tested, rarely returns to form easy, losing fees and volumes as it gets from $110 bln in the first 7-8 weeks of 2011 to $60 bln in the same period of 2012

Meanwhile Facebook IPO is totted up to $2 bln in tax revenue for California thru taxing its employees stock options and nvestors cashing out in the IPO in March

Facebook trading higher

Image representing SharesPost as depicted in C...

Image via CrunchBase

Though not with its symbol FB, the aftermarket is according the social media maven a more than 50-50 chance that shares will never be available this cheap again after its $10 bln IPO and listing in March. Shares are already trading at $42  from $34 just last month according to reports from Menlo Park where most are being traded over phone and on online private sale markets. In the post IPO 180 day period, many insiders won’t be able to sell and thus prices have a fair chance of staying up if no shakedown happens like on Groupon, and volumes on Sharespost have gone up to 150k shares and more each of the last three weeks

Winners this week/February

Daily Finance suggests that many IPOs successfully listed above the offer price including another social commerce deal Bazaarvoice ( cloud based), Casino Caesar’s (both on NASDAQ) as also an agricultural Biotech company Ceres that pocketed $65 mln and a NYSE listing for CNC parts maker Proto Labs (PRL) that already has an EPS of $0.98 per share. Fees are down 30% yet this year and post Facebook there may not be any appetite fear underwriters and investors

We want to stay in State Courts – BNY Mellon and BofA

The $8.5 bln settlement by Bank of America is still not out of the woods as investors groups tried to take it to Federal courts thru a challenge in the Appeals court The investors are led by a group called Walnut place while BofA trustee is arguing for the settlement to stay in State courts,where it is easy to enforce on everyone. THE appeals court has ruled in favor of investors like Balackrock and PIMCO raising hopes that the settlement would survive instead of going back to a Federal Court.

Profile shown on Thefacebook in 2005

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Medco/Synthes Deals

The $30 bln deals are both back in the news on hopes that each would be able to get by antitrust concerns but at the moment it seems unlikely.

Jamie Dimon’s 2012 Analyst Day

JP Morgan’s analyst day is slated for today as analysts hope for gory details on how the bank plans to shore up the banking giant’s share price. WSJ quotes analysts like John MacDonald, looking for $12 bln in cost cuts this year and more in 2013 rather like the Italian and Greek budget combined. Others would ofcourse be looking at fireworks also from Jes Staley the Investment Banking chief.  I think t’s more – It’s not going to be Europe, it’s not tha we are truly global, it is just us , we are JP Morgan and more to differentiate the bank from its competitors along the lines of the 2011 conference, with not much time for a fresh presentation after the details last year 😀 And no mr Mayo (Mike) being too big is not coming in the way of P Morgan though stock has risen only 15% compared to a 45% revival in BAC in 2012 trading.


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This entry was posted on February 27, 2012 by in Financial Markets and tagged , , , , , , , , , .


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