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Realogy, Workday, Sprint and a truncated Equities revival | US Equities- Deal Insight

BEIJING, CHINA - MAY 06: People wait in line t...

BEIJING, CHINA – MAY 06: People wait in line to buy an Apple Inc. iPad 2 tablet computer at the Apple store on May 6, 2011 in Beijing, China. Apple began sales for the iPad 2 in the Chinese mainland on Friday. (Image credit: Getty Images via @daylife)

You may attribute it to Apple’s rerating in 2011 or its introduction of the mini iPad which brings it down in the iPad Wars at almost a level playing field against Amazon and Android fed lost looking Samsung Galaxy still banned in the US. In fact the mini iPad would even compete with HTC in China whre it trails the Taiwanese maker and all this even before Microsoft peddles its dream hardware to back Windows 8 on the Tablets.

However, Apple’s storyustill has afew takers and investors are even eyeing Tier II debt as banks ae suddenly starved for Tier II Capital after having binged on Tier I and CocOs in Europe last year and having still got room to expand balance sheet on Tier II Capital a precious 2% of which is required by BaseIIIrules and that could translate into more than EUR 200 B in Euros across the pond itself.

The IPO story in the meantime had bigger jumps than in JP Morgan’s surprising Q3 earnings pop to $1.40 EPS which is a big 40% jump as Coldwell Banker and Century 21 came back after 5 years in the slump ridden US Real Estate Market earning their PE owners Apollo Global PE a 21% PE on a high priced IPO this last week.

Another HR Capital Software company Workday opened Friday and closed with a 78% first day Pop

Apollo survived a previous attempt by Carl Icahn in 2009 and managed to come out confident in a slowly recovering real estate market. Apollo owns 50% of the company, John Paulson over 10% and the IPO unloaded more than 1.1 billion shares at $27 while still leaving the Real estate company with $4.5 B in debt to be serviced. The Homebuilder SPiDeR is up 42% in 2012 including Home Depot and Lowe’s and shos where Paulsona nd Einhorn could be waiting next, this time with Carlyle, Blackrock and even KKR in tow waiting to clean out the big CMBS mess and take advantage of lower rates from the recently launched QE3 The IPO Valuation of Realogy net of debt was $4.4 B

Softbank meanwhile is paying $20 B for Sprint to understandably purchase Clearwire with the purchase giving Sprint a reason from its depths while Facebook continues at under $20

Under the deal taking shape, Softbank would buy $3 billion of bonds convertible into Sprint stock at $5.25 a share, the Wall Street Journal reported, citing people familiar with the matter. It would also buy $5 billion in stock directly from Sprint, and offer $7.30 a share for stock it buys in the public markets. Sprint shares closed on Friday at $5.73. (Softbank reportedly ends up with 70% of Sprint)

In terms of first day pop the Workday issue opened best on Friday, priced at $28, first trades at above $48 and closing at $48.69 or 74% higher

Dealbook reports:

Revenue at Workday — which was founded by David Duffield and Aneel Bhusri, two veterans of the software industry — has more than doubled every year in since 2007, reaching $134 million in the year that ended Jan. 31, according to its most recent prospectus. Still like many start-ups, its struggling to turn a profit. The company has reported a loss every year since 2007.

Despite the recent spate of strong showings, the I.P.O. market is being picky, following the botched debut of Facebook. Last week, Dave & Buster’s Entertainment withdrew its offering, citing the current conditions.

Workday had planned to release the IPO shares at an initially priced offer of $21 and WDAY lans to be in the Delamakers’ game with the proceeds even as Facebooka nd many others lick their chops waiting for their market valuations to improve to allow for further selling bouts in the market.

 

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This entry was posted on October 15, 2012 by in Amitonomics, Financial Services, Investments, Private Equity, US.

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