4 IPOs to Watch...and None are Facebook
02/09/2012 9:45 am EST
With all the talk about Facebook filing for a stock offering, all the other interesting IPO stories have been drowned out. And the number of IPOs—outside of the tech sector, no less—is even more impressive, writes Chris Preston of The Daily Profit.
Facebook’s IPO is attracting all the headlines, but the social network’s much-anticipated stock debut won’t actually happen until May. Meanwhile, nine smaller companies are scheduled to hit the market this week, injecting life into an IPO market that was virtually stagnant in January.
Just four companies went public in January. But February opened with a bang, as four more IPOs debuted in the first two days of the month alone. That was only prelude to the nine that will debut this week—the busiest week of IPOs since mid-December.
Here are a few of the headliners from this week’s crowded IPO lineup:
Caesars Entertainment (CZR)
This Las Vegas-based casino chain kicked off the busy week with an initial public offering in which the company raised a little over $16 million.
They could use the money. Caesars is sitting on a pile of debt—$22 billion to be exact. The company made a small dent in its debt load by offering 1.81 million shares at $9 a pop.
Considering the massive debt and that the company’s previous attempt to go public failed in 2010, Caesars’ IPO is a massive gamble for investors.
Cementos Pacasmayo SAA (CPAC)
The most ambitious IPO of the week raised $230 million by offering 20 million shares at $11.50 a share.
Cementos is a Peruvian producer and distributor of (you guessed it) cement. The company was founded in 1949 and booked $349 million in sales over the last 12 months. That makes Cementos the second-largest cement company in Peru.
This California-based company purports to be the developer of novel drugs that will treat Crohn’s disease and rheumatoid arthritis. The company planned to raise $60 million by offering 4 million shares at a price range of $14 to $16, but then cut its price to $10 at the last minute.
If you live in Illinois, Minnesota, or Wisconsin, you know this company. Roundy’s is a Midwest supermarket chain with 158 stores across those three states. The company raised about $150 million by offering 18.2 million shares at $8.50.
Roundy’s has plenty of history: it was founded in 1872. However, the company is saddled with debt, and revenue has been essentially flat over the last three years.
To become more appealing to investors, Roundy’s plans to offer a very generous dividend yield of 8.4 annually. That may be enough to entice short-term investors, but will be difficult for a small company with a pile of debt to sustain over the long term.