|
IPO market revs up
|
 |
May 12, 2001: 7:00 a.m. ET
After-hours trading stalwart ready to go public during regular hours
By Staff Writer Kim Khan
|
NEW YORK (CNNfn) - New issues investors aren't seeing things. There is indeed a blip on the initial public offering heart monitor, with five deals including electronic stock exchange Instinet and two IPOs in the still-strong energy sector set for this week.
"Our first thought is that we're just glad there's this many deals on the calendar," said Kyle Huske, an analyst with IPO.com.
There are five IPOs scheduled to price during the week, according to MC EquityWatch, with non-U.S. companies selling American depositary shares.
"There's so much money on the sideline that these sizable new issues are likely to get attention," said Steve Harmon, CEO of High Velocity Ventures. "That doesn't mean we'll see a huge premium or pop once trading begins. It means the amount and size of the offering looks supportable from institutional investors who need to put their money somewhere other than under the mattress."
Instinet ready to trade itself
The big name to look out for, according to analysts, is Instinet Group LLC, familiar to many after-hours investors.
Instinet, owned by Reuters, is a 24-hour global brokerage. The company plans to raise $368.75 million by selling 29.5 million shares between $11.50 and $13.50 per share.
Mike Falbo, analyst with IPOPros said the company is a leader in its sector with a strong name and he expects the deal to do very well.
"An important factor is that they are working with other international markets, other than just NYSE and Nasdaq," Falbo said. "As far as revenue is concerned, they've got strong growth."
According to filings with the Securities and Exchange Commission, the company had total revenues of more than $969 million, earning more than $136 million in 1999.
"I think it will get a respectable pop," said David Menlow, president of IPOFinancial.com. "There's nothing but superlatives for this company."
Huske said a good performance from Instinet could mean a number of other ECNs toying with the idea of going public could file.
Led by Credit Suisse First Boston and Deutsche Banc Alex. Brown, Instinet will trade on the Nasdaq as "INET."
Energy sector still has power
Energy deals have been the savior for the IPO market and Global Power Equipment Group Inc., which makes gas turbine power plant equipment, and refined petroleum product pipeline manager Kinder Morgan Management LLC are looking to keep that trend growing.
Global Power Equipment, led by Salomon Smith Barney and Credit Suisse First Boston, plans to sell 7.35 million shares between $16 and $18 per share, raising $124.95 million.
"It's not profitable, so there's a little bit of concern, but it's still an energy deal," Huske said.
The company lost more than $7 million in 2000, on revenues of more than $416 million. It will trade as "GEG" on the New York Stock Exchange.
Kinder Morgan Management, a unit of Kinder Morgan (KMI: Research, Estimates), is the largest deal of the week, looking to pick up about $598 million by selling 9 million shares between $68.50 and $72.10 per share.
Falbo said the fact that Kinder Morgan is already listed on the New York Stock Exchange will be a comfort to investors and with top-tier underwriter Goldman Sachs leading the IPO, it should do well.
In 2001 the company earned more than $278 million, with revenues of $815 million. Kinder Morgan Management will trade as "KMR" on the NYSE.
Also in the cards is a now-rare network deal, with optical switching solutions company Tellium Inc. scheduled to price.
Menlow said there is a misperception that the deal had a recent price increase, but while the company did boost its range to between $13 and $15 from $8 to $10, it cut the number of shares offered to 7.5 million to 17.5 million with the net effect of a 22 percent price reduction.
"The company has substantial losses and that will rub people the wrong way, but I think Morgan Stanley will bring it out right," he said.
Tellium will trade as "TELM" on the Nasdaq.
Coming to America
Indian information technology company Satyam Computer Service Ltd. is hoping to raise $116.75 million by selling 12.5 million shares at $9.32.
"A lot of Indian companies are outsourcing for companies in the U.S.," Huske said. "If (Satyam) does well it could be the beginning of a trend."
Satyam lost nearly $7 million in 2000 and had revenues of more than $164 million. The company, underwritten by Merrill Lynch, plans to trade as "SAY" on the New York Stock Exchange.
Also scheduled is Argentine steel tube manufacturer Siderca S.A.I.C. with a $37.98 million offering. The company plans to sell 1.8 million American depositary shares at $21.10, led by J.P. Morgan Chase and trading as "SDT" on the New York Stock Exchange.
-- additional reporting by Luisa Beltran 
|
|
|
|
|
 |
|
