This week's crop of IPOs, which all made their market debuts on Thursday, posted mixed results by the end of the week after presenting investors with their diverse fundamental stories.
Envestnet (ENV), which provides outsourced web-based investment solutions to financial advisors, was the week's winner, ending up 12% above its IPO price. The company raised $63 million after pricing 7 million shares at $9, well below its initial $12-$14 range. IPO investors were likely attracted to the company's scalable platform and ability to grow assets over the past several years despite the economic downturn.
Natural gas gathering systems operator Chesapeake Midstream (CHKM) was the only company this week to price above the midpoint of its range, raising $446 million after pricing its deal at $21 per share (at the top of its $19-$21 range). It was the fourth largest IPO year-to-date, after Smart Technologies (SMT), Oasis Petroleum (OAS) and Sensata Technologies (ST). Chesapeake Midstream, which was formed by parent companies Chesapeake Energy and Global Infrastructure Partners, followed trends set by its natural gas gathering and processing peers, which have rallied year-to-date: it ended the week up 9% from its listing price.
By comparison, Molycorp (MCP), the only rare earth oxide (REO) producer in the Western hemisphere, ended the week down 12% from its initial price of $14 per share after pricing below its original $15-$17 range. The company, which raised $394 million by selling 28 million shares in its IPO, had generated buzz on its ability to successfully produce rare elements such as lanthanum and neodymium, which are typically supplied by companies based in China. However, fluctuations in rare earth prices coupled with Molycorp's relatively early stage and plans for capital-intensive plant expansion resulted in a disappointing initial performance for this interesting company.
Medical device company Surgivision (SRGV) and biotech Trius Therapeutics (TSRX) were also scheduled for this week; Surgivision postponed its IPO and Trius Therapeutics set its pricing date for day-to-day. Early stage health care IPOs have struggled over the past year as investors have become more risk averse in the face of market volatility. Alimera Sciences (ALIM), Tengion (TNGN) and Anthera Pharmaceuticals (ANTH), the most recent batch to approach the market, are currently trading down 34%, 30%, and 23%, respectively, from their IPO prices.
The IPO market is expected to remain active next month, starting with six deals scheduled on the IPO calendar for next week. A total of nineteen companies specified terms for their upcoming IPOs during the month of July, up from fourteen for the previous month.
