Trader Talk

Buyers say No Mas! to biggest IPO day of the year

Traders work on the floor of the New York Stock Exchange.
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The IPO business:  the buyers push back.  A very mixed report card for the busiest week of the year for IPOs.  Did I say mixed?  How about crummy. 

Eight were scheduled to price overnight, and so far only six have made it.

Thursday's IPO scorecard

1  Above range (Glaukos)

1  Middle of range (TransUnion)

1  Bottom of range (Millacron)

3  Below range (Lantheus, Catabasis, Gener8 Maritime)

1  Postponed (Wayne Farms)

1  MIA  (CNX Coal)

Wow.  That is a pretty poor scorecard.  An IPO bubble?  Not on your life.  In a bubble, everything prices above the range.  That sure is not happening.  

What is happening?  The tape is telling you that IPO sellers are force-feeding the market.  Buyers are pushing back, they are telling the sellers that there is too much product and they don't want a lot of it, or at least not at the prices being floated.   

That is a good sign.  That's the best protection against a bubble forming.

For those who want the details:

1) The big winner:  Glaukos (glaucoma treatment products), is the clear winner.  They raised terms yesterday, to $16-$17 from $13-$15, priced at $18, and they added more stock, opened at $29.11.

2)  Doing OK:  TransUnion, the credit reporting company, priced 29.6 million shares at $22.50, at the high end of the $21-$23 price talk, opened at $24.62.

3) Bottom of range:  Milacron Holdings, which makes plastics processing equipment.  The company has emerged from a 2009 bankruptcy filing.  Priced at $20, low end of $20-$22 price talk, opened at $19.50.

4) Below range:  Catabasis Pharmacuticals (technology for improving drug efficacy); priced at $12, below the price talk of $13-$15;

Lantheus Holdings (diagnostic medical imaging agents) priced at $6, well below the price talk of $8.50-$10.50, and added more stock, opened at $6.12;

Gener8 Maritime (seaborne crude oil transportation)  priced at $14, well below the price talk of $17-$19, opened at $12.75 (ouch!)

5)  Postponed:  Wayne Farms, a broiler chicken processing company that supplies chickens to Chic-fil-A, Costco, and others. Why the postponement?  Not clear, but may be concerns about chicken prices and exports due to avian flu.

6) Day to day:  CNX Coal Resources (Coal MLP, with 10 percent dividend!)