Brand-Name IPOs Overshadow Unknowns
Despite BATS very public IPO failure, 36 companies have launched successfully in the first quarter. Investors, though, have learned to jump in quickly. Many of these successful IPOs closed much higher than their offering prices, only to exhaust those early gains.
Yelp! (YELP) was one of the companies which benefited from consumer recognition. It was priced at $15 earlier this month and closed on its first trading day at $24.58. It's now trading at roughly $28. Zynga(ZNGA) , another fan favorite, priced its stock at $10 late last year, but dropped 5% the first day. It then climbed to a high of $12.56, only to pull back to $12.30. These trading patterns are teaching traders to get in early for these consumer-friendly names.
The IPO love, however, hasn't carried over to the energy offerings. Solar company Enphase(ENPH) priced at $6, way below its planned range of $10 to $12 although it increased the amount of shares it offered, while natural gas shipper GasLog(GLOG) priced at $14, also below its planned range of $16 to $18.
Annie's Pasta (BNNY) started out as a small deal looking to raise $70 million and offered 5 million shares at a range of $14 to $16. But as the buzz got louder, Annie's increased the size of the deal to $85 million and lifted the price range to $16 to $18.
The shares ended up being priced at $19 and the stock jumped to $30 on its first day of trading. That's the best first-day stock event since LinkedIn turned in a return of 109% on its first day.
Annie's is a relatively new company, founded in 1989, and it has built up to $135 million in sales by 2011. Annie's is right on target with the consumer desire for healthy products.
Vocera Communications (VCRA) piggy-backed on Annie's good fortune by also popping 31% on its first day of trading.
Vocera also increased its offering at the last minute. It had planned to offer 5.75 million shares at $12 to $14 with the intent to raise $74.8 million. However, it ended up offering 5.85 million shares at $16 making the deal 25% bigger than planned.
Shares are trading close to $24 on Friday.
Vocera is a communication company that focuses on the hospital sector with a small wireless product that enables workers like nurses to talk to each other. The product is replacing landlines and hardwired telephones and giving these workers a quick way to exchange information. Vocera also is beginning to enter into the hospitality sector at high-end hotels.