Investment bankers had a busy week. They priced 13 IPOs during the last full workweek in June.

The last time the IPO calendar produced more new issues was during the week of September 25, 2000. Eighteen IPOs made their debuts that week, according to available records.

But there was a distinct difference this time. Last week’s IPO production line showed a clear division between “the haves” and “the have-nots.”  

The haves

Two of the three deals that appeared on last week’s “most wanted” list did better than expected in the aftermarket. They were the Cabela’s and Salesforce.com IPOs. The other, Gol Intelligent Airlines, lived up to expectations.

The average opening-day gain for the “most wanted” deals was 28 percent.

Salesforce.com, a San Francisco-based provider of application services for organizations to share customer information with businesses, priced its IPO of 10 million shares at $11 each – above its initial filing range of $7.50 to $8.50 per share. The stock opened at $15 per share on Wednesday, June 23, and closed its opening day at $17.20 per share – up 56.4 percent from its initial offering price.

By the end of the week, Salesforce.com stock closed at $15.80 per share – up 43.6 percent from its IPO price.

Cabela’s, a Sidney, Nebraska-based specialty retailer of hunting, fishing, camping, and related outdoor merchandise, priced its of IPO of 7.8 million shares at $20 each. It was priced above its initial filing range of $15 to $17 per share. The stock opened at $27.95 per share on Friday, June 25, and closed its opening day at $26 per share – up 30 percent from its initial offering price.

Gol Intelligent Airlines, a Sao Paulo-based air carrier that operates the only low-fare, low-cost airline in Brazil, priced its IPO of 16.5 million American Depositary Shares at $17 per share. It was priced on the high end of its initial filing range of $15 to $17 per share. The stock opened at $18.80 per share on June 24, and closed its opening day at $18.22 per share – up 7.2 percent from its initial offering price.

By the end of the week, Gol’s stock closed at $18 per share – up 5.9 percent from its initial offering price.

Most of the rest of last week’s calendar struggled after going public. And a few didn’t make it out the door.

The average opening-day gain for the other 10 IPOs was 1.68 percent. But there was an unexpected bright spot among them. It was the Momenta Pharmaceuticals deal, which had been delayed once and cut twice.

Momenta Pharmaceuticals, a Cambridge, Massachusetts-based company developing sugar-based generic versions of best-selling drugs, first appeared on the IPO calendar to price its IPO of 5.35 million shares at $13 to $15 each to raise $74.9 million for the week of June 14. The price range was cut to $7 to $9 per share to raise $42.8 million and rescheduled for the week of June 21. A second price cut was filed later to price the IPO at $6.50 to $7 per share to raise $36.1 million. The deal was priced at $6.50 per share to raise $34.8 million on Monday, June 21. It started trading at $6.75 per share the following day. The final amount raised was 53.6 percent below its original goal.

This is an example of what Macy’s does when merchandise doesn’t move. The merchandise gets marked down to “bargain basement” prices. When the price becomes cheap enough, the item will find buyers. (Anyone want a Chanel knock-off pink tweed jacket at $79.99? Hey, it works for some people.)

It worked for the Momenta Pharmaceutical IPO. The stock closed its opening day at $7.81 per share and ended Friday at $8.40 per share – up 29.2 percent from its IPO price.

The have-nots

Of the 10 IPOs not on last week’s “most wanted” list, eight deals were priced below their initial offering prices.

The high-profile Jackson Hewitt Tax Service, a Parsippany, New Jersey-based provider of income-tax return preparation services, was a recent example of a “have-not” IPO.

The Jackson Hewitt IPO of 37.5 million shares at $18 to $20 each to raise $712.5 million was originally scheduled to price during the week of June 14.

It didn’t make it to market, and was rescheduled for the week of June 21.

Using the Macy’s “bargain basement” strategy, the Jackson Hewitt offering was priced at $17 per share – a markdown of 10.5 percent. The IPO closed its opening day at $17.25 per share on June 22 – up just 1.5 percent from its IPO price.

Jackson Hewitt’s stock closed June 25 at $17.70 per share – up 4.1 percent from its IPO price.

How the baker’s dozen did

The opening-day scorecard for the 13 IPOs priced during the week of June 21 (yes, that’s 13 deals, for a baker’s dozen) reads like this:

·          13 IPOs priced

·          9 IPOs closed above their initial offering prices

·          4 IPOs closed below their initial offering prices

·          Average opening-day gain: 9.87 percent

·          Nasdaq Composite Index for the week: Up 1.95 percent

Last week had no moonshots. (A moonshot in the IPO market is any deal that closes its opening day with a gain of 100 percent or more.) But the Salesforce.com deal captured Wall Street’s attention. It scored an opening-day gain of 56.4 percent from its IPO price – still not the sharpest opening-day gain by an IPO in 2004.

From Canada – to the moon

JED Oil, an early-stage Canadian oil and gas developer, priced its IPO at $5.50 per share. It closed its opening day at $11.20 per share – up 103.6 percent – for a moonshot.

Looking back to the week of September 25, 2000, the average opening-day gain was 44.9 percent for the 18 IPOs making their debuts that week. There were three moonshots among the IPOs priced during that week.

The haves (the week of September 25, 2000)

·          CoSine, a Redwood City, California-based developer of communication platforms, priced its IPO at $23 per share. It closed its opening day at $63.06 per share – up 174.2 percent from its IPO price. The stock recently sold at 44 cents per share, after a 1-for-10 reverse stock split.

·          Ciphergen Biosystems, a Fremont, California-based developer of equipment used to decipher proteins, priced its IPO at $16 per share. It closed its opening day at $32 per share – up 100 percent from its IPO price. The stock recently sold at $7.21 per share.

·          Eden Bioscience, a Bothell, Washington-based developer of agricultural products using its natural protein-based harpin technology, priced its IPO at $15 per share. It closed its opening day at $30 per share – up 100 percent from its IPO price. The stock recently sold at 85 cents per share.

The have-not

Among the “have-not” IPOs priced during the week of September 25, 2000, one in particular stands out. It was the University of Phoenix Online. The IPO underperformed the rest of its graduating class. (That’s a polite way of saying it squeaked by with the lowest grades.)

·          University of Phoenix Online, a Phoenix-based online provider of educational programs for working adults, priced its IPO at $7 per share (adjusted for a 3-for-2 stock split and a 4-for-3 stock split). It closed its opening day at $8.91 (adjusted) per share – up 27.2 percent from its IPO price. That was off 39.5 percent from the average opening-day performance for all 18 IPOs priced during the week of September 25, 2000.

But don’t cry for the original investors. University of Phoenix Online recently sold at about $86 per share – up an amazing 1,128 percent from its IPO price.

What’s the message?

Maybe investors shouldn’t turn their backs on the “have-nots” from the IPO calendar.