Lucent IPO Will Be the Biggest in History
The biggest U.S. initial public offering ever--Lucent Technologies Inc.--is expected to come to market today an assured success. The 20% stake in the manufacturing arm of AT&T; Corp. could rake in $3.45 billion from eager investors.
The Lucent IPO is the biggest of a bunch of new offerings hitting the market soon. About 111 IPOs worth about $8.8 billion are slated to come to market this month, according to Securities Data Co. About $9.4 billion was raised from new offerings in the first three months of 1996, more than double the $4.4 billion raised in the same period of 1995.
Other irresistible IPOs this month include Internet software makers Yahoo! Inc. and Excite Inc. Also coming to market is Planet Hollywood International Inc., a restaurant chain whose investors include film stars Bruce Willis, Sylvester Stallone, Demi Moore and Arnold Schwarzenegger.
Still more offerings, not yet officially scheduled, may take place this month, including Travelers/Aetna Property Casualty Corp., the company being formed by Travelers Group Inc. and the property and casualty operations of Aetna Life & Casualty Co. that Travelers bought. This offering alone would add another $885.75 million to the April total.
Whether these IPOs will hurt the ongoing market rally remains a question. Money spent on these offerings is money that can’t be used to buy other shares. Meanwhile, the flow of money into mutual funds, big buyers of stock, is slowing.
“The market’s going to have to tread some heavy water as it deals with the IPO calendar,” said Peter Anderson, chief investment officer at IDS Advisory Group, which oversees about $24 billion in assets.
However, the addition of new shares may be more than offset by the loss of stock through stock buybacks and takeovers--which themselves are going at a fever pace, judging by Monday’s action in which at least four multibillion-dollar deals were announced.
