IPOs Have Best Day in 6 Months, Raising $2.2 Billion
After months of waiting for Wall Street jitters to subside, six companies sold shares to the public Friday, raising $2.2 billion in the biggest one-day stock offering since July.
The offerings were led by General Motors Corp.’s partial spinoff of its automotive parts subsidiary, Delphi Automotive Systems Corp., and by San Francisco-based Del Monte Foods Co.
Only two of the offerings were from Internet companies, and although they posted the biggest gains, analysts saw the day’s diverse group of offerings as a sign of new strength and breadth in the IPO market.
“The types of companies that are doing deals are spreading out a bit more and that is always encouraging. You don’t want the market to be dependent on one sector. It’s the start of something bigger and better,” said Steve Tuen, an analyst at IPO Value Monitor.
The largest of the stock issues Friday was Delphi Automotive. The Detroit-based auto parts supplier sold 18% of its shares to the public, raising $1.7 billion.
Delphi was the most actively traded stock on the New York Stock Exchange, rising $1.63 to close at $18.63.
When the IPO market was slumping in September, “we were somewhat anxious, but we also knew we had three or four months to see how the market developed,” said Alan Dawes, Delphi’s chief financial officer.
Del Monte Foods had wanted to go public late last year but postponed its stock offering. As fate would have it, Friday marked the 20-year anniversary of Del Monte’s exit from the exchange.
Texas Pacific Group, which acquired a controlling stake in Del Monte in 1997, sold a 38% stake in the company for $282 million. Del Monte’s shares rose 63 cents to close at $15.63 on the Big Board.
Santa Ana-based Corinthian Colleges Inc., one of the largest operators of for-profit career colleges in the U.S., rose 22% in its Nasdaq debut.
“We have made a transition from an industrial-based to a knowledge-based economy, which is driving enrollment at career colleges higher,” said Scott Soffen, an education analyst at Legg Mason Wood Walker Inc. in Baltimore.
On the Internet front, Pacific Internet Ltd. and Modem Media Poppe Tyson Inc. both soared on their first day of trading.
Pacific Internet sold 3 million shares for $17 each, but more than 3.2 million shares changed hands in the first hour of trading, driving the price as high as $88.
PacNet, an Internet service company, is the first in U.S. equity markets by an East Asian Internet concern, and the first Singapore-founded company on Nasdaq.
PacNet gave up much of its gains, ending the day at $45.
Modem Media Poppe Tyson was the day’s best-performing U.S. offering. The Westport, Conn.-based company saw its shares jump from $16 to close at $45 on Nasdaq. The company raised $41.6 million.
MicroFinancial Inc., which raised $60 million, closed unchanged on the NYSE at $15.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Array of Offerings
Friday’s six initial public offerings signaled a strong comeback for the IPO market:
*--*
Friday Company close Change Corinthian Colleges $22.00 +$4.00 Del Monte Foods 15.63 +0.63 Delphi Automotive Systems 18.63 +1.63 MicroFinancial 15.00 unchg. Modem Media Poppe Tyson 45.00 +29.00 Pacific Internet 48.00 +31.00
*--*
Sources: Associated Press, Bloomberg News
