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Krispy Kreme Rolling in IPO Dough; MetLife Gets $2.9 Billion

From Times Wire Services

Investors’ appetite for new stock offerings is expected to cool in the wake of the latest market volatility, but they still scarfed up Krispy Kreme Doughnuts Inc. on Tuesday, and MetLife Inc. went ahead with its scaled-back mega-deal.

MetLife (ticker symbol: MET) raised $2.9 billion in its initial public offering--less than half its previous $6.1-billion target--by selling 202 million shares at $14.25, near the middle of its latest expected price range. It was the year’s biggest U.S. IPO so far.

The shares, which will trade on the New York Stock Exchange, may benefit from a rally in insurance stocks, which have surged in the last three weeks as investors have focused on relative bargain stocks. John Hancock Financial Services, which had been trading below its offer price of $17, has rallied to $17.88 on the NYSE.

Krispy Kreme (KREM) got a sweeter-than-expected reception, selling 3 million shares at $21. The shares, which start trading today on Nasdaq, were priced above the $18 to $20 target.

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And earlier Tuesday, Cabot Microelectronics Corp. (CCMP) sold 4 million shares at $20. The stock rose 24% in its trading debut, closing at $24.88 on Nasdaq.

But the technology-oriented Nasdaq composite index’s seven-day slide has sent many other planned IPOs to the shelf, as more than half of this year’s new offerings slipped under water intraday Tuesday. Of the 127 companies that have gone public since Jan. 1, shares of 76 traded below their initial price on Tuesday.

“You don’t have history with a new issue so you tend to punt it out of your portfolio” in times of trouble, said Ned Brines, fund manager at Roger Engemann & Associates in Pasadena.

Palm Inc., one of the most anticipated sales of the year, fell below its $38 issue price to as low as $32 on Tuesday before recovering to $38.25. The hand-held computer maker had surged to $165 on its first day of trading in March.

Among companies that have already postponed planned IPOS are Drugabuse Sciences Inc. (DASI), Rigel Pharmaceuticals Inc. (RIGL) and Adolor Corp. (ADLR).

This year’s Internet-related IPOs have produced an average gain of 34% year-to-date, but they were up more than 100%, on average, through February.


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