Recent IPOs Riding High on Stocks’ Spring Rebound
Wall Street’s spring rebound is whetting more investors’ appetites for new stock offerings.
The initial public offering of Bermuda-based insurance firm Axis Capital Holdings Ltd. got a warm reception Tuesday: The stock, priced at $22 a share late Monday, jumped $3.55, or 16%, to $25.55 in its debut on the New York Stock Exchange.
And late Tuesday, Long Beach-based managed-care company Molina Healthcare Inc. said it sold 6.6 million shares at $17.50 each. That was near the top of the expected price range of $16 to $18 a share.
Molina’s shares will begin trading today on the NYSE under the ticker symbol MOH.
IPOs from Axis, American Financial Realty and Los Angeles-based Maguire Properties in the last week have marked the biggest new stock sales since December, according to Bloomberg News.
The IPO market is slowly recovering from a severe drought caused by the long bear market: Seven U.S. companies sold a total of $1.67 billion in shares in the second quarter, up from $513 million sold by four companies in the first quarter, according to Bloomberg data.
American Financial, a real estate investment trust, last week sold 56 million shares at $12.50 each to fund the purchase of up to 333 properties. Investors have bid the stock up to $14.70 as of Tuesday on the NYSE.
Shares of Maguire Properties, a REIT that owns major properties in downtown Los Angeles, haven’t fared as well: The stock closed at $19.30 on Tuesday on the NYSE. It was priced at $19 in its IPO last week.
Axis Capital, founded in November 2001, was established to take advantage of commercial insurance rates that soared in the wake of the Sept. 11 terrorist attacks. The company, which provides specialty insurance for such risks as terrorism and marine and aviation disasters, already is profitable: It earned $107.1 million or 74 cents, in the first quarter of this year.
Molina Healthcare, which also is profitable, serves low-income families. It said it would use the $107-million net proceeds of its offering to fund internal growth, acquisitions and to pay off debt.
