initial public offering

DealBook: Zynga Aims to Raise $1 Billion

December 2, 2011 by NewsMaker Leave a Comment

Jeff Chiu/Associated PressMark Pincus, chief of Zynga.

Zynga, the online gaming company, has set the price range for its initial public offering at $8.50 to $10 a share, a highly anticipated debut that could value the company at $7 billion.

At the top end of that range, the four-year-old company is on track to raise $1 billion, according to a regulatory filing on Friday. Its underwriters also have the option to sell an additional 15 million shares if demand is strong.

In its offering, Zynga appear to be moving cautiously amid the market turmoil and tough environment for I.P.O.’s.

Notably, Zynga, which is set to sell 100 million shares, or 14.3 percent of its total, is offering a bigger stake than many Internet companies that have gone public this year. Several start-ups, like Groupon and LinkedIn, have sold less than 10 percent of total shares in their I.P.O.’s. That strategy of constrained supply has allowed many to soar on their first day of trading, but it has also increased volatility.

The valuation of $7 billion is also softer than many analysts had predicted earlier this year, reflecting the tempered expectations for I.P.O.’s. A number of Internet and technology companies that have gone public this year have tumbled below their offering prices. Groupon, the popular deals site, has lost about $4 billion in market capitalization since its early November debut.

Insiders are largely holding on to their shares. Zynga’s two largest investors — its chief executive, Mark Pincus, and a venture capital firm, Kleiner Perkins Caufield Byers — are not selling any shares in the offering, according to the filing. Mr. Pincus’ stake is worth roughly 12 percent of the company, according to people familiar with the matter. Its other major venture capital investors, Institutional Venture Partners, Union Square Ventures, Foundry Venture Capital and Avalon Ventures, will sell a little more than two million shares, but only if the underwriters exercise the overallotment option.

Zynga, unlike many of its peers, is churning out a profit, a crucial selling point as it starts its roadshow on Monday. It recorded earnings of $30.7 million for the first nine months of this year, on revenue of $828.9 million.

The company, which makes the bulk of its money from the sale of virtual goods, is the top game maker on Facebook, with some 227 million monthly active users. Its latest franchise, Castleville, which started about two weeks ago, has already attracted about 20 million users on Facebook, according to AppData, a site that tracks online games.

Still, there are signs that growth may be slowing. After hitting an average of 236 monthly unique users in the first quarter, the game maker has pulled back modestly. Attracting and keeping new users is critical, since only a small percentage of Zynga’s users actually purchase virtual goods.

The company, which is being advised by Morgan Stanley and Goldman Sachs, is expected to make its debut on the Nasdaq in mid-December, under the ticker “ZNGA.”

Article source: http://feeds.nytimes.com/click.phdo?i=1b96a137fc067a407676d147a891b345

Filed Under: Business News Tagged With: initial public offering, internet companies, venture capital investors

DealBook: Empire State Building on Track for I.P.O.

November 29, 2011 by NewsMaker Leave a Comment

Librado Romero/The New York TimesThe 102-story Empire State Building at Fifth Avenue and 34th Street in Manhattan.

Want to buy a piece of the Empire State Building? You might have the chance.

The Malkin family, which controls the famed 102-story tower at Fifth Avenue and 34th Street, plans to create a publicly traded real estate company that will include the skyscraper, according to papers filed Tuesday with the Securities and Exchange Commission.

Two other buildings controlled by Anthony E. Malkin and his father, Peter L. Malkin — 1 Grand Central, a 55-story, 1.3-million-square-foot building across 42nd Street from Grand Central Terminal, and a 26-story building at 250 West 57th Street — are set to be included in the publicly traded real estate company.

The unusual S.E.C. fillings were devoid of specific financial information, but said that more detailed information is expected to disclosed in about three months, which would then set the stage for an initial public offering. Goldman Sachs is expected to be the lead underwriter on the deal, according to a person with direct knowledge of the potential offering who requested anonymity because he was not authorized to discuss it publicly.

A high-profile I.P.O. of a company built with bricks and mortar would stand in stark contrast to the slew of Internet company stock offerings that have dominated headlines. After several tech I.P.O.s this year, including Groupon‘s and LinkedIn‘s, the market is looking to a initial offering by Facebook sometime in 2012.

The I.P.O. would clean up the complex ownership structure of the Empire State Building and the other Malkin family assets. Each of the buildings that will be placed into the real estate company has separate owners with multiple partners, a legacy of the real estate syndication model pioneered Lawrence A. Wein, Peter Malkin’s father-in-law, and Harry B. Helmsley. As a result, the Malkins have to go through the painstaking process of gaining approval for the deal from the various buildings’ investors and then allocating the shares in the new company.

If consummated, the Malkin’s holdings would then be converted into a real estate investment trust, a common form of public ownership for real estate assets.

After gaining control of both the Empire State Building and the land underneath it about five years ago, the Malkins have spent more than half-a-billion dollars renovating the landmark, restoring its lobby to its original Art Deco grandeur and more than doubling the rents. Its 6,514 windows have been replaced, transforming the 1930s-era office tower into one of New York’s most energy-efficient office buildings.

The name of the new company is not known, but a person briefed on the matter said that it will be named in reference to the Empire State Building, a branding move that the owners hope will attract investors hoping to own a stake in one of the world’s most iconic skyscrapers.

It is unclear at this point what color the building’s tower will be lit up on the evening of its I.P.O., if that day should come. But most people expect it to be green, said a person briefed on the deal.

This post has been revised to reflect the following correction:

Correction: November 29, 2011

An earlier version of the story said the Empire State Building was a century old. It was built in the 1930s.

Article source: http://feeds.nytimes.com/click.phdo?i=ddf880c910b56625c971d834a437408a

Filed Under: Business News Tagged With: initial public offering, securities and exchange commission, stock offerings

Postal Union Turns to Wall Street for Advice

October 16, 2011 by NewsMaker Leave a Comment

The labor union representing more than 280,000 current and retired letter carriers is counting on him.

On Sunday, the National Association of Letter Carriers announced that it had hired Mr. Bloom and Lazard, the financial advisory and asset management firm, to develop a strategy to revitalize the deficit-laden postal service.

“We have retained Lazard and Ron Bloom to make sure we explore and expand the various range of solutions to address the postal service’s fiscal crisis as well as long-range business strategies not being pursued right now,” Fredric V. Rolando, the national president of the union, said in a phone interview. “They have experience in analyzing large, financially complex institutions and crafting creative solutions.”

In 2009, for example, Mr. Bloom, as a senior adviser on President Obama’s automotive industry task force, helped to reorganize General Motors and Chrysler. Meanwhile, the Treasury Department last year hired Lazard, which has worked with the United Automobile Workers union, to advise the government on the initial public offering of G.M.

Mr. Bloom, a former Wall Street investment banker, also worked with the United Steelworkers as a strategic adviser to help revive bankrupt companies and consolidate the nation’s steel makers to help save jobs.

Mr. Rolando said it was too soon to say how long the new advisory team would work for the union or how much the project would cost.

A representative of the postal service did not immediately respond to a request for comment.

The announcement comes as the postal service, facing a deficit of nearly $10 billion this fiscal year, is confronting critical problems in both revenue and expenses that threaten its viability.

With nearly 600,000 employees, the agency has huge labor costs even as first-class mail, a major source of revenue, has been declining because of consumers’ increasing use of e-mail. To remedy the problem, postal service executives, along with other government agencies and certain members of Congress, have proposed major cutbacks to the work force, postal locations and delivery days.

The postal service also must comply with a law requiring a $5.5 billion annual payment to finance the health coverage of future employees. The postal service says it has overpaid into the federal pension plan and proposes to recover billions of dollars from the government to meet the health payments.

But the union’s new partnership with Mr. Bloom and Lazard indicates that postal workers want to shift the debate about cost-cutting toward a discussion of potential growth strategies that they hope could make the agency viable for the long term. Like the steelworkers’ and the automobile workers’ unions before them, the union of letter carriers hopes to make a business case for its industry.

“We believe there is a business here,” Mr. Rolando said. “We believe there is a way to grow the business.”

It will not be easy at a time when the postal service’s capacity far outstrips consumer demand.

The post office operates 32,000 retail outlets and delivers mail to some 150 million addresses, including businesses, residences and post office boxes. To deliver mail six days a week to those households and businesses, the agency employed about 584,000 people last year. Labor costs now account for 80 percent of the agency’s expenses while competitors like the United Parcel Service, for example, devote only 53 percent of expenses to labor costs.

Meanwhile, over the last five years, mail volume has declined by more than 43 billion pieces, according to a recent press release from the postal service. In that time period, the volume of first-class mail declined 25 percent, including a 36 percent decline in individual letters — the kind that use postage stamps rather than meters.

Last month, Patrick R. Donahoe, the postmaster general, proposed cost-saving measures aimed at saving the agency $3 billion annually. Measures under consideration include closing or consolidating 250 processing centers, sharply reducing the agency’s transportation network and cutting as many as 35,000 jobs.

But Mr. Rolando, the president of the letter carriers’ union, said it would make more sense from a business perspective to view the postal service’s vast network of retail outlets, letter carriers and vehicles as an asset — and one that might be used to do more than deliver mail.

“Our hope is to be able to come up with a strategy to maximize the network and take the business into the future,” he said.

Since Mr. Bloom and Lazard are only beginning to analyze the business model of the postal service, Mr. Rolando declined to provide specific examples of how the network might be used.

Article source: http://feeds.nytimes.com/click.phdo?i=f7954595b782c526390713ff0aa52093

Filed Under: Business News Tagged With: bankrupt companies, fiscal crisis, initial public offering

G.M. Looks to Shepherd U.A.W. Pact

September 14, 2011 by NewsMaker Leave a Comment

Both G.M. and Chrysler have been holding around-the-clock talks with the union for several days, hoping to reach a new deal before their current four-year contracts expire at the end of the night on Wednesday.

The third Detroit automaker, the Ford Motor Company, agreed with the U.A.W. on Tuesday to extend its contract until settlements were reached at the other two companies.

With its stock price lagging 33 percent below its initial public offering price of a year ago, G.M. needs a deal that bolsters confidence in its comeback from its government bailout and bankruptcy.

And with the strongest balance sheet of the Big Three, G.M. is in position to sweeten worker bonuses and raise the pay of second-tier workers in exchange for flexibility in its plants and profit-sharing tied to quality and productivity.

“With a vastly improved balance sheet, G.M. has a distinct advantage in negotiation its U.A.W. contract,” said Mike Jackson, a senior analyst at the research firm IHS Automotive. “It is working hard to set terms that are more favorable to its own cause.”

Historically, the union reaches an agreement with one automaker first and expects the other two to follow the framework for wages, benefits and work rules.

Recently, G.M. has stepped up its efforts to devise a competitive cost structure that both the companies and the union can live with for the next four years.

Underscoring G.M.’s aggressive approach has been the presence of its chief executive, Daniel F. Akerson, at the bargaining table. In years past, it was rare for any Detroit chief executive to be directly involved in the talks until the end of the process.

The U.A.W. agreed not to strike G.M. or Chrysler as conditions of the Obama administration’s bailouts of the companies. But G.M. is still 26 percent owned by the American taxpayers, and its executives are eager to avoid a prolonged arbitration process if a deal cannot be reached.

“A failure to reach a settlement would be looked at as almost a repudiation of the government funding,” said Gary N. Chaison, professor of labor relations at Clark University in Worcester, Mass.

Among the top issues to be reconciled is how much workers should gain now that the companies have greatly improved their finances. G.M. earned $5.7 billion in the first half of 2011, and Ford’s profit for the same period was nearly $5 billion. G.M. also has a cash stockpile of more than $30 billion, which it has been using to pay down debt and create what it calls a “fortress balance sheet.”

A deal that investors see as favorable for G.M. could help reverse the slide in the company’s stock price. Shares of G.M. closed at $22 on Tuesday, one-third lower than the price for its initial public offering last November.

Instead of increasing wages — which have been frozen since 2003 — analysts expect the carmakers to offer workers large bonuses that they would receive as lump sums after the contract is ratified. That avoids permanently increasing the companies’ annual labor costs, and the signing bonuses most likely would amount to considerably less than four consecutive years of small raises.

The bonuses will probably be $5,000 to $7,500 at G.M. and Chrysler, and slightly more at Ford, predicted Arthur Schwartz, a former G.M. negotiator who is now president of the consulting firm Labor and Economic Associates in Ann Arbor, Mich.

Ford would pay more because it is healthier and thousands of its workers have filed a grievance against the company over executive bonuses. A hearing on that matter is scheduled for Thursday.

“Their pay rates are already competitive, so why they’re entitled to a pay increase by definition is certainly debatable,” Mr. Schwartz said. “A nice-size signing bonus would go a long way.”

A U.A.W. spokeswoman, Michele Martin, said reports that the union had asked for bonuses of as much as $10,000 were “inaccurate” and creating “false expectations” among workers.

The bonuses are meant to increase the chances of ratification by rank-and-file members, but a large amount would undoubtedly draw criticism from opponents of G.M.’s government bailout and could even cause workers to think they are being taken.

“Most workers could see a large signing bonus almost as a sign of a bribe,” Mr. Chaison said. “If it’s too large then they’ll get suspicious about what they’re being asked to accept.”

The companies are expected to slightly increase pay for workers on the entry-level pay scale, which currently starts at $14 an hour, or half as much as most autoworkers earn.

Workers said that they expected the new second-tier pay scale to top out at about $18 an hour. U.A.W. and company officials, however, have not confirmed an amount they are discussing.

The union also is seeking to protect as many jobs as possible, and specifically wants to persuade G.M. to reopen closed plants in Tennessee and Wisconsin. But G.M. officials have said they will need to restart those plants only if market demand is sufficient, asserting that they do not need additional capacity yet.

Article source: http://feeds.nytimes.com/click.phdo?i=487aad97d67b59ec96714cf94a1529fb

Filed Under: Business News Tagged With: chief-executive, initial public offering, wages

DealBook: In a Quiet Period, Groupon Feels the Noise

September 2, 2011 by NewsMaker Leave a Comment

Anthony Bolante/ReutersAndrew Mason, chief of Groupon.

Groupon’s initial public offering is about to hit some very rough turbulence.

The reason is that the Securities and Exchange Commission may force a postponement of the offering. The problem arises from an e-mail apparently sent last week by Groupon’s chief executive, Andrew Mason, to thousands of Groupon employees.

In the e-mail, as reported by Kara Swisher at All Things D, Andrew Mason details his frustration at “getting the [expletive] kicked out of us in the press”. He disputes media reports about the company and defends Groupon’s proposed accounting metric of “adjusted consolidated segment operating income,” which excludes types of marketing expenses, currently about 20 percent of Groupon’s revenue. Mr. Mason then makes a spirited defense of company, stating that Groupon’s businesses are doing better than its competitors and seeing “unprecedented growth”.

Unfortunately, Groupon is in the quiet period for its I.P.O. Under longstanding legal rules, once Groupon files its prospectus with the S.E.C., it is largely prohibited from sending out written communications to the public promoting its stock. These communication rules, which are quite intricate, dictate what a company can and cannot say once its I.P.O. document, known as a registration statement, is filed with the S.E.C. The guiding light is that a company should not be allowed to condition the market by hyping its stock through written materials that contain information not otherwise already in the registration statement or otherwise filed with the S.E.C. Instead, all of this material should be concentrated in one document, the I.P.O. prospectus, which is reviewed by the S.E.C.

Companies can easily be tripped up by these rules. In 2004 Google came close to delaying its I.P.O. because of an interview its two founders gave to Playboy. The S.E.C. investigated and did force the company to file the article as part of its I.P.O. document.

More tellingly, the S.E.C. forced the delay of an I.P.O. by Salesforce.com in 2004 because an extensive interview given by the company’s chief executive to The New York Times while the company was in the quiet period. The difference appears to be that Salesforce was in the quiet period while Google arguably was not.

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DealBook: An I.P.O. Built on the Basics: Sugar and Coffee

July 28, 2011 by NewsMaker Leave a Comment

Mario Tama/Getty ImagesNigel Travis, chief executive of Dunkin’ Brands, celebrated the stock offering outside the Nasdaq MarketSite in New York.

The latest splashy stock debut had all the markings of a sizzling technology start-up company: a better-than-expected offering price, a swarm of investors clamoring for shares and a first-day pop that defied a broader market drop.

But the company was not an online music service or a social networking site. It was a fast-food chain that sells bite-size Munchkin donuts and extra-large cups of coffee.

On Wednesday, shares of the Dunkin’ Brands Group, which priced its initial public offering at $19 a share, soared 46.6 percent, to close at $27.85. In spite of the turbulent market conditions related to the gridlock over the debt ceiling talks, the stock was flying high.

The gains on the first day mimicked those of newly minted Internet stocks like LinkedIn, Yandex and Pandora. At that level, Dunkin’, whose shares trade on the Nasdaq market under the ticker symbol DNKN, is valued at about $3.5 billion.

“People love brands, and we have two iconic brands with real history,” said Nigel Travis, the company’s chief executive. “We felt like this was good timing.”

For all the attention heaped on Facebook, Groupon, Zynga and other technology start-ups developing the next new thing, demand has been just as strong for some basic businesses that sell food, clothes and other consumer goods.

A crush of international and domestic investors tried to get initial public stock offering shares of Dunkin’, with orders amounting to more than 20 times the size of the eventual offering, according to one person with knowledge of the matter. In all, Dunkin’ sold 22.25 million shares and raised $422.75 million.

Over the last year, 20 consumer-oriented companies have gone public, generating average returns of 29.5 percent, according to Renaissance Capital, an I.P.O. advisory firm. Francesca’s Holdings, a women’s boutique chain that went public last week, is trading 56 percent above its offering price. Despite getting off to a shaky start, retail offerings overseas have also posted strong gains, with Prada up 25 percent from its initial offering and Ferragamo up 44 percent.

By comparison, there have been 50 technology offerings in the last 12 months that have gained a more modest 21.7 percent on average. The initial offering market over all is up 16.4 percent in the same period, based on Renaissance Capital data.

“Consumer I.P.O.’s are resonating well because they are easy to understand,” said Paul Bard, vice president of research at Renaissance Capital. “Despite cautious signals, investors are looking forward and expecting consumer spending to improve.”

For Dunkin’s new investors, the offering was an opportunity to bet on a well-known brand that is expanding in the United States. Its brands Dunkin’ Donuts and Baskin-Robbins have long been staples in America’s quick-food industry, with histories stretching back to the 1950s. Five years ago, the spirits maker Pernod Ricard sold the company for $2.4 billion to the private equity firms Bain Capital Partners, the Carlyle Group and Thomas H. Lee Partners, which still own 78.3 percent.

Dunkin’, which makes nearly all its money from franchising, blankets the New England and New York areas with about one store for every 9,700 people. In contrast, the Western half of the United States suffers from a severe Coolatta shortage. Unlike the coffee-peddling rivals McDonald’s and Starbucks, which have thousands of locations in the region, Dunkin’ Donuts has just 109 outlets. According to Mr. Travis, the company will open about 250 stores this year and will double the number of American stores in 20 years.

“This is a long-term play for us,” said Josef Schuster, the founder of the money manager IPOX Schuster, which got shares in the Dunkin’ offering. “Although their sales growth is modest, they haven’t touched the West, and that’s where strong earnings growth can come from.”

Unlike Web start-ups, consumer stocks are often established companies generating cash and profits. In 2010, Dunkin’ Brands earned $26.9 million on revenue of $577.1 million. Teavana and the Chefs’ Warehouse, other retail companies that are expected to start trading this week, are both profitable, too.

The consumer stocks are also cheaper in many cases. Dunkin’ is selling for about six times sales. LinkedIn trades around 39 times trailing sales.

“Many of these companies have a strong earnings record and are modestly priced,” said Mr. Schuster, who also owns the stocks of other recent offerings like Francesca’s and Vera Bradley, the accessories maker. “As these stocks continue to perform well, demand increases for consumer brand I.P.O.’s.”

Consumer stocks, particularly newly minted ones, are hardly a sure bet, particularly in an environment with a weak job market, anemic economic growth and global uncertainty. The private equity-backed Dunkin’ has the added burden of a $1.89 billion debt load. The company plans to use proceeds from the offering to help pay down its debt, according to a recent filing.

Retail companies typically do not have the same trajectory as fast-growing technology start-ups, either. Revenue at Dunkin’ increased 7 percent in 2010. LinkedIn’s sales more than doubled in the same period.

And today’s hot I.P.O. can always turn out to be tomorrow’s dud. Shares of Krispy Kreme Doughnuts, the fast-food chain that had a popular offering in 2000 and at one point traded for nearly $50, is currently at $8.27.

Still, the mood was celebratory on Wednesday when Dunkin’ went public on Nasdaq. To mark the day, the stock exchange unofficially changed its name to Nasddaq and splashed its logo with the signature pink and orange hues of Dunkin’ Donuts.

As shares of Dunkin’ climbed higher, Mr. Travis and his team sipped on the brand’s coffee and nibbled on a generous spread of doughnuts, Munchkins and Baskin-Robbins ice cream, which came in flavors like mint chocolate chip and strawberry.

“I’ve had at least seven cups of coffee today and a doughnut,” said Mr. Travis. “I’m delighted with the current enthusiasm, but I’ll wait until next week before I get too excited.”

Article source: http://feeds.nytimes.com/click.phdo?i=3705be33dd822cf40f9c21bb82a2e5b1

Filed Under: Business News Tagged With: debt ceiling, initial public offering, offering price

DealBook: Zillow Soars 79% in Its Debut on Nasdaq

July 21, 2011 by NewsMaker Leave a Comment

Zef Nikolla/NasdaqSpencer Rascoff, center, the chief of Zillow, and his colleagues celebrated its initial public offering at the Nasdaq.

8:46 p.m. | Updated

Once again, investors have caught Internet fever.

Shares of Zillow, the online real estate information company, gained nearly 79 percent in its debut on the Nasdaq stock market on Wednesday, closing at $35.77. The company, which set its initial public offering price at $20, soared as high as $60 when trading began.

The first-day gains in Zillow echoed those of the social network LinkedIn, which more than doubled from its offering price in May, and Yandex, known as the Google of Russia, which jumped 55 percent a few days later.

Investors are awaiting initial public offerings from Groupon, the social buying site; Zynga, the creator of the online game FarmVille; and ultimately Facebook.

Investors’ enthusiasm for Internet stocks this year has raised questions about whether this boom could be repeat of the 1990s technology bubble, setting investors up for a fall. In one instance, Renren, a Chinese social networking site, jumped as much as 71 percent on its first day on the New York Stock Exchange in May, but its shares are now trading well below their offering price.

And in a sign of nervousness, JPMorgan Chase, one of the underwriters of LinkedIn’s initial public offering, downgraded its rating on the company’s shares on Monday, calling them overvalued. Despite a retreat after the downgrade, LinkedIn still trades at more than twice its offering price of $45.

Investors have not been totally indiscriminate in their quest for Internet stocks. In June, for instance, shares of Pandora Media, a popular but unprofitable online music service, gained only 8.9 percent in their debut and later fell below their offering price before recovering.

Zillow did receive special treatment in its market debut, as it entered the rarefied club of publicly traded corporations with single-letter ticker symbols.

Zillow, which trades as Z, is the first single-letter stock to trade on the Nasdaq stock market. It joins such blue-chip corporations as the Ford Motor Company (F), Visa (V), and Citigroup (C), all of which trade on the New York Stock Exchange.

Before Zillow, the last company to trade under the letter Z was the now-defunct Woolworth’s department store chain.

Bob McCooey, Nasdaq’s head of listings, said on Wednesday that getting Zillow a single-letter ticker symbol required lobbying the New York Stock Exchange, which had put it on a so-called perpetual list of symbols it had reserved for future listings.

“For Zillow, it’s really about their branding,” Mr. McCooey said. “They felt like this was going to make them unique.”

Other companies seeking one-letter ticker symbols should hurry: I, J, Q, U and W are still available, though all five are on the New York Stock Exchange’s reserved list.

“They don’t share very much with us,” Mr. McCooey said.

Like other Internet companies, Zillow had outsize expectations about its initial public offering. Originally, the company set its price range at $12 to $14 a share, later increasing it to $16 to $18 before finally setting it at $20. The company raised more than $69.2 million from the offering, valuing it at as much as $550 million. With Wednesday’s 78.9 percent increase, Zillow has a market value of nearly $1 billion.

But as with peers, Zillow is still struggling to be profitable. The company reported a loss of $6.8 million in 2010, according to its recent regulatory filing. Still, the company is growing. Zillow’s revenue increased 74 percent, to $30.5 million. This year, Zillow entered into a partnership with Yahoo Real Estate and acquired Postlets, a real estate listing service.

Citigroup was the underwriter on Zillow’s initial public offering.

Article source: http://feeds.nytimes.com/click.phdo?i=e54731b1f597d250cafd7bedf43b1fad

Filed Under: Business News Tagged With: initial public offering, new york stock, yandex

DealBook: Pandora Pares Its Gains After Debut

June 15, 2011 by NewsMaker Leave a Comment

Ramin Talaie/Bloomberg NewsPandora Media’s top executives, Joseph Kennedy, left, and Tim Westergren, on hand at the New York Stock Exchange on Wednesday for their company’s market debut.

The market debut of Pandora Media, the online music service, provided a bright spot on Wednesday on an otherwise grim day on Wall Street. But Pandora failed to match the first-day performance of two other Internet stars, LinkedIn and Yandex.

Pandora’s shares closed at $17.42, a gain of 8.9 percent over its initial public offering price of $16. The stock did open at $20 and spiked as high as $26 in the morning before trailing off. At the close, Pandora had a total market value of nearly $2.8 billion.

Weighing on Pandora, however, was a stock market sell-off, as the main market indicators dropped 1.5 to 1.7 percent on increasing investor worries about European debt problems, especially those in Greece.

At $16, Pandora did price its shares well above its I.P.O. target price of $10 to $12. The performance of its stock on Wednesday could be an indication that its underwriters succeeded in pricing the issue closer to market, leaving less money on the table after the initial public offering.

In contrast to Pandora’s gain, LinkedIn’s shares more than doubled on their first day of trading in May, while shares of Yandex, considered the Google of Russia, jumped more than 55 percent in its market debut.

On Wednesday, LinkedIn fell $1.72, or 2.3 percent, to $74.62, while Yandex dropped $1.33, or 4.2 percent, to $30.27. Still, both issues remain comfortably above their initial public offering prices.

Article source: http://feeds.nytimes.com/click.phdo?i=0ad968e1ae641854fe171c9369d63b92

Filed Under: Business News Tagged With: initial public offering, linkedin, tim westergren

Stocks Retreat on Concern About Industrial Slowdown

May 24, 2011 by NewsMaker Leave a Comment

Crude oil and Brent futures rose after Goldman Sachs raised its forecast for oil, citing growh in demand for fuel.

The energy sector, which was one of the weakest Monday because of anxiety about Europe’s debt crisis, led the day’s gainers, while industrials pushed the market down for a second day.

Financial stocks also pressured the market.

“There isn’t much for the market to get excited at this point, especially going into summer months and the QE coming to an end soon,” said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Tex.

The Dow Jones industrial average was down 12.86 points, or 0.10 percent, at 12,368.40. The Standard Poor’s 500-stock index was down 1.43 points, or 0.11 percent, at 1,315.94. The Nasdaq composite index was down 10.06 points, or 0.36 percent, at 2,748.84.

Stocks closed on Monday at their lowest level in a month.

Following weaker-than-expected New York and Philadelphia Fed manufacturing surveys last week, the Richmond region reported on Tuesday an outright contraction as its index fell, the first negative reading since September, according to Peter Boockvar, equity Strategist at Miller Tabak + Company in New York.

“The Richmond survey is never market moving as it’s not widely followed. But it’s another piece in the anecdotal puzzle of the moderation seen in manufacturing in May, with the obvious hope that it’s just a mid-cycle misstep before the next acceleration,” he said.

Occidental Petroleum rose 3.4 percent to $102.33.

On the Nasdaq, shares of the Russian Internet company Yandex NV surged as much as 68 percent in their debut.

Yandex raised $1.3 billion in its Initial public offering on Monday by selling 52.2 million shares for $25 each. The offering valued the overall company at about $8 billion.

By midday, Yandex shares were up 41.4 percent at $35.35.

The United States Treasury is expected to sell 15 percent of its stake in the American International Group when the insurer prices its stock offering after the market closes. A.I.G. was down 1.2 percent at $29.63.

Data showed new single-family home sales in the United States rose unexpectedly in April to notch their second straight month of gains, but analysts said home builders still have a bumpy ride ahead.

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Filed Under: Business News Tagged With: initial public offering, internet company, nasdaq composite index

DealBook: Oaktree Plans Initial Public Offering

May 18, 2011 by NewsMaker Leave a Comment

Oaktree Capital Management is planning to list its shares on the New York Stock Exchange, the latest private investment firm to tap the public markets.

Oaktree, which manages about $82 billion, mostly in fixed-income strategies, is expected to transfer its shares from a private exchange to the N.Y.S.E., according to a person familiar with the planned move who requested anonymity because he was not authorized to discuss it.

The listing will provide Oaktree with a more active trading market in its stock, broaden the ownership of the firm to retail investors and, ultimately, give its founders a means to cash out their stakes.

In May 2007, at the market peak, Oaktree’s owners sold a minority stake in the company to institutional investors in a private placement. Those shares have since traded on a private exchange run by Goldman Sachs.

Its shift to the Big Board would follow a similar maneuver by Apollo Global Management, which moved its shares from the Goldman marketplace to the N.Y.S.E. in March and, at the same time, raised about $400 million in an initial public offering.

Oaktree would join the growing ranks of so-called alternative asset managers that are now publicly traded, a list that includes Apollo, the Blackstone Group, Kohlberg Kravis Roberts and the Fortress Investment Group. Five years ago, all those companies were closely held.

An Oaktree representative declined to comment. News of the firm’s plans was earlier reported by The Financial Times.

Based in Los Angeles, Oaktree was started in 1995 by Howard Marks and Bruce Karsh, who left the asset manager TCW to form their own firm. Mr. Marks has become well known for his investment memos to Oaktree clients. Those memos form the basis of “The Most Important Thing,” a new book by Mr. Marks released this month.

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Filed Under: Business News Tagged With: income strategies, initial public offering, private exchange