Today: The last of a bevy of initial public offerings reaches Wall Street, with investors showing more enthusiasm after Thursday's fizzles. Also: Apple (AAPL) bounces back slightly but stays lower than $400 in calm day for markets.
The lead: IPOs find welcoming investors Friday after earlier issues in busy week
Nine companies made their market debuts this week, the busiest week in recent memory for initial public offerings, but many of the companies that went through with their IPOs had to price their stock lower than originally
Specialist Ronnie Howard works at his poston the floor of the New York Stock Exchange at the close of trading, Friday, June 28, 2013. Stocks are ending mostly lower on Wall Street as the market closes out a turbulent month. (AP Photo/Richard Drew) ( Richard Drew )
thought, and investors seemed cold on the shares when they reached the open market.
Renaissance Capital reported last Friday that 11 companies planned IPOs this week, but two -- GDC Technology and Regado Biosciences -- did not follow through. The companies that did price shares and head to market experienced mixed results, with the biggest first-day gains coming for the companies that debuted Friday.
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& Co., a so-called fast-casual dining chain akin to Chipotle, found so much demand that it boosted its proposed range for shares, then priced its stock higher than that range Thursday night, at $18 a share, to bring in nearly $100 million. When the shares hit the Nasdaq trading floor, they experienced the largest first-day "pop" of 2013, outdistancing the 78 percent gain San Mateo's Marketo received earlier this year by more than doubling, closing at $36.75, 104 percent higher than the IPO price.
Friday's other offering, Dutch drugmaker Prosensa, had an added bonus Friday: It received "breakthrough status" from U.S. regulators for one of its drugs just a day before its first shares hit the open market. Prosensa priced its shares at the top of its proposed range, $13, to bring in $78 million, and that price rose nearly 50 percent in Friday trading, closing at $19.25.
Friday's gains were a welcome reprieve from Thursday's rough start for five companies that went to market on the same day: Four of the companies priced their shares below their proposed ranges, and the fifth priced at the bottom of its range.
The largest offering of the week belonged to HD Supply, Home Depot's former wholesale distribution business, which was spun off and sold to investors in 2007. The company brought in nearly $1 billion -- $957.6 million -- by selling shares for $18 apiece, but that was well below the company's initial range of $22 to $25 a share. Bringing down the price proved to be the right move, however, as investors were unwilling to pay much more on the open market: Shares closed at $18.66 Thursday and $18.79 Friday.
CDW was the only company to price within its range, but that was because it had previously revised its hopes down, from an original range of $20 to $23 to $17 to $18. The Illinois tech company brought in $396 million at that price, then closed with a decent gain at $18.37 Thursday and $18.62 Friday.
Tremor Video, a New York company that deals in video advertising, had the worst first-day performance, falling 15 percent from its $10 asking price to close at $8.50. The company did raise $75 million in its IPO, and shares recovered slightly Friday to close at $9. Pet-medicine developer Aratana Therapeutics had to take the biggest pre-IPO cut, pricing shares at $6 apiece instead of the proposed range of $11 to $13, but it boosted the number of shares it sold from 4.3 million to 5.8 million to make up some of that difference. The Kansas company experienced strong gains of nearly 40 percent Thursday, closing at $8.26, but fell to $7.56 at the close Friday. New York investment manager Silvercrest Asset Management Group sold 4.8 million shares for $11 each, below its range of $12 to $14, to raise almost $53 million; the stock closed at $11.83 Thursday and $12 Friday.
Earlier in the week, Michigan drug developer Esperion priced in the middle of its range at $14, but increased the size of its offering from 4.5 million to 5 million shares, pulling in $70 million. The price seemed right, as shares closed at $14.50 on its first day, Wednesday, and closed Friday at $14.10. Seattle's Nanostrong was not as fortunate, pricing its offering at $10, lower than the initial proposed range of $13 to $15, then taking a big plunge on the open market: Shares closed Wednesday at $8.06 and Friday at $8.
While the varied reactions to the week's bevy of market debuts leaves little room to determine a trend in the IPO market, Fortune's Dan Primack saw the disappointing performances of HD Supply and CDW as signs that the market may be wary of private equity-backed IPOs, and Renaissance Capital research analyst Greg Leffert told The Associated Press that the sheer number of IPOs that got off the ground could mean a more bountiful market ahead.
"It's definitely good that these were able to get done and it bodes well for activity picking up in next quarter," Leffert said.
That could be tough, Renaissance reported Friday afternoon that the second quarter of 2013 was the most active quarter for U.S. IPOs in nearly six years, with 61 companies raising $13 billion total.
SV150 market report: Valley stocks outpace market as Apple finally gains
A late dive for the Dow Jones industrial average Friday broke the market's run of three straight positive trading sessions, while the Standard & Poor's 500 had its first losing month out of eight. Tech stocks performed better, however, with the tech-heavy Nasdaq the only one of the three major indexes to gain Friday, and the SV150 increasing 0.2 percent thanks to a slight turnaround for Apple.
After four straight negative days this week that took Apple down 4.8 percent to its lowest closing price since April, the Cupertino company's shares gained 0.6 percent Friday, but still couldn't eclipse the $400 mark, closing at $396.53. Those proclaiming that Apple is headed to its demise can join a long string of such soothsayers, however, dating back decades.
Intel (INTC) gained 0.8 percent to $24.23 as it lost a key executive and new CEO Brian Krzanich promised to speed up Intel's rollouts of new technology. Google (GOOG) gained 0.4 percent to $880.37 after reports that it is developing a video-game console and smartwatch based on Android; the Mountain View search giant also sued the IRS seeking refunds from a denied deduction in 2004. Yahoo (YHOO) dropped 1.3 percent to $25.13 after Variety reported that it was out of the running for Hulu, the streaming-video site that several big names are bidding for; Quartz reported Friday that satellite-television company DirectTV was the front-runner for the acquisition. Hewlett-Packard (HPQ) gained 0.1 percent to $24.80 after retaining a $3.5 billion contract with the U.S. Navy, and Oracle (ORCL) moved 0.9 percent higher to $30.71 after CEO Larry Ellison publicly ended his feud with Salesforce CEO Marc Benioff Thursday afternoon; Salesforce dropped 1.7 percent to $38.18. Facebook gained 0.9 percent to close at $24.88 while announcing that it would stop placing ads next to content that could be deemed offensive.
Up: SolarCity, Electronic Arts (ERTS), SunPower (SPWRA), Juniper, Pandora, Yelp, Facebook, Oracle, Intel, Apple, Gilead, Intuit (INTU), Google
Down: Palo Alto Networks, Zynga, Netflix (NFLX), Tesla, Yahoo, LinkedIn, Cisco (CSCO), VMware, Adobe (ADBE), eBay
The SV150 index of Silicon Valley's largest tech companies: Up 2.35, or 0.19 percent, to 1,222.03
The tech-heavy Nasdaq composite index: Up 1.39, or 0.04 percent, to 3,403.25
The blue chip Dow Jones industrial average: Down 114.89, or 0.76 percent, to 14,909.6
And the widely watched Standard & Poor's 500 index: Down 6.92, or 0.43 percent, to 1,606.28
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.