Companies that had their IPO in 2009 – By the end of 2009, the long-stagnant IPO market was hot again. Find out which 2009 IPOs had the highest returns — and what they can teach us about 2010 IPOs.
Top Companies that had their IPO in 2009
The New York Times (New York).
TheStreet.com
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There were two very different worlds in 2009 for initial public offerings.
Despite obvious reasons, the year started at a snail’s pace, with no deals coming to market until February. In the first half of the year, only 14 IPOs took place.
By the fall, the market had regained its momentum. Double-digit deals were seen in October and November. IPOs in the fourth quarter alone are on track to surpass those in the rest of the year.
This year, 63 companies came to the market. In 2008, there were 31 total deals. Morningstar’s IPO strategist Bill Burr says the IPO market has now returned to normal.
China had the top three IPOs in 2009, based on stock returns. The reason isn’t surprising, as investors look for growth, says Eric Guja, a research analyst at Renaissance Capital. Today’s expansion is in China, of course.)
Despite market volatility Buhr says this momentum should continue into the New Year. Despite the lack of blockbuster deals, many solid companies are in the pipeline. Hoover’s industry expert Tim Walker says these names aren’t sexy. Their prices are reasonable, and they are coming to market fairly. And they are selling at a reasonable premium.”
Based on stock performance, we present the Top Five IPOs of 2009. Moving into 2010, each merits attention and provides insight into what may be new offerings in 2010.
More on Top Ipo’s of 2009,
A Lihua Company
(LIWA)
Copper-clad aluminium and recycled scrap copper wire (the cheaper version of pure copper wire) are used in consumer electronics, white goods, automotive, utility, telecommunications, and specialty cable industries. Since Lihua International’s IPO on September 8, the stock has soared 165.5% to close at $10.62 on January 4.
Despite nearly doubling its sales, the company announced a loss of $1.3 million, or 8 cents a share, in its third quarter.
A non-cash charge for the change in fair value of warrants issued to investors in conjunction with the company’s issuance of convertible preferred stock accounted for most of the loss. Lihua earned $6.7 million, or 39 cents per share, excluding the charge.
The company’s sales increased from $14.3 million to $40.9 million.
Duoyuan Global Water
A Beijing-based company that treats and processes water has a high demand due to a lack of clean water in China
Duoyuan Global Water
(DGW).
On 24 June, the company began trading on the New York Stock Exchange, demonstrating investor interest. The stock soared nearly 40% on its first day of trading, opening at $16 a share, above its expected range of $13 to $15.
It hasn’t waned. On 4 Jan, Duoyuan Global Water closed at $37.49, up 134% in half a year since its debut.
Continue to read about Companies that had their IPO in 2009,
According to the China Association of Environmental Protection Industry, the circulating water treatment, purification, and wastewater treatment industry will be worth $18 billion by 2010. Morningstar estimates that Duoyuan still has room to grow after 2008 sales of $87 million.
As China lagged behind developed countries in water treatment needs, Duoyuan was able to offer products that met domestic demand but were too low-end to give multinationals a technological edge.
Leaders in the water treatment industry include:
- General Electric
Attempts to penetrate the Chinese market have been unsuccessful.
- Changyou.com
Clean water may be in short supply in China, but online games are not.
Publisher of Chinese video games.
- Changeyou.com
In 2009, it was the second most successful IPO based on stock returns. Since separating from parent company Sohi.com on April 2, Changeyou.com’s stock has soared 120.7%, closing at $35.31 on Jan 4.
Changeyou.com raised $120 million by pricing shares at $16, ahead of its expected price of $14/share. According to Eric Guja, a research analyst at Renaissance Capital, the deal was attractive compared with others in the space.
MMORPGs are Changyou.com’s bread and butter.
Tian Long Ba Bu, with 1.8 million active accountants at the end of last year.
Although analysts fear Changyou.com will have limited success outside of its flagship title, the company launched its first game in the U.S. in November. It has three games that will also be available here.
Chinese online games have grown 40% annually over the past three years, and I Research predicts they will grow 20% annually over the next five years.
Changyou’s revenue increased 26% to $68.7 million in the third quarter.
Rival
- Shanda Games’
However, IPOs have not been as successful. Shanda Games was one of the most lucrative deals of the year, but the stock has fallen 20% since September 25.
A subsidiary of the Company.
- Shanda Interactive Entertainment
(SNDA) shares fell by 14% on its first trading day after pricing at $12.50, above its expected range of $10.50 to $12.50.
According to returns, Shanda Games is one of the 10 worst IPOs of the year.
- Mead Johnson Nutrition’s
Walker says PO was an anomaly. The first deal of 2009 eagerly awaited any good news.
Walker says its weight is disproportionate to the rest. “It’s like that”.
IPO in 2009,
- Visa
Marketed in 2008. Mead has already penetrated the market.”
An Affiliate
- Bristol-Myers Squibb
Among its products are formulas for infants, most notably Enfamil, and nutrition products for children.
On 11 February, the company offered 30 million shares at $24 each to raise $720 million. As part of its growth strategy, Bristol-Myers spun off Mead.
Due to weak performance in North America and Europe, earnings fell 5% to $97.6 million in the third quarter. With Mead’s IPO, it now has more stock available, and its per-share profit fell 21% to 48 cents from 61 cents.
Including one-time costs and benefits, the company earned 53 cents per share. Revenue fell 6% to $699.8 million from $742.80 million.
Mead’s stock has soared 87.5% since its IPO. It announced in the fall that it would begin making powder infant formula next year.
Bristol-Myers split its holdings in the company last month. Shareholders of Bristol-Myers could exchange some, all, or none of their shares for Mead stock tax-free and at a discount. Mead shares were worth $1.11 for every $1 of Bristol-Myers stock swapped.
- SolarWinds
On May 21, the Texas-based network management software maker came to market at $12.50 a share.
In addition to being cheaper and easier to implement, SolarWinds is attractive to small and mid-sized businesses. On Dec. 8, SolarWinds stock gained 84.6% since it debuted on the NYSE.
According to Morningstar, “We believe the company can continue to grow with small and medium-sized businesses, however, we are skeptical of the company’s ability to grow with larger enterprises due to much higher entry barriers.”
Competitors include
- IBM
- Hewlett-Packard
- Cisco Systems
As a result, SolarWinds’ products would be less necessary as their software incorporates more functionality.
Despite quadrupling its sales in the past four years, SolarWinds still represents less than 2% of the total network management market.
In the event SolarWinds continues to win business from small customers, its basic, low-cost software and high profitability could make it an ideal acquisition for a larger competitor looking to expand.
According to Jeanine Poggi in New York.
