Busy Week for IPOs

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Facebook’s IPO is attracting all the headlines, but the social network’s much anticipated stock market debut won’t actually happen until May. Meanwhile, nine smaller companies are scheduled to hit the market this week, injecting life into an IPO market that was virtually stagnant in January.

Just four companies went public in January. But February opened with a bang, as four more IPOs debuted in the first two days of the month alone. That was only prelude to the nine that will debut this week – the busiest week of IPOs since mid-December.

Here are a few of the headliners from this week’s crowded IPO lineup:

  • Caesars Entertainment (Nasdaq: CZR): This Las Vegas-based casino chain kicks off the busy week with an initial public offering in which the company hopes to raise $18.1 million. They could use the money. Caesars is sitting on a pile of debt – $22 billion to be exact. The company plans to make a small dent in its debt load by offering 1.81 million shares at $8 to $10 a pop. Considering the massive debt and that the company’s previous attempt to go public failed in 2010, Caesars’ IPO is a massive gamble for investors.

 

  • Cementos Pacasmayo SAA (NYSE: CPAC): The most ambitious IPO of the week plans to raise $245 million by offering 20 million shares at a price range of $11.50 to $13 a share. Cementos is a Peruvian producer and distributor of (you guessed it) cement. The company was founded in 1949 and booked $349 million in sales over the last 12 months. That makes Cementos the second-largest cement company in Peru.

 

  • ChemoCentryx (Nasdaq: CCXI): This California-based company purports to be the developer of novel drugs that will treat Crohn’s disease and rheumatoid arthritis. The company plans to raise $60 million by offering 4 million shares at a price range of $14 to $16. As a biopharmaceutical company, ChemoCentryx faces plenty of competition from the likes of Johnson & Johnson (NYSE: JNJ), Pfizer (NYSE: PFE) and Amgen (Nasdaq: AMGN).

 

  • Roundy’s (NYSE: RNDY): If you live in Illinois, Minnesota or Wisconsin, you know this company. Roundy’s is a Midwest supermarket chain with 158 stores across those three states. The company hopes to raise $200 million by offering 18.2 million shares at a range of $10 to $12. Roundy’s has plenty of history: it was founded in 1872. However, the company is saddled with debt, and revenue has been essentially flat over the last three years. To become more appealing to investors, Roundy’s plans to offer a very generous dividend yield of 8.4%, or 96 cents a share annually. That may be enough to entice short-term investors, but will be difficult for a small company with a pile of debt to sustain over the long term.
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