Facebook afterglow lights up IPO markets

Wed Feb 8, 2012 4:45pm EST

A Facebook user browses at a public internet service in Huaycan, a district on the outskirts of Lima, February 7, 2012.  REUTERS/Pilar Olivares

A Facebook user browses at a public internet service in Huaycan, a district on the outskirts of Lima, February 7, 2012.

Credit: Reuters/Pilar Olivares

(Reuters) - The excitement generated by Facebook's IPO filing rubbed off on companies listing on U.S. stock exchanges on Wednesday, with four of them seeing strong first-day gains.

Caesars Entertainment Corp (CZR.O), one of the largest casino operators in the United States, led the gains, with its shares nearly doubling on the Nasdaq.

Shares of EPAM Systems Inc (EPAM.N), Roundy's Parent Co Inc (RNDY.N) and ChemoCentryx Inc (CCXI.O) also soared, with investors expecting more companies to cash in on the momentum in the U.S. stock markets and a window of opportunity pried open by Facebook's IPO plans.

"The positive momentum is going to continue and most of the interest is going to be on mid cap to large cap IPOs, with good brand names," Josef Schuster, founder of IPOX Schuster, a fund that specializes in investing in newly public companies, told Reuters.

"The Facebook IPO is coming up, and it is going to open the window of opportunity for other deals."

Facebook filed to raise a targeted $5 billion in a much-anticipated initial public offering last week, but analysts estimate it could tap investors for $10 billion, valuing the company at $100 billion.

Caesars shares were trading up 81 percent at $16.25. The high volatility in the stock is being seen as a function of the small size of the offering, which is just 1.4 percent of the company's total outstanding shares.

IT services provider EPAM Systems' shares rose 25 percent to $15.05 in early trade, making them one of the biggest gainers on the New York Stock Exchange.

Roundy's -- which operates grocery stores under banners like Pick 'n Save, Rainbow, Copps, Metro Market and Mariano's Fresh Market -- saw its stock rise as much as 7 percent to $9.10.

Shares of drug maker ChemoCentryx Inc (CCXI.O), which is backed by U.K. based pharma major Glaxo Smithkline (GSK.L), also joined the party and climbed 26 percent to $12.77 within minutes of its Nasdaq debut.

However, units of Peru-based cement maker Cementos Pacasmayo (CPAC.N), which is also listed on the Lima Stock Exchange, fell as much as 14 percent to $9.84 on their U.S. stock market debut, after the offering was priced at the low end of the expected range.

Cementos Pacasmayo, which also produces and sells quicklime for use in mining operations, had priced its initial public offering of 20 million American Depository Shares, representing 100 million common shares, at the lower end of its planned range of $11.50 and $13 per unit.

Milwaukee, Wisconsin-based Roundy's, which is owned by private equity firm Willis Stein and Partners, will use the proceeds from the offering to repay debts.

EPAM priced its shares at $12 apiece, below its expected price range, and sold 6 million shares. It had expected to sell $7.4 million shares at $16 to $18 apiece.

Mountain View, California-based ChemoCentryx sold 4.5 million shares at $10 each, below its expected range of $14 to $16 a share.

(Reporting by Ashutosh Pandey and Sharanya Hrishikesh in Bangalore; Editing by Supriya Kurane)

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