Online ads target retail investors for Santander U.S. unit IPO
NEW YORK (Reuters) - Online brokerage Loyal3 Holdings has taken out a series of Internet ads aimed at getting retail investors to bet on the initial public offering of Santander Consumer USA IPO-SCUH.N, the U.S. auto-loan arm of Spain's Banco Santander SA (SAN.MC).
Loyal3, a co-manager of the IPO, said individual investors can buy as little as $100 worth of shares in the IPO and as much as $10,000, at the same price and time that it would be available to hedge funds and other large investors, on a first-come first-served basis.
The IPO is expected to be priced between $22 and $24 per share of common stock and raise up to $1.56 billion, Santander Consumer USA said in its prospectus.
The online ads, which have appeared on websites including the Wall Street Journal and through emails from advertisers of Bloomberg Businessweek, invite retail consumers to invest in the IPO, with a link leading to Loyal3's website.
Santander Consumer USA, which sells auto loans online, as well as through dealerships and a partnership with Chrysler, set aside up to 2 percent of the common shares in its IPO for retail investors.
The IPO's performance will be closely watched ahead of widely expected offerings from other financial services companies this year.
IPO activity surged worldwide last year as low interest rates and a surging stock market enticed investors. Companies raised $159.7 billion from IPOs globally, a 37 percent increase on 2012, and bankers expect 2014 to carry on where 2013 left off.
Ally Financial Inc, majority owned by the U.S. government, is hoping to go public this year while General Electric Co (GE.N) plans to spin off of its credit card unit.
Loyal3 said on its website it does not charge trading fees, but warned it combines sell orders into batches that it typically sells once a day, so the price of the shares may be different when they are sold than at the time the investor puts in the sell order.