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Re: RailAmerica IPO
Author: Jim
Date: 10-13-2009 - 14:55
FROM CNBC TODAY: (RA closed at $13.75)
IPOs hit the wall—did the Blackstone announcement put them over the edge? Another day, another indifferent reception to an IPO.
Today it was RailAmerica [RRA 16.34 --- UNCH (0) ], which operates short-haul rail lines—priced 22 million shares at $15, below the talk of $16 to $18, but it never once traded at $15. At one point this morning it was trading below $14. They were taken private nearly 3 years ago by Fortress Investment [FIG 5.32 -0.24 (-4.32%) ].
Why the poor reception? Two issues:
1) the deal structure. Half the money will go to Fortress, the other half will go to pay down debt (which Fortress put on) and possible acquisitions for RailAmerica. Not attractive for investors.
2) the Blackstone announcement. Blackstone announced last night that they would be seeking to float a large number of companies in the coming months, including United Biscuits, Merlin Entertainments, and up to 8 other companies.
This is a large overhang of new companies, and investors may be a little overwhelmed by the choices at this point.
IPOs hit the wall—did the Blackstone announcement put them over the edge? Another day, another indifferent reception to an IPO.
Today it was RailAmerica [RRA 16.34 --- UNCH (0) ], which operates short-haul rail lines—priced 22 million shares at $15, below the talk of $16 to $18, but it never once traded at $15. At one point this morning it was trading below $14. They were taken private nearly 3 years ago by Fortress Investment [FIG 5.32 -0.24 (-4.32%) ].
Why the poor reception? Two issues:
1) the deal structure. Half the money will go to Fortress, the other half will go to pay down debt (which Fortress put on) and possible acquisitions for RailAmerica. Not attractive for investors.
2) the Blackstone announcement. Blackstone announced last night that they would be seeking to float a large number of companies in the coming months, including United Biscuits, Merlin Entertainments, and up to 8 other companies.
This is a large overhang of new companies, and investors may be a little overwhelmed by the choices at this point.
| Subject | Written By | Date/Time (PST) |
|---|---|---|
 RailAmerica IPO
|
Bob Jennings | 10-13-2009 - 07:13 |
|
Re: RailAmerica IPO
|
Mike Derrick | 10-13-2009 - 11:24 |
|
Re: RailAmerica IPO |
Jim | 10-13-2009 - 14:55 |
|
Re: RailAmerica IPO
|
RRGary | 10-19-2009 - 13:10 |