Molycorp Inc., owner of the world’s largest non-Chinese deposit of rare-earth metals, and Internet investment-services provider Envestnet Inc. priced initial public offerings after reducing their size, while two other companies delayed or postponed sales.
Molycorp fell as much as 14 percent and traded at $12.42 as of 12:10 p.m. in New York. The company sold 28.13 million shares at $14 after its underwriters failed to attract enough buyers at $15 to $17 apiece, according to Bloomberg data. Envestnet raised $63 million yesterday after cutting its IPO by 42 percent.
Four IPOs by U.S. companies were postponed, delayed or reduced in size this week after deals worldwide last quarter were canceled at the fastest rate since the collapse of New York-based Lehman Brothers Holdings Inc. The Standard & Poor’s 500 Index, which has been up as much as 8.2 percent this month, sank to its lowest level since September on July 2 as concern about the global economic recovery shook investor confidence.
“When you have a risk-averse market, that’s going to make it difficult to get valuations on new companies coming up,” said Joseph Garner, director of research at Lancaster, Pensylvania-based Emerald Asset Management Inc., which oversees about $2 billion. “If you’re risk-averse on companies you are familiar with and that have track records, you’re probably inclined to be more so with ones that don’t.”
SurgiVision Inc., the Memphis, Tennessee-based developer of medical equipment and software for magnetic resonance imaging, yesterday postponed its initial share sale after reducing the proposed size by as much as 40 percent, Bloomberg data showed.
Greenwood Village, Colorado-based Molycorp, which aims to challenge Chinese dominance in the production of rare-earth metals by reopening a mine in the Mojave Desert of California, sold 2.5 million shares to existing shareholders including private-equity backer Resource Capital Funds of Denver, according to filings. Molycorp’s IPO was led by New York-based Morgan Stanley and JPMorgan Chase & Co.
Envestnet, based in Chicago, jumped by as much as 17 percent in New York trading today following the offering it completed after slashing the price and number of shares in a sale managed by Morgan Stanley and Zurich-based UBS AG.
“Our bankers tell us it was a tough market for new companies to access,” Envestnet’s Chief Executive Officer Jud Bergman said in an interview today. “Good companies can get out in markets like this, and we’re just pleased that we got out.”
Chesapeake Midstream Partners LP, an Oklahoma City-based pipeline operator owned by the second-largest U.S. natural-gas producer, gained as much as 9.5 percent in New York trading after raising $446 million in an initial share sale at the high end of the range. Chesapeake’s IPO was managed by UBS, New York- based Citigroup Inc. and Morgan Stanley.
Trius Therapeutics Inc., the San Diego-based developer of antibiotics, is scheduled to price an $84 million offering led by Citigroup today after twice delaying the sale this week, according to Bloomberg data.