Michael Kors (NYSE: KORS), Laredo Petroleum (NYSE: LPI), Bonanza Creek Energy (NYSE: BCEI) and Mid-Con Energy Partners (Nasdaq: MCEP) all went public today as part of a week in which 12 IPOs are hitting the market. But those companies are mere prelude to this week’s main IPO attraction, online games giant Zynga, which is set to begin trading on Friday.
Zynga hopes to raise $1 billion in its initial public offering. That would top the $700 million raised by online daily deals website Groupon (Nasdaq: GRPN) in its October debut, and make it the most profitable tech stock IPO since Google (Nasdaq: GOOG) raised $1.9 billion in 2004. To get there, Zynga plans to sell 100 million shares at a price between $8.50 and $10. Zynga’s IPO will be priced later today.
The four-year-old, San Francisco-based company is the maker of popular Facebook games such as “FarmVille” and “Mafia Wars”. Unlike Groupon, which has stumbled since its IPO, Zynga is profitable. The company pulled in $31 million in net earnings during the first nine months of the year on revenues of $829 million.
How today’s IPOs perform could shed some light on what to expect from Zynga tomorrow. Can Zynga meet its targets in such a volatile marketplace?
With that in mind, let’s look at how Thursday’s four IPOs were doing in mid-afternoon trading:
- Michael Kors Holdings: The company named for the guy who sits next to Heidi Klum on “Project Runway” was up 21% for the day after pricing at $20 a share. The luxury-apparel designer sold 47.2 million shares – 5.5 million more than expected.
- Laredo Petroleum Holdings: This oil and gas company priced below its expected range of $18-$20, with an IPO price of $17 a share. Laredo raised $298 million by offering 17.5 million shares. Its stock price was up a full dollar, 6%, to $18 a share at 2 p.m. this afternoon.
- Bonanza Creek Energy: Another oil and gas company, this one with operations in southern Arkansas and Colorado. Like Laredo, Bonanza Creek’s $17 IPO price was below its expected range of $20-$22 a share. So far it’s not a pretty picture: The stock is trading at $14.80 a share – already down 13% in its first day on the market.
- Mid-Con Energy Partners: An oil and gas developer in the central United States, Mid-Con raised $97 million in its IPO by selling 5.4 million shares at $18 a share. Again, the $18 was below its expected range of $19-$21. The stock was down 1.61% to $17.71 a share.
That’s a bit of a mixed bag. It hasn’t been a good day to be an energy IPO, but it was a great day if you were a well-known, high-end design company. Zynga is neither of those things. It’s a tech stock with a very ambitious IPO goal. Can it meet those goals? We’ll know tomorrow.