This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Market Volatility Weighs On IPOs This Week

The recent declines are tamping down prospects for Express, one of the country's biggest clothing retailers, market watchers say. Express hopes to raise about $304 million this week.

The 30-year-old chain's 573 stores sell clothes aimed at men and women in their 20s. Express is going public after spending the past few years improving its marketing process, launching its online store and revamping its clothing offerings, shifting from a focus on work outfits to one centered on casual and party wear and jeans.

It reported net income of $75.3 million on revenue of $1.7 billion in the year ended Jan. 30. The Columbus, Ohio-based chain said on April 30 that it expected a key revenue measure to rise 10 percent to 12 percent in the quarter ended May 1, with net revenue growing 11 percent to 13 percent.

It plans to open about 30 new stores a year for the next five years as the retail sector recovers from the recession.

But a roadblock for investors may be Express' plans for its proceeds. Instead of using the IPO to grow the company, it plans to use nearly all the money to prepay debt and make payments to its private equity sponsor, Golden Gate Private Equity Inc., and its former owner, Limited Brands Inc. The San Francisco firm acquired its 75 percent stake in the chain from Limited Brands in 2007 for $485 million. Express has since paid more than $556 million to Golden Gate in dividends.

Golden Gate also plans to sell at least 3.8 million shares in the offering.

"The marketplace hasn't taken too keenly to private equity firms placing their deals on the public market," Fitzgibbon said. Invstors are suspicious that banks and companies are trying to overprice shares, analysts say.

Last week, snowplow maker Douglas Dynamics Inc., backed by Aurora Capital Group and Ares Management LP, priced 25 percent below its expected range. Warehouse real estate investment trust Americold Realty Trust, owned by Ron Burkle's Yucaipa Cos., didn't make it to market at all. In early April, shares of Metals USA Holdings Corp., taken public by Apollo Management LP, tumbled 8.6 percent in their first day of trading â¿¿ after pricing above expectations. The stock is still more than 25 percent below its offering price.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs