NEW YORK (
-- Nine companies are scheduled to go public this week as many companies race to the market before the year ends.
The deals range from the mega-IPO of
to the fairly tiny
, but size isn't the only difference in the offerings this week.
Four of the companies can't pay dividends because of restrictions and some are private equity bailouts. There are also companies that previously filed to go public, only to withdraw their offerings and then come back to the market.
Last week's IPO winner was Chinese wealth management company
, which jumped 38% from its offering price. It was originally planned to price in the range of $9.00-$11.00 and ended up raising the price to $12. The stock has settled in at around $15. Whereas
was the market loser last week, launching at $9, 31% below its planned price of $12-$14.
IPO Desktop founder Francis Gaskins digs through the various offerings to help investors understand which deals look better than others.
Already ranking as one of the top five IPOs in history,
is looking to raise $10 billion.
The company first floated the idea in August when the company's market cap would have came in at $82 billion; it has since been pulled down to $46 billion. Gaskins believes investors will make money in spite of the United Auto Workers draining off much of the raised capital.
The UAW is getting an additional $6 billion for its pension fund, plus $2 billion in cash from a stock sale. On top of that, the UAW will receive $500 million a year in interest from the preferred GM stock issued after the bankruptcy.
On the plus side, GM's P-E ratio is lower than that of
. The company also enjoys a tax loss carry forward worth up to $45 billion from a special one-time federal exemption.
The deal is becoming so hot that the price range has reportedly been raised to $32.00-$33.00 from $27.50. This is great news. The more GM sells, the faster the American taxpayer will get repaid.
The next largest deal for the week is
coming in at $980 million. The company wants to use the proceeds for expansion in Las Vegas, a place in dire need of more hotels.
Caesars has $20 billion of debt and it's estimate that it will have a negative tangible book value of $6.8 billion after the IPO. Profits have declined from $532 million to a negative $634 million.
While gaming stocks have rallied this past year, it's mostly because of the Macau market exposure. Gaskins warns investors that Caesars is a very risky stock to get involved with at the price range of $16.00
Next up is investment advisory firm
, which hopes to raise $445 million.
This firm is home to 12,000 advisors -- a number that has stayed level over the past two years. Gaskins is concerned that the company is too highly leveraged with a negative tangible book value of almost $1 billion.
It has interest payments that exceed after-tax profits and can't pay dividends due to stock restrictions, Gaskins says. On a positive note, 60% of its revenue is recurring. 100% of the proceeds will go to the selling shareholders, so it reeks of a private equity bailout. With a P-E multiple of 38X, Gaskins feels the deal is risky for investors.
is hitting investors up for $254 million, with most of that money going toward repaying debt and fees.
The company makes equipment for defense-related customers, competing against
Gaskins believes the offering is overpriced because the company has a long track record of losing money. The tangible book value is a negative $450 million. The company also can't pay dividends due to restrictive debt covenants.
Booz Allen Hamilton
Booz Allen Hamilton
is a provider of management and consulting services to the U.S. government. The company wants to raise $252 million and use $230 million to repay debt.
Stockholders have already stripped the company of cash by taking a whopping $612 million in dividends in 2009. Compared to its competition, the company looks overpriced. Booz Allen's P-E multiple is 25X, while
is at 9X and
is at 12X.
The company can't pay more dividends because of restrictive debt covenants. Gaskin likes that the company has $11 billion in its backlog, but with a negative tangible book value of $586 million after the IPO, it's risky.
Bitauto Holdings Limited
Next in line is
with an offering of $113 million.
This Chinese company is a leader in the Internet-based automobile advertising market. It represents more than 30% of the overall online advertising spent by automakers in China.
Gaskins think the stock sale could be a bit overpriced, but concedes that many Internet content providers seem overpriced. The company faces competition from other automobile websites and Internet marketing service providers. However, total online advertising spending has increased 54% from 2005 to 2009.
uses boron-based chemistry to treat nail fungus and psoriasis. The company has filed to raise $80 million. It originally came to the market in August of 2008, only to withdraw the filing in December of 2008.
Gaskins likes that the company is partnered with big pharma names like
Its loss rate is declining and the company booked $15 million in sales over the past 12 months. Gaskins says, "It's worth watching."
is another biotech company on the calendar with plans to raise $78 million.
The company launched a needle-free injectable migraine medicine called Sumavel DosePro in June 2010. It has gone from 3,000 prescriptions to 11,500 prescriptions in that span. Zogenix has booked $8 million in sales over the past 12 months.
Half of the proceeds from the offering will be used for Phase 3 trials and the other half to fund the ongoing commercialization of Sumavel DosePro. While the SG&A expenses have shot up, Gaskins believes if it reduces those expenses, the company could break even.
, a relatively small deal looking for $10 million. Lizhan is a Chinese company that makes synthetic leather from recycled leather waste. The products are used in furniture and auto upholstery.
It's a relatively young company that began in 2008 and for the nine months ended in September, its sales grew 218% to $35 million from $16 million. 25% of the company's revenues come from export sales. Lizhan has five patents and is using the proceeds to install three production lines. Gaskins thinks it's worth watching.
--Written by Debra Borchardt in New York.
>To contact the writer of this article, click here:
>To follow the writer on Twitter, go to
>To submit a news tip, send an email to:
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.