This is the kind of week that IPO investors dream about. Fresh issues will tip into the double digits, with 11 stocks slated to make their debuts between now and Friday. One of those rookies, King Digital Entertainment, stands to raise as much as $532.8 million in its flotation -- and that's not even the biggest issue of the week! If the rest of 2014 is as hot as the next few days are going to be, this year will go down in history as one of the busiest and most exciting (not to mention lucrative) in IPO history.
Before we tuck into our company sketches for the week, though, we have to issue our usual warning: IPO investing carries above-average risk, since initial stock prices can be far from the value the market eventually puts on the company's shares. This situation provides immense upside potential, but on the flip side it also opens the possibility of losing a big chunk of an investment.
That said, here are four new issues coming to market over the next few days worth keeping an eye on.
King Digital Entertainment
The maker of the wildly popular digital game Candy Crush Saga is seeking a big prize from the markets, floating well over $500 million worth of shares. When announced, the issue was met with skepticism, particularly from investors who remember the unpleasant 2011 IPO of fellow game producer Zynga (ZNGA). That firm's shares dropped 5% in their first day of trading, and have since declined to less than half of their $10 issue price. King Digital has better recent fundamentals than its rival, however, and is generally a more stable company. Look for this stock to trade robustly when it hits the market on Wednesday.
A total of 22.2 million shares of King Digital are being brought to market for $21 to $24 per share, and they should trade on the New York Stock Exchange under the ticker symbol KING. The issue's lead underwriters are JPMorgan Chase (JPM 1.21%) unit J.P. Morgan, Credit Suisse (CS 2.18%), and Bank of America Merrill Lynch.
Nord Anglia Education
Can an IPO make the world smarter? This one from a Hong Kong-based firm just might. The company is an operator of private schools, 27 in total at the moment spread across China, Europe, the Middle East, and North America. It currently enrolls more than 17,000 students and at average revenue per pupil of roughly $26,600 that adds up to significant cash flow. Although much of the IPO's proceeds will be used to retire debt, Nord Anglia Education's fundamentals are improving, and it operates in an interesting corner of the educational market.
The company's IPO is slated to take place on Wednesday. Credit Suisse, Goldman Sachs (GS 1.86%), and J.P. Morgan are its lead underwriters, and the stock should bear the ticker symbol NORD on the NYSE. A total of 19 million shares will be sold at $15 to $17 apiece.
Another education-related IPO comes from this company, which produces a software platform that allows colleges and universities to deliver their offerings online to students around the world. It's already signed up famous institutions such as the University of Southern California and Georgetown, and its IPO timing seems appropriate -- in its prospectus, it cites a Department of Education growth estimate of 13% for post-secondary degree enrollments over the decade ending in 2021. Typically for an IT firm, however, robust top-line growth has not yet been matched recently by profitability on the bottom line.
2U's IPO is currently scheduled on Wednesday, in an issue that will see the firm float nearly 9.2 million shares at $11 to $13 per share. The stock should trade on the Nasdaq under the ticker symbol TWOU. Goldman Sachs and Credit Suisse are the lead underwriters.
CBS Outdoor Americas
Technology and fashion constantly buffer and influence the advertising market, but one aspect of it -- billboard marketing -- will always thrive. That, at least, is the argument from this specialist firm, which hopes to function as a real estate investment trust once it's gone public and become separated from current parent CBS.The company is well established in its niche, and thanks in no small part to that it's managed to grow its revenues and stay well in the black over the past few years.
CBS Outdoor Americas is the largest new issue of the week, which is saying something -- 20 million shares are to be floated at $26 to $28 apiece on Friday. Lead-underwriting the gold rush are this week's usual suspects: Goldman Sachs, Bank of America Merrill Lynch, and J.P. Morgan, plus Morgan Stanley (MS 1.96%). The ticker symbol should be CBSO, with the stock trading on the NYSE.