Largest IPO Ever

“We have a market that’s more willing to take on risk,” said Alan Gayle, senior investment strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees $52.5 billion. “This is a much better, much warmer climate for this type of offering.”

Yeah, but does that warrant the largest IPO in corporate history? According to the news, HCA scored $30 per share and sold an initial 126.2 million shares. The Nashville, Tennessee company also reported that the underwriters could potentially exercise an “overallotment” option which would allow the purchase of as many as 18.9 MM additional shares within the next 30 days. The company sold 87.7 MM shares with the initial investors hanging on to the remaining 38.5 million.

Reuters reports that in underwriting alone this year, investment bankers have walked away with $533 MM in fees. That is the most they have drawn since 2005. A whopping 30% of the fees collected have gone to three firms: Goldman Sachs, Bank of America and Morgan Stanley.

The old record was held by Houston-based energy-pipeline company Kinder Morgan Inc. Kinder Morgan raised $3.3 billion in its February IPO. According to Thomson Reuters, 83% of all IPO activity in 2011 have been the result of private equity-backed deals. It also has helped that the S&P 500 Index has rallied to the highest level since June of 2008.

Certainly the numbers will keep getting bigger, especially with the inflation-meter at red and the inflation-alarm getting ready to sound off at any minute. I’m curious to see what will happen when Facebook eventually does its IPO–which will certainly be through THE Goldman Sachs after they’ve figured out their issues with foreign vs. domestic investment.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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