Plywood maker Boise Cascade soars after IPO
Boise Cascade raised $247.1 million in its IPO, which was more than it expected, from selling 11.8 million shares for $21 each.
LOS ANGELES — Riding a U.S. housing recovery and a booming stock market, Boise Cascade, a maker of plywood and other building materials, jumped 25 percent in its market debut Wednesday.
It's the latest solid first-day gain for an IPO, boding well for other companies that want to raise money by going public. Cruise company Norwegian Cruise Line rose 30 percent in its Jan. 18 debut, and has kept rising. Child care provider Bright Horizons gained 27 percent on Jan. 25. Homebuilder Tri Pointe added 12 percent on Jan. 31.
“It's a very healthy IPO market,” said Francis Gaskins, president of researcher IPOdesktop.
“The lake is rising in terms of the stock market and that brings in IPOs, and in that context, IPOs generally do quite well.”
The Dow Jones industrial average, a stock market bellwether, had closed above 14,000 on Friday for the first time since the financial crisis.
When Wall Street rolls out the red carpet for companies like Boise Cascade Co. and others looking to tap the markets for money, it can have a ripple effect across the economy. Selling shares gives companies funds that they can use to grow their business and add more employees.
So far this year, 13 companies have raised $5.5 billion in U.S. initial public offerings of stock, according to data provider Dealogic. That's up sixfold from $909 million raised by eight companies in the same stretch last year. In all of 2012, 145 IPOs raised $47.2 billion, though IPOs all but dried up late in the year as concern over the “fiscal cliff” mounted. Lawmakers' deal over taxes at the beginning of January averted the steep tax increases and spending cuts that would have kicked in.
A burst of companies went public last month — it was the biggest January, by amount of money raised, on record dating to 1993, said data provider Dealogic. But almost half that money came from the IPO of Zoetis, Pfizer's animal health business. It raised almost $2.6 billion in the largest IPO since Facebook's $16 billion debut.