Banking, finance, and taxes
Green Dot Debuts Strongly in Green (GDOT, WMT)
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Green Dot Corporation (NASDAQ: GDOT) has made its debut, and made it with some cheer. The prepaid finance company sold some 4,558,050 shares of its common stock at $36.00 per share. The prior range was $32.00 to $35.00 per share, and shares are higher than the pricing level so far.
J.P. Morgan and Morgan Stanley were the joint book-running managers, and Deutsche Bank, Piper Jaffray & Co., and UBS Securities were the listed co-managers for the offering. This underwriting group can purchase up to an additional 683,708 shares to over-allotments from certain of the selling stockholders and if the price indications remain in place then it is a safe bet that the real float will be closer to 5.2 million shares rather than 4.5 million shares.
Green Dot has shown impressive growth and is proof that much of household America is going to face financial pressure or credit pressure for years and years. The company is also profitable.
Our issue of some caution here, despite that Wal-Mart Stores Inc. (NYSE: WMT) invested in it and signed it as a provider, is that all the shares were being offered by selling stockholders. The good news is that Green Dot did not really need the cash for its coffers. The issue is that it is almost always better received by new investors who feel they are building up cash reserves rather than just paying off investors that were in long before the IPO.
The risk here is the same as what has been seen elsewhere. Some IPOs are considered hot, but the after-market trading and the frequent harsh pullbacks in the stock market can be a real issue.
So far there is no fear as shares are trading up around $42.75 and we have already seen more than 1.6 million shares before the 10:00 AM time stamp. The pricing was at a premium and indications started at $38 to $40, then went to $40 to $42, and ultimately went to $42 to $44 before opening.
Update 10:10 AM EST: Shares are up at $42.69 on 2.21 million shares.
JON C. OGG
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