The market for initial public offerings is one which is a bit on the ropes.  Sketchy offerings from China, a soft market, and the news coming from Europe is all contributing to some caution.  Let’s go ahead and throw in the summer doldrums as well.  This week we do have three key IPOs which we will be watching.  Stewart & Stevenson Inc. (NYSE: SNS), Vanguard Health Systems, Inc. (NYSE: VHS), and KiOR Inc. (NASDAQ: KIOR) are all tentatively on our schedule.  The terms and dates can all be subject to change and there are no assurances that these deals will make it to market.

Bankrate Inc. (NYSE: RATE) got off to a rough start last week after we thought the pricing was fair for the most part but that now looks to have normalized, yet Pandora Media, Inc. (NYSE: P) did some added damage after gapping up way too high after doubling its planned capital raise.

Stewart & Stevenson Inc. (NYSE: SNS), the prominent supplier of equipment to oil field operations, has announced a public offering of 16 million shares in order to raise $240 million.  The offering is expected to price Tuesday, June 22, 2011 in the $14 to $16 range.  The principal underwriters are  J. P. Morgan, Goldman Sachs and Citigroup.

Vanguard Health Systems, Inc. (NYSE: VHS), a hospital operator with 26 acute care and specialty hospitals in five states, has filed an initial public offering to sell 25 million shares.  Vanguard aims to raise $600 million.  The offering is expected to price Wednesday, June 23, 2011 in the $21 to $23 range.  The Blackstone Group owns controlling in the hospital operator.  The lead underwriters are Merrill Lynch, Barclays, Citigroup, Deutsche Bank and J. P. Morgan.

KiOR Inc. (NASDAQ: KIOR), a biocrude start-up in Pasadena, Texas, announced it has filed an IPO to sell 10 million common shares with the objective of raising $100.  Kior is the latest Khosla Ventures-backed biofuel company to seek the support of the public markets. The shares are expected to price Thursday, June 24, 2011 in the $19 to $21 range.  The offering lists Credit Suisse, UBS  and Goldman Sachs and the principal underwriters.

We are now hearing that Angie’s List is even up for an IPO filing very soon.  None of these were part of our own Top 17 IPOs to Watch for 2011.

Our biggest problem is not the IPO market itself.  We just have an issue over how the underwriters are currently willing to allow overly hyped companies to command far too high of valuations that are not sustainable if you remove the small-float premium or if you just evaluate these businesses on historic levels.

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JON C. OGG

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