Secondary Offerings To Watch For Impact (AEGR, DPM, SIX, WAVX, FVE)

Secondary offerings matter.  They can raise capital for a company and they can help previous investors book profits.  They can also cause severe pressure on shares.  We have seen either indications of a secondary or possible secondary offerings.  Those still on deck or which may be coming are in Aegerion Pharmaceuticals, Inc. (NASDAQ: AEGR), DCP MIDSTREAM PARTNERS, LP (NYSE: DPM), Six Flags Entertainment Corporation (NYSE: SIX), and in Wave Systems Corp. (NASDAQ: WAVX).  If you doubt the impact these can have, look no further than recent deals in Five Star Quality Care Inc. (NYSE: FVE) and in Invesco Mortgage Capital Inc. (NYSE: IVR).

Aegerion Pharmaceuticals, Inc. (NASDAQ: AEGR) has not been public that long, but it is expected to sell up to 3.25 million shares of its common stock and another 1 million shares by certain pre-IPO stockholders this week.  The filing itself was for up to $86,606,500.00 and the book-runners are Jefferies and Deutsche Bank; co-managers are listed as Leerink Swann, Needham & Company, and Collins Stewart.

DCP MIDSTREAM PARTNERS, LP (NYSE: DPM) has filed an S-3 offering intended to raise up to $150 million accessing a “shelf registration.”  The entity’s common units are listed on the NYSE, under the symbol “DPM.”   At current trading levels the company’s market cap is $11.75 billion. In Tuesday trading, common units closed at 39.71. The 52-week price range is $28.82 to $44.17.

Six Flags Entertainment Corporation (NYSE: SIX) has filed an S-3 offering to cover additional shares resulting from the company’s stock split.  The company’s common stock trades on the NYSE under the ticker symbol “SIX.”  At current trading levels the company’s market cap is slightly in excess of $2 billion.   In Tuesday trading, shares closed at 74.60, up 1% over Monday’s closing price.  The 52-week price range is $31.76 to $80.50.  Be advised, the shares registered may not be sold entirely or at all but they cover up to 13,569,256 shares of common stock.

Wave Systems Corp. (NASDAQ: WAVX) has filed a shelf registration that allows it to raise up to $30 million using a “shelf registration” to replace an expiring shelf registration.  At current trading levels the company’s market cap is roughly $228 million.   In Tuesday trading, shares closed at 2.89, up 21% over Monday’s closing price.  In first-hour trading today, the shares are in decidedly volatile, trading at $2.78, down 6.7%.  Its 52-week price range is $1.76 to $5.31.  The reason we note this one is

Most recently, we featured this heavily discounted and huge drag of a secondary offering from Five Star Quality Care Inc. (NYSE: FVE).  This one has bounced nearly 10%, and that is only about one-fourth of the share damage that came from announcing the secondary offering in the first place.

Invesco Mortgage Capital Inc. (NYSE: IVR) was another fresh secondary offering and that mortgage-REIT has a monster yield that investors have to consider against peers.

JON C. OGG