Ceres IPO Priced Under Target (CERE)

Ceres, Inc. (NASDAQ: CERE), an energy crop company, has announced the pricing of its initial public offering of 5,000,000 shares of common stock at a price of $13.00 per share. All of the 5 million shares are being sold by the company.

The company calls itself an agricultural biotechnology company which markets seeds for energy crops used to make renewable transportation fuels, electricity, and bio-based products such as sweet sorghum, high-biomass sorghum, switchgrass, and miscanthus. Ceres markets its products under its Blade Energy Crops brand.

Goldman Sachs and Barclays Capital were listed as the joint book-running managers for the offering; co-managers were and listed as Piper Jaffray, Raymond James, and Simmons & Company.  The underwriters were given a 30-day overallotment option to purchase up to an additional 750,000 shares of common stock from the company at the same terms of the IPO minus fees.

Of the quarter ended in November, only $276,000 of the total $1.748 million in sales came from product sales.  The $1.472 million was listed as revenues under “collaborative research and government grants.”

Here is the problem… At $13.00, the price talk noted just yesterday on Dow Jones was $16.00 to $17.00 per share.

JON C. OGG