Why This Past Week’s IPOs Were on Fire

By Chris Lange Updated Jan 13, 5:40AM EST · Published Jul 16, 9:35AM EDT

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Why This Past Week’s IPOs Were on Fire — © Thinkstock

With the markets hitting new all-time highs, more and more companies are filing for their initial public offerings (IPO) to take advantage of these inflated prices. Considering the rising tide that the S&P 500 and Dow are bringing with their gains, companies just entering the market can get more bang for their buck when their shares price.

Line Corp. (NYSE: LN) and AdvancePierre Foods Holdings Inc. (NYSE: APFH) were prime examples this past week, as they capitalized on the market gains and pumped up their prices.

On Thursday, Line entered the market with a bang as the biggest initial public offering (IPO) of the year thus far. Despite Japan having a rough run of 2016, Line is signaling hope for this country with the outstanding market reaction. Not only did this company enter the market well above its original pricing but it set a precedent for all other tech companies looking to go public.

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When the company filed with the U.S. Securities and Exchange Commission (SEC) for its IPO, it expected to price its 35 million American depositary shares (ADSs) in the range of $26.50 to $31.50 apiece, up from its previous range of $25 to $28. However Line ended up pricing its offering at about $32 per ADS, but these ADSs actually entered the market at $42. Each ADS in the offering represents one share of common stock. There is an overallotment option for an additional 5.25 million ADSs. Also the entire offering is valued up to $1.3 billion.

Line is a leading global platform for mobile messaging and communication services, content distribution and advertising. Its mobile messaging application, which is the foundation of the Line platform and operates on all major mobile operating systems, enables users to communicate through free instant messaging and voice and video calls and serves as a smart portal to other applications and services.

Shares of Line closed trading at $39.65 on Friday, with a post-IPO trading range of $39.15 to $44.49. From the original pricing, the stock has actually gained over 20%.

AdvancePierre markets and distributes roughly 2,600 stock keeping units (SKUs) across all day parts in multiple product categories, including: ready-to-eat sandwiches, such as breakfast sandwiches, peanut butter and jelly sandwiches and hamburgers; sandwich components, such as fully cooked hamburger and chicken patties and Philly steaks; and other entrées and snacks, such as country fried steak, stuffed entrées, chicken tenders and cinnamon dough bites.

The company priced the 18.6 million shares in the range of $20 to $23 per share, specifically at $21.50. There was also an overallotment option for an additional 2.79 million shares. At this price the entire offering is valued up to $459.89 million.

However, the stock actually entered the market around $23.50, tacking on a gain of roughly 9% from the original price, and shares have moved higher since then.

AdvancePierre closed trading at $24.00, with a post-IPO trading range of $22.99 to $24.24.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.