Moelis & Co Shares Rise 9 Percent In Debut

Moelis & Co Shares Rise 9 Percent In Debut

Moelis & Co (NYSE:MC) sold 6.5 million shares in its debut after pricing its IPO at $25 a share and the shares held their gains in early trading.

This marks the first U.S. initial public offering of an investment bank since the financial crisis.

This mining and metals fund is having a strong year so far

Cubic Corporation Chris Hohn favorite hedge fundsThe Delbrook Resources Opportunities Master Fund was up 9.2% for May, bringing its year-to-date return to 33%. Q1 2021 hedge fund letters, conferences and more Dellbrook is an equity long/ short fund that focuses exclusively on the metals and mining sector. It invests mainly in public companies focused on precious, base, energy and industrial metals Read More

Moelis valued at $1.36 billion

Moelis raised $163 million in its IPO, selling fewer shares below the marketed range. The offering was structured to let Ken Moelis, who founded the firm seven years ago, retain control while still receiving a payout.

The investment bank is valued at $1.36 billion at the IPO price, based on 54.4 million shares outstanding if Class A partnership units and Class B shares are immediately converted into common stock.

Moelis’ IPO follows a drop in shares of peers Evercore Partners Inc. (NYSE:EVR) and Greenhill & Co, as stock markets tumbled.

Last month, Moelis & Co (NYSE:MC) disclosed paperwork for an IPO on the NYSE Euronext (NYSE:NYX) that it already had filed confidentially in January. The firm revealed that it has advised on over $1 trillion of deals, including three of the ten biggest announced global mergers in 2013. Its IPO filing signified a bet that big corporate clients will continue handing more lucrative M&A assignments to firms such as Moelis that have a narrower focus than their larger Wall Street peers and are perceived to be freer of potential conflicts of interest.

Lackluster pricing

Moelis & Co (NYSE:MC)’ lackluster pricing follows a pullback in U.S. stocks in recent weeks, particularly in shares of many newly-public companies. IPOs have still been getting done this week, but all five U.S.-listed debuts to price since the weekend have seen investors offer a lower per-share price than the companies had anticipated. Thanks to the past month’s selloff in certain parts of the market, such as high-growth technology and biotechnology stocks, demand for shares of newly listed companies too has suffered.

Interestingly, last month, Roger Altman, Chairman of Evercore Partners Inc. (NYSE:EVR) remarked: “I don’t see any reason why this won’t be successful and why the public markets won’t be hospitable to Moelis & Co (NYSE:MC)…[the] timing is reasonably good.”

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