First Data, first day, first decline.
The widely watched debut of the payments processing giant on the public markets — regarded by some observers as a tell on investor appetite for new stocks — fizzled.
Shares were down nearly 2 percent, dipping below the $16 initial price, itself a reduction from earlier expectations, to end the day at $15.75. The drop, though hardly precipitous, lends credence to the thought that stock market volatility may be here to stay after a tumultuous few months on Wall Street.
All told, the IPO raised $2.6 billion for First Data, which processes trillions of dollars of transactions across credit and debit cards and other financial instruments. That was enough to cement the debut as the largest listing in the United States thus far in 2015 — and the year is already growing long in the tooth. First Data’s market value itself stands at $14 billion. Not bad but think of how the returns to investors would have looked — this means KKR, of course, though that famed private equity house was not selling any First Data shares this time around — if the widely expected pricing range of $18 to $20 a share had remained intact.
As has been widely reported, the funds raised will go at least partway towards paying down a chunk of the $21 billion in debt that the company is carrying, according to The Wall Street Journal.
For KKR, which had at one point after taking First Data private marked the company down to $.60 on the dollar, the triumph may be mixed.
On Wall Street, timing is everything, and for First Data, the timing may not have been stellar. The shares were sold right into an environment where funds raised from IPOs in the United States is on pace to decline from a year ago, and other companies, such as Albertsons, have pulled their proposed offerings.
[bctt tweet=”On Wall Street, timing is everything, and for First Data, the timing may not have been stellar.”]
One day does not a trend make, but all eyes will be watching to see if First Data can climb above its status as a “busted” IPO.
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