2010.36 RealD IPO prices at $16, stock closes Friday at $19.50
Following up on our two prior posts on this subject (April 20 and June 30), we now report on the consummation of RealD’s IPO. Highlights as follows:
- Offering size increased from 10.75 million to 12.5 million shares. All the incremental shares come from shareholders, so the company sold 6 million shares as previously planned and shareholders sold 6.5 million shares.
- Share price increased. On June 30, RealD had gone on the road with an estimated price range of $13 – 15 per share. The IPO priced at $16. This cannot be considered a shocker, given that the NASDAQ had traded up over 6% month-to-date through Thursday’s close.
- Total offering generated gross proceeds of $200 million, and the company received net proceeds of $82.6 million. That ought to finance a few more deployments…
- Timing is everything. Not only did RealD likely benefit from the good performance of the equity market in July, but they priced their offering just before a 261 point decline in the Dow on Friday.
- Strong aftermarket performance. After pricing at $16 Thursday night, the stock traded as high as $21 in early trading Friday morning before closing at $19.50 per share (up 21.9%). Aftermarket performance for IPO’s in 2010 has not been generally strong, so this definitely counts as a successful start to RealD’s tenure as a public company.
- Valuation update. At the mid-point of the June 30 range ($14/share), RealD’s implied valuation was $725 million. At the actual pricing of $16, the valuation was $828 million. At the Friday closing price of $19.50, the valuation is a cool $1 billion.
- “Greenshoe” from the shareholders, not the company. As is typical for an equity offering, the underwriters have received a 30-day option to buy another 15% of the deal – in this case, 1.875 million shares – at the same price per share. In this offering, the additional shares would come from existing shareholders, not the company. With the stock price well above $16, it currently looks like a safe bet that the greenshoe will be exercised.
- 3D validated by the public market as a significant growth opportunity, and RealD established as the leading pure-play company in the space.
On behalf of Hadley Partners, congratulations to the founders, management, employees and investors in RealD! We look forward to continuing to follow the company as friends, bloggers and investment bankers. One of my friends and former co-workers at BT Alex Brown, Andy Howard, has represented Shamrock Capital on the board of RealD since Shamrock’s investment in the company, so my particular congratulations to Andy.
Have a great weekend, everybody!
