First Major IPO for 2009 Debuts on NYSE

By: scutler

File Under: Listed Companies

• 5 Comments
• Email Entry

In what I have described as the first drip in the glacial melt of the global IPO market, Mead Johnson, a Bristol Myers Squibb (BMY) carve-out, successfully debuted on the NYSE yesterday. The IPO raised $720mm, priced at the high end of its price range, and traded up during the first day of trading. Investor demand for the offering was very strong, despite the near 400-point drop in the Dow on the day of pricing.

From our perspective, the company proved the notion that great companies can get out in bad markets, and actually perform quite well. We see a tremendous supply of companies that are similarly situated, but very tentative to test the waters. Buyers are willing to commit capital to growth opportunities they cannot otherwise find in the secondary market.

The Mead Johnson IPO was also a successful demonstration of the value proposition of the NYSE, both as a trading/listing platform, as well as a global media and visibility vehicle. On the trading side, the interaction between the underwriters, designated market makers, floor traders, and the electronic book contributed to a very orderly open. The deal priced at $24, opened at $26, traded at $26.12 one minute post open, and closed at $26.43. For the day, the NYSE's quoted spread of $.036 was less than half of that experienced elsewhere, while the quoted size of 1,469 shares was more than double. NYSE was able to attract liquidity in the stock, with 70% of the market share in trading for the day.

We also worked closely with the company on a global visibility campaign, with coverage including 29 broadcast (TV/radio), 16 print, and 10 on-line mentions during the listing day. This distribution reached key Mead Johnson commercial markets such as China, and investors in all major financial markets.

These benefits help explain why:

-- Based on IPO proceeds raised globally in 2008, NYSE Euronext retained its # 1 ranking among major exchanges globally, with $45 billion raised, or 37% of total IPO capital proceeds.

-- In 2008, NYSE Euronext attracted the largest IPO in U.S. history, with Visa (NYSE: V), raising $17.86 billion/€11.5 billion, and in Europe, the second-largest IPO in Europe in 2008, with EDPR (NYSE Euronext: EDPR) raising $2.42 billion/€1.566 billion.

We welcome Mead Johnson to the NYSE family of listed companies, and look forward to continuing to provide these benefits to current and future members of the family.