Two of the biggest initial public offerings to hit Wall Street this year have flopped, and it could mean the end of new deals for the rest of 2015.
First Data, the payment processing company backed by private equity firm KKR, priced its shares below the range it was seeking.
It had been aiming for a share price of between $US18 and $US20, but priced at $US16, according to Bloomberg.
Grocery chain Albertsons meanwhile delayed the pricing of its offering until Thursday, according to Reuters.
That followed reports that the company would price its offering at $US20 per share or less, below the $US23 to $US26 range the company was pitching.
The news that competitor Walmart had slashed its outlook came at the worst possible time for Albertsons.
Both companies, though, also have some characteristics that might’ve turned off investors: They’re heavily indebted, growing slowly, and losing money. Both are also seeking funds only to pay down the debt that they have had thrust upon them by their private-equity backers.
It’s bad news for the individual companies, and bad news for Wall Street too, which was looking to the two deals as a bellwether for offerings in an otherwise weak year.
Proceeds raised in US IPOs are down more than 44% from last year, and the number of deals is down by about 20%, according to Renaissance Capital, which analyses IPOs.
There’s one more big deal on the horizon. Ferrari is poised to raise about $US900 million in a sale next week.
Payment processing company Square filed for its IPO on Wednesday, but that filing is preliminary so the share sale could still be months away.