Nymex IPO on deck

[Admin]

NEW YORK (MarketWatch) -- The Nymex will price its eagerly anticipated initial public offering on Thursday night as the bourse joins a small but elite class of exchange stocks to tap the market in the last several years.
The Nymex, the corporate name for the New York Mercantile Exchange, will offer 6.5 million shares at $54-$57 a share in a bid to raise about $361 million.
In a sign of strength earlier this week, the Nymex (NMX) boosted its price range from $48-$52 a share and increased the size of the IPO from 6 million shares. Now going public after more than 130 years as seat holder-owned entity, the Nymex has drawn fans as the latest financial marketplace to tap into greater profit margins from electronic trading.
Its added appeal comes from its role in the hot energy and metal commodities business and its possible target as a takeover candidate.
Sal Morreale, an IPO trader for Cantor Fitzgerald, said he's expecting the IPO to jump $5 or more at the open for a gain at least 10%. Others are forecasting a gain of $10 at the open for a rise of about 20%, he said.
"I'm hearing it's gonna be a real good one," Morreale said. "Allocations (of IPO shares) will be small and it will have a lot of aftermarket interest."
If Nymex performs like other exchange IPOs, it'll add on about $20 after the open.
Six new issues in the exchange business have risen an average of 35% in their first day of trades.

The Chicago Mercantile Exchange rose 23% above its $35 offering price on Dec. 5, 2002. The stock trades at $541 now.
The Intercontinental Exchange rose 51% over its $26 price in its Nov. 16, 2005 IPO. The stock now trades at about $97 a share.
The NYSE Group going public by margining with Archipelago -- rose 25% to $80 a share from its previous day close of $64.25 when it began trading on March 8. The stock now trades at about $95 a share.
The Nasdaq rose 18% over its $9 price when it moved to the Nasdaq exchange from the bulletin board on Feb. 9, 2005. It now trades at $37 a share.
The International Securities Exchange rallied 69% over its $18 price in its IPO on March 8, 2005. The stock is now at $51 a share.
The Chicago Board of Trade rose 49% over its IPO price of $54 a share on Oct. 18. 2005. It's now at about $160 a share. Charting a rise in its trading fortunes, Nymex Holdings Inc. on Nov. 7 reported third-quarter net earnings of $40.7 million, up 82% from $22.4 million in the same period last year.
The results included one-time, pre-tax charges of $6 million resulting from the closure of Nymex's London facilities and from job cuts.
The owner of the New York Mercantile Exchange said revenue in three months ended Sept. 30 rose 46% to $142.4 million from $97.9 million.
Daily average contracts traded rose to 1.32 million, up 42% from last year.

[Melequity]

NEW YORK, Nov 16 (Reuters) - Energy exchange NYMEX Holdings Inc. is poised for significant gains in its market debut after the company raised $383.5 million on Thursday with an initial public offering that priced above its forecast range, according to an analyst.

The 6.5 million share offering, which represents about a 7.5 percent stake in the company, sold for $59 per share, compared with a $54 to $57 forecast range.

NYMEX offered 5.39 million shares while selling stockholders sold 1.11 million shares. The offering price gives the company an initial market value of more than $5.1 billion.

At the $59 offering price, NYMEX shares will trade at 32 times annualized earnings, said Francis Gaskins, president of IPO Desktop, a research firm based in Marina del Rey, California.

Shares are expected to start trading on Friday.

The IntercontinentalExchange Inc. (ICE.N: Quote, Profile, Research), an energy and commodities exchange, trades at 42 times annualized earnings, according to Reuters Estimates.

"Those are the two leaders and the market is growing," Gaskins said.

Investor demand for NYMEX shares, driven by the performance of other publicly traded exchanges, led the owner of the New York Mercantile Exchange to increase the size and forecast of its float earlier in the week from 6 million shares at a price of $48 to $52 per share

New York-based NYMEX is the latest in a series of exchanges to transform themselves from membership-based organizations into public companies.

In March, the NYSE Group Inc. (NYX.N: Quote, Profile, Research), which owns the world's largest stock exchange, floated its shares, rising 25 percent to $80 on their first day of trading.

Last year, IntercontinentalExchange and CBOT Holdings Inc. (BOT.N: Quote, Profile, Research), the parent of the Chicago Board of Trade, both soared on their first days on the New York Stock Exchange.

Earlier this year, NYMEX struck a deal to sell a 10 percent stake to private equity group General Atlantic LLC for $160 million. Under that deal, General Atlantic said it would invest an extra $10 million if NYMEX met certain conditions, such as completing an IPO valued at $2 billion or more by the end of 2006.


Underwriters, led by JPMorgan and Merrill Lynch & Co., have the option to buy an additional 975,000 shares to cover over-allotments.

NYMEX will list its stock on the New York Stock Exchange under the symbol "NMX". (NMX.N)

[Melequity]

Nymex Shares More Than Double in One of the Top Performing Initial Public Offerings Since 2000

NEW YORK (AP) -- The New York Mercantile Exchange, the world's largest energy market, on Friday scored one of the top performing initial public offerings since 2000 as its stock price more than doubled in value.


Investors eagerly snapped up the commodity futures exchange on its first day of trading, sending shares skyrocketing $73.99, or 125 percent, to $132.99. The Nymex had sold the shares at a higher than expected price of $59; they opened at $120 Friday morning, and surged as high as $152.

Nymex Chairman Richard Schaeffer appeared surprised by the extraordinary demand for the shares, and indicated that it put more pressure on the company to perform.

"Nobody could have dreamed the demand would be like this," Schaeffer said in an interview, adding: "We've got to run this place efficiently so we can warrant the high price that people paid for us."

Nymex Holdings Inc. -- famous for its raucous, open-outcry trading of oil and gold futures -- sold 6.5 million shares and raised $293.1 million after underwriting discounts and commissions, but before expenses. Selling stockholders made about $65.5 million on the IPO.

At $132.99 a share, it has a market capitalization of about $11.59 billion. By comparison, larger rival Chicago Mercantile Exchange Inc.'s market value is $18.6 billion.

The stock, which listed under the symbol NMX on the New York Stock Exchange, debuted with one of the biggest one-day performances in history. The offering was second only to Chinese Internet firm Baidu.com, which surged almost 354 percent in its first day of trading in 2005.

Nymex easily beat chip developer Transmeta Corp.'s 115 percent jump in 2000 and Chipotle Mexican Grill Inc.'s 100 percent pop in January, according to data provided by Dealogic.

The debut of Nymex shares had been much-anticipated by investors who have witnessed the stellar IPOs of rival exchanges in recent years.

Shares of IntercontinentalExchange Inc. closed up 51 percent from the $26 IPO price on Nov. 16. Chicago Mercantile Exchange Holdings Inc. shares jumped 23 percent on the first day of trading in December 2002, while Chicago Board of Trade Holdings Inc. saw its shares surge 49 percent after their debut in October 2005.

"In general, the share prices of these exchanges have been way beyond what anybody thought they'd be," said Scott Wren, senior equities strategist at A.G. Edwards & Sons. "Public ownership of exchanges is such a new thing and has worked so well that will just draw money in."

David Easthope, an analyst with the financial consulting firm Celent, said Nymex shares likely popped "on frothy expectations, takeover possibilities and just hype right now."

"Retail speculation tends to be high when there's been a pattern of successful IPOs in a sector," he said. "The word gets out that exchanges have been popping on the first day."

The possibility of a takeover is palpable, considering the rapid consolidation of financial marketplaces this year. The New York Stock Exchange plans to combine with Paris-based Euronext NV in a deal valued at about $10 billion. The Chicago Merc is acquiring crosstown rival Chicago Board of Trade for $8 billion. And there is word on Wall Street that the Nasdaq Stock Market may make another bid for the London Stock Exchange, in which it currently has a 25 percent stake.

"If deals are brought in front of us, we will surely take a look at them," Schaeffer said. "Our objective is to continue to create shareholder value, and if combinations do that, yes, we will take a serious look."

The huge IPO also made it more expensive to buy a seat on the Nymex. The exchange reported on its Web site that a seat, bundled with 90,000 shares, sold for a record $9.8 million on Friday. This is 63 percent above the previous record of $6 million set on Tuesday.

Nymex has 816 seatholders, all of whom were promised in March 90,000 shares in the IPO. The Nymex seat gives the owner a trading right on the exchange's floor, which can be used or leased.

Shares that are sold with the seat can't immediately be traded, with one-third locked up for about six months, and the balance released over the following 18 months. At Friday's closing price, each seatholder is sitting on roughly $12 million worth of stock.

[Melequity]

Cramer's Blog: The Big Board's Big Value

Originally published on 11/17/2006 at 12:22 p.m. EST

If you like the Nymex (NMX - commentary - Cramer's Take) at $12 billion, don't you have to love the NYSE (NYX - commentary - Cramer's Take) at $14 billion? Can we really believe that the Nymex is correctly valued and the NYSE is correctly valued as well? Something has to give, when you consider the history and the opportunity.

My take is that right now, right here, if you were to go buy the NYSE you will do better than if you go buy the Nymex. Plain and simple, the opportunity is just greater and the margin expansion more formidable.

It is true that the Nymex has a ton of new products it is going to roll out, and the numbers are way low.

But the NYSE at roughly the same valuation? That's nuts.

Can you imagine if the NYSE were to start trading tomorrow instead of a few months ago?

It would easily be at $140. Easily.

At the time of publication, Cramer had no positions in stocks mentioned.