Markets
Warrants

CMPO Warrant Creep

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Warrants are becoming more commonplace in confidentially marketed public offerings, a trend that’s reminiscent of warrant growth in registered direct deals a few years ago. Whether the options will continue to be included in an even greater proportion of CMPOs going forward will hinge on the perceived quality of the specific issuers and general market sentiment. Already, however, the presence of warrants in so many recent deals has dispelled a widely held notion that investors would be happy with stock discounts only when buying CMPO shares. Both the registered direct and CMPO structures originally were supposed to provide issuers with a friendlier path to the capital markets than traditional PIPEs. Because the shares were registered on a shelf, unlike restricted securities sold in a PIPE, immediate liquidity would make investors less focused on hefty discounts and warrants, the argument went.

Markets

UTStarcom Hangs Tough

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Amid the wreckage strewn across the Chinese company landscape – what with the Securities and Exchange Commission’s ongoing investigations into the nooks and crannies of Chinese issuers and short-seller assaults – at least one growth company that conducted an actual IPO 12 years ago is still trying persevere. UTStarcom Holdings Corp. (UTSI), a Beijing-based provider of media support services and broadband equipment, earlier this month launched a tender offer to buy back up to 25 million shares, or 17.4% of its total shares outstanding, as part of a broader growth strategy announced in mid-November. The company is offering $1.20 a share, which represented a 52% premium over the stock price on Nov. 16.

Markets
VC

Late Stage Investors Bring the Bucks to Likes of Kabam, Coveo

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With IPO markets lolling in a post-Facebook (FB) malaise, public offerings are not an easy way to raise capital. Yet late-stage venture investing continues to provide growing, robust companies with substantial infusions of cash. Companies currently enjoying late stage rounds include 23andMe, Coveo, Kabam and One Kings Lane. Personal genetics specialist 23andMe is on the receiving end of $50 million in a Series D round with Investors including Yuri Milner of Digital Sky Technologies fame. DST has lead substantial investments in the likes of Facebook, Zynga (ZNGA), Groupon (GRPN) and Chinese web mall 360buy.com.

Markets

Sandy Left Behind Market Doldrums

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Hurricane Sandy’s devastation of the Northeast led to widespread power outages, gasoline shortages, communication breakdowns and public transportation shutdowns. It also delivered a blow to growth companies trying to raise capital in what’s normally considered the busiest deal-making time of the year. Issuers completed only 21 growth equity private placements (GEPPs) in November, raising $704.8 million according to PlacementTracker, a division of Sagient Research. That was about half of the number of monthly transactions that companies raised capital in each of the preceding three months, which netted companies more than $1 billion per month. At the halfway mark of 2012, public companies with market capitalizations from $10 million to $1 billion and share prices over $1 had raised $6.6 billion in 216 deals through the private placement of fixed-price registered and unregistered common stock, and fixed-price convertible securities.