Who would have expected that last month when the giant private equity firm Blackstone acquired Knott’s Soak City, the water park in Chula Vista, it would soon be part of a newly announced initial public offering of stock scheduled for 2013.
Of course, the real gem in the IPO is the popular SeaWorld park in San Diego as well as 10 other theme parks that will be known as SeaWorld Entertainment. Blackstone purchased the parks from Anheuser-Busch in 2009.
This will not be the first time SeaWorld has been down the IPO path. Four years after its launch in 1964, the company used a stock offering to finance the construction and expansion of the waterfront attraction. Anheuser-Busch ultimately acquired it in 1989.
The financial community is hoping SeaWorld Entertainment will make a big splash with its IPO; the market for new stock offerings was lethargic in 2012, to say the least. But there were 128 offerings, raising $43 billion, the highest total since 2007, according to Renaissance Capital.
“Since the end of the financial crisis that started in late 2007, there have been strong hands on the reigns of the U.S. capital markets, slowing down the IPO market," said Jeff Corbin, CEO of KCSA Strategic Communications. "While there have been some big names that have gone public during the last few years, the vast majority of those companies that could have, and should have, accessed the public markets have had to wait for improving market conditions. Those conditions seem to be coalescing in 2013, which should make for a more active IPO market.”
The consulting firm surveyed 50 securities attorneys and found that 35 percent believe the IPO market in the coming year will be stronger than the previous year, the highest percentage in the three years the survey has been conducted.
The survey also found that the attorneys expect that more companies like Blackstone will begin unwinding the assets they have acquired during the economic slowdown through a series of IPOs.
Of course, you can probably sum up the 2012 market for initial public offerings of stock with one word: Facebook. Filled with plenty of peaks and valleys — mostly valleys — the stock of the social media giant has been the subject of much controversy.
After months of planning and discussing, Facebook finally took the plunge in May with an offering priced well above expectations at $38 a share. Although there was a brief flurry of buying on the first day of trading, briefly touching $45, the stock immediately went into a steady decline.
By August the shares had fallen to below $18 and languished there until mid-November, when millions of shares of locked up stock held by insiders were finally released. The stock has steadily moved higher and will likely finish the year near $26, closer to the $28 price most people believed would have been appropriate for the IPO.
Other social media companies have also struggled. Zynga, the online gaming company closely linked to Facebook, went public in December 2011 at $10 a share and jumped to near $15 three months later. But it cratered after that and is fighting to stay above $2.
The exception has been LinkedIn, the business social media company. It held its IPO in May 2011 at $45 and has stayed well above its offering price, currently trading at $114.
Don’t look for many social media companies to go to market in 2013; most offerings will come from more traditional sectors.
“We believe that the real estate sector is set to be more active due to increased investor interest ahead of a possible rebound in this sector," said Maria Pinelli, of Ernst & Young. "Oil and gas also look set to become a more dynamic sector in the U.S. and Europe. Other sectors to watch include infrastructure and health care, where investment is expected to occur.”