New York Mercantile Exchange shares debuted at $120 — more than double their initial offering price — and continued climbing Friday, as the commodity futures exchange ended its 134-year run as a private company.
Nymex Holdings Inc. sold 6.5 million shares at $59 a piece on Thursday after the market closed, ahead of its previously projected range of $54 to $57. The shares then opened on the New York Stock Exchange Friday at $120, soared past $150 and then came down to finish the session at $132.99.
The company, whose market is famous for its raucous, open-outcry trading of oil and gold futures, raised $293.1 million after underwriting discounts and commissions, but before expenses. Selling stockholders made about $65.5 million on the IPO.
At $133 a share, it has a market capitalization of about $12 billion.
Nymex Chairman Richard Schaeffer appeared surprised by the high demand 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.”
The stock lists under the ticker symbol NMX on the New York Stock Exchange.
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.”
