Keep your fingers crossed. The Nielsen Company is hoping to raise about $2 billion in an IPO so its stock can start trading on Wednesday and Demand Media is also selling stock for the first time, to the tune of a little over $100 million. How well those are received could determine whether other media companies are able to sell new stock this year.
Nielsen will be far and away the biggest IPO so far in 2011 – and the biggest since General Motors in November. It is out to sell about one and three-quarters billion in new stock which will trade on the NYSE as “NLSN.” The offering price is projected in a range of $20-22 per share. The other quarter billion will come from some bonds which seem quite similar to convertible preferred stock, since they carry a mandatory conversion to stock in just two years.
The Nielsen IPO had been pending since last June, but the company and its underwriters waited until market conditions improved to launch the roadshow earlier this month. As the big player in the TV ratings business, Nielsen is a well known name to consumers as well as people in the industry. That familiarity should help in selling such a large IPO. Nielsen, it should be noted, was public once before under the name VNU, but was taken private by a group of private equity funds for $9.7 billion in 2006.
JP Morgan and Morgan Stanley are leading the offering, with participation from just about everyone who is anyone on Wall Street. If all goes according to plan the offering will be priced Tuesday evening and trading on the NYSE will begin Wednesday.
Less well known to broadcasters is Demand Media, which will trade on the NYSE as “DMD.” It is an Internet content producer – sort of like a smaller Yahoo! or AOL – which creates content to be used on client websites. It uses lots of freelance writers and video creators to produce “how to” videos and instructional content.
Demand Media’s claim to fame is that its CEO is Richard Rosenblatt. He’s the guy who headed MySpace when it was sold to News Corporation for $580 million in 2005.
The Demand Media IPO is being led by Goldman Sachs and Morgan Stanley. It hopes to raise about $112.5 million with the new shares selling at $14-16 each. It also is expected to be priced Tuesday evening and begin trading on Wednesday.
RBR-TVBR observation: This is about more than Nielsen or Demand Media. If these media-related stock sales are well received, then other people in the media space will start lining up for IPOs or for existing public companies to sell new shares. As previously noted, Pandora and Groupon are candidates for IPOs this year – but only if the market for new stock really has opened up.