Rice Energy shares rise in their market debut
Rice Energy Inc. weathered a stormy day on Wall Street for its stock market debut on Friday, finishing up 4 percent after being priced at the upper end of its range.
The performance was a successful opening for the Cecil-based driller, said Kathleen S. Smith, a principal at Renaissance Capital LLC, an investment advisory firm that specializes in initial public offerings.
“You can't be negative about how Rice traded,” she said. “They managed to pull off the IPO just fine.”
The stock, which underwriters priced at $21, closed up 90 cents at $21.90 per share. It fell below the offering price and traded as high as $22.50 per share on a day of dramatic declines on Wall Street. The Dow Jones industrial average fell 318.24 points, or 2 percent.
Debuting stocks historically average a 13 percent jump, but they usually don't have to contend with a troubled market, Smith said.
Rice went public to pay off debt and help expand its natural gas drilling in Western Pennsylvania and eastern Ohio shale. The company and one of its stockholders sold 44 million shares, raising $924 million total. Nearly $600 million of that would go to the company, Rice officials had said.
After telling investors to expect a price between $19 and $21, the company announced on Thursday evening that it would sell at the higher end of that estimate.
“That it was trading at the upper end of the range, that's good,” Smith said. “It tells you investors are interested.”
Rice officials could not be reached for comment and have not been talking to the media in the lead up to their stock's debut. Companies are subject to a Securities and Exchange Commission ban on promotional publicity, or a quiet period, surrounding their IPO.
Energy companies have been struggling with IPOs this year after a hot fall. Three of four other energy companies with January IPOs finished their first day below their offer prices, according to Renaissance Capital LLC, which tracks IPOs.
But because of its shale gas holdings, Rice is more comparable with Antero Resources Corp., Smith said. It also drills in Appalachia and had one of 2013's most successful public offerings.
Antero raised $1.57 billion with a stock price that jumped 18 percent to $52.01 when it made its debut in October. Antero fell 0.9 percent on Friday, but it's still up from its initial offering, finishing the day at $57.99 per share.
Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Young adults drive home rental trend in Western Pennsylvania
- Government approves compromise on Corbett’s alternative Medicaid plan
- Twitch.tv online network reveals value of video gaming market
- USDA updates dairy insurance program
- Highmark denies premiums in federal insurance marketplaces affected by level of competition
- 2 top technology officers leave UPMC
- Auto market booming, but longer loan terms cause concern
- Ukraine conflict, disappointing earnings reports weigh on stocks