The initial public offering market in the first month of the year has nearly kept up with last year's frothy pace, and a Baltimore company that runs facilities for troubled youth yesterday joined the party.
Youth Services International Inc., run by former Jiffy Lube International Inc. Chairman W. James Hindman, yesterday sold 1.3 million shares to the public on the Nasdaq Stock Market at $10 a share. More than 300,000 shares changed hands by the end of the day, and the stock gained 25 cents.
Although the stock was sold at the low end of the expected $10- to $12-a-share range, the company and industry observers said that the sale showed continued strong interest by investors in new stock issues.
"We feel it's a fair price," said Youth Services spokeswoman Joan S. Stephens. "We're just really glad to have the deal consummated."
The sale, managed by Ferris, Baker Watts Inc., came just two days after an initial offering from a Melville, N.Y., company that also operates rehabilitation and correctional facilities for local governments, although its inmates are all adults. Esmor Correctional Services Inc. sold 833,000 shares on Tuesday at $6.25 a share.
Those two offerings followed some $2.1 billion in new stock sales so far this year, according to Going Public: The IPO Reporter, a newsletter published by Investment Dealers' Digest in New York. Last year a record $57.4 billion was raised in initial public offerings, including about $16 billion in offerings from closed-end investment funds.
"There's quite a breadth of companies that are filing to go public," said Ivan Cintron, associate editor of the IPO Reporter. It's been said "that some have filed to go public simply because it's easier to tap the public markets than to get a loan," he said.
Youth Services runs seven facilities in Iowa, Tennessee, Utah, South Dakota and Maryland, including the Charles H. Hickey Jr. School in Baltimore County. The company has lost money since its inception in January 1991, but reported its first quarterly profit of $208,000 in the three months that ended Sept. 30.
Yesterday's sale of 1.3 million shares represented 26.4 percent of all outstanding shares.