When Gander Mountain debuted its IPO in April SEW quipped that the management there should send some flowers to Ed Stack and his team for helping create the impression of a strong opportunity in sporting goods retail stocks. Well, we think the Cabelas team probably owes the DKS boys a bit more than flowers this week as Cabelas rode the coattails of the Dicks acquisition of Galyans and the recent success of the Gander IPO that was also seen as a driver for the price jump.
An IPO that was initially expected to price in the $15 to $17 per share range debuted on Friday morning at $20 a share, netting the company and other shareholders $156.3 million, or a 25% ($31.3 million) gain from the range mid-point before the IPO even hit the market. Cabelas will see $125 million from the sale, before expenses.
The CAB shares gained another 30% on their first day of trading on Friday, closing at $26.00 for the day.
The IPO floated 7.8 million shares of common stock, with Cabelas selling 6,250,000 primary shares of common stock, and the other stockholders selling the balance of 1,562,500 shares of common stock. The underwriters, Credit Suisse First Boston and JPMorgan, also had an option to purchase an additional 1,171,875 shares, from the selling stockholders at the initial public offering price to cover over-allotments, if any. Cabelas does not receive any of the proceeds from the sales of shares of common stock by its selling stockholders.
GMTN shares jumped 51% the first week on the market (SEW_0417), but has settled back to close at $21.97 on Friday, still a 37.3% gain from its debut at $16 a share on April 21. DKS shares closed the week at $33.43, up 14.5% for the week and up 450% since its IPO in October 2002. In sharp contrast to the current environment, Dicks actually pulled back from its intended range of $15 to $18 a share, debuting at $12.00, or $6.00 when adjusted for a 2:1 split. Shares rose just 7% the first day.
>>> Okay, so what do they do with the extra cash. How ironic that they will probably use it to put pressure on DKS and GMTN.
>>> Now were just waitin for Bass Pro…
