KPMG Consulting Enters Uncertain Market
An oversubscribed initial public offering of KPMG Consulting (KCIN) was expected to be overshadowed by a share slump in one of its major shareholders. But the IPO, launched today, was one of the strongest IPO's in a year.
Shares were priced at $18.00, opened at $20.44 and shot up to $24+ on fairly heavy volume on the first day of trading.
Analysts expected the trading to be negatively affected by Cisco Systems, which owns 20% of the consultancy, who saw its shares fall by 13% earlier this week after posting results below expectations. But the market responded differently, embracing the launch of the first - and likely not the last - accounting related consulting offering.
KPMG Consulting's Nasdaq flotation comes five months after receiving regulatory approval for the move, due to uncertainty over market conditions.
Chief underwriter Morgan Stanley Dean Witter sold 117m shares in KPMG Consulting (KCIN) at the top price of $18, valuing the firm at $2.2bn.
The firm expects to use approximately $400 million of the proceeds to repurchase from Cisco preferred stock that will not be converted into shares of common stock.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.