After announcing its planned IPO of Ryan Beck in April, parent company BankAtlantic got the jitters and pulled back the offering in late July, citing poor market conditions and a terrible quarter.
Just how bad was it? The boutique investment firm reported an operating income loss of $2.1 million in the second quarter of this year, compared to a $1.6 million loss in the first quarter and operating income of $13 million in the second quarter of last year. Driving the loss was weak investment banking and capital-markets revenues, according to analysts.
Perhaps contributing to the pullback was the cool reception given the mid-June IPO of Societe Generale's Cowen investment-banking arm. The IPO opened at $16 per share, well below the anticipated range of $19 to $21, and it raised only $179.5 million for investors, versus the $212 million Societe Generale had expected.
In any case, analysts suggest Ryan Beck's IPO plans were poorly thought out from the start. “We question why BankAtlantic filed for the IPO in the first place, since it knew Ryan Beck would have the loss in the first quarter,” writes Janney Montgomery Scott analyst Albert Savastano, adding that “it is clear to us that Ryan Beck is destroying, rather than creating value.”
