The company i will study is Centrus Energy Corporation (LEU) with IPO date as 7/
ID: 2744032 • Letter: T
Question
The company i will study is Centrus Energy Corporation (LEU) with IPO date as 7/22/1998.
1. What advisors the firm hired? Record information about consultants, auditors, layers, underwriters, and printers if any. What are the costs/fees for them? Which one you believe placed the most important role during the preparation of the IPO? Since we are examining retrospectively, was there any seasoned equity offering after this IPO? If so, did the company use the same underwriter?
2. What was the Offering Price and number of shares offering? Was there any changes before the actual listing?
3. How did the market react to the IPO?
3A) The short-run IPO return Find the ending price when the market started trading, and calculate the one-day return from the offering price to the ending price on the first trading day. What was the 1st day return of your IPO Company? Were there money left on the table?
3B) The long-run performance From Yahoo!Finance, find the Adjusted Ending prices for: first trading day, three years after the IPO listing day, and five years after the IPO listing day, and calculate 3-year and 5-year post-IPO holding period return (HPR) using Adjusted Ending prices. What was the HPR of your IPO Company over 1 year post IPO? What about 5 years post IPO? Record your short-run and long-run IPO returns in the shared Master file on One Drive (we will be using this pool of IPOs to find the mean value of the IPO market returns).
Explanation / Answer
In the 1940s the US government started moving Uranium for defense purposes. Commercial sale of Uranium was started in the 1960s, worldwide. The next 20 years the US government have ruled the Uranium market as a monopoly power.
In 1992 it was decided in the Energy Policy Act of 1992 to eventually fully privatize the government’s uranium enrichment organization. The new government corporation began operations in July 1993.
The IPO of this company started in 1998 when USEC Inc., a private, investor who was then owning the company, began trading on the New York Stock Exchange. The sale proceeds from the fetched more than $3 billion to the U.S. Treasury.
After a financial restructuring in 2014, the company re-emerged as Centrus Energy Corp., with a stronger balance sheet and a new board of directors. In 2015, the Board selected a new leadership team, which is focused on expanding and diversifying its business. Today, the company has a multibillion-dollar long-term order book with customers around the world, a diverse base of nuclear fuel supply contracts stretching to 2026 and beyond, world-class technical capabilities, and a strong market opportunity as the global nuclear industry continues to grow.