Market Top: AEI Cancels IPO After Drop Of Price Expectations

Ah, the dreaded "market conditions" loophole. After several recent IPOs had seen a less than stellar reception by the equity market, banks have decided it is time to pull IPOs entirely and wait for a better window of opportunity. The most recent casualty: energy company AEI. As the AP reports:

AEI, a former Enron entity with energy-infrastructure operations in 19 developing countries, had expected shares to price between $14 and $16 per share. The company was offering 16.7 million shares. Its largest shareholder, Ashmore Funds, planned to sell 33.3 million. Thursday, AEI lowered its expected price to $12 to $13 per share. It raised its offering to 20 million shares, while Ashmore Funds cut its offering to just 1 million shares.

Per the company's disclosure:

"We have decided not to proceed with an initial public offering of our shares at this time due to market conditions."

If market conditions are inhospitable at the S&P at nearly 1,100, one wonders when the next IPO window of opportunity will come. Now that the Fed is liquefying markets much less, and the Treasury has bigger problems (debt ceilings and such) to deal with, it may be the case that just like last summer when in a matter of one week over a dozen coal IPOs were pulled as the energy market broke down, that if you were lucky enough to catch a few greater institutional fools - good for you. And if you did not, you may well be stuck holding on to that paper equity for quite a while longer.