Reuters reports that Albertsons yesterday decided "to go ahead with a downsized $800 million initial public offering (IPO)," which priced shares at $16 apiece, rather than the original $18-$20 target range.
The decision is seen by experts as a reflection of a desire on the part of private equity owner Cerberus Capital Management to cash out after a 15-year investment. Reuters says that there was some internal debate about whether to walk away from the IPO at the lower numbers, but that the decision was made to move ahead.
While the pandemic had improved Albertsons' fortunes, driving sales at a time when much of the nation's retail economy was shutting down, "the scaling back of the IPO on Thursday indicates that some investor skepticism lingers.
"Below-target pricing may also signal recent robust investor demand for new listings is softening after U.S. stocks fell sharply on Wednesday amid a surge in coronavirus cases in the United States."
About a week ago, Albertsons was saying that it was hoping the IPO would raise more than a billion dollars, and that it would take advantage of what was seen as a rebounding stock market.