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Michaels IPO Closes Barely Up On Opening Day

After what can only be described as an unimpressive performance on its first day of trading on the NASDAQ, Michaels Companies (MIK) stock ended the day at $17.02, two cents above the price the IPO started at this morning.

After a brief initial dip that took the stock as low as $16.655 in the first half hour it was trading, it began a slow steady climb that took it to a high of $17.25 shortly before 1pm. The rest of the afternoon was a slow slide back to pennies above the initial offering price, where it hovered for most of the last hour of trading before closing at $17.02 for the day. Volume has been light in the first hour of after hours trading, with the price bouncing between $17.01 and $17.05 before settling again at $17.02.

A comparison to Thursday’s IPO by wearable camera manufacturer GoPro puts the Michaels IPO in perspective. GoPro (GPRO) launched on the NASDAQ yesterday morning at a price of $24/share. It closed its first day at $31.34, and by market close today, was trading for $35.76.

The Michaels IPO has not been met with optimism by most financial industry commentators. Jeff Macke, who is the host of Breakout for Yahoo Finance, seemed to sum up the sentiment of Wall Street when discussing the stock on Breakout’s “Hot Stock Minute” segment today, saying “This is not a growth story.” Macke acknowledged the company’s position as an industry leader, but added that he felt the company would be better off remaining private.

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Michaels CEO Rings NASDAQ Opening Bell for Michaels IPO

Michaels Stores CEO Chuck Rubin rang the opening bell on the NASDAQ exchange this morning to celebrate the start of trading of Michaels IPO on the exchange today.

Since the high-tech NASDAQ exchange does not have a physical trading floor, the exchange uses a location in New York’s Times Square for its bell ceremonies instead. Below, Michaels CEO Chuck Rubin (left) poses with NASDAQ CEO Robert Greifeld (right).

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Michaels IPO Offering Price Announced

Late Thursday evening, Michaels Companies announced that the initial offering price of the company’s IPO on Friday, June 27th will be $17/share.

The price for the Michaels IPO is on the low end of the predicted range of $17-$19 per share that was indicated for the offering in previous SEC filings. Media analysts have been indicating lukewarm interest in the offering from investors due to concerns about the company’s heavy debt load – over $3 billion – and reliance on a single product – the Rainbow Loom – for recent growth.

The stock will list on the NASDAQ exchange Friday under the symbol MIK. With $27.9 million shares being sold, the company will have an approximate market value of $3.45 billion, raising about $470 million in the IPO.

Post-IPO, private equity firms Bain Capital and the Blackstone Group will continue to own over 80% of the company. Michaels Companies also filed nearly two dozen SEC statements this evening recording insider ownership of company stock by the company’s executives. CEO Chuck Rubin (whose legal name is Carl), was reported as owning 315,353 shares of the company, with an option to purchase a total of nearly 1.85 million more at a price of $13.86 at various points over the next 7 years. This makes Rubin (unsurprisingly) the largest stockholder among company executives, but his holding pales in comparison to the holdings of Bain Capital and Blackstone, totaling roughly 80 million shares each.

Both the market and the crafts industry will be watching with interest to see what happens to the stock over the course of the day tomorrow. Opening price isn’t as critical to an IPO’s perceived success as closing price on the first day. The much-vaunted Facebook IPO was deemed a disaster after the stock tanked in the hours immediately after its offering on the first day. It has since recovered, but the ghost of the “Facebook IPO disaster” still haunts IPO offers.

Scrapbook Update will be watching the market closely over the course of the day and will issue updates on the website and on Twitter and Facebook as warranted.

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