Albertsons’ initial public offering has been delayed indefinitely, and it could be thanks to one critical error leading up to its pricing.
The Idaho-based grocery chain was scheduled to price its offering on Wednesday.
That turned out to be the same day that Walmart revealed dismal earnings results. Goldman Sachs, which was the lead underwriter on the IPO, declined to comment for this story. Albertsons’ private-equity owners, Cerberus Capital, also declined to comment.
IPO advisers put a lot of consideration into timing – weighing factors including whether other large issuers are in the market and holidays that could keep investors away from road-show meetings.
Sometimes the preferences of a company founder can come into play. When Alibaba Group was planning its IPO, Bloomberg News and other media reported that founder Jack Ma wanted the stock to begin trading on August 8 (or 8/8) because the number eight is associated with good luck in China.
Of course, luck does have something to do with it. Investor sentiment can sour for unpredictable reasons.
But some risks can be foreseen. In Albertsons’ case it is that Walmart was long scheduled to report its results on Wednesday morning.
Unfortunately for the company’s planned offering, when Walmart announced earnings it also cut its forward-looking estimates. Its share price dropped by as much as 9%, the biggest single-day decline in at least six years.
Later in the day, Albertsons’ IPO pricing was delayed. Now, it seems, that Cerberus and Goldman Sachs will have to live with that decision for some time.