Slim Thursday pickings for oil infrastructure IPO shares

Underwriters for Solaris Oilfield and Gardner Denver Holdings plan to price their IPOs Thursday evening. But will the price justify current risks?

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Compression equipment simulation. (Screen capture of an Exterran video description, via the company's website)

WASHINGTON, May 11, 2017 – Short column again today, or relatively short anyway. As we’ve duly noted in our companion column, trading action is negative, goofy and not very convincing today, with volume having that “lower than average” feeling.


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All we’re looking at today, aside from a decent Thursday recovery for our Allergan convertible preferred “A” shares position (symbol: AGN/PRA, your broker’s symbol may vary), is a pair of IPOs we’ve put in for but may ultimately not decide to buy.

Trading Diary


For the record, we’ve requested a modest number of shares in both Solaris Oilfield (proposed symbol: SOI) and Gardner Denver Holdings (proposed symbol: GDI). Both IPOs are involved one way or another in the oil patch, with SOI providing products and services to drillers and GDI marketing compression and flow-control equipment and other services in the energy and industrial environments.

Frankly, neither of these companies looks exciting, given current uncertainties in the oil patch. Further, GDI is one of those real companies that was “taken private” some years back by vulture capitalists who, having milked the company for what they could get, are offering it back to the public now with a load of debt.

Of the two, GDI may very well have the better prospects in the end. But we saw last year what happens to small companies in the oil patch when oil prices go south. So we may finalize our share request after both issues price tonight if they come in at a substantial discount from their currently expected pricing range.

Otherwise, we’ll take a pass. As our readers know, we put in for shares in a similar IPO last week, only to have the IPO withdrawn by the underwriters, thus making the “buy or pass” decision for us. It’s possible the same fate may await both these IPOs later this evening, although strengthening oil prices over the last two days might just encourage both companies and their underwriters to take a chance on what could be an improving market.

This pair of IPOs is risky, though. In this “Sell in May” season, maybe it’s best to keep some cash for another day.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17