Posted by: Aaron Pressman on April 10, 2007
Shares of innovative wireless carrier MetroPCS are expected to be priced one day next week. That’s as specific as lead underwriters Bear Stearns will go. The expected price range is still $19 to $21 a share, as I mentioned the other day. The stock will trade on the New York Stock Exchange under the symbol PCS. It’s very difficult for individual investors to buy shares of hot IPOs at the offering price. Best bet is to have an account with one of the brokerage firms in the underwriting syndicate. Bear Stearns, Banc of America, Merrill Lynch, Morgan Stanley, UBS, Thomas Weisel, Wachovia Securities and Raymond James are listed on the prospectus.
Buying hot IPOs in the aftermarket can be a recipe for trouble or a winning move, but it all depends on the valuation. You might be better off buying a comparable company trading at a cheaper valuation. In this case, keep an eye on Leap Wireless (Symbol: LEAP), the only real comparable wireless company that’s already publicly traded. Currently around $72 a share, Leap has a market cap of almost $5 billion and an enterprise value of just over $6 billion. So the market sees the company as worth a little more than 5 times its revenue or 22 times its earnings before interest, taxes, depreciation and amortization.