Hot IPO- VeraSun Energy

The market weakness has not deterred VeraSun, the Ethanol producer from pricing above the top of its range. The other ethanol stocks have taken a beating in the market correction. PEIX is down 50, ANDE is down around 30% and ADM is barely holding on to its gain.

On Tuesday night, VeraSun Energy, the second largest ethanol producer in the US, priced its highly anticipated IPO of 18.25 million shares at $23, above the company's upwardly revised range of $21 to $22. The original deal structure was 17.25 million shares at $18 to $20 before the range was raised and insiders offered an additional 1 million shares (bringing the secondary share total to 7.25 million). VeraSun plans to use the proceeds to signficantly expand its production of ethanol, which is needed to meet federal mandates as a gasoline additive. Morgan Stanley and Lehman Brothers were the lead managers on the deal. The stock is expected to begin trading on the NYSE under the ticker VSE on Wednesday.

Another recent IPO to keep an eye on is THI, Tim Hortons Inc.



THI was a hot IPO some month ago and the sector is showing good resilience with SBUX at top of its range. So keep an eye on this one.