Fine Air Cancels Initial Public Offering In Wake Of Crash
Fine Air Services Inc. said it will refund the $123 million it made in an initial public offering just two days ago, fearing panicky investors would drive down the stock price after Thursday’s crash of a Fine Air cargo plane in Miami.
Hours after the airline rescinded its IPO, a rare action, the Federal Aviation Administration said it may suspend 29 Fine Air pilots’ certifications for 60 to 90 days for flight-rule violations in South America. If the suspensions occur, they would devastate the Miami-based company, analysts said.
The Fine Air DC-8 crashed Thursday shortly after takeoff from Miami International Airport, killing three crew members and a security guard on board. The flight was bound for Santo Domingo in the Dominican Republic.
Canceling the IPO gives Fine Air time to show “why this accident will not have a material adverse effect on the company,” said Barry Fine, president of the Miami-based cargo company.
Fine’s comments were made before the FAA announcement. A company spokeswoman later said Fine Air hadn’t seen the FAA’s statement and didn’t immediately have a comment.
Pulling an IPO after it has been priced is a rare move on Wall Street.
In a rescission, all the buy and sell orders that were placed during trading are canceled, as though they never took place, analysts said. A company can make the decision within three business days of the IPO, which is how long it takes trades to officially clear. In their first day of trading Wednesday, Fine Air’s shares rose 9.5 percent to 15-7/8, after an 8.5 million-share sale. The company sold 7.4 million shares and stockholders sold 1.1 million for $14.50 each, within an expected range of $13 to $15. The stock represents about a 40 percent stake in the company.
Fine Air’s shares fell as much as 1-1/2, to 14-3/8, before trading was halted late Thursday. Trading never resumed.
Some stocks that moved substantially or traded heavily Friday:
NYSE
Electronic Data Systems, down 6-1/16 at 37-1/8 The computer services company late Thursday reported lower-than-expected second-quarter earnings.
Coca-Cola, down 3-7/8 at 62-11/16 The Atlanta beverage giant issued a cryptic business outlook, saying its third quarter earnings would “slightly exceed” year-ago levels and that structural changes in its bottling operations may have a “short-term impact” on its results.
Heritage Media, up 2-3/16 at 19-1/16 The Antitrust Division of the Justice Department will raise no objections to News Corp.’s $1.3 billion deal to buy Dallas-based Heritage, which will hold a shareholders’ meeting on Monday to consider the proposed merger.
America Online, down 1-9/16 at 69-15/16 The nation’s largest online service late Thursday reported a fourth-quarter loss of $11.8 million that was slightly smaller than expected.
NASDAQ
PetsMart, down 2-3/4 at 9
The operator of pet supply stores warned late Thursday that its second-quarter earnings will fail to match Wall Street expectations.
American Medserve, up 2 at 17-1/2
Omnicare agreed to acquire American Medserve for $222.6 million. Omnicare, based in Cincinnati, is an independent provider of professional pharmacy and consulting services for long-term care facilities. American Medserve, based in Naperville, Ill., is a pharmacy-services company.
Network Connection, down 2 at 8-1/4
The Alpharetta, Ga.-based computer networking products company reported a wider-than-expected second-quarter loss.