American Capital Mortgage shares drop in first day of trading
American Capital Mortgage Corp. (MTGE) picked a bad day to go public. Its shares dove today, falling 8.6% to $18.41 from the mortgage REIT’s $20 initial public offering price before rebounding to $18.63 in after-hours trading. It wasn't an auspicious start, but it came on a day when stocks were hammered by a negative economic outlook. The Dow Jones Industrial Average shed 513 points and the Standard & Poor's 500 fell 60. American Capital Mortgage was the third mortgage REIT to go public in the last two months. It followed in the footsteps of its predecessors in at least two respects: the scaled-back size of the offering and the initial share price, which, at $20, was exactly the same as the other two mortgage REIT IPOs. Underwriters shrank the number of shares by more than half from an anticipated 17.5 million to just 8 million, with another 1.2 million available for over-allotments, down from a planned 2.63 million. At that size, net proceeds from the offering should total $160 million. At the same time, American Capital Mortgage is offering $40 million in a private placement of shares that American Capital Ltd. (ACAS) has agreed to purchase.The newly public REIT is externally managed and advised by American Capital MTGE Management LLC, whose parent company is American Capital Ltd. (ACAS) The REIT plans to use the proceeds from both transactions to invest in agency mortgage investments, nonagency mortgage investments and other mortgage-related investments. Ten financial companies have brought IPOs to market this year, reaping $3.4 billion in proceeds, according to data from Renaissance Capital LLC, a Greenwich, Conn.-based provider of IPO research and investment services. That’s more than a tenth of the 92 IPOs that have hit the U.S. market this year, as the number of companies going public rose by almost 18%. AG Mortgage Investment Trust (MITT) shares have fallen to $19.14 from the IPO price of $20, while Apollo Residential Mortgage (AMTG) shares have slid to $18.00. At least four more mortgage REITS have filed to go public this year. Write to Liz Enochs.