Why Boise Cascade's Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of lumber company Boise Cascade jumped as much as 27% today after its IPO.
So what: The official IPO price for select investors was $21 per share this morning, but on the open market they were never near that price. Shares opened over $25 and never looked back. Private-equity firm Madison Dearborn controls the company.
Now what: Even the IPO price was well above a floated initial range of $16 to $18 per share. Investors are gobbling up stocks that may benefit from a housing rebound, and that has helped push the stock higher. Buying on IPO day can be a risky investment if you're not lucky enough to get in at the IPO price, so I'd wait to see where shares settle out before jumping in.
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