Cartwright Prices AAC Above Expected Range, Stock Soars in Aftermarket

Addiction Treatment Industry Newswire
10/02/2014 -ATIN – After much anticipation, and back-to-back investor meetings and hard work on his IPO “road show,” Michael Cartwright priced the initial public offering of his American Addiction Centers above the expected $12-$14 price range, getting $15 a share and raising $75M, $10M more than American Addiction Centers, with its new AAC trading symbol, was seeking from what is known as the “primary” money markets – the markets where new and existing companies go directly to investors either offering them new stock in an existing company or, as in the case of AAC, raising money for the first time.


At the Moments of Change conference in Palm Beach, which just finished up basically yesterday, the AAC deal was a major topic of conversation with many executives agreeing that a successful AAC IPO deal would have a positive effect on the entire valuation of addiction treatment assets nationwide, on the theory that a rising tide lifts all boats. Said senior Origins Recovery executive Rob Park: “I can’t help but think that a successful IPO of any treatment center would be good for valuations across the board in the treatment industry.” And now, according to published reports, American Addiction Centers started off with a market valuation, or market capitalization in Wall Street lingo, of nearly $320 million.

Price Soaring in Secondary Market

In very early morning trading in the “secondary” marketplace for stocks – the market that most people are familiar with that is represented by trading in places like the venerable New York Stock Exchange, NYSE, or the newer trading markets that appeared in the 1960s and 1970s like the Nasdaq – investors had already driven the stock over $18 a share, giving AAC and Cartwright a further 20 percent or more lift in valuation. The stock closed at $18.50, over 23 percent higher than its primary pricing IPO launch of $15. In a quick call with Treatment Magazine, Cartwright told us he talked to hundreds of investors from big mutual fund grandees like Fidelity to small private investment firms and that he was looking forward to officially ringing the opening bell tomorrow on the New York Stock Exchange, where AAC is listed. Volume was almost 3M shares today with the stock hitting a high of just over $20 before falling back. 

Phones Ringing

If addiction treatment center owners thought their phones were ringing off the hook with investors before today, they are likely to be inundated going forward.


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