After its initial public offering Tuesday, shares of Alon USA Partners LP — owner of the Big Spring Refinery — rose this week by as much as 19 percent, according to totals reported at the stock market.
The company issued 10 million shares at $16 each in its initial public offering. Since that time, however, the company has approximately 62.5 million shares outstanding, fetching Alon an estimated $1 billion in market capitalization.
Initially, Alon had expected its IPO to be issued between $19 and $21 per share, according to previous information provided by the oil company.
According to Francis Gaskins, analyst for IPO Desktop, the reason for the shortfall comes from the markets lack of dealings with oil refiners.
"The market is not used to processing and evaluating refinery IPOs and so they wanted to price it low because they did not want to have a broken IPO," Gaskins said following the offering.
Alon USA Partners — a unit of Alon USA Energy Inc. — was formed to own and operate its parent's refining and petroleum marketing business in South Central and Southwestern regions of the United States, according to Alon officials.
The Dallas-based company filed with the U.S. Securities and Exchange Commission in August with expectations to raise approximately $230 million with the IPO.
According to Alon officials, Citigroup Global Markets Inc., Goldman, Sachs & Co. and the U.S. Division of Credit Suisse Securities LLC are acting as lead underwriters for the offering.
The company — which reported a net income of $268.7 million on revenue of $2.65 billion for the nine months ended the end of September — plans to use the proceeds from the offering to repay debt and for capital expenditure.
Shares of Alon USA Partners LP are currently being traded on the New York Stock Exchange as ALDWN.