Fertilizer trumps FX in IPO-market buzz this week

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Digital Domain, one of Hollywood’s best-known special-effects studios, expects to price its initial public stock offering on Tuesday or Wednesday.

But in terms of IPO-market buzz this week, the Venice-based FX firm’s work on such films as ‘Titanic’ and ‘Transformers’ can’t compete with the allure of a company at the far, far opposite end of the technology spectrum: Denver-based fertilizer producer Intrepid Potash.

Intrepid’s underwriters priced its 30-million-share offering this afternoon at $32 a piece, well above the expected range of $27 to $29. And that range had risen from $24-$26 last week.

In a hungry world, anything related to agribusiness is a hot investment idea these days. It has helped Intrepid that a major rival -- Potash Corp. of Canada -- has been one of Wall Street’s biggest winners of the last five years, and closed today at yet another record high of $208.79 a share. Intrepid will begin trading Tuesday on the New York Stock Exchange under the ticker IPI.

As for Digital Domain, it’s still hoping to sell 6 million shares at $12 to $14 each. But IPO-market analysts say the deal hasn’t generated a lot of hype on Wall Street since the terms were announced on April 7.

The company, which has been racking up operating losses since 2005, wants to develop its own feature films and also push into video-game development and production.

The stock (which will trade under the ticker DTWO) could pop a bit if underwriter Thomas Weisel Partners has done a decent marketing job, and if the stock market overall trades higher. But no one is expecting investors to step up the way they did for Pixar Animation‘s IPO in 1995. Pixar, fresh off the success of ‘Toy Story,’ soared from $22 at the offering to $39 on its first trading day. The company was bought by Walt Disney Co. in 2006.

Posted April 21, 2008